The Premier released his long awaited Fiscal Strategy yesterday.

If credit ratings agencies stumble on a copy we’re bound to be downgraded. It doesn’t comply with the Act.

There are no targets for each of the next four years as required. Only a cut and paste of recycled motherhood statements and objectives plagiarised from Saul Eslake’s Report into State Finances.

Objectives, laudable in that many reflect expert advice of Mr Eslake, however sadly lacking due to any evidence of the means to achieve them.

At a time of crisis Tasmanian are being treated with disdain.

One of the objectives relates to “…….returning the General Government Sector net operating balance to an underlying surplus within four years and achieving an overall fiscal surplus over the following six years”.

An underlying operating surplus excludes all the capital grants from the Australian Government. The now discarded 2025/26 Budget planned to generate an underlying operating deficit of $582 million in 4 years’ time. The Premier now plans to trim at least $582 million from operating expenses ‘cos he’s determined not to raise any more revenue. How exactly will he do that? Borrow Elon Musk’s chain saw?

The Premier then plans to achieve a fiscal surplus in a further six years’ time, in 10 years’ time in other words. This shows a complete lack of understanding. He seems to have overlooked that if the underlying operating figure is in surplus, then so too will the fiscal balance. So, he won’t have to wait another six years. This is because the operating surplus figure includes depreciation so if you exclude capex grants to calculate an underlying balance and then exclude depreciation, so even when the total capex spend is added to derive a fiscal balance figure it will almost certainly be an improvement on the underlying surplus figure.

This is certainly the case for all years included in the now abandoned 2025/26 Budget. It will aways be so, unless capex spending is much greater than depreciation which is unlikely given current cash constraints.

It may all sound a bit esoteric but clearly the Premier wasn’t the least bit concerned if what he tendered as a Fiscal Strategy was intended to make any sense or was to be even remotely achievable.

How can one claim to have a 2030 Strong Plan with such a confusing set of unachievable objectives being presented and absolutely no plan or semblance of description as to how the strategy will be achieved.

Just one more thing on budget balances. Even if there is a fiscal surplus, because equity contributions aren’t included, debt of the general government could still be growing because of equity top ups needed by government businesses. We know this is something that is likely to continue and possibly increase with government businesses such as TTLine facing real financial challenges.

Furthermore, even if government businesses aren’t receiving equity top-ups/equity transfers they might be borrowing themselves meaning overall State debt will still be rising. It’s true the Fiscal Strategy doesn’t have to specifically address debt by government businesses, but because government businesses comprise such a large part of the general government’s net assets they shouldn’t be ignored.

The other matter of fundamental concern is the increasing amounts devoted to debt servicing which simply reduces amounts available to fund government services - that is services such as the delivery of health care, education, public safely, justice, community services, etc. Debt in this case includes interest plus amounts to fund defined benefit super payments, which are de facto debt amounts because governments of all political persuasions failed to set aside any super for defined benefit members over the past 30 years preferring instead to spend the amounts then and there and borrow down the track when the need arose. Which it is doing now at the rate of over $400 million per year and increasing, at least for the next eight or so years. The peak is expected to be around $500 million at which point all members will be retired and in receipt of pensions but gradually falling off their perches, which is the only way future debt servicing costs will fall given current policy settings.

The new Fiscal Strategy has an objective which covers debt servicing as a percentage of general government receipts. In five years’, time the percentage set by the Premier in his Fiscal Strategy is to be 7 per cent. Today as I write the percentage is already 7 per cent. The government’s aborted 2025/26 Budget estimated in 4 years’ time the figure will be 10.7 per cent. There’s no plan to increase revenue, but the Premier is now saying debt servicing as a percentage of receipts a year later, in 5 years from now, will be 7 per cent. It’s absurd. He’s making a mockery of his legal obligations set out in the Charter of Budget Responsibility Act 2007. I’m gobsmacked. The government has had access to treasury and treasury advice for 11 years and one would have thought developed some understanding of treasury matters, fiscal strategies and budget management and development, legal responsibilities under various legislation such as the Charter of Budget Responsibility Act and Financial Management Act and be in a position to deliver a compliant, meaningful, achievable fiscal strategy that complies with the

State’s own legislation.

There’s no plan.

Just a pot pourri of numbers hoping to pass the smell test.

They won’t.

As I search desperately to find protocols and procedures with which we can slowly build a framework for a sustainable fiscal future, I thought there were signs of hope if political parties presented strategies with objectives and targets over the next four years as required by an Act supported and passed by the Parliament which would give guidance as Tasmanians agonise who to vote for.

Alas it was not to be.