Moody’s blues for Gutwein
Infrastructure spend ‘difficult to deliver’
INTERNATIONAL ratings agency Moody’ s has cast doubt on the Gutwein government's ability to deliver its ambitious $5bn infrastructure program announced in Thursday’s budget.
Premier Peter Gutwein on Friday started his budget sell with a cross-state roadshow spruiking his big-spending blueprint to beat the coronavirus blues.
But in commentary issued following the budget, Moody’s Investors Service said promising was one thing, delivering was another.
“Notwithstanding the budgeted increase in debt-funded infrastructure spending, we consider slippage over the forward estimates period is highly likely ,” the company said.
“This reflects our view that the scale of infrastructure spending will be difficult to deliver within the projected time frames.”
Mr Gutwein appeared at a TCCI business breakfast in Hobart on Friday, ahead of a lunch in Launceston and dinner in Burnie.
Mr Gutwein said spending big and incurring a $1bn deficit this year on the way to $4bn in debt was a necessary and manage able response to the economic havoc caused by coronavirus.
“The COVID-19 pandemic has been the largest shock in generations to our way of life, our society, our economy and our budget ,” he said.
“We are responding to both a health crisis and an economic crisis.
“It’s why we moved swiftly to put in place measures at our borders and in our community to save lives, and leveraged our strong balance sheet to save livelihoods. It should come as no surprise that the support we have provided has come at a
cost. I have been open with Tasmanians about that from dayone.
“However, importantly, as our economy returns to growth, there is a pathway back to the black with a return to a modest surplus in 2022-23.”
Labor Treasury spokesman David O’Byrne described the budget as “a con job”, said Moody’s was right and growth and employment would be lower as a result.
“This should be no surprise to Tasmanians ,” he said.
“They’ve been suffering under a failure of delivery of infrastructure from this government for years.
“And the ratings agency Moody’ s today have just confirmed what Tasmanians know and that is that this government is highly unlikely to deliver on its infrastructure strategy.”
TCCI chief executive Michael Bailey said infrastructure was going to be the government’ s big challenge.
“What we’ll be looking for now (is) how they can tighten their processes and their systems to make sure that those projects can get out the door and get on the ground,” he said.
“What we do know is although infrastructure has been a focus of both state and federal governments for the last probably 10 months or so, getting the money out the doors is a different question .”
He said that from the business community’s point of view, the budget didn’t go far enough.
“We certainly felt that it could be a reform budget. The market is ready for reform, we know that Tasmanians have been fantastic at accepting change over the last 10 months, we’d hoped to see a budget that cut deeper with some new ideas and new thinking.”
In his analysis of the budget, leading economist Saul Eslake said the government’ s headline figures painted an exaggerated picture.
“The additional infrastructure spend in the budget — over and above what had already been announced — is actually quite modest ,” he said.
“Although ‘ general government’ infrastructure spending will approach almost $4bn over the four years to 2023-24 …only $300 mo ft he additional general government infrastructure spending has been added since last year’ s budget .”
IT SHOULD COME AS NO SURPRISE THAT THE SUPPORT WE HAVE PROVIDED HAS COME AT A COST. I HAVE BEEN OPEN WITH TASMANIANS ABOUT THAT FROM DAY ONE.
PETER GUTWEIN