Tasmania's Treasury has just delivered what might be the most passive-aggressive pre-election financial report in State history. The Pre-Election Financial Outlook (PEFO) released in June 2025 is not only a warning - it’s a damning indictment of budgetary smoke and mirrors, political spin, and the kind of financial sleight of hand that would make a used car salesman blush.

At the centre of this fiscal farce is the 2024–25 Revised Estimates Report (RER), a document that Treasury officials effectively binned and started again. Under the Charter of Budget Responsibility Act 2007, PEFO is meant to give Tasmanians a clear, honest account of the state’s fiscal position heading into an election. But when Treasury turned to the RER looking for suitable forward estimates, they found what appears to have been a patchwork of half-truths and conspicuous omissions.

The most egregious example? A glaring $345 million health funding commitment in 2024–25 with absolutely no continuing figures in the forward estimates. That’s right - despite announcing a new policy decision to address health demand, the government left more than $1 billion in expected costs out of the forward estimates. Their excuse? Apparently, they couldn’t estimate the future costs/demand.

If you’re wondering when a government budget doesn’t require an estimate, join the club. This wasn’t a case of fuzzy forecasting - it was deliberate omission. It was left out so the government wouldn’t have to own up to the true scale of the problem. It was a choice. A bad one.

Treasurer Barnett owns this RER, the now binned 2025-26 budget and the ensuing mess, even if he himself doesn’t acknowledge it. It was his first full set of papers, and it seems he decided to exclude the kind of health spending that might have made the numbers look, well, too real. However, this forced Treasury into a corner. Unable to meet their obligations using the government’s RER numbers, they did what they had to do: they did their own projections.

And those projections are a spreadsheeted scream for help.

Using historical growth trends over the past 10 years, Treasury produced fresh forward estimates from 2025–26 to 2027–28. These aren’t forecasts, they hasten to add—they’re projections. And the picture is bleak. Net debt is set to explode from $4.2 billion to a staggering $13 billion in just three years. Interest payments? Up 202 per cent—from $230.9 million to $697.9 million annually. That’s nearly three-quarters of a billion dollars a year just to service debt.

Treasury didn’t mince words: “This rate of growth in debt is not sustainable… immediate and sustained action is needed.” The budget has a “structural problem,” and it can’t be solved with economic growth alone. What’s required are “explicit policy choices.” That’s Treasury-speak for: stop pretending everything’s fine and start making hard decisions.

In contrast to the PEFO released before the 2024 election—where the then-current RER was deemed fit for purpose—this year’s effort throws the government's budget management credibility into the gutter. If the PEFO is anything to go by, Treasury no longer trusts what it’s being given. And neither should we.

In theory, PEFO is designed to help political parties finalise their election policies with an honest accounting of the state’s finances. However, it lacks key fiscal measures and there’s almost no modelling of structural reform scenarios. There’s no integration of broader state sector risks, where many major financial risks sit with government businesses. TT-Line, for example, remains a multi-million-dollar mystery.

It’s not that Treasury doesn’t know what’s going on. Their commentary practically screams into the void. The State Service is too big. Employee costs now account for nearly half of the operating budget and are still growing. And despite Treasurer Barnett’s delusional responses and protestations that everything was on track until the election “interrupted” the government’s glorious path to surplus, the truth is this: there was no path to surplus—just a road paved with denial, delay, and debt.

So what do we really have here?

We have a set of forward projections built on the same decade of unchecked expenditure growth that got us into this mess in the first place. And we’re now projecting forward… based on those mistakes.

But maybe that’s the point. If Treasury can’t see a viable path out of the woods with current policy settings, there’s a high likelihood there isn’t one. Treasury’s spreadsheet of doom is its way of screaming enough. Maybe, in the absence of political honesty, it’s the bureaucrats who’ve had to hold up the mirror and say: this is what you’ve become.

If we are truly to have a functioning democracy and an informed electorate, Tasmanians deserve a full picture of the risks, including what’s brewing in the murky waters of government businesses and an actual plan and strategy to address them. We deserve transparency, honesty and accountability. And above all, leadership that acknowledges reality instead of deflecting blame and papering over the cracks.

Because here’s the truth: this is not just a budget problem. It’s a trust problem. A governance problem. A courage problem.

The government tried to game the numbers, and Treasury called them out—quietly, methodically, and devastatingly.

Now it’s up to voters to decide whether they want more of the same illusions… or something better. It is up to all seeking your vote to be honest about the reality, clear about their approach and committed to fixing the budget mess.

Hon Ruth Forrest MLC
Independent Member for Murchison
26 June 2025