Treasurer Michael Ferguson will watch Federal Budget with interest ahead of Tasmania’s budget

Treasurer Michael Ferguson will be watching Tuesday’s federal budget with heightened interest: the key figures and projections will set the tone for the state budget in just 16 days time. DETAILS >

Member for Franklin Dean Young, Deputy Premier Michael Ferguson and Member for Clark Madeleine Ogilvie at Macquarie Point in Hobart on Monday, May 1, 2023.

Treasurer Michael Ferguson will be watching Tuesday’s federal budget with heightened interest: the key figures and projections will set the tone for the state budget in just 16 days time.

The highlight of Jim Chalmers’ second federal budget for many Tasmanians will be $66m-plus in cost-of living relief through the joint state and federal Electricity Bill Relief Fund.

Mr Ferguson said the state government was watching carefully to make sure that election promises were funded and that the state received its fair share of GST.

“They were very clear in the lead up to the last federal election they nearly matched everything of the previous coalition’s commitments, particularly in infrastructure and transport projects and then they went a little bit further,” he said.

“We are looking forward to seeing those commitments honoured, including $540 million for road upgrades, $50 million for Nyrstar, $60 million to deliver runway upgrades at Hobart airport and $20 million to expand ferry services.

Member for Franklin Dean Young, Deputy Premier Michael Ferguson and Member for Clark Madeleine Ogilvie at Macquarie Point in Hobart on Monday, May 1, 2023.

Mr Ferguson said there also concern about the looming threat to the state’s bottom line via the ‘no-worse-off guarantee’ — Which puts a floor under GST revenues and is slated to end in 2026/27.

“We do have a looming challenge with the Australian government on a key revenue line for the state; GST is about two-thirds of our income,” he said.

“There is a fiscal cliff with GST when the ‘no-worse-off guarantee’ comes to an end. It mustn’t come to an end.

“We are working very closely together as a Cabinet on our next State Budget, but a key event will of course will be tomorrow night’s Federal Budget, which will provide a critical update to the forecast GST pool and population estimates.

“This information is a key input to estimating our future GST revenue, which is something that we’re very alive to.”

Budget night may also reveal some details of what exactly the federal government is funding at Macquarie Point, under what conditions and whether it includes the proposed stadium.

The Tasmanian government has requested that $240m grant announced by Prime Minister Anthony Albanese not reduce the state’s GST share, as is customary.

Under current arrangements, federal grants are taken into account by the Commonwealth grant Commission when calculating the state’s rightful share of GST in the following years their delivery.

The Liberals in 2019 criticised Andrew Wilkie, saying the $340m in federal funding he secured towards the Royal Hobart Hospital was not ring-fenced from GST calculations.

Mr Wilkie rejected the claim by then Treasurer Peter Gutwein.

Mr Ferguson said work had been done to seek an exemption from the usual arrangements.

“It’s a very complicated process by which the Commonwealth Grants Commission determines GST payments year by year, but under the law, the only person who can make that decision is indeed the Federal Treasurer.

Labor leader Rebecca White said tomorrow’s budget signalled the need for the state government to do more to drive down power prices.

“It’s good to see a federal Labour government recognise that the cost of living is a key issue for so many people and the planned cost of living relief with energy relief will be welcomed by thousands of Tasmanians,” she said

“But it doesn’t mean to say government doesn’t still have a responsibility here and they can cap power prices for Tasmanian customers because we know so many Tasmanians are struggling with the cost of living — and energy prices are a big part of that.