The Liberal Government is delivering on its long-term plan for Tasmania, which is all about economic growth and job creation.
As part of the plan we promised to fix the budget mess left behind by the disastrous Labor-Green government.
Three years ago Labor and the Greens announced they needed to rein in expenditure and find savings equivalent to 1,700 full time jobs. That strategy was passed by Parliament.
But Labor and the Greens did not have the fiscal discipline to stick to the financial strategy they had promised and instead kept on spending beyond their means.
The revenue forecasts in the 2011-12 budget were incredibly accurate. The problem is that expenditure has blown out.
Since the 2011-12 Budget, expenditure has been over $1 billion more than was forecast in the 2011-12 forward estimates.
In the last financial year alone the blow out in expenses is expected to be more than $400 million higher than forecast in the 2011-12 budget, the budget the then Treasurer Lara Giddings said was supposed to rein in government expenditures.
Tasmania’s public sector wage bill is more than $100 million a year higher than forecast by Labor and the Greens just 3 years ago. Since 2003-04 public sector employment costs have grown by more than 80 per cent.
The Liberal Government is committed to putting the budget onto a sustainable footing. We are looking at ways to save jobs, protect frontline services and rein in wages spending.
One of the broader measures that we are considering is a wage pause across the entire public sector. A wage pause would mean all public servants would remain at their current salary for at least one year and we estimate it would save up to 500 jobs and $50 million.
We are also considering restricting wage increases to 2 per cent per year once the pay pause was lifted and until our budget position improves.
If we do what Labor and the Greens did and let the cost of wages spiral out of control, there will need to be harsher, more severe cuts later on to restore the budget to a sustainable position.
But if we can control spending on wages, it will reduce the pressure on the budget, save public sector jobs, put us onto a pathway to a more sustainable position and avoid the need to consider deeper cuts again in a few years’ time.
The Liberal Government has already announced it will freeze for one year the salaries of Members of Parliament, ministerial staff, Senior Executive Service staff within the public service and board fees.
Peter Gutwein, Treasurer
