Business community calls for budget repair
The TCCI is the voice of business in Tasmania and is calling for the Government to do more to get the State’s budget back on track.
The call comes following the release of the 2024-25 Budget.
TCCI CEO, Michael Bailey, said that the State’s budget position was unsustainable.
“We are concerned that if the Government doesn’t do more to prioritise budget repair the State’s finances will be cooked,” Mr Bailey said.
“The Government needs to get the balance right. Obviously it needs to fund its election commitments and continue to invest in vital infrastructure and public services.
“However, that doesn’t excuse the Government from doing what’s needed to get the budget back on track. Yesterday, we released our ten principles that we think should guide the way the Government spends money in Tasmania. Key amongst those is driving greater productivity in the public sector.
“Importantly, we think that the business community and the private sector could and should do more of the heavy lifting when it comes to driving economic growth. But to do that, the Government needs to get out of the way.
“Red tape, the rising costs of increasingly scarce energy, insurance costs and housing availability are all contributing to a decline in private investment.
“We accept that there are economic headwinds that are out of the Government’s control, but we think that the Government should do more with the levers it has to support the economy and put the budget on a sustainable path.”
The TCCI’s ten budget principles are:
1. The Independent Review of State Finances report by Saul Eslake and Treasury’s Preliminary Outcomes Report for 2023-24 should be an urgent wake-up call for all Tasmanians about the state of our finances and economy.
2. The TCCI has been saying for some time that the Tasmanian budget was in a precarious position and that the current path was not sustainable.
3. The TCCI believes that the primary problem is one of runaway expenditure (government revenue is in line with expectations) since the Covid pandemic, with the Tasmanian government failing to rein in expenditure as the crisis passed.
4. The TCCI agrees with the broad objectives outlined in Saul Eslake’s report, especially the urgent need to chart a clear path to a sustainable state budget.
5. The TCCI believes that this will take some hard decisions by the Tasmanian government to reduce expenditure and to reduce the scope of Tasmanian government activities (TCCI agrees that efficiency dividends and vacancy control are poor ways to target savings), rather than increasing taxation.
6. The TCCI also believes that the Tasmanian government must focus on increasing public sector productivity, this is what the private sector would focus on during challenging times and it should be no different for governments.
7. The TCCI considers that it has never been more important to stimulate the private sector in Tasmania to invest in wealth-generating activities, the Tasmanian government can do this by providing greater certainty.
8. The TCCI and Tasmanian business want to be involved in solutions and are ready to provide ideas to achieve a sustainable state budget, the Tasmanian government must consult beyond the bureaucracy as we would question the merit of the bureaucracy performing surgery on itself.
9. The TCCI believes that the Eslake Report also highlights an urgent need for reform of Tasmanian government business enterprises and state-owned companies.
10. The TCCI agrees that there needs to be a clear infrastructure priority list developed by the Tasmanian government and improvements in the delivery of major projects.
Mr Bailey said that the TCCI and the wider business community of Tasmania stand ready to help chart a path back to budget sustainability.