GUT WE IN’ S RECORD SPEND

PETER Gutwein will attempt to restart Tasmania’s COVID-ravaged economy with a historic $5bn splurge on infrastructure.

The state budget handed down by the Premier and Treasurer on Thursday includes a massive spending boost on roads and bridges, hospital and school upgrades and housing.

He said he was “throwing the kitchen sink” at the pandemic recession in a bid to create 25,000 jobs in the next four years.

The budget contained no new taxes or tax increases.

The record spending will come at the cost of three budget deficits in a row, record debt — and the prospect of austerity budgets in years ahead.

The catch cry for the biggest jump in government spending in living memory is “Jobs, confidence, community: rebuilding a stronger Tasmania ”.

The government will spend $1.1bn more than it earns this financial year — although Mr Gutwein has optimistically defied uncertain times by predicting razor-thin surpluses of $13.9 m in 2022-23 and $17.2m 2023-24.

The budget predicts the state will go from having $175 min the bank in July 2020 to being $4.3bn in debt in 2023-24.

Mr Gut we in says the debt is manageable with low interest rates meaning the cost of servicing that debt will amount to less than 1 percent of government spending.

He said he would leverage the state’s strong pre-COVID performance to rebuild the economy.

“I will not sugar-coat these challenges for the Tasmanian people,” he said. “The road ahead will not be easy .”

“In the face of the most deadly global pandemic the world has seen in a century, our response must be proportionate and it must be strategic. We can never tax our way to prosperity, nor can we cut our way to recovery.

“The way to rebuild a stronger and more resilient Tasmania is to invest heavily to support jobs, to re gain confidence and to rebuild our economy and our community .”

The government will spend $7.5bn this financial year in its bid for fiscal stimulus, a 12 per cent jump in spending.

At the same time revenues will rise by just 0.23 percent.

The budget papers betray an element of risk in the government’ s plant ore lyon infrastructure spending: only 70 per cent of the $723 min the last budget has been spent in the intervening 17 months.

This year’ s massive increase in spending looks set to be followed by a period of austerity.

Government spending is forecast to fall by 6 per cent in next year’s budget and be flat the year after but Mr Gutwein said he did not anticipate job cuts to the public service.

While Tasmania’s economic growth is expected to bounce from -0.5 per cent in 2020-21, to 3.75 per cent in 2021-22, unemployment is predicted to be up wards of 8 per cent in both financial years.

And population growth will be a bare 0.6 per cent in 2021-22, although Mr Gut we in said he was optimistic it would be higher.

THE WAY TO REBUILD A STRONGER AND MORE RESILIENT TASMANIA IS TO INVEST HEAVILY TO SUPPORT JOBS, TO REGAIN CONFIDENCE

PREMIER PETER GUTWEIN