Hope is not a fiscal strategy for our States’ Long-term future
Every budget tells two stories. There is the story the Treasurer reads aloud in Parliament – polished, confident, reassuring. And then there is the story buried in the budget papers – written in numbers, not adjectives. This year, those two stories could not be further apart.
The Treasurer opened his speech with a line from the “Good Book” about seasons: a season for deficits, and now a season for repair. It was a neat metaphor. But when you read the documents that matter – the Fiscal Sustainability Report (FSR) and the Policy and Parameter Statement (PPS) – it becomes clear this is not a season of repair at all. It is a season of pretending.
Three months before the budget, Treasury released the FSR. It is the most honest document in the entire process, written by the same officials who must actually keep the state afloat. Its message could not have been clearer: Tasmania’s finances are structurally unsustainable. Not temporarily strained. Not cyclically weak. Structurally unsustainable.
The FSR warned that without corrective action, debt could explode over the next decade and interest payments could swallow a huge share of the State’s revenue. It said, in plain language, that efficiencies alone will not fix the problem. And it said something else the Treasurer chose not to repeat: Tasmania needs both revenue measures and spending measures if it is to avoid drifting into a position where fiscal repair becomes impossible.
The FSR modelled three credible pathways: a five-year plan, a ten-year plan, and a fifteen-year plan. All three relied on a combination of revenue measures, expenditure restraint, and structural reform. Faced with those options, the Treasurer chose something Treasury did not model at all – he used only one lever, ruled out revenue entirely, and claimed he could arrest debt growth in just three years. Tasmanians are entitled to ask whether this is credible, or simply the latest chapter in a long Tasmanian tradition: the glide path to surplus that is always just around the corner, but that Treasury’s own numbers cannot find.
To understand what that means in practice, you need the PPS – the budget’s X-ray that shows the bones. The PPS reconciles this year’s budget with last year’s Forward Estimates and separates policy changes, the Government’s deliberate choices, from parameter changes, the unavoidable realities of cost and revenue. This year, those two categories tell completely different stories, and the gap between them is where the budget’s credibility breaks down.
On the revenue side, the budget’s apparent strength is almost entirely imported. Revenue is up nearly $2 billion compared to last year’s estimates – but more than $1.6 billion of that comes from the Commonwealth, the very government the Treasurer regularly blames for Tasmania’s fiscal difficulties. Another $200 million comes from conveyancing duty, one of the most volatile revenue sources the State has. The budget itself acknowledges conveyancing duty is “particularly sensitive to a range of factors including interest rates, population growth and housing supply” and warns it is genuinely difficult to forecast. The same document projects $200 million in growth from conveyancing duty and simultaneously concedes that projection may not hold. Government owned business returns are down $151 million, contributing less to repair for the next three years.
This is not a self-reliant budget. It is a budget leaning heavily on Canberra, the property market, and agency effort.
On the expense side, the PPS reveals more. Approximately $300 million of the unallocated savings removing the Productivity and Efficiency Dividend from the coming years and placed the savings task entirely and explicitly on agencies instead, acknowledging savings can’t materialise naturally through vacancy control and procurement tightening and must now be deliberately forced.
And before the Treasurer even arrived at operational efficiencies, policy expense changes had already increased spending by over $1 billion across three forward estimate years. A billion dollars in new policy spending, with almost no policy revenue to offset it.
Facing that problem, the Treasurer reached for the only lever he was prepared to use. The PPS shows the result: $210.9 million in claimed efficiencies, cuts, in 2026-27, rising to $429.6 million by 2029-30. But these are not identified savings. They are not attached to programs or service lines. They are not grounded in service redesign or productivity analysis. They are simply the number required to make the bottom line look respectable. The PPS exposes the truth plainly: the pressures are real; the savings are invented.
What makes this even less credible is what is missing from the other side of the ledger – the cost of actually achieving the savings task. The Government says around 1,800 staff will go, but the budget contains no funding for separation costs. Long-serving staff could receive up to 48 weeks pay. These costs will wipe out first-year savings entirely and makes the efficiency task not just unrealistic, but mathematically impossible in year one.
The budget also caps wage indexation at 2.5 per cent while known enterprise agreement outcomes are running at 3 per cent or more – forcing agencies to quietly eliminate between 400 and 500 additional positions nobody has been told about. Non-salary indexation is capped at 2 per cent while the budget’s own economic chapter projects CPI at 4.5 per cent. Fuel, electricity, medical supplies – all rising faster than the budget allows. The difference is absorbed silently through deferred maintenance, unfilled vacancies, and the erosion of services Tasmanians rely on. And the $74.7 million shortfall in the Tasmanian Risk Management Fund sits in the budget papers, funded by nobody.
The FSR said Tasmania needs a mix of revenue and expenditure measures. The Government chose only one. The fiscal strategy requires everything to go right simultaneously – and almost nothing has gone right for five years.
Hope is not a fiscal strategy. And Tasmanians deserve better than a budget built on hope.