Tasmania’s finances deteriorating according to independent economist
Tasmania's finances are deteriorating that in just three years they could be the worst in the country. That's the brutal assessment by independent economist Saul Eslake laid out in a new review. He says the situation is entirely attributable to state government policy decisions and despite the dire predictions previous warnings by treasury have gone unheeded.
Category
📺
TVTranscript
00:00Independent economist Saul Weslake has delivered a stern warning about Tasmania's financial
00:07position.
00:08He says it's said to be the worst in the country over the next three years.
00:13And he's blaming one factor alone.
00:15My report shows, using publicly available information, that the deterioration in Tasmania's
00:21financial position up to 2022-23 was entirely the result of policy decisions made by the
00:28government of the day.
00:29The report says that unless it takes corrective action, Tasmania is projected to spend $12.7
00:35billion more than it earns in the next decade.
00:38In 10 years' time, the state is projected to rack up $16 billion in debt and will have
00:43to spend $730 million a year just to cover the interest.
00:48The likely result?
00:49The state's credit rating being downgraded.
00:51There's nowhere to hide for Treasurer Michael Ferguson and the report outlines that it is
00:57decisions of the current government that has led to this predicament.
01:01There have already been warnings from State Treasury about the state of Tasmania's coffers.
01:06Last year we introduced a new fiscal strategy.
01:08It's about rebuilding the budget position.
01:11It's about building a new fiscal buffer because you never know in the future if there'll be
01:15another pandemic, another external shock.
01:18So how does Tasmania fix it?
01:21Mr Weslake says cutting spending on services like health and education isn't the answer.
01:27He says new or expanded taxes and selling public assets should be considered, as well
01:32as reducing the amount spent on infrastructure.
01:35We're not going to be increasing taxes.
01:38We're not going to be introducing new taxes.
01:40The Jackie Lambie Network, who pushed for this review as part of its agreement with
01:44the government, are not quite united on the way forward.
01:47I think they need to look at revenue raising, absolutely.
01:51When it comes, you were talking about raising taxes, I mean really what we've got to look
01:54at first is cutting spending.
01:56Cutting spending in places that we need is not the healthy way to go.
02:02Returning Tasmania's public finances to a sustainable position, a politically challenging task.