Tasmania’s Fiscal Crisis Demands More Than Politics as Usual
On 27 February 2026, Treasury released a document that should have concerned every Tasmanian. The Fiscal Sustainability Report, prepared by Treasury itself, delivered a finding that demands urgent attention: Tasmania’s public finances are projected to rapidly deteriorate, and without immediate action, the problem will move beyond the reach of any reasonable policy response within a decade.
Less than two weeks later, the Premier delivered his State of the State address. The Fiscal Sustainability Report was not mentioned once.
That silence tells us something important about the political challenge we face. And it tells us why we need a fundamentally different approach to solving it.
The numbers are not abstract. If we do nothing, General Government Net Debt alone could grow from $4 billion today to $129.5 billion by 2039-40. Add Government Business Enterprises, and total public sector debt could reach $146.3 billion. Interest payments are already forecast to reach $700 million per year by 2028-29 – nearly triple the worst-case projection from the 2021 FSR for the same period. These are the fiscal inheritance we are building for our children.
Treasury is clear about what is required: a mix of reduced operating expenditure, lower capital expenditure, and increased state taxation revenue. Not one lever alone. All three. This is the first time Treasury has been so direct about the need for revenue measures, and it deserves to be heard.
The Treasurer described this report as evidence that the economy and budget is “manageable” and spoke of a “glide path to sustainability.” We should compare that with Treasury’s own words: immediate and sustained action is needed. Those are not compatible descriptions of the same document.
This disconnect is not new. I have been raising these warnings since 2014. The 2016, 2019, and 2021 FSRs all pointed in the same direction. The 2021 report’s worst-case scenario had net debt reaching $20.4 billion by 2034-35. We are now tracking worse than that. Saul Eslake’s 2024 independent review said the same. The Pre-Election Financial Outlook in June 2025 said the same.
We are not short of warnings. We are short of the political will to respond to them.
The problem is structural. Fiscal repair, especially repair involving both spending discipline and revenue reform, is politically challenging. Governments that raise taxes lose votes. Oppositions that support difficult spending decisions become targets. The incentive structure of our political system pushes all parties toward the comfortable middle: acknowledging the problem in general terms while avoiding the specific decisions that would actually address it. Each year of inaction makes the reckoning larger. The five-year repair path requires cumulative correction of $3.3 billion. Wait fifteen years and it reaches $11.3 billion – equivalent to 43 per cent of projected expenditure on government services.
As we consider how to respond, it is important to begin from honesty rather than deflection. There will always be external pressures to point to: global economic uncertainty, geopolitical instability, the prospect of an international downturn. These risks are real. But they must not become a convenient explanation for inaction, nor a substitute for confronting the decisions already before us. Tasmania’s fiscal challenge did not arrive suddenly from beyond our borders, and it will not be solved by waiting for circumstances elsewhere to improve.
Nor can responsibility be credibly shifted to others. While federal-state relations matter, Tasmania’s fiscal position is largely the product of choices made here over many years. Repeated warnings were issued. The trajectory was well understood. Action was deferred. Any serious response must begin by acknowledging this reality without blame or recrimination – accepting collective responsibility for where we are, and engaging the community in determining how we move forward.
This is precisely why I am calling for a properly constructed, professionally facilitated citizens’ assembly – a deliberative process that brings everyday Tasmanians into the heart of this conversation. Citizens’ assemblies have been used successfully in Ireland, the United Kingdom, Canada, and increasingly in Australia to work through complex, contested questions that political institutions struggle to resolve. Participants receive expert briefings, hear competing perspectives, and work through choices and/or trade-offs in a structured environment – consistently producing courageous recommendations that conventional politics cannot deliver.
The challenge we face is not technical. Treasury knows what needs to happen. The challenge is political: how do we build the shared understanding and commitment that makes action possible and durable? A citizens’ assembly cannot substitute for parliamentary decision-making, but it can change the political environment in which those decisions are made – building the community mandate and cross-party consensus that repair at this scale demands.
I say this with personal investment. After last year’s election, I agreed to serve as Treasurer if Labor formed government. That didn’t happen, but my commitment reflected a genuine willingness to put my name and record on the line, out of my passion for Tasmania, to address the fiscal crisis I have been warning about for over a decade. Real leadership is what this challenge requires.
The debt we are accumulating today is being accumulated in the name of young Tasmanians – our children and grandchildren. The $700 million annual interest bill projected for 2028-29 is money that cannot be spent on the schools, hospitals, and infrastructure they need.
The FSR says the challenge is large but not insurmountable. Achievable, however, is not the same as automatic. It requires honesty about the scale of the problem, about all available options including revenue, and about the need for genuine partnership with the community in finding a way through. Only by starting from that clear-eyed understanding can we build solutions that command public confidence and endure beyond a single political cycle.
A citizens’ assembly is not a delay tactic. It is a way of making better decisions – ones that carry democratic weight and can endure beyond election cycles.
Tasmania’s finances are too important to be left to politics as usual. Our people deserve better. And they are capable of rising to the challenge, if we trust them with the truth.