THE STATE GOVERNMENT’S NARRATIVE ON MARINUS LINK IS DRIFTING FURTHER FROM ECONOMIC REALITY
Premier Jeremy Rockliff’s New Year message celebrates Tasmania’s economic strength and the confidence that underpins it. Confidence, he argues, is the backbone of what makes us great. It’s a compelling idea. But confidence is only as strong as the facts that support it. And when it comes to Marinus Link, the government’s narrative is drifting further and further from economic reality.
In his Talking Point piece (Mercury, December 31, 2025), the Premier claimed that Marinus Link will “inject an estimated average of $470m into Tasmania’s bottom line each year.” It is an extraordinary figure and one that would transform the state budget overnight. Yet it appears without explanation, without modelling and without any reference to the mechanisms through which such a windfall could possibly flow.
Tasmanians deserve clarity. Because if business confidence is truly the backbone of our success, it cannot be built on numbers that have no grounding in the National Electricity Market, no presence in the state budget and no support in any published analysis.
The reality is simple: Marinus Link is a regulated transmission asset, not a profit making venture. The company that owns the link, Marinus Link Pty Ltd, will receive regulated revenue. But regulated revenue is not profit. It is designed to recover costs: depreciation, maintenance, financing, tax allowances and operating expenses. And even if the company records an accounting profit, that does not mean it has free cash to distribute.
Dividends depend on free cash after interest, principal repayments, tax and operating costs – not on regulated revenue. Marinus will be a heavily leveraged asset for decades. Most of its regulated revenue will go straight to servicing debt. Only if the company generates free cash after all of that would a dividend even be possible. And Tasmania would receive diminishing returns from the dividends on the initial 17.7 per cent ownership that is reducing with every new call for capital. This is a percentage of any dividend, not a percentage of revenue. That is vastly different from a $470m annual fiscal injection.
The Premier also appears to confuse economic modelling with budget revenue. The Whole of State Business Case (WoSBC) did contain large numbers from theoretical economic benefits modelled over decades. But these were not cash flows to the state budget. They were not dividends. They were not guaranteed. They were not fiscal benefits. They were modelling outputs, not money. Recasting them as a $470m annual “bottom-line” boost is not supported by the WoSBC or any other published analysis.
Hydro Tasmania does not, and will never, receive Victorian prices when electricity is exported. It is always paid the Tasmanian Regional Reference Price (RRP). If the electricity is on-sold in Victoria at a higher price, the additional proceeds are collected by AEMO, not Hydro.
We are often told that Tasmania will be paid to take Victoria’s surplus electricity when Victorian prices go negative, as they increasingly do during solar soaked afternoons. But the NEM is made up of five separate regional markets, each with its own price. When Victorian prices are negative, it is Victorian generators who must pay AEMO. If that electricity flows into Tasmania to meet Tasmanian demand, Tasmanian buyers still pay the Tasmanian RRP, and AEMO pockets the difference on the interstate trade. Negative prices never flow across Basslink, and they will not flow across Marinus. The idea that Tasmanian households will directly benefit from Victorian negative prices is not just wrong, it is impossible under the NEM’s settlement rules.
In the past when Hydro controlled an unregulated Basslink, AEMO paid it the interstate proceeds. That era ended on June 30, 2025.
As Hydro will always receive the Tasmanian RRP, the only way it will benefit from higher Victorian prices is if Tasmanian prices rise too. And the WoSBC makes exactly that point: Tasmanian wholesale prices are expected to rise faster with Marinus, gradually moving closer to Victorian levels. If higher prices lifts Hydro’s profits, Tasmanians will be paying more for electricity.
That is not a windfall from interstate. Yet the Premier uses the word “inject” as if $470m is flowing into Tasmania from interstate. It isn’t. Any uplift would come from Tasmanians’ own power bills.
So the basic questions remain. Where does the $470m come from? What modelling supports it? What mechanism delivers it? They are the minimum economic tests any serious claim must pass. I’m not sure what’s worse – dismissing expert advice as just another opinion or making it up as you go.
Tasmania deserves a debate grounded in facts, not slogans. If the Premier truly believes Marinus will deliver $470m a year, he should publish the modelling and show the money flows.
Until then, business confidence is better served by honesty than by numbers that cannot be reconciled with the economics of the NEM.
Confidence built on a false narrative is not a backbone but a fault line.
Tasmanians will be far better served if 2026 becomes the Year of Truth.