Today I released the Budget Update and Risk Report, and the March Quarterly Report.

One of the Liberal Government’s key priorities is to return the budget to a sustainable position which is why I asked Treasury to prepare a Risks Report, to provide an update on the budget and to provide a more detailed assessment of the risks which were highlighted in the revised estimates report released in February by the Labor-Green Government.

This report lays bare Labor and the Greens’ financial mismanagement, a $1.1 billion Labor-Green budget black hole.

The report highlights:

• That Labor and the Greens have left the State with a cumulative total of more than $1.1 billion in operating deficits over the forward estimates period to 2016/17;

• Net debt rising to more than $400m by 2016/17;

• A further loss of $270m in GST receipts and mineral royalties over the period to 2017/18;

• A failure by Labor and the Greens to deliver the savings targets they set in the 2011/12 budget; and

• That Labor and the Greens had no plan for the future recurrent funding challenges of the Royal Hobart Hospital, the NDIS and Education funding as well as infrastructure investment in our roads and rail.

The legacy of the Labor-Green Government is that Tasmania has been left with a $1.1 billion budget black hole, rising debt and rising interest payments that if not addressed will rob Tasmanians of the basic services they need.

We have promised to fix the Labor-Green budget mess. Tasmanians elected us to do that, and that is what we will do.

The Liberal Government will rebuild the budget day by day, dollar by dollar with an aim of returning the budget to surplus within six years.

We will start by implementing the sensible savings we outlined during the election campaign.

This report is not an excuse to break our promises, we intend to keep every one of our election promises.

Rather, the report highlights the scale of the challenge our State is facing as a result of Labor and the Greens’ incompetence.

The August budget will be disciplined and responsible, it will be tough but it won’t be a slash and burn budget.

We are very mindful of the importance of government spending to Tasmania’s economy, to essential services, and to jobs.

Recognising the need for budget discipline until the budget is delivered, the Government has commenced the implementation of our election savings strategies, such as commencing the merger of DEDTA and DIER, reviewing boards and committees, reducing the cost of ministerial transport, and we have implemented strict vacancy control across government ensuring that only essential positions are filled.

In addition to reviewing revenue and expenditure requirements during the 2014/15 budget development process, agencies are also being instructed for the remainder of 2013/14 to immediately :

• review all discretionary funding including consultancies, transport and travel policies

• suspend all expenditure on non-essential advertising; and,

• review spending on discretionary grant programs.

This report provides the foundation for the development of the 2014/15 budget and supports the Government’s decision to delay the budget until August 2014.

The task will not be easy but with a disciplined and responsible approach we will fix the mess that Labor and the Greens have left us.
Peter Gutwein, Treasurer