Tasmanian Budget – Bread & Butter Budget…with a Stadium on Top

MyState Bank CEO Brett Morgan said the 2023-24 Tasmanian State Budget was bread and butter budget….with a stadium on top.

“The 2023-24 State Budget has revealed a sharp drop in Tasmania’s expected economic growth, a fall state tax revenue, and a rain-check on a budget surplus,” Mr Morgan said.

“It is clear that many of the challenges that Tasmanians have been struggling with, including high inflation and rising interest rates, have had a significant impact on the Government’s budget too.

“This has forced the Tasmanian Government to again focus spending on health, education and cost of living, clawing savings with the reintroduction of an efficiency dividend, while paying for the new Macquarie Point Stadium.

"This is a bread and butter budget…with a stadium on top."

Mr Morgan said the Reserve Bank of Australia’s record 11 interest rate hikes had hit the State Budget, just as they had hit and hurt the budgets of households across Tasmania.

“When the last State Budget was penned, the RBA had only increased interest rates once. Since, there’s been 10 rate hikes, and they have dramatically increased the cost of the state's debt," Mr Morgan said.

"The cost of servicing the billions of dollars of debt will jump by almost $200 million in the next four years, from a budgeted $90 million this year to an estimated $285.5 million in 2026-27.

“There is also a hit to the state's income, with the sluggish housing market wiping around $420 million from the Budget across the forwards."

Mr Morgan said there was however cause for optimism, for both the budgets of the State Government and Tasmanians. "There will be some short term pain, but some long term relief ahead," Mr Morgan said.

"Inflation has peaked and is falling, albeit slowly. We are very near the top of the rates cycle, with another rate rise expected this year. But Tasmanians can expect a rate fall within the next 12 months, and more likely early next year."

Mr Morgan said the almost $350 million in cost of living measures would be welcome news to Tasmanians. “Every dollar counts and the $347 million in support will help many Tasmanians at a time when there's huge pressure on many household budgets," Mr Morgan said.

Mr Morgan also welcomed the State Government’s $1.5 million Affordable Rentals Initiative to assist renters.

“It’s great to see the State Government following the lead of Colony 47 and the MyState Foundation, which last month announced a pilot program to subsidise the rent of eligible Tasmanians in the private rental market,” Mr Morgan said.

“All levels of Government, the private sector and charitable organizations have a role to play in helping to fix Tasmania’s complex housing issues, it’s a big challenge and it will take a village.”