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Message from the Premier

Premier - Lara Giddings

When I became Treasurer a little over six months ago one of the first things I had to do was work through the process leading up to the Mid-Year Financial Report.

I was determined to be as upfront as possible with the Tasmanian people about the decline in the State’s finances in the wake of the Global Financial Crisis and the kinds of measures we would need to take in response.

The task recently got harder in the Federal Budget when we found we’d lost another $343 million in GST revenue, bringing our total loss in GST revenue and State taxes to some $1.5 billion.

I have consistently said we needed to take strong action.

In this year’s Budget we are doing just that.

It will see almost $1.4 billion in savings achieved over the next four years.

It will return the State’s finances to a sustainable position.

And it will allow us to once again put money in the bank to fall back on in hard times, just as we took all the hay out of the barn in response to the GFC over the last three years.

The decisions we have had to make have not been easy and I recognise they will cause pain.

We have tried to limit the impact on public sector staff.

But we cannot continue to maintain a public service that is unsustainable.

We have tried to minimise the impact on key services for the most vulnerable in our community.

But we cannot achieve the savings required without affecting the biggest areas of expenditure such as health and education.

Both of these agencies will in fact receive more funding in this Budget than last year, but the growth over the next four years will be slower than expected.

Where possible we have found savings in areas like travel, cars, phones and the like.

However, that was never going to be enough.


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The latest Treasury estimate is that we still need to identity specific savings as part of that $1.4 billion that equate to the wages of 1700 full time staff.

But once again I want to make clear that does not mean we intend to sack 1700 staff.

I am confident that through vacancy control and improved productivity we can minimise the job losses so involuntary redundancies are needed only as a last resort through the fair and lengthy process I outlined two weeks ago.

It would be easy just to focus on the cuts, especially when the burden of those cuts is shared by every government agency and across the community.

But we should not lose sight of the fact that we are still spending $4.7 billion on key services for the Tasmanian community.

And we should not lose sight of the fact that across government and GBEs we are investing $4.4 billion in infrastructure that will create jobs, pave the way for economic growth, and lay the foundation for better services in future.

Strong economic management is not an end in itself.

It is needed so the government can continue to afford to provide quality public services, such as public hospitals, public schools, community safety, and support for the most vulnerable members of our community.

Despite the difficult times, we have still found additional money to help Tasmanians in need deal with the impact of rising costs.

There is extra emergency funding for people who are struggling to pay bills or afford food, and I am pleased that we have been able to invest in giving vulnerable Tasmanians practical help to drive down their energy costs.

But if we allow the Government to slip back into debt those services and that support would be jeopardised, as they were in the 1990s, by the need to pay interest on the State’s debt.

I believe that by making strong decisions now we will ensure a better future for Tasmania.

We are already seeing signs of recovery in our economy, with 6000 additional jobs created in the last 18-months, rising private sector investment, growing exports, and overall economic growth that is the second fastest of the States.

Our investment in infrastructure and our determination to manage the State’s finances responsibly are designed to boost that recovery and create more jobs and prosperity.

We are not making strong decisions and reducing expenditure just for the sake of it.

We are doing so because it is the right thing to do.

It is the right thing by the State’s economy.

It is the right thing for Tasmanians.

It is the right thing for the future of this State.