2017-18 Budget: Balanced Budgets Each and Every Year

25th May, 2017

Peter Gutwein, Treasurer

The 2017-18 Budget is all about Building Tasmania’s Future.

It is a Budget which builds on our three years of hard work in Government.

It delivers better health and education services, more jobs, better roads and transport, action on cost of living, and continued investment in essential services such as public safety and supporting Tasmanians in need.

In our first Budget we had to take some difficult but necessary decisions to stem the bleeding.

Our second Budget was about consolidating the State’s financial position, and the third delivered last year - albeit after losing nearly $500 million in GST - was about reinvesting back into health, education and other essential services.

This Budget, the fourth budget delivered as a part of our long-term plan, will ensure that the hard work that has gone on over the last three years and the results that have been achieved are not squandered.

It continues our strong plan for Tasmania and delivers not only a balanced budget bottom line, but also key initiatives and sensible investments that will build Tasmania’s future.

Our economy continues to grow, and is forecast to expand above trend by 2.5 per cent in 2017-18.

When businesses are confident as they are under us, they invest more and they employ more people – since the election there are now over 6400 more Tasmanians with jobs. At 5.8 per cent, our unemployment rate is equal to the national average, and is one of the lowest among all States.

The 2017-18 Budget forecasts a surplus of over $54 million in 2017-18, and we will remain in surplus each and every year of the Forward Estimates for the first time in a decade, with a cumulative surplus of just over $200 million.

And rather than forecasting rising net debt as the State did three years ago, we now have a strong balance sheet and this budget forecasts positive net cash and investments across the forward estimates.

Net Cash and Investments will be more than $450 million as at 30 June 2018, which is an improvement of more than $277 million relative to the estimated 30 June 2018 figure in last year’s Budget.

We know like any household or business does that you must cut your cloth to suit your circumstances, that you can’t keep spending more than you earn and expect to retain a strong financial position.

Over the life of the Government under our settings the annual growth in spending through to 2020-21 is estimated to be around 2.4 per cent, while the annual growth in revenues over the same period is forecast to be 2.7 per cent, which is well below the long run trend of revenue growth of 4.7 per cent.

Key initiatives in this year’s Budget include:

• The biggest ever boost to health, $650 million and 106 beds;
• A package of measures to support around 7,600 young Tasmanians in jobs;
• Action on cost of living which will save households $300 on the cost of electricity, up to $550 over six years on water and sewerage, and make it cheaper to build your first home;
• $117 million for new and better school and TAFE buildings, $134 million in “full Gonski” funding for our schools, and $17.8 million to employ more specialist teachers to help our students get better results;
• $44 million to support agriculture and aquaculture, and improve biosecurity;
• A $37 million boost to tourism, including $11 million for marketing, $8 million for Parks, $6 million to support the Cycle Tourism strategy, and an additional $6.8 million to Cradle Mountain;
• $44.8 million to improve our child protection system and $53.4 million towards rebuilding Tasmania’s police service;
• A $2 billion infrastructure spend right around the state, including $827 million on roads and bridges;
• $27 million to continue the very important fuel reduction program; and
• An additional $100 million into the TT-Line Ship Replacement Fund.