Peter Gutwein,Premier
With a nation leading economy just weeks ago*, today’s Economic and Fiscal Update Report on the state of our economy and budget, demonstrates the significant local impact of COVID-19.
Tasmania is the only state to provide an economic and budget update at this time, however, we believe to move forward from coronavirus together, we first need to all know where we stand.
Before the pandemic hit, the Tasmanian Treasury was forecasting in its mid-year update released in February a surplus of $11 million this year. Now, we are facing a likely deficit of just over $700 million.
From leading jobs growth in March 2020, we now forecast 27,500 jobs lost by the end of June and an unemployment rate of 12.25 per cent.
And from being the fastest economic growth in the nation at 3.6 per cent last financial year, Treasury now forecasts a decline of 1.75 per cent for 2019-20.
Reduced economic activity has impacted government revenue and government expenditure is higher as we manage the impacts.
The slowing national economy will have a significant impact on our GST revenue, which we expect to be written down by $310 million this current financial year and more than $357 million in 2020-21.
State taxation revenues will fall over this financial year, and next, by a total of $360 million.
The increased expenditure since the Budget will be around $396 million more in the current year and $439 million more in 2020-21 than forecast. This includes nearly $330 million associated with the COVID 19 response.
The impacts combined mean that rather than holding net cash and investments, as outlined in the Revised Estimates Report released in February, our net debt position is forecast to be $646 million at 30 June this year and around $2,350 million next year.
Tasmania’s Net Debt position will continue to be the lowest in the country.
COVID-19 has delivered a health challenge and an economic challenge, but saving lives has been our number one priority, with modelling highlighting that had action not been taken up to 89.1 per cent of the Tasmanian population may have been infected.
The Tasmanian Liberal Government has taken Tasmania to a position of strength before, rebuilding our state from the fiscal and economic laggard it was under Labor and the Greens in 2014, to the nation leader it became by March 2020.
This included leading jobs growth, with bold strategies to back our competitive advantages, grow local business and deliver better training and education outcomes.
We have delivered for Tasmania before and we will do it again.
Together, we will regain our confidence and rebuild our strong economy once more.
The Report has been prepared by the Department of Treasury and Finance and is available online at www.treasury.tas.gov.au
*CommSec State of the States Report April 2020
