Tasmania's budget deficit has surged by half a billion dollars this year, driven by unbudgeted health spending and disaster response costs. A new Treasury report reveals the state's net debt is on track to exceed $9.5 billion by 2028, just three months out from the next state budget.
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00:00Natural disasters, growing demand for health services and workers' compensation claims
00:08continuing to blow holes in the state budget.
00:12We will not turn Tasmanians away when they turn up to the hospitals.
00:16They need to be cared for and supported.
00:19The revised budget estimate report released today showing the state's finances have been
00:23hit harder than predicted in the last budget, but the government is keeping positive.
00:28Pleasingly, the report does show a continuing growth in our economy in Tasmania, and as
00:35I say, that's so important for jobs and to back in business and back in industry.
00:42The revised Estimus report shows the government is set to spend an extra $500 million this
00:47financial year, on top of what it budgeted for.
00:50That will push the budget further into the red, with a $1.3 billion deficit.
00:55But four years from now, the deficit would shrink to about $40 million, $23 million less
01:01than the budget forecast.
01:02The Treasury expects net debt to worsen.
01:05Its revised estimate for this year is about $287 million worse than what was budgeted.
01:12And that variation blows out to more than a billion dollars by 2027-28, when net debt
01:18is expected to reach about $9.6 billion.
01:22Instead of admitting they've got a problem, they continue to make things worse.
01:25By saying there's a pathway to surplus when there clearly isn't, they're making things worse.
01:30The numbers are one thing, but how does the government fix the problem?
01:34An independent review of the state's finances by economist Saul Eslake made 26 recommendations,
01:41and the government today responded.
01:43It ruled out tax reform or reviewing mining royalties, instead wanting to keep focusing
01:48on finding efficiencies in the public sector.
01:52I don't think the government has embraced the spirit of my recommendations, let alone
01:58taken up any of the specific suggestions.
02:01The government believes an operating surplus is still on the horizon, but it might not
02:05solve structural issues.
02:07Tasmania's facing a difficult fiscal situation, and that the longer decisions to correct it
02:15are put off, the harder they will ultimately be.
02:18The state budget will be delivered in May.