In this update I will revisit some important aspects of the Charter of Budget Responsibility Act 2007 https://www.legislation.tas.gov.au/view/html/inforce/2025-06-14/act-2007-035 . It’s a pretty simple Act. Whilst it contains some fairly broad motherhood statements (what is sound fiscal management for instance) its intent is quite clear: to provide a framework to explain the fiscal challenges and proposed remedies to all Tasmanians.

I wouldn’t normally cite an Act where legalese can make for difficult reading, but in this instance it’s pretty straightforward.

Section 1 sets out the purpose of the Act:

1. Purpose of Charter

The Charter of Budget Responsibility provides a framework to improve fiscal policy outcomes by requiring –

(a) a fiscal strategy statement based on principles of sound fiscal management; and

(b) regular reports to provide for the assessment of the Government's fiscal performance; and

(c) the publication of a pre-election financial outlook report; and

(d) a process for costing the election policies of parties represented in the House of Assembly.

The government adopted a new fiscal strategy two years ago which appears in the Budget Papers.

Opposition parties are only required to have a strategy when an election is called. Section 6(2) sets out this requirement:

6.   Public announcement before election of party's fiscal strategy statement

(2) The Leader of an Opposition party is to publicly announce a fiscal strategy statement, and provide a copy of the statement to the Secretary, within 15 days of the commencement of the election costing period.

That means Leaders of Opposition parties have to provide a fiscal strategy by 26th June. Note it includes Opposition parties plural. This suggests that includes the Greens.

Sec 8 sets out what it should contain:

 8.   Contents of a fiscal strategy statement

(1) A fiscal strategy statement is to –

(a) specify the long-term objectives within which budgets will be framed; and

(b) specify the key fiscal measures against which fiscal policy will be set and assessed; and

(c) specify the fiscal objectives and targets for the budget year and the following 3 financial years; and

(d) identify how the fiscal objectives and strategic priorities relate to the principles of sound fiscal management.

Furthermore the Act in Sec 16 requires the government to regularly report its performance against the strategy:

16.   Reporting progress against the fiscal strategy statement

The Treasurer is to provide information within the budget, the revised estimates report and the Treasurer's annual report to allow assessment of the Government's fiscal performance against the fiscal strategy set out in its current fiscal strategy statement.

The current government’s Fiscal Strategy contains 11 strategic actions and targets.

Only one strategic action (number 9) is on track. It requires the annual infrastructure spend be greater than depreciation. But that’s like planning to get out of bed every day, it’s hardly an aspirational target that’s going to propel the State to new heights.

Another strategy (number 9) was to develop a cost–benefit framework for infrastructure projects over $50 million which would have been used to assess the Macquarie Point project work, thereby providing a basis to assess the mega benefits which are claimed to flow from the stadium. In 2023–24 work was said to have “commenced.” In 2024–25, it was “continuing.” And in this year’s Budget it will “commence” in 2025–26.  Have we been misled? We in the Legislative Council never got a chance to quiz the government at this year’s Estimates hearings about the apparent untrue statements to Parliament. One can only guess why the government has dragged its feet on developing this crucial measure.

The government’s remaining nine strategies or targets are all hopelessly underwater, or heading so rapidly in the wrong direction they are incapable of being reached by the target date 2032/32,

Worse still there is no plan — no roadmap, no timelines, no reforms — to get back on track.

With hindsight, the Act doesn’t specifically require the government to specify how it intends to get back on track. The drafters of the original legislation must have presumed corrective action was inevitable and there was no need to mandate it in the Act.

Ironically, achieving a surplus, according to the Treasurer and the Premier, is just around the corner but this is not one of the eleven strategic actions which comprise the government’s fiscal strategy. There is a strategy which relates to the fiscal balance of the overall State sector which includes departments, agencies and government businesses which is a good proxy for the budget cash outcome, but which is utterly unachievable by any means except divine intervention.

With Parliament being dissolved on the 11th June, the election costing period, as it is known in the Act, begins. The Opposition party(s) have until 26th June to reveal their fiscal strategies. As we saw above Sec 8 requires them to specify targets for the year 2026/27 and the next 3 years. Hopefully how those targets will be achieved will also be revealed.

Planning to bring the Spirit ferries home announced by Labor with a backdrop of one of the current Spirits, brought to mind what possible backdrop will the PR crew select to announce Labor’s fiscal strategy, seeing as it made budget mismanagement a central part of the successful no-confidence motion in the Premier. Will we see the Opposition leader standing in front a massive black hole signifying our current position, or perhaps at the foot of a precipitous climb symbolising the challenges ahead?

We have less than 2 weeks to wait.

Hopefully this election campaign will see some attention paid to the sensible requirements of the Act which electors badly need to revive their faith in the polity.

What the Act intended as a policy framework for dealing with our fiscal woes has become a skeleton without muscle or movement. The election campaign will determine if its just another institutional arrangement which gets trampled by political convenience.

In the next update I will outline some of the issues that need a mention in the Pre-Election Financial Outlook (PEFO)