Legislative Council Thursday 15 October, 2020

Ms FORREST question to LEADER of the GOVERNMENT in the LEGISLATIVE COUNCIL, Mrs HISCUTT

The Charter of Budget Responsibility Act 2007 provides for the preparation and updating of a fiscal strategy statement. Sections 4 and 5(1) and (2) state:

4. Purpose of fiscal strategy statement

The purpose of a fiscal strategy statement is to –
(a) establish a benchmark for evaluating the Government's fiscal performance; and
(b) increase public awareness of the fiscal policies of the Government and Opposition parties.

5. Public announcement and tabling of Government's fiscal strategy statement
(1) The Treasurer is to publicly announce and table the first fiscal strategy statement for a particular Government at or before the time of the Government's first budget.
(2) If the Government wants to change its fiscal strategy statement, it may do so at any time by the Treasurer publicly announcing and tabling a new fiscal strategy statement.

With regard to the impact of COVID-19 on the State’s fiscal position:
1. Is the Treasurer intending to update the current fiscal strategy statement in light of the significant impact COVID-19 has had on the State’s fiscal sustainability and position?
a. If so, when is this likely to be tabled; and
b. If not, why is this not deemed necessary?

ANSWER:

• The impact of the COVID-19 pandemic on the Tasmanian community is unprecedented.

• The Government has worked with the Tasmanian community, Tasmanian businesses and other levels of Government to minimise the impact of the pandemic on the health and wellbeing of the Tasmanian community and the Tasmanian economy while also actively supporting its future recovery.

• During this difficult time the Government has been open and transparent about the financial and economic impact of the pandemic on the State through the publication of Economic and Fiscal Update Reports in May and August.

• Detailed information on the Government’s current assessment of the impact of the pandemic on the State Budget position will be provided in the 2020-21 Budget to be tabled in parliament on 12 November 2020.
• The 2020-21 Budget will include information on the action taken by the Government already in response to the pandemic and the further action being taken by the Government to support Tasmanians and the Tasmanian economy.

• It is important to recognise, however, that notwithstanding the significant work that has been undertaken to understand the impact of the pandemic on the State’s economy and finances, the full economic and financial impact of the pandemic remains highly uncertain and will not be known for some time.

• When first elected in 2014, the Government highlighted the importance of a Fiscal Strategy that was not subject to regular change but was focussed on long term principles and responsible financial management and that recognised that Tasmania’s economic and fiscal circumstances could change quickly and significantly.

• The occurrence and impact of the COVID 19 pandemic certainly reflects these circumstances.

• The Government also noted that a principles-based approach recognised that a government could legitimately depart from objectives in the short term in response to changing circumstances, as long as that departure was necessary, transparent and justifiable.

• Reflecting this strong focus on long-term fiscal principles, the Government acted to amend and extend the principles of strong financial management included in the Charter of Budget Responsibility Act.

• The focus of these amendments was on:
- improving the wellbeing of Tasmanians;
- improving services to Tasmanians;
- building a strong economy; and
- building a robust financial position.

• Given the Government’s well-established approach to its Fiscal Strategy and its principles focus, the Government does not consider it necessary to amend its Fiscal Strategy strategic actions at the present time.

• These strategic actions remain as important, if not more important, in the current environment as they were when they were first endorsed by the Government.

• These strategic actions provide a clear indication of the Government’s fiscal intent and focus.

• That said, as noted above, the full impact of the COVID-19 pandemic, from a social, economic and fiscal perspective, remains very uncertain.

• The Government will continue to consider the long-term requirements of the Tasmanian community and Budget position and, if considered necessary, will adapt its strategic actions to ensure that they reflect the Government’s ongoing commitment to strong financial management.