Tas govt seeks public sector ideas to tackle mounting budget crisis

Tasmania's government has turned to its workforce for solutions as the state battles rising debt and faces what critics call 'the bailout budget'.

Eric Abetz Treasurer. Question time in the Tasmanian House of Assembly. Picture: Nikki Davis-Jones

The Rockliff government will ask its public sector workforce for “frank and fearless feedback” on ways to get the state’s finances back in the black as opposition parties say they fear big cutbacks in Thursday’s budget.

Treasurer Eric Abetz will hand down his first budget amid a background of successive billion-dollar-plus blowout deficits and spiralling debt.

What the Liberals are describing as the “2025/26 interim budget” is being handed down more than four months into the financial year, after former Treasurer Guy Barnett’s May attempt did not pass parliament.

That fiscal blueprint forecast spending of $10.4bn, revenues of $9.4bn, a $1bn deficit, and $7.3bn in debt.

Mr Abetz’s task of budget reform is made harder by a series of threats to the state’s bottom line, including public sector wage demands, out-of-control health spending, key government business enterprises recording profit slumps or needing bailouts, and a federal GST review which could undermine a vital revenue source.

Mr Abetz will on Thursday launch a promised DOGE-style Efficiency and Productivity Unit to rein in costs.

“We’re now calling for feedback from the public service – the people who know it inside and out,” Mr Abetz said.

“Inconsistencies, duplications, where technology can be better used, and more – we want to hear it.

“This is about delivering better outcomes for Tasmanians while maintaining and improving service delivery.

“There are many ways we can improve program and service delivery – we can work smarter, we can empower staff, and we can improve the systems that support all Tasmanians.”

Unlike some similar schemes elsewhere, workers will not be paid a bounty for their money-saving ideas.

Labor leader Josh Willie said he did not have high hopes for the interim budget.

“This budget will be known as ‘the bailout budget’ because it contains $75m to bail out TT-Line’s finances,” he said.

“We knew that TT-Line’s finances were in difficult shape when the head of TASCORP at a parliamentary committee said that further borrowings and support from the government would be more likely than not.

“What did the government do over those 12 months? They refused to answer questions and

sought to cover up, because they know that they have made a huge mess of Tasmania’s finances.”

Greens leader Rosalie Woodruff said she was worried the budget would hit the state’s most vulnerable the hardest.

“We’re hearing community services, family violence centres, neighbourhood houses, community gardens, all suites of community services are looking at cuts already. They’re afraid of what this budget will hold,” she said.

“This will be a stadium austerity budget.

“If Labor is concerned about a one-off payment of $75m, they should be much more concerned about that amount every single year going to pay the interest on a stadium that we cannot afford and don’t need.”

Education Minister Jo Palmer took time out from a war of words over industrial action in her department to announce free breakfasts for all government school students.

Ms Palmer said $6.5m will be spent to deliver the program over four years, ensuring every student has the opportunity to start their day with a healthy meal and the energy to learn.

“We know how much breakfast matters in a student’s school day. Hungry students are more likely to disengage, and this can result in a loss of up to two hours a day in learning time,” she said.

The program currently operates in 40 Tasmanian Government schools and will expand to 30 additional schools from Term 1, 2026.

And five health and community organisations issued an urgent plea to the government to invest in preventive health now or risk condemning the next generation to poorer health and shorter lives.

Representatives from St Luke’s, Cancer Council Tasmania, Quit Tasmania, Youth Network of Tasmania, and researchers from the University of Tasmania said “every dollar withheld today is a debt our children will pay with their futures”.