Virus creates $500 million hole in state’s bottom line

After years in the black, Tasmania’s economy has taken a massive hit due to the coronavirus pandemic dropping from a predicted $57 million surplus to ten times that – in the red.

TASMANIA’S budget deficit this financial year may exceed $500 million.

But Premier Peter Gutwein says the state’s economy is still in a strong enough position to come out the other side of the coronavirus pandemic.

It is a massive financial U-turn from the $57 million surplus predicted in May last year.

The State will learn more about the government’s Road to Recovery plan for the State on Friday afternoon in which timelines for business re-openings will be given.

In the interim, Mr Gutwein has outlined the “unprecedented” range of measures – worth about $1 billion – implemented to support the community and businesses through the health and economic crisis.

“While our deficit this financial year may well exceed half a billion dollars, we went into the pandemic from a position of strength, and we will use our strong balance sheet to get us through to the other side. during the COVID-19 pandemic,” Mr Gutwein said.

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The black financial hole comes through the allocation of that $1 billion Social and Economic Support Package while revenue dropped off significantly due to less business activity and consumption.

Initiatives funded include $111 million in applications to the State Government’s local government zero interest loan program which has provided support to around 260,000 households and thousands of businesses.”

By April 30, the government had received 6725 applications for assistant grants and 20 eligible loan applications for $111.6 million from Tasmanian councils.

More than 11,500 social housing households across the State have been provided with rent relief and 1500 government property leases impacted by COVID-19 have enjoyed rent relief to the value of approximately $4.8 million;

In the week April 24 – May 1, 10,738 ready-to-eat meals were delivered to residents representing a 330 per cent increase from pre COVID-19 numbers.

In the same period, 1022 food hampers by Loaves and Fishes, Foodbank and Volunteering Tasmania were delivered – up 69 per cent.

“In addition, the public sector has been supported with the removal of $258 million in efficiency dividends over the next three years so they can focus on supporting the community as we respond and recover,” Mr Gutwein said.