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Infrastructure spend leads
ASMANIA is poised to be plunged
back into debt and deficit for the
foreseeable future as the State Liberal Government works to rebuild
the economy after the unprecedented shock
caused by the COVID-19 pandemic.
The State Government has launched a massive infrastructure spend across all sectors of
the economy but it will send Tasmania back
into billions of dollars of debt with no clear
pathway out of the red.
This year the budget deficit will be $1.1
billion with net debt at more than $1.8 billion. The Government optimistically predicts
its path to surplus will take only three years,
with the deficit reducing to $281 million in
2020-2021 and returning a modest $13.9 million surplus the following year.
In 2023-2024 it is expected to increase
slightly to $17 million.
However, the State’s net debt levels will
continue to soar, topping $4.4 billion in the
four-year forward estimates.
Premier and Treasurer Peter Gutwein insists his $7.5 billion dollar Budget and the
debt it creates, is needed to keep the economy
“Unprecedented times call for unprecedented measures,” Mr Gutwein said.
“This debt will be manageable, with interest rates remaining at record lows.
“We are spending this on intergenerational
investment. This is the time to use debt to our
Mr Gutwein was also keen to highlight that
it would be the lowest level of net debt carried
by any jurisdiction in the country.
“To service that debt it works out to be less
than one per cent of overall revenue going
forward,” he said.
Revenue has taken a hit at the hands of the
pandemic, with GST receipts cut by $347 million this year alone. But the Premier is confident this will recover and hasn’t taken steps
towards reforms or increasing the State’s revenue base.
“Now is not the time to broaden the tax base
and ask people who pay very little state taxes
to pay more,” the Premier said.
At the height of the pandemic 19,100 Tasmanians lost their job, figures show around
two-thirds of them have since returned to work.
Employment is predicted to decline by almost two per cent this financial year and by
one per cent in following years. It will see the
unemployment rate rise to 8.5 per cent compared to the 2019-2020 estimate of 5.9 per
Treasury predicts modest jobs growth of just
under 4500 between June next year and June
2022 underpinned by billions of dollars in infrastructure projects ranging from bridges and
roads, school upgrades, health improvements,
irrigation projects and a tourism recovery.
The Premier is also banking on avoiding a
second wave of the pandemic.
The Budget’s $5 billion infrastructure investment includes $2.4 billion for roads and bridges, almost a billion of which will be spent in the
next two years on projects such as the Sorell and
Midway Point causeways, the new Bridgewater
Bridge and upgrades to the Midland, West Tamar and Bass Highway.
The budget invests $391.2 million in hospital
and health infrastructure and a further $10 million for regional health and ambulance facilities.
Education infrastructure is set for $218.1 million worth of improvements with new schools
already planned for Brighton and Sorell and
there is more than $300 million for social and
affordable housing projects.
The Government has also created a specific
COVID-19 funding of $145 million.
It includes $50 million to support business
and the economy, help women back into work,
support the arts, improve the environment
and invest in public housing infrastructure
Virus uncovers a
REBECCA WHITE, Labor Leader
HE global pandemic exposed structural weaknesses in the Tasmanian
community and our economy.
The opportunity for the State Government
this year was to deliver a Budget that gave
hope to all Tasmanians, and that responded strongly to the economic and social pain
wrought by COVID-19.
Sadly, Peter Gutwein did not seize this opportunity.
The 2020 Budget could have been a car-
bon copy of the 2019 version, with few new
initiatives announced that reflect the new environment we’re in.
Peter Gutwein has promised to build a
way out of COVID. But the inability of this
Government to deliver major infrastructure
projects is well documented.
The Government’s lack of imagination
and vision is highlighted by the shopping
list of infrastructure projects heralded in the
Budget. They are, in the main, re-announcements of projects that have failed to launch.
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2 TASMANIAN BUSINESS REPORTER, November 2020