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.
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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.