The Tasmanian Treasurer has revealed a half-a-billion-dollar blow to the state budget because of lower-than-forecast GST receipts and stamp duty revenue.
- Tasmanian Treasurer Peter Gutwein is now six weeks out from handing down his sixth budget
- He says “hard choices” will need to be made for the budget, but has not detailed how the state government will deal with the blow
- The Opposition has accused the Liberals of squandering millions of dollars
Lower consumer spending and the housing price collapse in mainland cities has contributed to the national GST pool forecasts being written down by more than $10 billion over the four years to 2022-23, meaning less money to be doled out to each state.
The Western Australian Government is bracing for a $1 billion hit to its revenue, and now six weeks out from handing down his sixth budget, Tasmanian Treasurer Peter Gutwein has told Parliament his state will also face a “substantial” hit.
Mr Gutwein said the “severe” fall in the national pool meant Tasmania would receive about $280 million less than forecast over the forward estimates.
He said the budget would be further hit by a reduction in stamp duty receipts, because while property sales volumes remained high, they had shifted to the north and north-west of the state where the value of properties being sold was lower.
“In total, the revenue loss over the budget and forward estimates in a cumulative sense, from the fall in the GST pool and from lower duties revenue, will be around $560 million next budget period,” Mr Gutwein told Parliament.
“This is a significant and material impact on our revenues and will be a challenge to manage, however the Government will approach this in the same sensible and responsible manner that we have in the past.”
Mr Gutwein said Tasmania had been dealt a similar hand in 2016-17, when the state faced a GST write-down of about half a billion dollars.
The Treasurer did not explain how the budget hole would be filled, but said the Government would not be cutting infrastructure investment or essential services, and would not be selling government businesses.
“It will mean some hard choices will need to be made in this budget. We will need to cut our cloth to suit our circumstances,” Mr Gutwein said.
Mr Gutwein took the opportunity to link the budget issue to public sector unions’ demands for a 3 per cent wage rise, saying “under these circumstances” their demands could not be met.
The State Government massively cut its budget surplus prediction in January’s Revised Estimates Report, down to $7.3 million for 2018-19 and $12.3 million for 2019-20.
Labor fears cuts to jobs and services
Opposition Leader Rebecca White said the Liberals’ so-called “golden age” for Tasmania was officially over because of mismanagement by the State Government.
“Peter Gutwein declared a golden age for Tasmania and yet today it’s been proven to be fool’s gold,” Ms White said.
“They have squandered millions of dollars and the state budget is looking like it’s going into the red.
“This is going to be terrible news for Tasmanian services, because already the Treasurer has outlined that he will have to cut its cloth to suit — which means cuts in jobs and cuts in services.”
The state budget is due to be handed down on May 23.
Tom Lynch from the Community and Public Sector Union said Tasmanians could not trust what the Treasurer said about the budget.
“Less than a year ago he was telling us that he had a $620 million surplus, then he went to an election and spent like a drunken sailor, now he tells us he has a deficit,” Mr Lynch said.
“I think he makes it up as he goes along. He is using the budget and the budget process to try and create excuses for not paying public sector workers decent wage increases.”
Topics: government-and-politics, state-parliament, community-and-society, hobart-7000, tas, launceston-7250
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