Economy
Cash crash: state has just $196m in reserve
Daze
THE Tasmanian government has used up almost all the cash in its piggy bank according to the Tasmanian Auditor-General.
In a private briefing to state MPs, Auditor-General Mike Blake used a graph, pictured, to illustrate how little the government held in its cash reserves, called Special Deposits and Trust Fund, as of June 30.
His data shows that since 2008 the fund has been whittled down from $1.2 billion to $196 million – when discounting $424 million in Commonwealth money committed by Canberra to specific projects.
The opposition has described the news as alarming, but the government says it vindicates why budget cuts, already under way, are necessary.
Mr Blake said the graph – similar to that already published in his annual report – was not meant for public consumption but had since been published online (Tasmanian Times: Dazed, confused and without a clue, HERE).
“From that graph somebody has drawn the conclusion that the government is running out of money. I’m not saying that, but I am saying it’s getting low,” he said.
“What I was saying (to MPs) was you need to look at the trends and think about what the implications of that are.”
If the trend continues, Mr Blake said it would become more difficult for the government to avoid going into net debt.
Premier Lara Giddings said her budget papers showed the government would avoid net debt by $53 million this year providing it met its savings strategies.
“The government is concerned about its budget position and that is why it is taking the action it has to reduce the growth in government expenditure following the loss of $1.8 billion in GST and state taxation revenue over the next four years,” she said.
“The government is doing all it can to address this situation and avoid going into net debt, which would mean that funding currently being spent on services would need to be reduced further just to pay for interest on the debt.”
Opposition finance spokesman Peter Gutwein said it had taken successive governments 18 years to build up the fund.
“The only way that this cash can be rebuilt is by funding it from future surpluses or by increasing our external borrowings or selling assets,” he said.
Earlier on Tasmanian Times:
The Bosun’s Mate: Dazed, confused and without a clue …
John Lawrence: It will be a tough 2012