Tasmanian Budget: Economy entering 'golden age', but no new money to address homelessness
Updated
Tasmania's state budget paints a picture of a "golden age" in Tasmania's economy, with the Treasurer boasting of plenty of money in the bank to protect the island state from unforeseen cost blowouts.
Key points:
- Projected surplus of $161m next financial year
- Cumulative surpluses of $620m over next four years
- Record $2.6b infrastructure spend
- Confirms election promises on health
While today was the first Hodgman Liberal Government budget since being re-elected in March, it was a mostly a case of no surprises apart from the sell-off of a key state-owned heritage-listed building in Hobart and a plan to locate a new medical centre on an existing hospital site.
The budget promises to create 9,300 jobs over the next four years.
"I think we are on the cusp of a golden age," Treasurer Peter Gutwein said.
Premier Will Hodgman described it as a "superb" budget.
"This is a budget that will literally build Tasmania's future," he said.
Surpluses bigger than predicted
The centrepiece is a surplus of $161 million, and cumulative surpluses of $620 million over the forward estimates.
In February, a surplus of $34 million for next year was predicted, with Mr Gutwein today heralding a $127 million increase on that.
But, the surplus represents only 2 to 3 per cent of total revenue, which is a conservative buffer.
State Government revenue hit a record $6.2 billion, up from $5.8 billion.
Despite the extra cash, there was no new money for homeless services, a key issue that the state has been grappling with this year.
The Government defended its record, saying money had been brought forward for affordable housing.
The net underlying operating balance, which does not take into account several grant payments, is a deficit of $4.5 million, jumping to $82 million in the red in 2019-20.
Mr Gutwein warned that while the books look good, Tasmania must be prepared for unexpected events, such as natural disasters.
"Whilst Tasmania is in a very strong position, it would be reckless to do what others call for and spend every dollar that is earned," Mr Gutwein said.
There is looming uncertainty about Tasmania's GST share, with the Productivity Commission review on GST carve-up due to be made public this month.
GST is the single largest source of revenue, making up 40 per cent.
However, during a visit to the state today, Prime Minister Malcolm Turnbull assured those in attendance that Tasmania "will be happy".
What's new?
While the budget papers contained few new announcements, the Government confirmed the intention to sell the historic Treasury building on Murray Street, with the building valued in 2015 at $18 million.
That figure is considered conservative given Hobart's property boom.
Mr Gutwein would not reveal the figure he expects to receive from its sale.
"I think it's worth much more than that," he said.
The Government also plans to co-locate a new private hospital at the Launceston General Hospital.
Mr Gutwein said Calvary Health Care last year lodged an unsolicited proposal for the development, adding he had formally notified Calvary the Government would progress the proposal to the second phase.
The investment by Calvary is expected to be worth $100 million, but because it is a private development it does not appear in the budget papers.
Cementing election promises
The budget contains $335 million in recurrent election promises, and $1.6 billion in infrastructure promises.
Mr Gutwein said the budget measures would "deliver on all our election commitments, in full and on time".
Health spending makes up 30 per cent of the budget, costing $1.8 billion, with funding for 478 extra health and hospital staff and 76 new beds over four years.
Mental health will be given a boost with $95 million for 25 new beds.
There is an additional $20 million to ease the wait for elective surgery — a measure announced after the election.
Also as promised, there is money to employ 277 teachers and support staff, with almost $70 million over four years.
Mr Gutwein is spruiking the "biggest ever infrastructure spend", with $2.6 billion set aside for road and rail works, up from $2 billion last year.
A suite of tax incentives to grow business have also been confirmed, including payroll tax cuts, payroll tax holidays for interstate businesses that relocate to regional Tasmania and incentives for businesses to employ apprentices.
Businesses delivering for Government
Tasmania's energy businesses continue to act as cash cows, predicted to deliver almost half a billion dollars in dividends to the state's coffers over the forward estimates.
After the state's 2016 energy crisis, the Government stopped taking dividends from Hydro Tasmania, up until this year.
But, from next year it will return generous dividends of $67.7 million, increasing to $84 million by 2021-22.
Sustainable Timber Tasmania, formerly Forestry Tasmania, will pay a special dividend of $15 million next financial year, due to the sale of its hardwood plantations.
Topics: budget, government-and-politics, states-and-territories, tas
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