Legislative Council, Tuesday 26 May 2026
Ms. FORREST (Murchison) – Mr President, I want to begin by congratulating the Treasurer on his budget speech, not for fiscal content, which I will come to shortly, but for its literary opening. The Treasurer told this parliament: ‘as the good book reminds us, this is there is a season for most things’, and then he declared ‘a season for deficit budget and now is the season for balancing the books’. It’s a memorable phrase and I think the Good Book had considerably more to say about this budget than the Treasurer actually let on. Last Friday, after having read much of the budget papers, it became apparent to me this budget is like walking through an old mine site where every few steps you take you risk breaking your ankle as you stumble across past exploration drill holes and hidden mine shafts. The cost pressures are real, the efficiency measures demanded are real, and the absence of any coherent plan to reconcile the two or explain where the cuts will fall is very, very real. The Treasurer speaks of a dispensable backroom staff. I know for a fact that many in the backroom support those in the front rooms. If the backroom staff are dispensable, will the frontline staff absorb their work as well? I will return to this matter a bit later.
Before examining the Budget itself, I want to spend some time on the document that provides the most honest account of Tasmania’s fiscal position: Treasury’s Fiscal Sustainability Report 2026, released in February this year. Members will recall I tabled a PAC report last week following the committee’s assessment of the fiscal sustainability report. The fiscal sustainability report needs to be read alongside this Budget because together they reveal a tension the budget speech of the Treasurer does not acknowledge. So we look at the scale of the problem, the fiscal sustainability report is unambiguous; and I’ll quote from the report a number of times in my contribution. It says, Tasmania’s public finances have ‘worsened significantly since the previous FSR undertaken in 2021,’ and confirms that Tasmania’s fiscal position is ‘unsustainable’ and the budget’s structural problems will ‘rapidly deteriorate’ if it’s left unaddressed.
What it’s saying is, without corrective action, GFS net debt for the general government sector will grow from $4 billion in 2024-25 to $129.5 billion by 2039-40. Total non‑financial public sector debt, which is government-owned business sector, is projected to reach $146.3 billion dollars. Debt servicing costs would grow from 2 per cent of our revenue, to more than 50 per cent over 15 years. Within 15 years, Tasmania would be borrowing money simply to pay the interest on the existing debt.
Tasmania now has the lowest net-financial worth of any Australian state, when debt and unfunded superannuation liabilities are combined. I think that’s really important because if you’re going to compare apples with apples between this state and others, you need to look at the whole picture. A superannuation liability is not something to say, ‘Oh well, we won’t worry about that, that’ll be somewhere in the future.’ It’s real, it doesn’t go away, and it needs to be addressed.
The FSR delivered a blunt message, Tasmania has a structural deficit, persistent not cyclical. The state’s operating position is unsustainable and the government must take immediate material steps. It called for structural reform, credible savings, not tinkering. The FSR is explicit on three points, that this Budget directly contradicts or ignores. First, growing the economy will not fix the problem. Government revenues correlate poorly with economic growth. Tasmania’s major revenue sources, GST and Commonwealth grants, are largely outside the state’s control. The Treasurer’s opening comments about our economic strength are not wrong, but the FSR says it’s insufficient, it’s not enough.
Second, efficiencies alone are not good enough. The FSR states plainly, and again from the report itself,
Improvements to productivity, and the planning and delivery of services, can be beneficial, however, they are not sufficient on their own and will take time to have an effect. The repair task needs greater and more urgent action.
The entire revenue side of this Budget rests on efficiency. The FSR says that’s not enough.
Third, on the mix of measures, the FSR does not equivocate on this matter. It says, ‘A combination of revenue and expenditure measures will be required. No single class of intervention is likely to be sufficient to achieve peak debt.’ That sentence appears twice actually, in the executive summary. The conclusion chapter adds,
The size of the corrective action required to stabilise debt means that no one measure will be sufficient, rather it will require a combination of measures, and the longer they are delayed, the harder repair task will be.
On what happens if the combination is not applied, as we see in the budget papers here, it says, ‘In the absence of significant corrective budget measures to arrest the growth in debt, the State may reach a point where it is not able to return to a position of fiscal sustainability.’ That’s Treasury’s own language. Not the Treasurer’s, that’s the Treasury’s language, telling the government, in writing, 3 months before this Budget landed, that there exists a trajectory beyond which fiscal repair becomes structurally impossible. The FSR cites Tasmania’s own 1990s repair as a relevant precedent. That repair comprised targeted job reductions, service restructures, expenditure reductions and, critically, revenue raising measures. Tasmania has been here before and the instrument that worked included revenue measures. The Treasurer has ruled these out entirely, despite the FSR explicitly contradicting that position.
The FSR notes that Tasmania has relatively low car registration fees, mining royalties, property-based emergency service levies, and a high payroll tax threshold. The Budget addresses none of these except a fees and charges review buried in a single bullet point in budget paper 1, with what appears to be a $3 million figure attached to it, but no timeline and no expected outcome. The Treasurer did not even mention it in his speech to parliament. The good book of budgeting reporting, which I would suggest here is the FSR, is clearly not the one that Treasurer is relying on for inspiration.
The FSR modelled three repair scenarios: a five‑year path to peak debt, which requires $3.3 billion in cumulative correction and 25 per cent of projected expenditure on services, a 10‑year path requires $6.5 billion of cumulative corrective action, and 15 years requires $11.3 billion. What the government has committed to is peak debt by 2028‑29. A three-to-four-year scenario more aggressive than the FSR’s fastest model pathway, yet the Budget’s total savings across the forward Estimates only reach approximately $440 million by year four, a fraction of what the FSR’s own modelling requires. Either the savings assumptions are wrong, the peak debt target will be missed, or services will have to be cut far more severely than acknowledged, and possibly all three.
The FSR also warns that longer fiscal repair pathways increase the risk that the repair is detailed by a shock. Global bond market pressures from the Middle East conflict, fuel price uncertainty and Commonwealth grant risks are not hypothetical shocks. We need to be alert to them. Who knows what’s coming down the line next? The ones I just listed are live risks. The FSR says that any one of those we know about now could derail even the best constructive repair pathway and this pathway is not the best constructed. Maybe there’s a fourth, another Loaves & Fishes moment, perhaps.
I want to move now to what the policy and parameter statement (PPS) says and what it tells us. The PPS divides all changes into two categories. Policy changes are deliberate decisions of the government – new programs, election commitments, service expansions, operational efficiencies, machinery of government changes. They’re discretionary and they reflect political choice. Parameter changes are different. They are external or technical – commonwealth grants, GST pool movements, demand pressures, wage drift, inflation, indexation, unavoidable cost pressures, actuarial adjustments. They are not discretionary and they reflect an operational reality. Something you can’t avoid. The distinction is critical to understanding the 2026‑27 Budget because this year’s PPS tells two completely different stories.
When we look at what the PPS reveals on the revenue side, across the three forward Estimate years, total revenue increased by $1.97 billion compared to last year’s forward Estimates. That sounds like strength, but the composition of that increase is the whole story. This is the revenue side for the parameter adjustments. Commonwealth grants account for $1.16 billion of that growth. That’s a lot, more than 80 per cent. Specific purpose grants and national partnership payments alone count for $920 million. The overwhelming driver of Tasmania’s improved revenue position is Canberra, not anything the state government has done. I say this despite the constant criticism of the Australian Government by the Treasurer in his speech: blame anybody else but ourselves.
State taxes contribute approximately $200 million, and I note that this growth is driven primarily by conveyancing duty, a volatile, property‑market‑driven revenue source that the government cannot control, and that may not sustain itself across the forward Estimates with current cost of living and other global pressures. Lest anyone think that assessment is overstated, you need look no further than page 81 of budget paper 1 itself, where the budget acknowledges, in its own risk chapter, and I quote from budget paper 1, the Treasurer’s document, the good book, that:
Conveyance duty is particularly sensitive to a range of factors including interest rates, population growth and housing supply, which can result in volatility from year to year.
And that also a little bit further on:
Given uncertain economic conditions and the potential impacts on property transaction volumes and prices, the timing, direction and duration of conveyance duty changes is challenging to forecast.
Here we are; we’re relying on that for the big uptick, but Treasury’s telling us it’s a huge risk, we shouldn’t be relying on it. The same document which projects $200 million in revenue growth driven primarily by conveyancing duty, simultaneously the same document warns parliament that conveyancing duty is volatile, sensitive to interest rates and genuinely difficult to forecast. I have little faith, as I usually do, in the forward Estimates figures. That is the government’s own description of one of the two pillars holding up its revenue story. It’s not a stable foundation for a fiscal repair strategy. It is, by Treasury’s own account, an unpredictable one.
Agency own‑source revenue contributes $217 million, mostly driven by three agencies. This is the revenue that agencies pull in from various sources, Health, State Growth and DPFEM, or the police and emergency services: more than double last year’s equivalent figure, so they’re going to bring in almost double what they brought in last year in revenue. There are many questions that need to be asked of agencies to understand how the increases in agency revenue, including through fees, charges and internal revenue streams are being used to fill the gap. These are questions for Estimates; they will have to tell us how they’re going to fill the gap to make the numbers stack up.
It is worth pausing on this, the agencies that are now being told to shed staff and cut their back offices, or back rooms, as the Treasurer refers to them. These are the same people within the agencies that have been asked to look at how they can generate the strongest discretionary revenue growth in this budget. The back rooms the Treasurer describes as dispensable appear to have, in fact, been working. Well, someone will need to do it to improve the budget’s headline figures, so who do they think will do this work if they’re cut? These aren’t the people on the front line delivering the service, these people are in the back room trying to get the money from the private health funds in Health, and fees and charges.
GBE returns, according to the policy and parameter statement, are down $151 million. Hydro, TasNetworks, MAIB and TasPorts are all weaker in the policy and parameter statement over the years that are reported. The commercial arm of government is not contributing to repair; it is detracting from it. I note the claimed 2029-30 uplift in returns from Hydro does not appear. There aren’t 2029-30 figures in the policy and parameter statement, and I will say a bit more about that later, and probably next week as well. The revenue story in summary is this: this Budget is being held up by Canberra, conveyancing duty, and the effort of agencies to drag more money in from somewhere, not by the state’s own economic base, not by its government businesses, and emphatically not from any revenue reform.
Let’s look at what the policy and parameter statement says on the expense side. That was the revenue side; we will look at the expense side. What the PPS reveals on the expense side is this: total parameter expense changes – these are the changes that are outside the control of government – across the forward Estimates are $1.207 billion. These are the parameter expenses outside the government’s control: $1.21 billion. This figure is materially misleading unless it is further unpacked. Approximately $300 million of this is the reversal of last year’s productivity efficiency dividend in the 2027‑28 and 2028‑29 financial years. In the 2025‑26 budget, Treasury treated the productivity and efficiency dividend as assumed savings that would occur naturally through vacancy control, procurement tightening and administrative efficiencies within agencies; that’s why it wasn’t allocated. It’s sitting in finance general; it will happen somewhere, surely.
This year, Treasury has abandoned that assumption entirely and has allocated savings requirements across agencies as operational efficiencies. If you want to see them, they’re all in the policy and parameter statement. Every area has got them, some bigger than others. This is done at the very same time all agencies have a recognised, unavoidable administrative parameter adjustment. These are the unavoidable increases in costs. If you look at the policy and parameter statement, on the expense side you have the operational efficiencies, and on the parameter side you have the adjustments that can’t be avoided, they just can’t be cut. They cross both sides. They’re being asked to save money while also recognising that they just can’t say this.
Treasury is acknowledging, in the structure of the policy and parameter statement, that the savings included in last year’s budget were not organic or parameter changes; they were imposed. They did not materialise as expected and now they must be deliberately and explicitly reimposed. Once you’ve set that reversal of $300 million of the productivity efficiency dividend side, the remaining parameter expense growth is approximately $900 million. This is how much extra that is just unavoidable costs across our agencies, and it’s almost entirely driven by $920 million in additional Commonwealth specific‑purpose payments and national partnership payments. The Commonwealth gives more and the state must pay more to match. We know that most Commonwealth funding comes with a requirement to put some in ourselves.
Here is what is absent: there is almost no recognition of real state cost pressures in the parameter figures, the cost pressures that agencies actually face; the gap between 2.5 per cent wage indexation and no enterprise agreement outcomes; the gap between 2 per cent of non‑salary indexation and actual inflation; the Tasmanian Risk Management Fund shortfall; the leave liabilities; they don’t appear as parameters. They were either assumed away or left to the agencies to absorb. I will come to these more fully in a moment, because these make the figures even more rubbery.
Another matter that is not considered for inclusion in the policy and parameter statement is the cost of staff separations. Staff separations cost money, even if it’s a voluntary redundancy. The budget appears to make no provision for the costs associated with the separation of possibly 1800, or thereabouts, people: staff the government says it needs to let go. Staff separation is not a neutral cost. The cost will depend on when the staff leave and the years of service, even when they’re voluntary redundancies. I will be asking the Treasurer next week about what modelling has been done on the cost of these separations. Without a provision in the Budget, an agency making, say, a $2 million saving in 2026-27 by reducing staff and reducing salaries, must then also generate payouts associated with those separations. Even with a minimum payout, the cost of advice and other costs associated with separations, there will be little to no savings to be found in the first 12 months, and this presumes that most of the separations occur at the beginning of July this year, otherwise you can’t, because it just goes on.
This is a further hidden impost for agencies cutting staff and the expected agency savings to be made through operational efficiencies, with no apparent funding support for the decision. Agencies cutting staff will have to make an even greater saving or potentially cut even more staff to make their savings. For long‑serving staff who seek a voluntary redundancy, they may receive up to 48 weeks pay: that’s a year. They will get a year of pay, so this would guarantee no savings in the first year, and that also assumes that these staff leave on 1 July. So at the same time agencies may be making savings by reducing staff, and thus reducing the salary cost, they will need to find money to generate the separation payout for those staff, with no obvious source of funding or mechanism to achieve the agency savings that are baked into the budget. That’s what the numbers rely on, but there’s no funding for it, or they’re going have to cut far more staff. Does anyone seriously think this is achievable? It won’t all be long‑term staff that leave, I acknowledge that, but it still costs money.
Before the Treasurer even arrived at imposing his operational efficiencies, the policy and parameter statement shows that expense policy changes increase spending by $1.068 billion across the three forward Estimates years, and $1.433 billion if the fourth year is included. This is the scale of the policy cost reduction problem that the Treasurer faced. Election commitments are still hitting the books, with the increased costs, previously announced policies materialising, new initiatives scattered across agencies: $1 billion in new policy spending. That’s what that is, there’s $1 billion in new policy spending and no policy revenue to offset it. That is the context in which the efficiency task must be understood. It is not primarily about fiscal repair; it’s about neutralising a policy blow‑out that the government has created through its own choices over the last 10 years, 12 years.
When the Treasurer faced a $1 billion policy cost problem, parameter expenses dominated by tied Commonwealth grants, wage and indexation assumptions he knew were understated, and a commitment to no new taxes, he had only one lever available: that’s described in the budget papers as ‘operational efficiencies’. The policy and parameter statement shows what he reached for: $210.9 million in efficiencies in 2026‑27; $353.8 million in 2027‑28; $409.7 million in 2028‑29; and $429.6 million in 2029‑30. I want to be clear about what those numbers are and what they’re not: they are not identified savings; they are not attached to program, functions or service lines; they are not operational plans; they are not the product of service redesign or productivity analysis. They are the numbers required to make the bottom line appear consistent with the government’s fiscal targets. Because they are imposed rather than organic, they must be classified in the policy and parameter statements as policies, not parameters, and that’s why they’re under the policy section.
This is the budget’s central truth, and the policy and parameter statement reveals it plainly. The pressures are real, they’re there; the savings are invented. The parameter side of the policy and parameter statement shows genuine, unavoidable cost growth. The policy side shows a savings task reverse‑engineered from a desired fiscal outcome, imposed on agencies without a plan, and classified as deliberate government policy because there is no other honest way to classify it.
I want to give us a little brief illustration, to lighten the mood for a minute, of what this means in practice: imagine a hospital, busy, under pressure, with rising demand and exhausted staff. One morning, two visitors arrive. The first is the Treasury nurse. She reviews the charts. ‘You’re in trouble. Demand is rising, costs are rising, case load is rising. Here is a bunch of funding, some parameter adjustments for the unavoidable cost pressures of your work. Here’s the money we know you need.’ The hospital breathes a sigh of relief. Finally, someone understands. Then the second visitor bursts through the doors, wearing a suit two sizes too small and carrying a calculator. ‘Good news! I’m here to take a large sum out of your budget. These are the operational efficiencies, also unavoidable.’ The hospital says, ‘How can both be unavoidable? How can I need more funding because demand is rising and less funding because the budget needs a bottom line? Is there a plan?’
‘I am the plan,’ the second visitor in the tight suit boldly announces. The Treasury nurse quietly says, ‘He’s not the plan, he’s just a number the Treasurer typed into a spreadsheet.’ This is what is described in the policy and parameters statement. This is what’s happening. The need that’s unavoidable has been recognised, but still, you have to save all of this money, because we need to make the books balance. The funding for cost pressures is real. The efficiency task is imposed to offset; it is not grounded in operational reality. The agencies caught between the two will absorb the difference through deferred maintenance, unfilled vacancies and the quiet erosion of services, or, more than likely, in reality: it just won’t be achieved.
The people who will feel it most are the Tasmanians who rely on these services every day. The policy and parameters statement divides all changes into two categories: policy changes are deliberate decisions of government, new programs, as I said, election commitments, service expansions, operational efficiencies. They’re discretionary and they reflect political choice. The parameter changes are different. They are external or technical, things like the Commonwealth grants, GST pool movements, demand pressures, wage drift, inflation and indexation. These are unavoidable cost pressures. They are actuarial adjustments. They’re not discretionary; they reflect the operational reality. The distinction is critical to understanding the 2026‑27 Budget, because this year’s policy and parameter statement tells two completely different stories from the rhetoric around the budget.
To move on, the savings task grows – and we will look at how it will all work – by more than $440 million by year four, with no framework; no implementation plan; no agency breakdown; no milestone structure; and no accountability mechanism of parliament to track delivery. Obviously, these things will be followed up next week, but that’s what we’re looking at right now. Had this House supported it, the proposed budget accountability and oversight committee would have provided quarter‑by‑quarter transparency in what this task requires. Instead, we will now have to rely on fiscal faith.
Before I leave the matter of targets or where we need to get to, I want to update the record on the pattern I’ve spoken about over previous budget replies. Previously I’ve noted that between 2020‑21 and 2024‑25, the government had projected a net operating balance surplus on 13 occasions. This is prior to the Liberal Party taking government, obviously, but this is the history, this is the pattern. The government had projected a net operating balance surplus on 13 occasions and failed to deliver one. Including the 2025‑26 estimated outcome, now available, that figure has risen to 16: so, 16 times we’ve been promised, 16 times the government has failed;16 occasions across budget and revised estimate reports on which the Tasmanian people were told a surplus was coming; yet 16 times a deficit was delivered instead of a surplus. Not one surplus, not one. The government has zero credibility in this space even before we begin examining what is now being proposed. A sceptic once defined faith for me, believing in something you know to be untrue. I’m beginning to believe he may be correct.
I want to spend a brief time on chapter three of budget paper number one, the fiscal strategy, because it deserves acknowledgement alongside scrutiny. I say this genuinely, it is good to see a greater focus on the fiscal strategy framework. However, unless they have meaningful measures that make sense to everyone, are we actually achieving the targets or even meaningfully heading toward them. Because if it’s not clear, they’re meaningless.
That said, a strategy is only as credible as its assumptions, and when you read chapter three alongside everything else I’ve observed in the budget papers, the strategy’s credibility raises a serious question. The fiscal strategy projects that the government will achieve its net operating balance surplus target and reach peak general government sector debt by 2028-29. That projection relies on a chain of assumptions all holding simultaneously.
For that to be achieved, these things all have to happen simultaneously. GBE dividends recovering sharply from a low base. Commonwealth grants flowing as projected, and we know, we heard from Saul this morning, that’s not always the case and we know that from reality. Efficiency savings of more than $400 million being delivered on time and in full. Wage outcome staying at or below a 2.5 per cent index cap, that’s not even a reality now. Non salary costs inflating at 2 per cent. No significant fiscal shocks materialising. And the no worse off GST guarantee remaining in place through 2029-30.
Some of these things are outside our control. As I’ve demonstrated at length, each of these assumptions is under serious question. The probability of all of them holding up simultaneously is not high. I draw members attention to the fact that almost all measures in the fiscal strategy are still heading in the wrong direction.
Even in chart 3.8 on budget paper number one, which projects general government sector purchases and non financial assets and depreciation projected to almost converge. Meaning that we will not be spending much more on maintaining and updating or building new infrastructure than the rate of depreciation. That’s not a good place to be in.
There are several specific features of the new fiscal strategy that also warrants attention. The new target measuring employee expenses as a percentage of total revenue in table 3.7 is set at 44 per cent. What the accompanying chart reveals is that this target was already met in 2026-27 and then on the basis of the saving assumptions, keeps falling to levels not seen since 2011-12.
This invites the obvious question, if the employee expense target is being met from next year, why is the government simultaneously arguing that thousands more positions need to be cut across the forward Estimates. The chart undermines its own narrative.
The annual growth and the operating expenses chart, chart 3.7 is equally revealing, it shows a sharp decline in expenditure over the next two years. Two years dominated by the invented savings task, but then, in the following two years, the growth in operating expenditure increases significantly, returning to precisely this problem zone where expenditure growth matches or exceeds average revenue growth.
If nothing structural changes and nothing in this budget structurally changes it, the chart is telling us that by 2030-31 the government will face exactly the same problem it has today. The fiscal strategy contains within its own charts the evidence that the repair is temporary, not structural.
We’ve been here before, I have spoken previously about this and noted previously adopted government fiscal strategies comprising 11 strategic actions and targets. All but one or two of those targets were well outside the reach of the target and there was absolutely no plan for fixing them. Whilst there’s been a review, a new shiny fiscal strategy to some extent, but I don’t see the measurability much improved. So Mr President, even though we have a revised fiscal strategy, the so-called plan doesn’t really line up with the expectation.
In recent years, almost all key indicators have gone the opposite direction. Between 2020-21 and 2024-25, the government produced estimates on 13 occasions showing net operating surplus will be achieved. Not one was actually achieved, not one, and here we’re going to get it in a couple of years.
The pattern has become so well established, and time will tell, I guess but I cannot see from the available information, despite most measures still heading in the wrong direction, that we will see any real improvement next year. As I said, time and a lot of good luck will possibly tell.
I’m not saying the fiscal strategy of this budget is wrong, I’m not saying that at all. I’m saying the strategy which it requires everything to go right, in a fiscal environment where almost nothing has gone right for five years, and which relies on savings that the policy and parameter statement reveals were invented rather than identified. It deserves to be true with far more scepticism than the budget speech invites.
The Fiscal Sustainability report made this point with precision. It noted that credible repair pathways are those that reach peak debt within 5 to 10 years, and the longer the pathway, the greater risk of derailment by a shock. It also warned that scenarios that work, are those that combine revenue and expenditure measures. This strategy relies on expenditure alone.
As a final aside, the policy and premise statement points out how $100,000 has been allocated to provide an independent review of the fiscal strategy each year. Something, I might add, would have been welcome as funding for the budget academy and oversight committee, if only we got that up. But then in the next breath, Treasury are told operational efficiencies of $100,000 will have to be found to outsource the work the Treasury should be doing themselves but find themselves less able to do because the government keeps outsourcing what they should be doing.
Is this because an outside consultant may be more likely to give a favourable tick to what the government is doing? Treasury didn’t give a favourable tick in the FSR or the models they give a favourable tick for what they’re not doing perhaps, but it may be more accurate.
Consultants have been known to give favourable reports so as to increase their chances of retaining the job. Governments have a history of ignoring internal reports, like the Fiscal Sustainability Report if they find them uncomfortable.
There is one further accountability matter I want to place on the record. In the record in the 2014-15 budget, delivered by this same Liberal government in its first term, Treasury was required to prepare quarterly public reports on the implementation and progress of savings measures, including that budget. These reports were published on the Treasury website and continued for approximately two years. New governments want to blame everything on the old government, just put it out there. They’re no longer there, Mr President, they’ve been removed. The government was happy to publish progress reports, what was trying to pin the savings task on the Labor and the Greens. It appeared far less enthusiastic about doing so when the savings task is its own.
And the contrast with 2014 is worth dwelling on. When the Liberal government took office in March 2014, it delivered a first budget in August of the same year that included a whole chapter on agency-by-agency savings, identified measures, and implementation mechanisms. By October 2014, five months after the election, the then treasurer was making a ministerial statement to the House detailing progress, confirming the savings implementation was underway and announcing the government’s response to the failure of the wages freeze.
As of 30 June 2014, general government sector net debt was a was negative $208 million and the net operating deficit balance deficit was $165 million, 3.4 per cent of revenue.
Today, general government sector net debt is an estimated $6.8 billion as opposed to a negative $208 million, and a net operating balance deficit for 2025-26 is approximately $923 million, up from $165 million. At around 9.5 per cent of revenue as opposed to 3.4 per cent of revenue. The fiscal position is incomparably worse than when the Liberal Party came to government here. If the government is now telling us that it will take just three budgets, just three – 2025‑26, 2026‑27 and 2027‑28 ‑ before any substantive understanding of the repair strategy will be available, with many agency actions describing the budget repairs as to be determined beyond 2026‑27. Doesn’t sound like a plan to me. In 2014, with a dramatically smaller population, there was a plan and a public accountability mechanism within months. In 2026, with the dramatically larger problem, parliament is now being told to wait. How can we actually believe anything here?
I note the new April 2026 State Service Management Office document titled Managing Positions in the State Sector. In terms of transparency and accountability, I call on the government to publicly release the reports that are required under this report. These reports should be made public with information that could identify individuals redacted. But they’re required to report against this. There’s a new document that’s been produced in DPAC, by SSMO, and they should be releasing those reports. That’s a matter for Committee B to take up with the Premier, but I will also be taking it up with the Treasurer. This is the minimum expectation on public reporting on savings, implementation targets and achievements, and it should also include a comprehensive update in the revised estimates report that allows parliament to assess progress before the 2027‑28 budget is handed down. That’s the minimum requirement, absolute minimum requirement. I genuinely hope we do see improvement in the next budget, cause by gosh we need to, but hope is not a fiscal strategy and the numbers before us today that we see here, the trajectory is more likely to deteriorate than to improve.
The Treasurer’s complaints against the Canberra and the Commonwealth government are sometimes justified. Health underfunding through the National Health Reform Agreement is a genuine grievance. I agree. I don’t dispute that. NDIS cost shifting risks are real, and I’m sure the minister is well aware of that. The 66 per cent dependency on Commonwealth revenue is a genuine structural vulnerability, but the specific complaint the Treasurer makes most emphatically, the 2018 changes to the GST distribution require scrutiny of his own role. He told parliament those changes and, in his own words, undermined horizontal fiscal equalisation and created a two-tier federation. That’s right. I agree with him. It’s exactly what it did. In 2018, he was a senator for Tasmania, sitting in the government of the federal parliament that passed them. It was his government that did this. It was supported by the opposition federal Labor Party at the time too, but he was in government. Tasmanian Liberal senators initially stated that they were united in opposition to any change that would disadvantage Tasmania. That opposition did not hold. The legislation was passed with their support. Now, I acknowledge the pressures of party discipline, and I acknowledge the Treasurer is now fighting the right battle, but honesty about how we arrive is a precondition for credible advocacy about where we need to go. We do need to get back to full horizontal fiscal equalisation. I’m not sure we’re going to get there. The no worse off guarantee expires in 2029‑30, the very year that this budget projects fiscal stabilisation. If it lapses without full horizontal fiscal equalisation being restored, the budget’s own projections completely unravel. The Treasurer has my support in the campaign for restoration, but it will be more credible with the frank account of the political history, including the role of the party that now leads it.
I now want to turn to the issue of wages funding, because it goes to another issue in the heart of the budget’s credibility. Budget paper 1, page 86, states that a 1 per cent point increase in wages above the 2.5 per cent indexation rate could increase costs by up to $470 million across the forward Estimates. Last year, the same scenario was costed at $250 million. The new figure appears materially overstated, but for the moment I’ll use Treasury’s own number to illustrate the real position facing agencies.
The Budget funds wages at 2.5 per cent. Known enterprise agreement outcomes, already accepted by unions and proceeding to registration, are running at 3 per cent or more in headline terms. That means the Budget is already 0.5 per cent short of what agencies will actually have to pay. If Treasury’s own sensitivity figure is applied, that 0.5 per cent gap equates to $235 million in unfunded wage costs across the forward Estimates. Agencies are told to absorb that gap, I don’t know how, through internal savings, service reprioritisation and workforce adjustments. In plain language, cut more staff. On average, the employment cost of that shortfall translates to about 400‑500 additional positions that will need to be removed simply to make the budget numbers add up. That’s an additional 400‑500 jobs, not because of any deliberate workforce strategy, but because the wage index assumption does not reflect reality. These agreements have already been passed and agreed to.
And here is the critical point. The inflated sensitivity figure actually understates how few job losses are required to achieve the government’s preferred bottom line because the real underfunding comes from the 2.5 per cent wage cap, not the hypothetical future wage drift. The workforce contraction is already baked into the base. The sensitivity assumption detracts from that fact. It shifts attention to the hypothetical risk, while obscuring the real and immediate pressure on agency budgets.
There is also a striking inconsistency. The same budget assumes 3.5 per cent wage growth for the purposes of calculating the defined benefit superannuation liability, yet funds agencies at 2.5 per cent. Treasury tells the actuary one thing, 3.5 per cent wage growth, and tells the agencies another, 2.5 per cent wage growth. The result is a hidden impost that agencies must find from their so-called back office or backroom on top of the operational efficiency targets already imposed. This is not a technical matter, it’s a structural underfunding of wages that forces job losses, undermines service delivery and makes operational efficiency, even the task of that, even more unrealistic.
Then we look at the non‑salary indexation, this is capped at 2 per cent. The Budget’s own in economic chapter projects CPI at 4.5 per cent in the near term, moderating to 3.5 per cent, a structural inconsistency within the same document. Police, ambulance and fire services still need to put fuel in their vehicles. Hospitals must still pay electricity bills and the ever‑increasing costs related to supplies and consumables. Courts still have to heat their buildings. These are not discretionary costs. A 2 per cent cap on the non‑salary indexation – these are the things you have to buy and pay for to deliver your services – does not reduce the cost increases agencies have to meet. This means that agencies must identify further savings to keep the same level of service. Savings made by further reductions in staff, deferred maintenance, reduced consumables – maybe going to reuse some more stuff – and the further erosion of service capacity that never makes it into any ministerial statement.
I’m sure if the Treasurer looked closely at his good book, he might find that honesty and integrity are not seasonal. An open and transparent government would be upfront with the Tasmanian community and identify where and how these hidden savings measures will impact on the services agencies provide.
We’re told that 438 public servants have volunteered 735 ideas. That’s admirable, but ideas are not separations. If the headcount reductions required across the forward Estimates can’t be met through voluntary separations, they will require compulsory redundancies. Regardless of whether they are voluntary or compulsory, redundancies impose costs on agencies, including separation entitlements, as I said earlier, of up to 48 weeks pay, costs for legal and taxation advice and transition support. You can’t push someone out the door without providing that sort of support for them.
Industrial consequences also need to be managed. None of this appears to be costed or funded in the Budget. Any significant workforce reduction will also crystallise leave liabilities – annual leave, long-service leave, and other recruit entitlements paid out in separation – all unfunded. And it assumes they leave on 1 July. Machinery government changes carry productivity transition costs that the fiscal sustainability report warned are real even when unquantifiable. The Treasurer acknowledged transition challenges and upfront costs in his speech, but where are they in the numbers?
To move on to Homes Tasmania. Homes Tasmania’s debt sits outside the general government sector. The government’s peak debt target of 2028‑29 is a general government sector measure. Homes Tasmania’s borrowings, projected to reach $720 million in June 2028, are not captured in it. That’s a bit of a gap. The government has included efficiency savings from the Homes Tasmania amalgamation in the forward Estimates, while leaving the amalgamated entity’s debt off the ledger. You cannot take credit for the savings of a consolidation while excluding its liabilities. You can’t take the asset without the liability in this case. You just can’t do it. That’s not budget repair. Some may say it’s a bit of creative accounting, but it leaves a big gap. A big hole.
Large savings figures are attached to the establishment of Building Tasmania and the Tourism Events and Creative Tasmania entities across the forward Estimates. What is absent is any explanation of which functions will be reduced, which positions will be cut or which services will change. The savings have been included in the Budget. The basis for them has not. The fiscal sustainability report warned that effective repair requires knowing what you’re actually going to do. The Budget does not meet that standard.
Let’s look at the Tasmanian Risk Management Fund shortfall. There’s $74.7 million not in the Budget. The $183 million in the 2025‑26 Budget, the gap between the Tasmania Risk Management Fund’s assets and liabilities for personal injury in particular, has deteriorated to a shortfall of $74.7 million at June 2026. That shortfall is not in the Budget. Another gap. How it will be funded is unknown. Will it be funded centrally? Will we see another top‑up? From where? Will it be attributed to the agencies absorbing this $74.7 million into their savings on top of everything else? Either way, it’s a real cost and it’s not included in the budget papers.
We look at the Service Tasmanian transaction fees. Buried on page 116 of budget paper 1 is a plan for Service Tasmania to introduce a transaction fee from 2027‑28, raising $3 million per annum. The budget doesn’t say who pays for it, but I think we know who pays for it. Given Service Tasmania is the unavoidable channel for licence renewals, registrations and a whole range of government’s transactions, the answer is Tasmanians will pay for it. This is not called a tax, it does not appear in the Treasurer’s revenue measures, but a fee paid by Tasmanians to access their own government is a charge on Tasmanians, whatever name you apply to it.
I think there may be a little error as well. I’m sure the former member for Huon would have picked it up if he was here. On page 164 of budget paper 1 it states that the Commonwealth will a make $113 million equity contribution to TasPorts. The Commonwealth cannot hold equity in TasPorts. It is a Tasmanian government-owned corporation. If this is not an equity contribution in the conventional sense, parliament is owed an explanation of what it actually is. One assumes it’s probably a grant, a loan, a payment for an asset or something. No explanation is provided. It’s most likely an error. In the way of support, I’m sure the minister’s noting that down right now, page 164, budget paper 1.
We look at GBE dividends and some of the optimistic assumptions. The Budget projects significantly increased Hydro Tasmania dividends based on based on improved Basslink access, an anticipated coal exit from the National Electricity Market (NEM) –
Sitting suspended from 1.00 p. m. to 2.30 p.m
Resumed from above
Ms FORREST (Murchison) – Before the lunch break, I started speaking about the falling dividends and somewhat optimistic assumptions associated with some of our government owned businesses. I will repeat what I said so that it’s in context to recommence.
The budget projects significantly increased Hydro Tasmanian dividends based on improved Basslink access, anticipated coal exit from the National Electricity Market, and from 2028‑29 stronger wholesale market conditions. Each of those assumptions is contestable. The Auditor-General’s November 2025 report recorded Hydro Tasmania’s underlying profit at $3.09 million in 2024‑25, down from $189.77 million in the prior year, a 98 per cent collapse. The budget projects a sharp recovery. If any of the coal exit, wholesale price or water storage assumptions do not materialise as projected, the dividend revenue underpinning the fiscal aggregates will just not be there, and Parliament should be told that clearly. It’s like everything relies on everything going perfectly to even have a shot. The income tax equivalence from Hydro in 2029‑30 of $155 million implies underlying profits from Hydro that year $515 million with a regulated Basslink operating when Hydro receives the Tasmanian regulated price for all its electricity, including all the high-priced electricity supposedly sold into the Victorian market when coal closes. That’s a huge turn around: $515 million profit from a $3 million profit in 2024‑25. This is the volatility of the climatic conditions that Hydro operates in.
It’s also important to remember this, that the high prices in that volatile period, which no doubt will occur when coal comes off, aren’t received directly by Hydro. Contrary to what the minister would like us to believe, they are paid into an interstate trading pool, which I was asking the minister about in question time today, which Hydro has to bid for the pool at auction. I wonder if the minister will be able to tell us what part of Hydro’s 2029‑30 profits come from the interregional revenue pool? And how much Hydro expects to pay at auction to gain access to the pool funds? As you actually have to pay to gain access. Obviously, these are questions that can be further explored next week, but it must be in Hydro’s business plan. If it’s in the budget papers, it must be in their business plan, surely, which I understand the minister received in March this year. We deserve to know and we would like to understand the situation before the $470 million from Marinus each year starts arriving, because we’ve been told after Marinus starts there’s going to be $470 million in returns annually from Hydro. Again, if that’s not right, the minister needs to tell us. Hopefully, he will tell me tomorrow and all of us. If that’s true will our coffers actually be large enough to take it all, I think there’ll be plenty of holes to fill. so we will probably be alright.
I want to move on to another matter which is about commitments of government and whether we can take the government at its word. When the Legislative Council voted on the Macquarie Point Stadium in December, the government secured the then Member for Huon’s vote through Premier-signed commitments including a $500 million Public Non-Financial Corporation debt reduction. That’s a debt reduction from our government businesses, and revenue measures to be public before this budget. I’m not going to go through the whole lot, but these are the ones I want to focus on. This budget apparently is that public accountability. On the commitment of $500 million to be removed or reduced from the PNFC debt, page 73 of budget paper 1 states that this target of $500 million has been achieved, and I quote from the budget paper:
… through the removal of debt funding for Hydro Tasmania’s Cethana project…
That project, the budget paper now acknowledged, and I quote again:
… has not yet progressed to a level of design maturity or preparatory work sufficient to warrant an inclusion in the budget at this time.
Was it ever there? The Fiscal Sustainability Report published just three months earlier said the same thing. Cethana had neither reached a final investment decision nor formal procurement, with timing and cashflows insufficiently certain to project. The $500 million commitment has been met by not retiring debt, but by removing a budget line in the government’s own Treasury had flagged as inappropriate to include. On what basis was it included in the first place, and is its removal genuinely a $500 million improvement of the state’s fiscal position, or the correction of a projection that should never have been there? It’s truly an extraordinary way to meet the genuine – well, what I believe the former member for Huon took as a genuine commitment to reduce the PNFC debt by $500 million.
I’ve examined this matter carefully to understand whether the Cethana project was actually in the 2025-26 Budget in the first place, and perversely, the answer is yes, but not in the way you would expect; and that’s precisely the problem. Cethana did not appear in the 2025‑26 Budget as a named project with specific appropriation, in the way that the Tarraleah project, for example, did. What it appears in is Hydro’s aggregate projected borrowings in the outer years of the 2025-26 forward Estimates, specifically 2027-28 and 2028-29, not this financial year. Either way, it doesn’t meet that commitment. We know this because the 2026-27 budget paper 1 describes the removal of Cethana debt being from 2027-28 onwards. That phrase tells you exactly where it’s at.
Here is the question that I believe the parliament deserves an answer to: on what basis was Cethana embedded in Hydro Tasmania’s borrowing projections in the 2025-26 forward Estimates, given that the government’s own Treasury, in the fiscal sustainability report, published just three months before this budget, regards the project as insufficiently certain to include in its own fiscal projections? Yet those same projections apparently found their way into the 2025-26 PNFC borrowing estimates, and then their removal has been presented as the delivery of a $500 million commitment to the former member for Huon.
Treasury excluded Cethana because it was too uncertain a project; the Budget included it, then removed it and counted it as fiscal repair. On the revenue commitments made to the former member for Huon, this Budget contains no substantive new revenue measures despite the commitment. The fees and charges review, as I mentioned, this bullet point with no numbers and no timeline, perhaps $3 million, I don’t think that really counts. The short‑stay levy was not part of Mr Harriss’s commitments, and who knows where that’s going to go. The commitment also included increased and adequate funding to Audit Tasmania, and this has also not been delivered. These are the commitments that were made to secure the former member for Huon’s vote.
Ms Thomas – And the Integrity Commission, wasn’t it?
Ms FORREST – Yes, the Integrity Commission too. I haven’t looked at that one. I was more interested in the ones I’m looking at. Yes, probably the same. I don’t know. I’m sure there are other members who have looked at that. The Premier signed a letter; the stadium was approved. The commitments have not been delivered in any meaningful sense. I raise this not to relitigate the stadium debate, but because it goes to the credibility of the commitments this government makes to parliament when it needs something, and what those commitments are worth once it gets what it needs.
I will keep going. Chapter 4 of budget paper 1 identifies governance safeguards for Macquarie Point, including a cap on the state government funding contribution. We all know that sounds reassuring; after I’ve just read what I’ve just read, you may be starting to doubt, but the same chapter notes that the risks may materialise through increased expenditure on consultants, assurance activities, design revisions or contract variations, particularly as the project moves into procurement and construction.
My question is: are those costs within the cap or additional to it? If within it, how will a project in procurement and construction absorb those pressures without squeezing delivery? If additional, the cap is not a cap on total state exposure, it’s a cap on one category with an open-ended commitment alongside it. PAC will continue to ask these questions too, but this is an important matter to consider in the budget process, in line with commitments made to the member for Elwick. What interest rate is the government modelling on MPDC borrowings, presumably from TASCORP, and fully underwritten by the state?
Budget paper 2, page 222, suggests approximately $35 million in grants and subsidies will be provided to Macquarie Point Development Corporation for debt servicing, with around $27 million over the forward Estimates for operations. It just keeps ticking up. It is a material question: is the interest cost accruing during construction within the cap at current rates over the multi-year build before even a single AFL game is played? So, these are questions we will no doubt pursue next week. The club funding and development agreement makes the government solely responsible for cost overruns, with $4.5 million penalties per missed completion milestone. These are significant contingent liabilities. They don’t appear to be in the disclosures with the specificity they warrant. Are they included in the cap? Are they likely to be not met? Some of them are unlikely to be met.
If the government or MPDC funds consultants and interest payments outside of the headline cap and does not count them against the total cost, it will be pure deception. As I said, I will continue to pursue this through estimates and the Public Accounts Committee. So, taken together, the structural inconsistencies in this budget paint a coherent picture of holes everywhere: a revenue outlook built on optimistic GBE dividend assumptions that may not materialise; machinery of government savings with no identified source; wage indexation capped below known enterprise agreement outcomes; non‑salary indexation less than half the CPI the budget’s own economic chapter projects; a multi‑million‑dollar human information resource system gap, which I was concerned about when I read the budget paper, and was confirmed by the Auditor General’s report in his briefing today, because this project will not be completed this year, yet funding only appears for 2026-27, not the out years. I think it’s a $40‑50 million black hole, another mine shaft to fall down.
Homes Tasmania debt is excluded from the general government sector, while its amalgamation savings are included. The $74.7 million shortfall in the Tasmanian Risk Management Fund: that has to come from somewhere, no doubt from agencies. New transaction fees on Tasmanians with no disclosed terms: any one of those items would warrant an examination. Together they describe a budget constructed to achieve the desired headline result, the optics of fiscal repair, rather than provide the parliament and people of Tasmania with an honest account of the state’s financial position and a credible plan to improve it.
So, the Treasurer told parliament Health continues to be the largest area of expenditure, and we know that it is. At $15 billion across the budget and forward Estimates, the government walks the talk, but the budget tells us a little bit more complicated story. I’ve touched on this when I talked about the policy and parameter changes, but Health faces unavoidable cost pressures of $209.4 million in 2026-27, growing to $245.2 million in 2028-29. The budget has to fund these. This is the parameter changes I was referring to.
Simultaneously, at the same time, Health must deliver efficiency savings of $131.4 million in 2026-27 growing to $191 million in 2028-29. As my short parable outlined a while ago, both are unavoidable. There used to be a saying when there’s Indian giving: take with one hand and pull back with the other. Despite Tasmania’s high per‑capita health spend, among the highest of any state, emergency department performance remains the poorest in the nation. This is not a picture of a well‑funded system, delivering strong outcomes, that can afford to be trimmed. It is a system already under pressure, performing below benchmark, facing simultaneous additions and reductions, with no published plan for how the savings will be achieved, where they will come from or where the service impact will be.
Are we expecting, perhaps, the paramedics to meet the patients they need to attend halfway to manage the operating costs associated with fuel? Are we to see expectations of reusing medical equipment? I think not, but there is no coherent plan and the pressures are real and expectations likely to be unachievable, but they’re modelled in the Budget, so one assumes they’ll happen because if they don’t, we’re in a bigger world of pain.
I spoke last week on a motion about the arts funding. I want to touch on that just here as well. The Treasurer spoke of supporting the Tasmanian brand, cultural participation, excellent pathways across the arts. The budget papers tell quite a different and more complicated story. The arts industry development line is not transparent. It includes competitive grants, four‑year funded organisations, the Premier’s Arts Prize, other initiatives and a grant to the Queen Victoria Museum & Art Gallery that is not publicly identified. The $5 million for the TSO, Ten Days on the Island and the Theatre Royal sits in a separate grants and subsidies line, so they’re outside of that. The result is, parliament basically cannot determine from the budget papers how much of the arts industry development figure reaches the competitive grants program for artists and organisations that depend on it. On my analysis, only approximately $5 million does, but the budget papers do not say.
The numbers in 2023‑24 was $9.985 million. In 2024‑25 it was $11.614 million but included a $1.5 million uplift with no public detail on application. Underlying $10.114 million in 2025 was $14.126 million, but that included $4.5 million in one‑off TSO capital funding related to the stadium, so the underlying was $9.626 million. In 2026‑27, this financial year coming, it is $9.175 million. Comparing like with like, arts funding appears to have fallen by approximately $450,000 in real term with no indexation.
The Department of State Growth 2024‑25 annual report recorded an arts industry development budget of $12.318 million and actual expenditure of $11.01 million, a $1.37 million gap from the released budget papers for that year. In a program where only approximately $5 million reaches competitive grants, a variation of that scale is material. We’re talking about a poorly funded sector, not millions and millions and millions of dollars, so $5 million is a lot of money here.
The arts sector has been telling government for more than 3 years that funding has not kept pace with inflation, employment costs, or the real cost of producing work in a small regional economy. Organisations are in a cycle of survival, not sustainability. Three specific structural failures remain unaddressed – these are matters I raised last week – the absence of CPI indexation, the inefficiency of annual grant cycles that force proven organisations to reapply for funding that they receive consistently, and the problem of festivals competing with the arts they present for the same limited grant pool because federal portfolios in tourism do not adequately fund artist payments. These pressures now see festivals mostly competing for federal and philanthropic dollars as they’ve been unable, or told they no longer can apply for Arts Tasmania grant rounds. Everywhere there’s pain in this sector.
A new creative industry’s key delivery is cited in the budget papers as driving future growth in the arts industry development line, but there’s no detail on what this is, who funds it, on what terms, or whether it represents new money or reallocation of existing grants. Another question for next week, no doubt. We’re being asked to appropriate funding for an initiative that has not been explained.
This is a very real challenge in the arts sector that raises a question on community sector indexation more broadly. The same problems that the arts sector faces, the community sector faces. In the 2025‑26 Budget, organisations with index grant arrangements received 3 per cent indexation per annum across the budget year and the first year of the forward Estimates. In the 2026‑27 Budget, that 3 per cent applies across the budget year and 2027‑28 only, dropping to 2 per cent for the remaining two forward Estimate years. This means community‑sector organisations, many of whom are already operating on razor‑thin margins, are facing a real reduction in the purchasing power of their grants in the out years. At precisely the moment when the Budget’s own economic chapter projects sustained cost pressures from the Middle East conflict flowing through freight, energy and goods. Even if that war finishes today, there will be a year of impact. We know that. We’re at the very end of a very long chain. I’ll be seeking confirmation through Estimates of exactly what this means for grant recipients, both in the community sector and in the arts space, and whether the reduction was a deliberate policy decision or an artefact of the budget construction.
Another area I want to talk to is the funding of parliament. People might think, ‘Oh my god, here we go talking about ourselves.’ Well, yes, we are, because parliament is not just about members, it’s about the staff who work in it. It’s about everyone in this place. Members will recall – some of the new members may not be so familiar – but Sarah Bolt undertook a review of workplace culture in this parliament and produced quite a scathing report. The Workplace Culture Oversight Committee has been working to see the implementation of all the recommendations that she made and members would have seen interim reports. Members would also recall – and the new member for Huon when she was sworn in – affirmed her agreement with the code of conduct, which includes the independent Complaints Commissioner process.
Our parliament, and particularly this House, is not being funded adequately to provide the work that we need. The independent Complaints Commissioner is a critical part of this for the workplace safety of not just members – in fact it’s just as important, if not more important for the people who work in this building – the staff, the ministerial advisors. This parliament agreed to establish the independent Complaints Commissioner and what do we see in the Budget? $50,000. You could hardly even recruit a person for $50,000, but we can give $98,000 to Scott Roth to promote Tasmania. The government doesn’t care enough about the safety and welfare of the people who work in this place to put a decent amount onto this provision. $50,000 – I won’t go in to all the other problems with it, but it’s just breathtaking. As I said, this $50,000 per annum would not sustain a part‑time investigator for a quarter of a year.
In a budget of almost $10 billion, $50,000 for parliamentary workplace safety oversight is an insult. It’s an insult to the clerks. It’s an insult to the staff. It’s an insult to everyone who works in this place. I’m ashamed to think that I sat around that table and chaired that committee for so long, and we ended up with a really good outcome, a code of conduct, an alcohol statement – the only jurisdiction in the nation to have one – and approval to establish an independent Complaints Commissioner. Then the government gives the parliament $50,000 for it. It’s a statement of priorities, isn’t it? It’s an insult to everyone this office is meant to protect. As I said, what a contrast, $98,000 allocated to Scott Roth without a tender process because it’s less than $100,000. It’s appalling. I could go on, and I will go on, but I’ll talk about something else that’s interesting.
TasInsure. That’s very interesting, isn’t it? We all knew this was nonsense from the outset, but not every Tasmanian understood. They were misled. The Treasurer’s speech states:
New funding has been allocated over the next two years to support the next phase of work to establish TasInsure and commence the delivery of services and functions for the community.
We know they’re not going to provide insurance. What are we paying this money for? I have searched the budget papers for what TasInsure will do. How it will operate, who will govern it, what services it will provide to whom and on what terms and what cost, and I found none. I was not surprised. After an election promise that Tasmanians would save hundreds of dollars on insurance, promises built on, at best, wishful thinking, this initiative was presented to Parliament as a line of funding with a name attached and nothing else. A name they don’t even own, actually. Tasmanians deserve to know what they’re being asked to fund and why, and there’s a bigger number on that than there is for the Independent Complaints Commissioner. Enough said on that one.
When I turn my mind to what responsible budgeting would look like, I want to be clear about what I’m saying and what I’m not saying. I’m not saying Tasmania does not face serious fiscal challenges. It does. I’ve been saying this for years. I have said it consistently and I’m not saying expenditure reduction is never appropriate. It is needed and it’s necessary and I support genuine efficiencies where they exist. I’m not opposed to budget repair. I’ve been asking for it for years. What I am saying is that the repair plan in this budget is structurally deficient in ways that the government’s own fiscal sustainability report makes clear. A responsible approach would be honest that repair requires a mix of measures including revenue. I’ve seen the social media posts of the Liberal Party having a crack at the Labor Party with spinning dials looking at more taxes, we can’t even have an adult conversation without the Liberal Party putting out stupid memes. I’m sure there will probably be something about me pretty soon too. It just beggars belief we can’t have a proper conversation about this.
The government needs to be honest. That repair does require a mixture measures. Their treasury has said it. They should just listen to their treasury. The promise of no new revenue measures is politically understandable, but is fiscally irresponsible, and I’d rather be fiscally responsible than politically, well I am politically exposed now because I’m saying what I’m saying. A responsible approach would publish agency-by-agency savings plans with timelines, milestones and accountability mechanisms so parliament and the community can assess where the targets are being met and what the service consequences are. It’s not too much to ask. I spoke about this earlier, it’s critical. Reports, as I said earlier in my contribution, will be required under the 20 April 2026 SSMO document titled Managing Positions in the State Sector. These reports should be made public with information that may identify individuals redacted.
A responsible approach would also budget honestly for transition costs, redundancy payouts, leave liability crystallisation and the productivity drag of structural reform. A responsible approach would use accurate wage and non-salary indexation assumptions, and report transparency on employment consequences. A responsible approach would provide substantive detail on new initiatives, like TasInsure, before allocating public funds to them. None of these things have been done. Rather than calling for divine intervention, blaming the federal government for problems that the Treasurer helped create when he was in the federal parliament, and not taking responsibility for the actions of the government he serves. I suggest this is the season, not just of balancing the books, but of telling the truth about how he planned to do it.
In conclusion, I know I’ve made quite a substantive contribution, and this may be the last time I can speak for more than an hour, so I’m just making the most of it. The Treasurer opened his budget speech with the good book’s council that there was a season for most things, and he was right about that at least. There is a season for deficit budget, there’s a season for balancing the budget, and there is apparently a season for presenting a budget that appears to do the second while still doing the first. As I said at the outset that reading this budget felt like walking through an old mine site. Having now walked the full length of it I want to report back on what I found and how many holes I fell in. I found a revenue story built almost entirely on Canberra’s generosity and the property market, neither of which the government controls. I found GBE dividends projected to recover sharply from the base year in which Hydro Tasmania’s underlying profit collapse by 98 per cent. I found the backroom staff the Treasurer calls dispensable generating the strongest discretionary revenue growth in the Budget by collecting the fees and taxes that we do collect, and being told they’re no longer needed. They’re the background people, surely. Who else are? I found a savings task of more than $400 million by year four with no plan, no milestones, no accountability.
Savings, the policy and parameter statement reveals were reverse engineered from a target not built from operational reality. The pressures are real and the savings are invented. I found wage indexation capped below known enterprise agreement outcomes which if achieved, would quietly require the cutting of between an extra 400 and 550 staff from positions in the public sector that no-one has been told about.
I found non-salary indexation capped at a rate less than half the CPI the budget’s own economic chapters report, with the gap absorbed silently, apparently through agencies that can no longer afford to operate at the standard Tasmanians accept. I found redundancy costs, leave liabilities, the machinery of government transition costs, which are real material and are entirely absent from this budget.
I found Homes Tasmania debt off the ledger, while the savings are on it. I found a $74.7 million hole in the Tasmanian Risk Management Fund that nobody is funding. I found $3 million in new transaction fees on Tasmanians that the Treasurer did not mention in his speech. I found a $500 million debt reduction commitment honoured by removing a project that the government’s own Treasury said should not have been in the forward Estimates.
I found a stadium cap that may not cap what it purports to cap, with interest costs and consultant fees flowing through separate lines, whose treatment requires explanation. I found another gap in the human information resource system funding. Who knows how much that will be? I found TasInsure, the proposed government owned insurance company that promised hundreds of dollars in savings for every Tasmanian presented as a funding line with a name and nothing else.
I found a paltry $50,000 for the body this parliament agreed to establish to protect the people who work within it, in a budget of around $10 billion. I found an art sector at breaking point, receiving real terms funding cut, dressed up as continuity with a new initiative nobody can define. Well, maybe the minister can next week. Throughout the whole document I found the government blaming Canberra for a GST problem the Treasurer helped create while invoking a 1990s fiscal repair precedent that included tax increases in a budget that rules them out.
The Fiscal Sustainability Report said no single class of intervention is likely to be sufficient. This budget relies on a single class of intervention without a plan, without monitoring, without management. The Fiscal Sustainability Report said the repair task needs greater and more urgent action. This budget savings target is less than half of the Fiscal Sustainability Report’s own modelling says it requires for a credible five-year repair pathway. And the Fiscal Sustainability Report said there exists a trajectory beyond which the fiscal repair becomes structurally impossible.
The budget moves along that trajectory while describing this journey as responsible fiscal management. That said, I will support the passage of the appropriation bills. The state must function and essential services must be funded. I’m not seeking a constitutional crisis and I’m certainly not seeking another election. Not for us, for them.
But I want to be plain about what support for passage of the appropriation bills at a later time means and doesn’t mean. It does not mean confidence in this plan or the plan, because there is no plan. It’s just a few targets. It does not mean acceptance of the transparency standards on offer. They are far too inadequate because this transparency on offer is insufficient on the scale of the challenge. It does not mean agreement that the government has been honest with the parliament and the Tasmanian community about what the Budget will actually do to agencies, to the workforce, to the services Tasmanians rely on.
As I said, the mine site that I’ve walked through this week has real dangers. Some I’ve named today, and there’ll be far more that other members will have identified. And more we’ll no doubt find throughout Estimates. The reckoning for those that remain unaddressed, the indexation gaps, the unfunded liabilities, the invented savings, the off‑the‑book debt, will come, whether or not parliament has been told about them.
The Treasurer invoked the good book’s wisdom that there was a season for most things. I want to suggest there is a season for something this budget has not provided: an honest account of what fiscal repair actually costs, who bears it and how we will actually know whether it’s working. As I’ve raised in this place before, and I will continue to, we need to have an honest, frank and open dialogue with the people of Tasmania to help them fully understand the challenge, and be part of forming future solutions. They’re not stupid: the people aren’t stupid, and we don’t need stupid memes. What we need is an open, honest, mature conversation.
I will continue to work towards finding ways to engage with our population, as I said previously, through a properly‑constructed citizens assembly, and work with all Tasmanians to be part of the solution. I can’t see any other way, with the attitude that we’ve seen from this government. It is this government who have presided for 12 years over the decline of our financial position through policy decisions; some critical decisions such as our response to COVID and the commission of inquiry, acknowledged, but the problems are far deeper and wider than those. They are just now being used as excuses. Our state and economy need to be in a position to weather storms when they inevitably come, because they will, and it has absolutely no capacity to do so at the moment.
I do have some sympathy for the Treasurer. He’s only recently joined the Tasmanian Liberal team, and the Tasmanian Liberal government, and at least he acknowledged we have a problem, and he seems to have a willingness to tackle it. I can’t say the same for the Premier, who has been in the leadership position during the whole deterioration of our state’s finances since 2014. It is his government who made these policy decisions to get us here, and his government that refuses to take the advice of his own Treasury.
Treasury have been clear. The fiscal sustainability report offered three pathways to fiscal repair: five, 10 and 15 years. The five-year path required the most aggressive cumulative correction, $3.3 billion, equivalent to 25 percent of projected expenditure on services. The fiscal sustainability report endorsed both the five and 10‑year scenarios as credible repair pathways. It said beyond 10 years the risk of shock derailment became unacceptably high, and that if uncorrected, Tasmania could reach a point where return to fiscal sustainability is not achievable at all.
Critically, the Fiscal Sustainability Report was unequivocal: all credible repair pathways require all three levers of reduced expenditure; increased revenue; and reduced or reprofiled infrastructure investment. No single class of intervention is likely to be sufficient, but the government and the Treasurer have said they can achieve peak debt, or that point, in just three years: more aggressive than Treasury’s fastest modelled scenario using only one of the three levers, cutting costs predominantly through cutting staff. Their likelihood of success, as I’ve outlined, is completely fanciful. I look forward to Estimates, and I look forward, one day, to a budget that tells the truth from the first page.