URGENT UPDATE: Tasmania’s Liberal government has just unveiled its 2025/26 interim budget, revealing drastic cost-cutting measures and an alarming rise in debt. Delivered by Treasurer Eric Abetz on Thursday, the budget projects net debt to soar from $5 billion in 2024/25 to nearly $10.4 billion by 2028/29.
The budget’s grim forecast is a response to economic pressures exacerbated by two early elections, the fallout from COVID-19, and significant payments to abuse survivors. Abetz has launched an efficiency and productivity unit aimed at identifying public sector savings, confirming that discretionary government spending will be tightened and the public service will be “right-sized.”
In a significant development, the initial pledge to cut 2,500 public service jobs has now escalated to approximately 2,800. Furthermore, the budget introduces a new measure to slash spending on marketing, leasing, and procurement by $5.9 million in 2025/26 and $11.9 million annually thereafter.
Opposition Labor MP Dean Winter criticized the budget, stating it sets the stage for even greater cuts. “After 11 years, the Liberals have taken Tasmania from having no net debt to the worst set of financials of any state in Australia,” he asserted.
The budget also highlights the contentious pursuit of a new AFL stadium, estimated at $1.13 billion. Critics, including Greens leader Rosalie Woodruff, argue that focusing on the stadium is misplaced given the state’s financial challenges, warning of potential cost blowouts similar to other major projects.
Further complicating the financial landscape, the government faces a stalemate in pay negotiations with public sector unions, as workers have rejected a 3% pay offer, while the budget accounts for only a 2.5% raise. Public sector wages, including superannuation, consume nearly half of Tasmania’s annual $10 billion expenditure.
The budget reveals a stark $1.08 billion deficit for the current fiscal year and forecasts a slim $5.6 million surplus by 2028/29. Despite these challenges, Abetz remains optimistic about Tasmania’s future, citing the state’s abundant resources. “No challenge is too great,” he stated.
Looking ahead, Abetz has not ruled out raising taxes in the 2026/27 budget, with Treasury officials warning that additional revenue will be necessary to stabilize the state’s finances.
TASMANIA’S INTERIM 2025/26 BUDGET HIGHLIGHTS:
- Deficit: $1.01 billion
- Revenue: $9.5 billion
- Expenditure: $10.5 billion
- Net debt: $7.1 billion
- GST revenue: $3.8 billion
- Unemployment rate: 4%
- Major spending areas: health (34%), education (23%), public order and safety (9%), social protection (7%), general public services (6%)
This budget announcement marks a critical moment in Tasmania’s financial trajectory. As the government grapples with rising debt and public sector challenges, the implications for residents could be significant. Stay tuned for further updates on this developing situation.
