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Rein in government spending, don’t raise taxes on Tasmanians

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The Tasmanian Chamber of Commerce and Industry (TCCI) says the State Government must urgently tighten spending control and strengthen financial governance rather than turn to higher taxes on Tasmanian businesses and households.

This follows the Auditor-General’s latest Audit of State Entities which found:

  • State Government departments overspent their budgets by $2.42 billion over the past three years
  • The Department of Health accounted for $1.37 billion of that overspend
  • Two alleged multimillion-dollar frauds within the Department of Health were not investigated in a timely or adequate manner
  • A finding that the Department of Health does not have an adequate fraud control framework in place
  • General Government net debt of $5.05 billion (around $8,767 per Tasmanian), forecast to rise to $10.40 billion (around $18,056 per Tasmanian) by 2029

TCCI Chief Executive Officer, Michael Bailey OAM, said the report highlights a serious failure of expenditure discipline and financial controls across government.

“Tasmanian businesses and households are already under cost pressure. They cannot be expected to pay for government overspending through higher taxes, charges or fees,” the CEO said.

“The clear message from the Auditor-General is that spending has been allowed to run ahead of realistic budgets and basic controls. The priority now must be tightening expenditure, fixing governance and improving transparency – not looking for new or higher taxes.”
The Auditor-General also highlighted:

  • A lack of control of expenditure within budget
  • Unrealistic budgets and significant deficits over the past four years, with more deficits planned
  • Inadequate performance reporting, particularly in the Department of Health, meaning decision-makers and the public do not have a clear picture of what is driving overspends

The CEO said this poses a growing risk to Tasmania’s economic outlook.
“Runaway spending and weak controls erode confidence, push up debt and ultimately crowd out private investment. If left unchecked, it will mean less room for future governments to invest in infrastructure, skills and services that support growth.”
“The focus must be on getting value from every dollar already being spent, not reaching for the tax lever. Business needs certainty that government will manage its own budget responsibly before asking more of taxpayers.”

Media Contact:
Michael Bailey OAM – Chief Executive Officer, TCCI