Tasmania’s Stories

Gutwein delivers $54.3m surplus

Edition 184 Gutwein Oliver King Examiner

Tasmania's Treasurer Peter Gutwein delivered a surplus of $54.3 million in his fourth Budget, with expenditure focussed on health, education and jobs.

An expected GST windfall and improved returns from several Government Business Enterprises (GBEs) enabled expenditure of $5,800 million to be planned for 2017-18.

Budget surpluses are projected for each of the next four years.

Highlights of the May Budget are:

  • $1,700 million for health, with 106 extra beds and 360 more staff.
  • $1,500 million for education.
  • $245 million on new infrastructure projects.
  • No new taxes.
  • Improved returns from GBEs and increased revenue from tax/stamp duty.

Mr Gutwein described the Budget as one on which Tasmania's future could be built.

"It provides us with a buffer, as well as providing us with a balanced outcome that provides for the most significant boost to health spending in the State's history," he said.

"Construction is going well, tourism is going. We're seeing a return to strength in our agricultural sector and forestry.

"State revenues are up, federal revenues are up."

Leading economic commentator, Saul Eslake, wrote: "A combination of good management and good luck has ... put the Hodgman Liberal Government in a strong position ahead of the next State election — whenever it is held."

Mr Eslake said the Government's improved operating position had allowed it to set aside a $335 million election honey pot.

He said the Government was now reaping benefits of three tight budgets, but he felt fundamental reform needed to close the gap between the State and national economies was missing from the Budget papers.

Mr Eslake wrote: "New spending in the Budget is, for the most part, well targeted towards meeting pressing needs — as in the State's hospitals, or the care of vulnerable children — or creating jobs, and supporting key drivers of economic growth, including tourism and agriculture.

"The Budget's assumptions about the Tasmanian economy — economic growth of 2.5 per cent in 2017-18, easing back to 2 per cent per annum after that, employment growth of 1.25 per cent in the coming financial year, and 1 per cent per annum thereafter — are by no means unreasonably optimistic.

"And the Budget is more conservative in its assumptions about Tasmania's share of the GST revenue than those contained in the recent Federal Budget.

"Even so, these upward revisions to forecasts of all of the Government's major sources of revenue have allowed it to increase recurrent spending by more than $320 million per annum over and above what was envisaged in last year's Budget — including, as the result of 187 new policy decisions costing an average total of $195 million per annum — while still leaving the underlying net operating balance an average of almost $50 million per annum better off than anticipated a year ago.

"This improved 'operating' position, together with a willingness to borrow a bit more than planned a year ago, has allowed the Government to make 44 new infrastructure spending commitments totalling almost $260 million over the four years to 2020-21."

Mr Eslake said the total level of projected infrastructure spending during the four-year period was now over $2 billion.

"This includes a 'general provision' of $335 million for infrastructure projects 'yet to be announced' — a honey pot which will no doubt be drawn on ahead of the forthcoming election," he wrote.

Mr Gutwein told Parliament the State's surpluses relied heavily on GST revenue and the Government would continue to fight for its fair share.

"Any significant change there would have a detrimental impact on the State," he said.

GST payments to the State will be $2.3 billion in 2017-18, about $40 million more than previously projected.

The Budget confirmed Hydro Tasmania would not pay a dividend for a second consecutive year, but projected a $12 million contribution from the GBE in 2018–19.

Overall revenue from GBEs increased $94 million on the previous year, including higher dividends from the Motor Accidents Insurance Board and TasNetworks.

A total of $100 million will be added to the TT Line's Vessel Replacement Fund, including $20 million from the Government and $80 million from the GBE, bringing the reserved amount to $180 million.

The Government has put aside $25 million for a youth employment strategy which includes $17.1 million in payroll tax relief for businesses that employ apprentices, trainees and young people, with grants of up to $4,000 for small businesses that take on a trainee or apprentice.

Health expenditure takes the biggest slice of the budget pie, with investment in hospital infrastructure and $144 million allocated to recruit extra staff.

The transfer of the Mersey Hospital back to State hands and an accompanying $730 million payment from the Commonwealth has boosted the Tasmanian Public Finance Corporation's bottom line.

A total of $6 million will be spent over four years on a statewide operations and command centre to improve communication between Tasmania's major hospitals.

A second search-and-rescue helicopter will be purchased at a cost of $9 million to address increasing demand.

A record investment in education will include $6.9 million to employ more support staff, including pathologists, psychologists and social workers.

There is also a $1.6 million child and student well-being strategy investing in more school nurses in district schools, and $250,000 for suicide prevention.

A $500,000 injection into Tasmania’s brand to differentiate and market the State was welcomed by the Tasmanian Farmers and Graziers Association.

Mr Eslake restated his concerns about the State's superannuation liability.

"Tasmania's overall public sector net debt is smaller, relative to the size of the State's economy, than anywhere else in Australia," he wrote.

"That would be sufficient to warrant Tasmania having an AAA credit rating — if it weren't for the nearly $7 billion unfunded superannuation liability, which (scaled against the size of Tasmania's economy) is by far the largest of any State or Territory."

The superannuation liability inherited from the Public Sector Defined Benefits Scheme is sitting at $6.3 billion and will not be off the Government's books until 2078.

Nevertheless, Mr Gutwein finished his Budget speech with a message to Tasmanians who have moved away.

"There is no better time to come home if you're a Tasmanian who has left," he said.

Image courtesy of Oliver King and The Examiner

5 June 2017, Edition 184

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Facts about Tasmania


Tasmania is the southernmost state of Australia, located at latitude 40° south and longitude 144° east and separated from the continent by Bass Strait. It is a group of 334 islands, with the main island being 315 km (180 miles) from west to east and 286 km (175 miles) north to south.


Tasmanians are resourceful and innovative people, committed to a continually expanding export sector. In 2012-13, international exports from the state totalled $3.04 billion. USA, China, Taiwan, India, Japan and other Asian countries account for the bulk of exports, with goods and services also exported to Europe and many other regions.


Tasmania is similar in size to the Republic of Ireland or Sri Lanka. The Tasmanian islands have a combined coastline of more than 3,000 km.


The main island has a land area of 62,409 sq km (24,096 sq miles) and the minor islands, taken together, total only 6 per cent of the main island's land area. The biggest islands are Flinders (1,374 sq km/539 sq miles), King, Cape Barren, Bruny and Macquarie Islands.


About 250km (150 miles) separates Tasmania’s main island from continental Australia. The Kent Group of Islands, one of the most northerly parts of the state, is only 55km (34 miles) from the coast of the Australian continent.


Twice named 'Best Temperate Island in the World' by international travel magazine Conde Nast Traveler, Tasmania has a mild, temperate maritime climate, with four distinct seasons.


In summer (December to February) the average maximum temperature is 21° Celsius (70° Fahrenheit). In winter (June to August) the average maximum is 12° C (52° F) and the average minimum is 4° C (40° F). Snow often falls in the highlands, but is rarely experienced in more settled areas.

Annual Rainfall

Tasmania’s west coast is one of the wettest places in the world, but the eastern part of the State lives in a rain-shadow. Hobart, the second-driest capital city in Australia, receives about half as much rain as Sydney.

Annual Rainfall

Annual rainfall in the west is 2,400 mm (95 inches), but hardy locals insist there is no such thing as bad weather, only inadequate clothing. If you travel 120 km east to Hobart, you experience a much drier average of 626 mm (24 inches) a year.


The 512,875-strong community spreads itself across the land; less urbanised than the population of any other Australian state. Hobart, the capital city, is home to more than 212,000 people.

Capital City

Hobart nestles at the foot of Mt Wellington (1,270 m / 4,000 ft) and overlooks the Derwent Estuary, where pods of dolphins and migrating whales are sometimes seen from nearby beaches. Surrounded by thickly forested rolling hills, the city is home to the state parliament and the main campus of the University of Tasmania.

Capital City

Its historic centre features Georgian and Regency buildings from colonial times. Hobart is home port for coastal fishing boats, Antarctic expeditions and vessels that fish the Southern Ocean.

Land Formation

Mountain ranges in the south-west date back 1,000 million years. Ancient sediments were deeply buried, folded and heated under enormous pressure to form schists and glistening white quartzites.

Land Formation

In the south-west and central highlands, dolerite caps many mountains, including Precipitous Bluff and Tasmania's highest peak, Mt Ossa (1617 m / 5300 ft). More than 42 per cent of Tasmania is World Heritage Area, national park and marine or forest reserves.


Vegetation is diverse, from alpine heathlands and tall open eucalypt forests to areas of temperate rainforests and moorlands, known as buttongrass plains. Many plants are unique to Tasmania and the ancestors of some species grew on the ancient super-continent, Gondwana, before it broke up 50 million years ago.


Unique native conifers include slow-growing Huon pines, with one specimen on Mt Read estimated to be up to 10,000 years old. Lomatia tasmanica, commonly known as King's holly, is a self-cloning shrub that may well be the oldest living organism on earth. It was discovered in 1937.


Tasmania is the last refuge of several mammals that once roamed the Australian continent. It is the only place to see a Tasmanian devil or eastern quoll (native cat) in the wild and is the best place to see the spotted-tailed quoll (tiger cat), all carnivorous marsupials.


The eastern bettong and the Tasmanian pademelon, both now extinct on the Australian continent, may also be observed.


The Tasmanian tiger, or thylacine, was Australia's largest surviving carnivorous marsupial and is a modern day mystery. The last documented thylacine died in captivity in 1936 and although the animal is considered extinct, unsubstantiated sightings persist.

History and Heritage

Aboriginal people have lived in Tasmania for about 35,000 years, since well before the last Ice Age. They were isolated from the Australian continent about 12,000 years ago, when the seas rose to flood low coastal plains and form Bass Strait.

History and Heritage

Descendants of the original people are part of modern Tasmania's predominantly Anglo-Celtic population.

History and Heritage

Tasmania was originally named Van Dieman’s Land by the Dutch explorer Abel Janszoon Tasman in 1642. The island was settled by the British as a penal colony in 1803 and the original name was associated with the convict era. It was changed to Tasmania when convict transportation stopped in 1853.


A resourceful island culture has generated leading-edge niche industries, from production of high-speed catamaran ferries and marine equipment to lightning-protection technology.


Tasmanians produce winches and windlasses for some of the world's biggest ocean-going pleasure craft; large-scale inflatable evacuation systems and provide specialist outfit-accommodation services to the marine industry.


The Wooden Boat Centre at Shipwrights Point has re-established the skills and traditions of another age and attracts students from around the world.


Tasmania is a world leader in natural turf systems for major sporting arenas and in areas of mining technology and environmental management. Its aquaculture industry has developed ground-breaking fish-feeding technology and new packaging.


Tasmanians sell communications equipment to many navies and their world-class fine timber designers and craftsmen take orders internationally for furniture made from distinctive local timber.


The state is a natural larder with clean air, unpolluted water and rich soils inviting the production of 100 varieties of specialty cheeses, as well as other dairy products, mouth-watering rock lobsters, oysters, scallops and abalone, Atlantic salmon, beef, premium beers, leatherwood honey, mineral waters, fine chocolates, fresh berry fruits, apples and crisp vegetables.


Tasmania is a producer of award-winning cool-climate wines, beers, ciders and whiskies. Other export products include essential oils such as lavender, pharmaceutical products and premium wool sought after in Europe and Asia. Hobart is a vital gateway to the Antarctic and a centre for Southern Ocean and polar research.


The industries in Tasmania which made the greatest contribution to the state's gross product in 2010-11 in volume terms were: Manufacturing (9.4%), Health care and social assistance (8.2%), Financial and insurance services (7.2%), Ownership of dwellings and Agriculture, forestry and fishing (each 7.1%).

Getting to Tasmania

Travel is easy, whether by air from Sydney or Melbourne, or by sea, with daily sailings of the twin ferries Spirit of Tasmania 1 and 2 each way between Melbourne and Devonport throughout the year.

This site has been produced by the Brand Tasmania Council © 2014

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