Tasmania’s budget surplus has been pushed back, net debt continues to rise and the price tag of a controversial stadium project could grow.
Liberal Treasurer Michael Ferguson on Thursday handed down the 2023/24 budget, which also included a $900 million boost to health over four years.
An expected $19m surplus predicted for 2023/24 in last year’s budget has been replaced with a $298m deficit.
A deficit of $148m is tipped in 2024/25, with a return to a surplus of $13m the following financial year.
The budget includes allocations towards the state’s $375m commitment for a roofed stadium at Macquarie Point in Hobart.
It sets aside $230m over the next four years for the $715m project, which is opposed by state Labor and the Greens and has drawn community opposition.
Two Liberal MPs quit the party to become independents earlier this month citing concerns about transparency around the stadium plan, plunging the government into minority.
“As a large infrastructure project, and with the scope of the project yet to be fully defined, it may be subject to the same ongoing supply constraints and cost escalations that other major projects across the public and private sectors are experiencing in Tasmania,” the budget papers said.
The stadium was a condition of the AFL granting Tasmania the licence for a team, which is slated to play from 2028.
As part of the deal with the AFL, the state will cover any cost overruns.
The budget includes $100m to relocate the wastewater plant at the Macquarie Point site but concedes the final cost will exceed original estimates.
There is also $60m for an AFL team high performance centre, $35m for initial start-up costs, plus $65m for University of Tasmania Stadium upgrades.
Net debt is expected to rise from $3.5b in 2023/24 to almost $5.6b in 2026/27.
The government has pledged to introduce a modest efficiency dividend in 2024/25 across government agencies for a saving of $300m over four years.
Mr Ferguson said it would be achieved through back-end efficiencies, such as digital enhancements, and the government would work to ensure frontline services weren’t impacted.
He described the state’s net debt as being in a manageable position, describing the budget as a “safe course” through economic headwinds.
Labor’s shadow treasurer Shane Broad said the descent into further net debt was reckless.
“The Liberals came to office with zero net debt, but after almost 10 years all we see is record debt and an ongoing housing, health and cost-of-living crisis,” he said, claiming that the state will spend $883m on interest payments over the next four years.
Greens leader Cassy O’Connor said the government was more worried about rolling out the red carpet for the AFL than tackling societal challenges.
Tasmania’s GST revenue, which accounts for 42 per cent of all government revenue, has reduced by $900m between 2022/23 and 2025/26 when compared to the most recent estimates.
The budget sets aside $30m to respond to recommendations from an inquiry into child sexual abuse in state government institutions which is due to deliver a final report in August.
It also notes future costs may be significant.
Health and education accounts for a combined 58 per cent of the budget’s overall $8.7b spend in 2023/24.
Total health spending is more than $12b over the next four years.
There is $347m over four years to help people on lower incomes pay water, sewerage, power and local government bills.
Some $1.5m will be spent on trialling a program in which the government will rent properties on the private market and provide them to eligible low-income Tasmanians at a reduced rate.