The Pre-Election Financial Outlook was published today by Treasury.
“The outlook for the Tasmanian economy has improved since the 2020-21 Budget and the Revised Estimates Report were published. The successful management of the COVID-19 pandemic has allowed the Tasmanian economy to continue to recover, the scale of which is now being reflected through new economic data released by the Australian Bureau of Statistics.
The updated estimates and forecasts presented above reflect new data issued by the ABS since the publication of the 2020-21 Budget and Revised Estimates Report. Despite a severe contraction in economic activity throughout Australia and Tasmania in the June quarter 2020, positive gross state product growth of 0.3 per cent was recorded in 2019-20. This was considerably higher than the decline of ½ per cent estimated in the 2020-21 Budget. Since then, new data from the ABS have shown strong growth in the second half of 2020, reflecting improved consumer confidence and underpinned by significant government stimulus and support measures.
Estimates of state final demand for the first two quarters of 2020-21, from the ABS, indicate a stronger and faster rebound in economic activity in Tasmania than was anticipated at the time of the 2020-21 Budget and the Revised Estimates Report. Growth was recorded across the major components that comprise state final demand – household consumption, private investment and government expenditure. Dwelling investment was particularly strong in the December quarter 2020, boosted by Australian and State Government support for housing construction.
Similar trends are expected to continue across most components of state final demand for the remainder of 2020-21, leading to a revised estimate of 2½ per cent growth in state final demand for 2020-21 (up from a decline of ¼ per cent forecast at the time of the 2020-21 Budget and growth of one per cent in the Revised Estimates Report). Due to the stronger performance expected for 2020-21 (increasing the base year from which growth is calculated) growth of 2½ per cent is forecast for 2021-22 (down from a 3½ per cent growth rate anticipated at the time of the 2020-21 Budget, but slightly higher than the growth of 2¼ per cent in the Revised Estimates Report).
Gross state product forecasts have also been revised, consistent with the changes impacting state final demand. Gross state product is forecast to grow 1½ per cent in 2020-21 (compared to a contraction of 1½ per cent in the Budget and an increase of ¾ per cent in the Revised Estimates Report), and 2½ per cent in 2021-22 (compared to growth of 3¾ per cent in the 2020-21 Budget and three per cent in the Revised Estimates Report).”
Read the full Pre-Election Financial Outlook.
Media release – Tasmanian Liberals, 13 April 2021
Pre-Election Fiscal Outlook Shows Our Plan Is Working
The Pre-Election Fiscal Outlook (PEFO) confirms Tasmania’s Budget has significantly improved, jobs have rebounded strongly and our economic outlook is positive with strong growth expected.
Despite COVID, the Net Operating Balance improves by $607 million over the Budget and Forward Estimates, and Net Debt improves by almost $600 million this financial year, with continued improvement over the forward estimates.
There is significant jobs growth over and above what is already forecast.
As a result, Treasury has revised upwards its economic forecasts across all key indicators, with larger than expected growth in our economy, employment and participation.
The Report notes growth in GST receipts and own-source revenue up $741 million compared to the same time last year, as a result of Tasmania’s nation-leading economic recovery and burgeoning local economy.
A strong economy and responsible budget management allows us to invest in the essential services Tasmanians need, and only a majority Liberal Government has the track record to deliver this.
Labor has already announced a completely unachievable, unbelievable and unsustainable election spend, which would deliver Tasmanians the same result it did last time they were in minority Government – an economy in recession, a health budget slashed and 10,000 jobs lost.
As Deloitte reported just yesterday, Tasmania’s economy has come through COVID better than just about anywhere else because of our management of the pandemic.
Today’s report confirms that only a majority Gutwein Liberal Government can be trusted to manage Tasmania’s post-COVID recovery.
David O’Byrne MP, Shadow Treasurer, 13 April 2021
Treasury confirms Liberals can’t and won’t deliver promises
Shadow Treasurer David O’Byrne said Labor welcomed today’s improvement in the budget and debt position, but noted the improvement is almost entirely due to increased GST receipts and the Government’s failure to deliver its infrastructure promises.
“Today’s report shows the Liberals will under-deliver on their infrastructure promises by nearly $600 million,” Mr O’Byrne said.
“That means hundreds of families won’t be housed this winter, run down schools won’t be fixed, hospitals will still be in crisis and traffic will be as bad as ever.
“The report also shows there is absolutely no room for complacency.”
Mr O’Byrne said Tasmania’s economic recovery remains fragile, with the latest Deloitte forecasts expecting over next four years Tasmania will have the lowest economic growth of any state, business investment growth just a third of the national rate and a low per capita GSP, which will fall from 79.2% to 78.3% of the national average.
“On top of that, today’s ABS jobs figures show Tasmania has experienced the lowest jobs growth of any state over the past year, 70% below the national average and half the growth seen in Victoria.
“Tasmania needs Labor’s ambitious plan for jobs, health, housing and education, and a Government that will deliver the infrastructure Tasmania needs and was promised.
“Only Labor is working for Tasmanians to deliver better economic outcomes.”
Media release – Tasmanian Small Business Council, 13 April 2021
Parties out of excuses on payroll tax cuts as Treasury coffers overflow
The Tasmanian Small Business Council has renewed its calls for both major parties to commit to payroll tax cuts after a startling report released today showed the Treasury coffers were overflowing.
“This is one of the most remarkable budget turnarounds in living memory. From teetering on the brink of a recession 12 months ago, Tasmania now has booming economic and revenue forecasts,” Robert Mallett said.
“Tax revenue in particular is through the roof. A lot of that is payroll tax, which is effectively a tax on jobs at a time when we can least afford it. While I’m pleased the books are looking good, it’s disappointing that’s because more small businesses are paying payroll tax.
“With bracket creep and a stronger jobs market, more and more small businesses with fewer than 15 staff have to pay payroll tax. It’s simply too much for small businesses to bear. Small businesses are slowly but surely putting the worst of COVID behind them, the last thing they need is the cold, dead hand of Treasury holding them back and reaching into their pockets.
“The Tasmanian Small Business Council is urging both major parties to commit to a bipartisan policy of raising the payroll tax threshold and reducing the rate as a way of supporting small business at this crucial time.”
