KEEP CALM AND SPEND

THE state budget contained few surprises. Across Australia and the globe, governments will be forced to rack up massive debt in order to spend their way out of the corona virus crisis. Last month we said a similar thing in relation to the federal budget, in which Treasurer Josh Fry den berg announced a record $213.7bn deficit. Australia’s gross debt is expected to hit $872bn this financial year and balloon to $1.13 trillion by 2024.

And those figures were part of a bestcase scenario which assumes the early release of a reliable coronavirus vaccination, which in turn would allow restrictions to fully ease, including a potential opening of Australia’ s international borders. Tasmania’ s budget follows that lead. Tasmanian Premier and Treasurer Peter Gutwein has delivered a budget with a $1.1bn deficit. The state will slide into net debt to the tune of $1.8bn this financial year and will be $4.4bn in the red by 2024.

It’s a far cry from the debt-free Tasmania of 2019-20, but those worry-free days are long gone.

Mr Gutwein will argue that Tasmania is better off than other states and that our strong balance sheet heading into the corona virus crisis stood us in good stead.

The opposition will claim the warning signs were already there and that our budget under the Liberal government was heading south.

It doesn’t really matter because now there is no choice, Mr Gut we in has to spend his way out of this health and economic crisis while praying tourists return to our shores and that they don’t bring with them a second wave of infections.

With interest rate satan all-time low, it’ s the right time to spend and, as we’ve said before, Mr Gutwein has carte blanche to fork out the cash.

With a planned $5bn infrastructure spend, Mr Gutwein says he is throwing the “kitchen sink” at our recovery. And that’ s what’ s needed.

But as Mercury political editor David Killick points out, the state struggled to deliver a $500msp end last year.

So the big test will be whether or not this government is capable of delivering on these projects fast enough. Can we get the approval sin order, do we have the boots on the ground to start the construction work and get the cash out the door?

Tasmanians are eager to return to the purple patch that we’ ve recently enjoyed.

But the Premier acknowledges that despite the relative prosperity and improvement, there is so much more to do to ensure all of Tasmania benefits from the spoils.

This budget, along with government policy, has to deliver better health and education outcomes forth estate.

It has to restore the sort of confidence that will see private industry match the government’s willingness to take risk and to spend.