$600M BILL OF HEALTH

STATE WILL INJECT CASH INTO AILING SYSTEM

THE State Government will invest an additional $600 million in health care over the next four years.

Premier and Treasurer Peter Gutwein announced the funding move yesterday, saying better health outcomes were his government’s number one priority.

THE State Government will pump an extra $600 million into the state’s health system over the next four years.

Premier and Treasurer Peter Gutwein released the Revised Estimates Report yesterday, saying the budget fundamentals were on track and the state’s economy continued to ride the crest of a wave.

The Government will fund the increased health spending next year in part by clawing special dividends totalling $90 million from Hydro Tasmania and Sustainable Timbers Tasmania.

Mr Gutwein said the health portfolio would also be spared further cuts in the name of “efficiency dividends”.

“Over the four years of this budget cycle, we will be investing $600 million more into health – around $150 million each year,” he said.

“One of the things that we’ve done this year to ensure that we’re in a position to enable a significant investment to occur into health, we’ve forecast a special dividend from

Hydro and a special dividend from Sustainable Timbers Tasmania. Both have strong balance sheets.”

The budget update revealed a drop in the predicted net operating surplus for 2019-20 of $46 million, from $57.4 to $10.8 million.

The revised state budget revenues were affected by a $73 million drop in GST recepts, but this was offset by a $90 million increase in state tax revenue, thanks to increased stamp duties and land tax from the state’s booming property market and increased payroll tax receipts as employment rises. The biggest impact on expenses was a $131 million jump in public sector employee costs, mainly in health.

The state will remain net debt free at the end of this financial year, with $36 million in the bank instead of a predicted debt of $284 million – representing a variation of $321 million. Net debt is on track to reach $1.3 billion by 2022-23 but Mr Gutwein said now was the time to take advantage of good economic times and low interest rates.

“This is intergenerational infrastructure investment and it’s going to provide hospitals, it’ll provide schools and provide roads and bridges, houses and irrigation schemes,” he said.

The budget’s predictions for growth, employment and population growth are all tracking close to or better than budget predictions. The Consumer Price Index has increased to 2.75 per cent, higher than expected, signalling increased cost of living pressures caused by rising housing costs.

Tasmanian Chamber of Commerce and Industry chief

Michael Bailey said the business community was confident the state’s economic good times were likely to continue.

“We have no reason to think that boom isn’t going to continue,” Mr Bailey said.

Labor’s Treasury spokesman David O’Byrne was not impressed.

“Thanks to Peter Gutwein’s financial mismanagement, net debt will hit near record levels in a couple of years,” Mr O’Byrne said. He said the Premier “runs to the GBE’s each year in a panic to plug the holes in his budget”.