Tasmania's election campaign should be fought on the budget, business leader and economist say

Australia Broadcast Center

20-06-2025

When Labor declared it had tabled a motion of no-confidence in Premier Jeremy Rockliff, it listed three main reasons.
They were the potential privatisation of public assets, the failure to deliver the new Spirit of Tasmania ferries on time, and the state of the Liberal government's budget.
On that budget, here are a few quick figures:
Now, with Tasmania in an election campaign, business leaders and economists are hoping to hear the major parties' plans for repairing the balance sheet.
The Tasmanian Chamber of Commerce and Industry's Michael Bailey says as the election is largely about the budget, the campaign should be fought on it.
"Tasmania has a spending problem at the moment.
"We need to make sure that we can get our spending back under control."
That partially refers to the fact the state has a history of spending more than it budgets for, particularly in health.
Here's how the Liberals and Labor have been treating the issue of spending and budget repair:
Elections are often a big-spending affair.
The Liberals have previously been accused of pork barrelling (slang for bribing the electorate for their votes), but they say they are simply listening to community concerns.
Labor also promised a whole heap of community grants last election. The main difference is the relevant department would eventually assess them to decide if they were worthy of spending money on.
There are also a whole heap of other policies, such as the stamp duty exemption for first home buyers, that will cost taxpayers money.
And those spending promises really add up.
Economist Saul Eslake says Treasury data shows the 2018 and 2021 elections each added $1.4 billion of spending to the budget without any mention of how to pay for the promises.
Last year's was even more expensive.
"[The levy is] about the only election commitment that hasn't been met since the election.
"Labor would've spent an additional $2 billion over five years if they had won.
"So, to hope that that wouldn't be repeated in the election campaign would be a bit like Samuel Johnson's definition of second marriage — a triumph of hope over experience."
At the moment, 40 per cent of Tasmania's money comes from the carve up of GST. Around a third is own-source revenue.
Mr Eslake has put forward several options to raise more money, including collecting more payroll tax from businesses, raising car registration fees, adding a duty on the purchase of expensive new motor vehicles — "with appropriate concessions for pensioners and other low-income earners".
He also suggested switching stamp duty to a land tax and increasing mining royalties.
He says Tasmania collects about $40-50 million a year less than it would if its scheme was equivalent to those of other states.
Money could also be found by asking the salmon industry to pay royalties for the use of Tasmanian waters.
"That wouldn't solve Tasmania's problems, of course, but it would make a useful contribution to reducing the deficit over time."
All of these ideas have been rejected by the major parties.
Mr Rockliff also pointed out that legislative changes in 2023 meant the salmon industry now pays for its own regulation.
"The salmon companies cost government. They return that to government, so it's cost neutral and that's been a significant reform under our government," he said.
Another way to raise revenue, selling off state-owned companies and government business enterprises has been ruled out by both major parties already.
As have any new taxes.
Growing the economy is also a big part of how both major parties plan to get the state out of debt.
As part of that, the Liberals have been waging a war on red tape, and if some of Labor's new policies are anything to go by, they're planning to do the same.
When asked about increasing revenue, Labor leader Dean Winter talked about growing the economy by unlocking $25 billion in renewable energy developments.
Premier Jeremy Rockliff on the other hand said investments in key services such as health, education and community safety would help increase revenue.
The TCCI's Michael Bailey is less worried about the revenue side of things.
"You don't give someone with a spending problem more money," he says.
Mr Bailey wants the parties to find efficiencies in the public service, arguing that it's grown by 30 per cent since the COVID pandemic.
"We know that we're borrowing to pay for those wages," he said.
"They do wonderful work, but it's simply too big for what Tasmania can afford right now, so we would argue that that's the first thing that should be looked at."
Both major parties have revealed their plans to find some savings, and they include the creation of new units.
The Liberals' plan, which was announced in March, is called the Efficiency and Productivity Unit (EPU); Labor has the Review and Evaluation Unit (REU).
Two names and slightly different descriptions for two things that will do very similar things — examine the effectiveness and value for money of government programs to try and identify savings.
The Liberals are assuming they will be able to cut spending to the point where in three years' time overall government expenses will be less than they are this year.
They hope to find savings through:
Labor's plans to "save the budget more than half a billion dollars", while not outlined in an alternative budget, were part of leader Dean Winter's budget reply speech.
They hope to do this by:
This list is far from extensive, however, none of the policies have been costed by treasury.
If the party that wins government does not right the ship, Mr Eslake estimates Tasmania is heading to a debt of $16 billion by 2035 with repayments to hit $750 million a year.
"We've gone from in the middle of the past decade, being a net creditor, that is having more money in the bank than the government owes by way of debt, to now having debt and other liabilities," Mr Eslake said.