Massive, high risk spending marks deficits and debts in Gutwein’s budget
History will judge Premier Hodgman and Treasurer Peter Gutwein’s 2018-19 State Budget as a house of cards, driving Tasmania perilously close to net debt, while simultaneously failing to deliver for essential services.
Shadow Treasurer Scott Bacon said while Tasmania enjoys the benefits of a lower Australian dollar and a healthy global and domestic economy, you would expect a responsible government to be taking a long term view and build up cash reserves to invest in Tasmania’s future.
“Instead, reckless election spending has been prioritised over investments in essential services,” Mr Bacon said.
“Key commitments to health and education have been pushed beyond the next election.
“The Liberals promised $757 million for health but the budget outlines just $370 million while their education commitment was $324 million with only $261 million in the budget.
“Despite a $162 million increase in revenue, Mr Gutwein has still produced a $96.7 million underlying deficit in 2017-18.
“Mr Gutwein has never produced a real surplus and based on this budget, he never will.
“Mr Gutwein has hinted all week at surprises to be contained in his budget, but the only surprise today is the shocking level of spending which will drive Tasmania to the brink of net debt by 2021.
“In his white knuckle panic to be re-elected, Premier Hodgman and his Treasurer have committed Tasmania to spending it cannot sustain.
“Today’s budget shows this government has increased its expenditure by a massive 17.4 per cent over its four years in government. They have done so while not resolving the crisis we know exists within our health, housing and child protection sectors.
“The risks are enormous.
“The immediate risk to Tasmania’s GST played out today as the Prime Minister refused to guarantee Tasmania’s share of the GST will not change.
“The Budget Paper itself acknowledges the GST risk could impact Tasmania from 2020-21 at a time when net cash and investments are forecast to be a wafer thin balance.
“It now looks almost certain Tasmania will go into net debt under this Treasurer.”