Legislative Council, Tuesday 3 June 2025

Ms FORREST (Murchison) - Mr President, I was hoping I would never have to speak about a budget that is so bad. I have been struggling to find the words to describe my despair. Anyone who has bothered to read the recent fiscal sustainability reports will not be surprised, but it comes as a bit of a shock when it actually happens. It is a bit like a loved one dying. No matter how prepared you are, it is still a shock. Our current situation is probably worse than the worst-case scenario in the 2021 Fiscal Sustainability Report. That is a Treasury document, not the Treasurer's document, a Treasury document.

The level of debt for this budget year in the 2021 Fiscal Sustainability Report is similar to the worst-case scenario for the same year in the 2021 Fiscal Sustainability Report. We are at that point. What makes this situation worse is that the interest rates are much higher than a few years ago, meaning the debt is accumulating much faster. It is quite obvious that the government has completely ignored past fiscal sustainability reports, as has the opposition for that matter.

What the 2021 fiscal sustainability report had to say is as relevant today as it was back then and I like to refer to a few paragraphs from page 33 of that Treasury report. It says: (tbc 12.03)

Where high levels of Net Debt persist over the long-term, it can constrain fiscal flexibility due to the associated higher debt servicing payments. This situation limits the government's ability to fund essential services. It also limits a government's ability to respond to unforeseen events or to pursue other policy objectives. The result of the projections in this Report show that, if unchecked, the size of corrective action required to bring Net Debt under control could be very large. For example, under the Historic Trends Scenario, if Net Debt is not addressed, it could grow to $20.4 billion by 2034 35.

If measures taken to address the growth in debt are implemented in the short-term, the corrective action required will be less than if action is delayed. For instance, by 2024 25 revenue would need to be 4.5 per cent higher to retrieve a zero Net Operating Balance under the Historic Trends Scenario.

While this would be challenging, the size of the corrective action required is projected to increase significant significantly over time. If no earlier corrective action is taken, by 2029 30 revenue would need to be 9.1 per cent higher to achieve a zero Net Operating Balance under the Historic Trends Scenario.

The issue of intergenerational equity must also be considered in relation to managing debt. If debt is allowed to grow significantly over time, it will become an unreasonable burden for future generations. On the other hand, measures used to address the growth in debt should not unduly burden the current generation.

The corrective action taken to address net debt also needs to be balanced against the risk to the broader economy. If changes implemented to reduce debt, such as expenditure and taxation measures are introduced without sufficient time for the community to adjust, or undertaken during a period of economic weakness, it could lead to further economic and financial disruption. This could place strain on businesses and the community. However, if no corrective action is taken, higher levels of debt can increase borrowing costs and divert revenue that could otherwise be used to provide services to the community. The demand for many of these services is expected to grow as a population ages.

That is the quote from the 2021 Fiscal Sustainability Report. Where are we? Potentially worse than where the worst scenario put us. When we looked at those reports in the PAC, it was, 'Oh well, the worst scenario is unlikely to happen because the government will do something.' No, they have not.

Nothing was done, which is why we are in this disastrous position we are today, it is disastrous. The worst-case scenario in the 2021 Fiscal Sustainability Report had interest for the general government sector at $268 million in 2028-29, the end of the forward estimates. This year, the 2025-26 Budget predicts interest on debt at $770 million in 2028-29, nearly three times the worst case in the fiscal sustainability report.

This is an absolute recipe for impending calamity. If people are not willing to see it, I do not know what we have got to do. Especially if this is the case of interest rates keep rising as lenders demand higher rates due to falling credit ratings, which is a very real risk.

Due to the windfall additions of the GST pool in 2025-26, our own source revenue is now funding less than 30 per cent of expenses. Never, has it been so low as a proportion, never. Yet, when you read the policy and parameter statement in budget paper 1, there is not a single dollar of increased revenue resulting from new policies.

When we go begging for a bailout - nothing is more certain than us needing a bailout somewhere in the near future - what is our response to the question? You have known about the problem for at least 10 years. Why have you not done something about it?

In real terms, spending on current operations is falling, despite all the talk about spending record amounts. In real terms, spending on current operations, delivery of services, is falling. Increasing debt servicing costs and paying for past liabilities is gradually leaving less and less to pay for ordinary operations, that is, delivering of services.

With regard to the fiscal strategy, I am not sure how the Treasurer assures himself that we are in a position that will see us return to any form of surplus in the foreseeable future. Two years ago, the government adopted a new fiscal strategy comprising of 11 strategic actions and targets. I was filled with hope that at least there seemed to be a plan. Sadly, two years later, all but one or two of the targets are well out of reach and there is absolutely no plan for fixing them.

What is the point of setting targets with no plans to reach their targets? In fact, all those key indicators are going the opposite direction. That is all outlined really clearly in budget paper no. 1, under the chapter Fiscal Strategy. One of the targets, number 9, relates to a framework for assessing large infrastructure projects more than $50 million in size, undertaken by government business enterprise and state-owned companies. It is essentially a benefit cost measure. The target was to have a positive benefit-to-cost ratio I think that was a typo. A positive benefit-cost ratio is hardly a worthy goal. If it was negative - like the opposite being negative - it would indicate negative benefits. Surely, we would not approve a project that had negative benefits for the state. I think what it was meant to say was the ratio should be greater than one, not simply a positive number; the government will perhaps have a look at that.

This strategic target first appeared in the 2023 24 Budget with the following comment, 'Work on the development of this framework will commence in 2023 24.' The next year, in 2024 25, the comment was, 'Work on the development this framework is continuing and will be included in the 2025 26 Budget.' Oh well, I thought, only 365 more sleeps to wait to see the framework put into action. But then in this year's budget papers, this wording appears, 'Measurement on this action will commence in 2025 26.' Too hard? What is the problem?

This is the framework that would have been used to measure the worthiness of the stadium, for example. For two years we have been told they are working on it. Now we are told that work will start this financial year, starting in a month's time, roughly. It sounds a bit like Berth 3; I am staggered. The whole point of measuring benefit-cost ratios is so that we can prioritise spending.

The next challenge is to ensure benefits accrue in an equitable manner and hopefully some of the benefits can be captured in monetary form or by government so that the benefits can be spread more widely, providing a greater range of government services. If we are not doing this, the government is failing. One of the problems of the government's fiscal strategy, comprising the 11 strategic targets, is that some overlap and others are in conflict with each other.

I note the government has made some modest improvements, based on the recommendation from Saul Eslake in abandoning the blunt efficiency dividends and improving economic analysis. That is a welcome change indeed, but the government's fiscal strategy remains fragmented, ineffective, and effectively meaningless with no plan to meet the targets.

On a positive note, I will also welcome the inclusion of the estimated outcomes throughout the budget papers and for each line item, something I have asked for some time now. Some departments have been quite helpful in providing that; others have looked at me like I am from some second planet, but anyway, they are there for all to see now and it is helpful. I thank the government for doing that.

However, back to the fiscal strategies. I note that the review, as mentioned by the Treasurer, will be taken of the fiscal strategies. This must be a genuine approach, not moving the goal posts to try and meet one of the meaningful strategies in actions. When we look at the suggested actions on pages 65 and 73 of budget paper 1, this is the fiscal strategy chapter, it reads in part:

The government's commitments to ongoing and responsible budget improvement are detailed in chapter 1 of this budget paper. Measures relevant to total general government services own-source revenue as a percentage of total expenditure include: expenditure and service level reviews, managing growth in public sector employment, driving public sector productivity and modernising expenditure decision-making.

Noting that, according to the Treasurer, these measures are intended to improve this fiscal strategy action as they are implemented through future government policies and budgets, however, for readers, the link between corrective measures and the strategic target is a little tenuous. Strategic action 11, public sector efficiency, productivity and financial transparency, will be improved allegedly through 'continuation of saving measures from previous budgets'. I am not sure we have seen those or - it is a matter for next week, I am sure. 'Responding to review and inquiry recommendations' - they have taken up some of the perhaps easier to adopt recommendations from Mr Eslake, and the establishment of an Efficiency and Productivity Unit. Wow, that is encouraging.

Noting that the target is the target of those measures to fix our budget problem, this is what the target says in the budget papers:

Review to be undertaken in 2032 33 to assess the impact of action taken.

We will be in a world of pain by then if we do not do something more than this. I have little faith we are on any road to recovery here. The Treasurer can, of course, expect questions about this next week.

Noting the upcoming review that I mentioned, I note the fiscal strategy still includes 1 separate targets, many of which are quite vague, redundant or irrelevant. Only one is being met: that infrastructure investment exceeds depreciation. I would suggest that if we cannot meet that one, we may as well just turn the lights off.

There are no 10 year projections, no clear path to surplus, no structural reform. On the matter of redundant targets, take for instance the twin goal to run break-even fiscal balances in both the general government and the total state sectors. At first glance that is a commendable aim, when you think about it, but on close inspection, it is all a bit silly.

Achieving a surplus fiscal balance in the general government will heavily rely on dividends and income tax equivalents from government businesses, and also the receipt of capex grants intended to be passed to government businesses such as TasRail and Tasmanian Irrigation; but when the fiscal balance for the total state sector is calculated, all the internal transfers to and from the general government are eliminated. Hence, the fiscal balance in the total state sector will always be much lower. It is quite dumb to have identical targets for both. It just does not work that way.

This does bring us to the next issue: whilst all the talk about budgets and budget sustainability is about the general government, it would be totally remiss to overlook the rest of the total state sector, namely the government business enterprises and state owned companies, of which Tasmania has a disproportionately high number compared to other states.

Any target for fiscal balance and net debt should arguably relate to the wider sector that includes these GBEs and SOCs, especially now with the proliferation of a form of the latter, with the likes of Macquarie Point Development Corporation, Stadiums Tasmania and Homes Tasmania. That is where we see net debt in the broader sector being twice that of the general government, where debt is increasing at a rate of $2.5 billion per annum, with little respite in sight. If there is any hint of a possible respite over the forward estimates, it is only because the government have been very selective about what it has included.

Let me detail a few matters which caught my eye: the CPI is estimated to be higher than 2.5 per cent, which is the amount of wage increases the government is hopeful of securing. Is the government actually expecting nurses, teachers, police and others to accept real wage reductions? That is what that says.

The government has adopted a policy in recent years of including efficiency dividends in the budget as a bulk saving amount, an unallocated negative expense amount that sits in finance general. This amount has varied from $50 million to $150 million per annum. It is basically a lipstick-on-a-pig exercise designed to make the bottom line look better, so the government can continue to assert it is assiduously searching for the mythical pathway to surplus. As the years tick over, the unallocated amounts get allocated and become embedded in the budget. The policy and parameter statement tells us this; however, we never discover exactly what programs are impacted or who is monitoring the show. Are savings made or is it just a pretend exercise and wishful thinking? Again, we will have some questions next week about this.

Rebranding of projects and the budget efficiency dividend to the productivity and efficiency measure strongly suggests more lippy on the same pig. I will be keen to hear how the Treasurer explains this.

There are so many avenues for cost blowouts on upcoming infrastructure projects that it is hard to keep track. I have a mixture of concern and bemusement at the lack of contingencies, when seriously big infrastructure projects are tackled. The '$375 million, not a red cent more,' will go down in folklore. Unfortunately, the way we all laughed at such a ridiculous claim that was meant seriously, has trivialised budgeting for other projects. You can get away with saying it when it comes to estimating the cost of a project, but it has evolved to a situation where projects are commenced with too many unknowns and without adequate planning to deal with contingencies.

In the Public Accounts Committee's most recent hearing on the TT Line's delivery of the berthing infrastructure in Devonport, the key message for the adults who are now in charge of the project was, 'Design, design, design, design, design, design, design, build.' What are we seeing with another major project around here? De- build. Agree to building it without all that really important work done. That is what we are being asked to do.

When we went to the Bridgewater Bridge the other day, one of the same people involved, the adults in the room delivering the Devonport berth now, he talked about 'Design, design, design, design, design, design, design and build it,' for that beautiful bridge - it is lovely, but that was the message. That is the only way you do not throw good money after bad.

Increasingly and worryingly, public infrastructure plans are enthusiastic adoptees of moral hazard. The government will always pay, is the guiding principle, just get it approved in the first place. That appears to be happening in this budget, whilst possible cost blowouts are disclosed for Berth 3, the Macquarie Point Waste Treatment Plant, the North West Transmission Development, and for Marinus, not to mention Mac Point itself, we find ourselves among fiscal volcanoes that may erupt at any moment because of the known unknowns. Some are sure to create havoc, particularly if you look at the recent form and history.

We need a better process for contingencies, or maybe just better planning or design at the outset. We are told there is a sensible path forward, but everywhere you look there are targets that are hopelessly underwater and no hints about fixing them. We are constantly told there is a strong plan for the future. I hate to say it, but the government is engaged in wilfully misleading deceit of the people of Tasmania.

There is no sensible path to surplus; we missed that boat years ago. The government turns a blind eye to unfavourable reports like fiscal sustainability reports and Saul Eslake's report on state finances. They even go one step further for reports like Nick Gruen's and call the dogs out to attack his professional integrity.

Ms O'Connor - It is shameful.

Ms FORREST - It is appalling. We are in a sad and sorry state. This budget shows where these years of inaction have got us - into one hell of a mess. Almost past the point of no return. I say almost because I am an optimist by nature.

What options are there? Borrow more? We tried that and it did not work. We cannot service the existing debt. Sell government businesses? At best, a sugar hit, but the next morning the feeling will be one big hangover. One-off debt reduction? They are a little pointless if we have not solved ongoing sustainability where spending exceeds receipts. Cut spending? That is the current plan, although it is not described in those terms exactly. The government is pretending it is not pursuing austerity, but it is. Amounts spent on current operations in real terms is falling. Ipso facto, it is austerity.

Is it what people are demanding? Are they asking for this hysteria - asking for cuts? Not to my knowledge. Raise more in own source revenue? The government wants to but is not prepared to do anything about it. They say they want to do something, but then do nothing. Income from government businesses is under stress and the policy and parameters statement in the Budget reveals just that and new streams are ruled out. Yet, without more of our own source revenue, we are doomed to further austerity. Whether it is raising more in taxes or more in charges for goods and services via government and government businesses, it is one and the same from an economic impact viewpoint. Whatever is done, however, must be done equitably.

To rule anything out is dumb public policy. State governments, as with local governments, are like households, they face the same budget constraints. The federal government is uniquely placed in the system. It has control over the creation of money. They are not the same as the state. The federal government has outsourced most money creation to private banks. Banks create money by making loans. The federal government creates money by spending. Most money is created by the former, contrary to popular opinion. That is - banks create money to make loans.

We need a rebalancing of our economy where banks create less by making fewer loans - which basically keeps inflating residential property markets, which keeps banks profitable - and the federal government creates more by spending, specifically giving infrastructure grants to state governments to help keep state borrowings lower and enable states to devote more of their revenues providing much needed services at a state level. That is the role of federal government in terms of their interaction with the state.

The reform of state finances can be done, but it will need a lot of cross-party support, which is sadly absent from this much of the current debate. It is something that has to be done at the federal level. It is not something we can do in isolation. Surely it would be better for us if we can engage with the federal government on this rather than have them come in over the top of us and impose measures on the state that may not be what we would have chosen, if we were able to take responsibility and take get our own house in order to fully participate in such a discussion. We must work with the federal government on federal-state financial relations in a proactive and meaningful way. It is not something we can do alone. We are past that point.

I am going to reiterate some of the facts and restate some of my concerns related to this Budget and what we are required to consider here this week and next. When we look to the general government sector, the core of public service delivery, it is projected to run net operating deficits totalling $3.5 billion over the next four years. That is $1.5 billion worse than the government's own projections just four months ago in the revised estimates report, and it is $1.8 billion worse than last year's Budget. They are horrifying figures. The true picture is even more alarming. When we exclude one-off federal capital grants, which artificially inflate the revenue side, the underlying net operating deficit rises to $5.3 billion through 2027 28, with a further $582 million deficit forecast for 2028 29.

These are not temporary imbalances. These are structural shortfalls, the result of persistent overspending and an unwillingness to make hard fiscal choices. An unwillingness to admit reality or, it seems, to understand what this Budget truly does. This is unconscionable, especially whilst at the same time blithely assuring us that we are on a path to surplus.

If you look at the cash deficits and debt, it could almost be described as a ticking time bomb. The government's cash position is deteriorating even faster. Over the next four years, Tasmania will run cash deficits of $5.1 billion, with another $498 million in 2028 29. These deficits are not being driven by investment in future productivity. They are being driven by operating shortfalls, cost overruns and servicing of past liabilities.

As a result, net debt is forecast to reach $10.2 billion by June 2028, and $10.8 billion by June 2029. That is $1.6 billion more than projected just a year ago, not only that these projections do not include a number of key known and costly risks to government expenditure, but they are bad enough without that. You add in some of those known risks and it is even worse. Let us be clear, this debt is not being used to build a stronger Tasmania, as much as the government might keep repeating it. It is a fallacy. It is being used to plug holes in the operating budget, a dangerous and unsustainable practice.

This Budget is based on unrealistic assumptions, with the Budget's projections relying on what could be called heroic and unfounded. In fact, assumptions, chief of these, that the operating expenses will grow by just 0.3 per cent per annum over the next four years. It would be the lowest rate in modern Tasmanian history. It is a pure fantasy. The assumption flies in the face of recent experience. Over the past four years, the government has incurred $2.5 billion in cost overruns, including $1.3 billion in health, $285 million in interest expenses and $271 million in State Growth, just those alone. If the government could not control costs in the past, why would we even believe they could do it now?

This Budget relies on misleading comparisons as well, to convince us, or try to convince us that Tasmania's true position is not as bad as others. The budget papers attempt to reassure us by comparing Tasmania's debt levels with other states, but these comparisons are misleading and some would say dishonest. Yes, Tasmania has the lowest nominal net debt, but we also have the second smallest economy and population. When we account for our own unfunded superannuation liability and the debt of our non-financial corporations, that is our GBEs and SOCs and other entities, Tasmania's net financial liabilities are the worst in the nation. In fact, over the next four years Tasmania will have the largest cash deficits and net financial liabilities of any state or territory. That is the reality, no matter how these numbers are spun. I urge the government to cease misleading the people of Tasmania.

When we consider the economic outlook, the best we can say is built on very fragile and shaky foundations. The Budget assumes the Tasmanian economy will go by 1.5 per cent per annum in 2025 26 and 2026 27, returning to 2.5 per cent thereafter. But are these forecasts realistic or are they resting on shaky ground too? Business investments expected to decline in the near term. Employment has fallen by 1.7 per cent over two years, while national employment has grown by 4.8 per cent, labour force participation has dropped to 60.4 per cent compared to 67 percent nationally. Population growth assumptions are optimistic, with state forecasts double that of the federal treasury.

These are not the hallmarks of a resilient economy, they are signs of stagnation, the foundation and grounds on which the economic outlook are very shaky indeed. Where do we go from here? What can we do with the state? First, we must acknowledge reality. Tasmania is not on a path to surplus. We are on a path to deeper debt and diminish fiscal capacity. Second, we must make hard choices. This means reprioritising spending. It is clear not all programs can be preserved. Exploring new revenue sources, including fair and efficient taxation, but not in isolation. These are not one-off things. We need to look at the whole picture, improving public sector productivity through targeted reforms, not across the board cuts and third, we must rebuild trust.

There is a massive trust deficit in this government because they are not open and transparent about this. They are pretending it is all tickety-boo. What this means is transparent reporting, honest reporting, realistic assumptions and a willingness to confront uncomfortable truths. I have spent my time in here in parliament always seeking the advice and expertise of those far more knowledgeable and experienced than me in the areas that I am not proficient at. I have been doing that since I entered parliament in 2005.

With matters related to the state budget and our financial position, this was very new territory for me 20 years ago. I have worked really hard to fully understand these critical areas of our responsibility as elected members. I have relied on the expertise of career economists and accountants to assist me in this task. At times I have been quite the remedial student. For close to 10 years now - and probably a bit longer when I look back - I have been speaking out and warning of the need for actual and meaningful responses to the state's financial position.

It has not been just me saying this, particularly of late. Treasury, in the last two fiscal sustainability reports, have provided clear warnings of the need from remedial action. Years ago, to avoid the position we now find ourselves in, economists, including Saul Eslake, have been saying the same things that I have, with a growing sense of urgency.

Still, the government does nothing to correct our trajectory. This government has done nothing to address the known problems in any meaningful way since they came to power in 2014. In fact, it is solely the result of their policy decisions, not parameter changes, that we are now in this position. Saul Eslake has made that very clear in his commentary on this matter.

It is this government who have led us to the brink and still do not have a plan, despite the rubbish and rhetoric that continues to issue forth from the Treasurer and his other Cabinet colleagues. It is inexcusable to not have the courage to admit the situation. Ignorance is no excuse, as there are many experts out there, and others who are not experts, such as myself, who have been warning of this for years.

The 2025 26 Tasmanian State Budget is not a road map to recovery. There is no credible path to surplus, however described, and there is no sign of any plan to create or deliver a surplus. This Budget is yet another warning sign, a red flag waving over a deepening fiscal chasm.

Despite the Treasurer's confident rhetoric and the Premier's today - I was watching it in Question Time this morning - this Budget does not deliver a credible path to surplus. It delivers a continuation of structural deficits, rising debt and a growing disconnect between spending ambitions and revenue realities. The forward Estimates are fanciful and mere illusions with many known risks that will absolutely impact the Budget referred to in the commentary but not accounted for.

The forward Estimates show optimistic increases in the profitability of Hydro Tasmania in 2028 29. If you want to look at it, it is page 141 of budget paper No. 1. The explanation of this is due to expected returns to normal rainfall. It is almost double the amount the year before. Who provided that advice? That is not a question you need to answer. I hope someone else can next week. They are basing this significant uptick in profitability of Hydro through dividends and income tax equivalents in 2028 29, and all I could find - the only explanation I could find in this budget paper here, was an expected return to 'normal rainfall', whatever the hell that is at the moment in the climate change that we are experiencing. There is no credible evidence that this will be the case, and if their long range forecast is that good, I am sure every farmer would be pleased to have it.

Furthermore, given Treasury estimates that CPI will be 3.3 per cent in 2024 25 and 2.75 per cent in 2025 26, why does the government expect to be able to wait to negotiate a wage agreement or any wage agreements at 2.5 per cent? It is another well understood risk that has not been factored in. Effectively, as I said earlier, what this is saying is there is an expectation that nurses, doctors, police, teachers, et cetera, will agree to real reductions in wages. That is going to make it easy for us to recruit them, is it not, or to keep them?

I say that whilst also noting that the government is making a virtue - that is, claiming credit for recent high wage growth. The wage price index is 3.5 per cent. You cannot have it both ways in any credible way here.

Another absolute reality is the rising cost of self insurance through the Tasmanian Risk Management Fund, which has been funded through agency contributions and continues to be. However, this year, for the first time in my memory, there is a $127 million appropriation to cover expected cost just for this year.

Budget paper 2, Volume 1 on page 77 informs us that the appropriation in 2025 26 represents funding to reflect actuarial analysis regarding increasing liabilities related to workers compensation, and that the funding will ensure the fund has a sufficient balance of financial assets to meet outstanding claims liabilities in relation to this risk category. It goes on to say:

the increase in the Tasmanian Risk Management Fund expenses primarily reflects the latest actuarial advice for changes in potential claim estimates, in particular personal injury claims. 

We are likely to see even more personal injury claims if the staff cuts and pressure exerted on workers and negative wage growth to people like health workers and teachers continue. There will be more workers compensation claims, not less. These essential workers are already working as hard as they can to meet the needs of Tasmanians, and t is not simply a matter of asking teachers and nurses, for example, to be more efficient. Nurses can only look after a certain number of patients, depending on the acuity of the patient. Teachers can only teach a certain number of students.

Other known risks include - and these are risks we know are going to have an impact, but they are not factored into the forward Estimates, which are fanciful. These risks include the highly likely bailout needed to enable TT Line to deliver the new ferries and berth in Devonport highly likely; the enormous financial risk to the state of Marinus Link and the associated North West Transmission Development; likely cost escalations associated with the relocation of the Macquarie Point Wastewater Treatment Plant - we have signed up for that, sharing the cost escalations with TasWater; the Northern Access Road to support the Hobart Port and proposed stadium; funding for Stadiums Tasmania; Treasury Future Accommodation that is not included, how much that is going to cost if we sell the Treasury building, they did tell us last year they were not going to when asked directly in budget Estimates; health demand cost; and claims for compensation for survivors of institutional sexual abuse are just some of these are the risks that we know are there but are not factored in.

I have not even focused on the enormous financial risk that the proposed Macquarie Point stadium poses to this budget and the forward Estimates. This warranted a full page in the risk section of the budget papers, the final paragraph stating after laying out the risk to the budget, that as with any large infrastructure project, the Macquarie Point Multipurpose Stadium and the wider Macquarie Point Urban Renewal Project are subject to the same ongoing procurement, supply and cost risk that other major projects have experienced and therefore need to be carefully managed, even though we are told there is a significant contingency baked in. When I go back to my comment about design, design, design, design, design, design, design, design before you build - the risks are everywhere.

We also know the state has to fund any cost overruns related to the Australian Antarctic Division, Macquarie Wharf 6 Project, and to fund the shore power, refuelling and the life cycle and maintenance costs of the infrastructure. This is not something we might have to do, this is something we have signed up to do. It is another thing. We know it is almost a certainty that the cost will blow out.

These costs, known and/or assumed, are not included in the forward Estimates. They are identified as risks. The treasurer has chosen to include the $150 million efficiency and productivity unit savings as a certainty, making the picture look just a little bit more positive in those two outyears.
It is simply misleading to only include possible positive impacts and assume they will be delivered - including higher returns from Hydro, as I mentioned earlier - and not include no negatives that are clearly outlined in Chapter 4, the Risk and Sensitivities chapter in budget paper 1.

With all this considered, and noting the warning scheme by two Treasury Fiscal Sustainability Reports, it is clear the forward Estimates will be even worse than projected and disastrous without real and meaningful action.

Tragically, the government have let it come to this. They have had 11 years to take to corrective action, and they have failed. Tasmania has faced financial crisis before and we have overcome them, but only when we face facts, make tough decisions and put the long-term interests of the state ahead of short-term political convenience and populist decision making. We need to have an inclusive conversation about the future of the state. Wantonly continuing to ignore all the warnings and seeking to mislead the public with patently false productivities is disgraceful. This budget does not face facts. It does not make tough decisions and it puts the long term interest of the state ahead of short term political convenience and takes a blinkered singular focus on delivering a project that has divided the state in clear sight of failures such as the berth 3 in Devonport and the massive cost escalation that has created to name but one stuff up to the financial detriment of our capacity to deliver services. This is unacceptable.

I have always held the view that the government have a right and duty to bring down a budget to deliver Tasmanian services, infrastructure and a vision for the future. In the absence of illegal borrowings or gross malfeasance, I have always held that it is up to the government to provide services, infrastructure and a vision for the future, even if I prefer to see some other priorities at the margins. I have sought to scrutinise the Budget and hold the government of the day to account both in the Chamber and in my work on the PAC to ensure we know how public money is being spent, on what and for what outcome.

This is my first time in 20 years where I have asked myself, can I in all good conscience actually support this budget? This budget defers the reckoning, it delays the repair and it denies the depth of the challenge. It is the government with its head in the sand and/or lacking the financial literacy or wherewithal to face reality. We can do better. We must do better for the sake of our economy and services and future generations of Tasmanians. I am deeply concerned. I only intend to speak on the actual Budget. There are many other things that I could discuss and I will use other opportunities to do so, but it is such a serious situation we are facing, that I have focussed my entire contribution on this because the government is in complete denial and continues to mislead the people of Tasmania with their rhetoric and dishonest claim that they are on a pathway to surplus.

These are matters I will follow up next week, but I'm deeply concerned, and it is the worst budget I have ever seen and I did not think we would get here despite the warnings, but here we are. I note the Budget.

 

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