Budget Reply 2026

[5.30 p.m.]

Ms BURNET (Clark)

Honourable Speaker, I rise this evening to speak on the May Budget of 2026. This is budget number-two for the Treasurer, Eric Abetz, and we see him in full flight. No longer a softly, softly approach, but a full-throttle attack on the Tasmanian Public Service, selling community services short and failing to deliver not only for the most vulnerable of Tasmanians, but for a growing number of Tasmanians who are going without in a cost‑of‑living crisis.

In justifying his austerity budget, the Treasurer tells us, 'We are facing economic turbulence, inflation, high interest rates, conflict abroad and that these pressures are hitting households and businesses.' That much is true, but what he doesn't say, what he doesn't acknowledge, is what his own Treasury has said plainly: Tasmania's financial buffers have been depleted.

The backdrop is there is a war in the Persian Gulf and continuing in Ukraine, with direct implications for Tasmanians. We have climate uncertainty and weather events impacting communities, often the same ones over and over, more frequently. We are poorly positioned to respond to the next shock. Whether that be a pandemic, a bushfire or a global economic downturn, how did we get to this incredibly weak economic position? Because of decisions that government has taken over nearly a decade. As economist Saul Eslake said, 'This is the result of an egregious lack of fiscal discipline over the past nine years.'

Even now, when properly measured, including our superannuation liabilities and GBEs, Tasmania's finances remain the worst in the nation relative to the size of our economy. That is the legacy of this government.

When I became an independent earlier this year, I took the opportunity to start attending the Budget Matters panel. It is informative, and helps me gain insight to specific government departments and Treasury. It gives independents, for those who attend, visibility into the scale, sometimes, of the problem. Let me be equally clear ‑ this panel is no opportunity to influence Eric Abetz's Budget, no role in shaping the decisions, no genuine seat at the table. The members of the multi-partisan Budget panel have no input into this Budget. This is a Liberal Government Budget through and through, owned entirely by the Liberal Government, and you can see that.

Treasury has said:

Immediate action is required to stabilise debt. Doing nothing is not a responsible option.

On that, I agree with the Treasurer. Action is necessary, but how we act matters. The Treasurer presents this as a binary choice. Do nothing and drift towards fiscal crisis, or slash the public service, which he is doing writ large, and call it 'repair' ‑ but that's a false choice.

We live in a very non-binary world where choices are many and worthy, in particular when the evidence and advice is clear from Treasury's Financial Sustainability Report and other experts, including economist Saul Eslake and experts at UTAS. When state debt and borrowings are out of control, they said that:

The least damaging path is one where fiscal repair is shared; lower expenditure, higher state revenue; and reduced infrastructure spending, balanced, sensible, responsible, but less pain.

But the Treasurer has refused to take that path. Instead he has chosen to pursue surplus and his only revenue-raising measure, the short stay levy, will probably only generate a few million dollars a year, if it even passes the upper House. In making these choices, the Treasurer has concentrated the pain unnecessarily on the public service, the community sector, and the people who rely on them.

The cuts will bite later. The pain is not immediate, completely. It is staged. The deepest cuts are pushed into the forward Estimates beyond the headlines, beyond the scrutiny, but the numbers tell the story. And the story is this: services will shrink, capacity will fall, staff will be under more pressure.

Let's look at the Tasmanian profile. We have a dispersed population, we have a high proportion of Tasmanians living below the poverty line and/or on welfare who rely on the disability support pension, on NDIS, who are homeless or at risk of homelessness. There is a large public service to provide services, support and care for all Tasmanians. We have the fastest ageing population and health profile which sees us with the greatest proportion of chronic diseases.

The Tasmanian State Service is an important part of the economy. In turn, public servants shop at one of Tassie's 40,000 small- and medium‑sized businesses. They buy locally. They buy locally made beds from Howard Road factory, which is sold at a local retailer on Grove Road in Glenorchy. They buy coffee and all sorts of goods and services. But when you cut the public service deeply, you don't just cut bureaucracy, you cut demand, jobs and you cut economic activity. The deeper the cuts, the deeper the economic impact. The further Tasmanians go to find jobs - on the mainland and beyond.

I don't appreciate the lecture and patronising response of members of the government who talk down to me about economics and yet who seem not to grasp one of the most fundamental components that drives Tasmania's economy. The very important economic driver is the 36,000 Tasmanian public servants.

This is a budget built on wishful thinking. Even if you accept the Treasurer's approach that the budget problem can be solved without taxes - and I do not - there is a deeper problem. This budget simply does not add up. S&P Global has already warned it will be difficult for the state to meet its targets, citing rising spending pressures, demographic realities and limited revenue capacity. We've seen this before. In just seven months since the last budget, the spending forecast increased by $1.3 billion, including $700 million in health alone.

What about when one of our major industrials puts their hand out? Those requests are coming thick and fast in this economic climate, and this is a government that seems happy to dip into the taxpayer's pocket and stem the paper losses of multinational corporations in exchange for extending their shelf life by another few weeks.

Looking back over eight budgets, average expenditure growth has been around 11 per cent per year compared to what was estimated. That means year after year, Treasury underestimate the growth in expenditure by, on average, 11 per cent, yet forward Estimates in this budget imply that growth in operating expenses will slow to 1.8 per cent per annum over the four years to 2029‑30. That's equivalent to negative 2.4 per cent in real terms, or 0.9 per cent per annum and negative 3.2 per cent per annum in real terms, excluding interest and superannuation.

If the budget grows at the historical average, the projection of peak debt collapses: a $1 billion blowout next year, $2.5 billion the year after, $3.7 billion by 2028‑29, and $4.66 billion by 2029‑30. That is an $11 billion deterioration across the forward Estimates if expenditure growth continues at the historical average and with it the so-called surplus disappears.

There is the other side that is hidden in plain sight: our GBEs have accrued $10 billion in debt, even as the Treasurer claims to be putting on the brakes on spending, our GBEs are not. Their debt will peak at almost $20 billion in 2030.

There will be more equity injections, no doubt: for Marinus; an equity payment of $170 million to TasNetworks; $16 million to major industrials to deal with the power price increases from Marinus; as well as the other big‑ticket debt items such as TT-Line and Macquarie Point for that major sinkhole. As I have alluded to already, Treasury has warned of this risk and tighter controls are needed now. But the Treasurer has chosen to delay these controls to push discipline into the future while the commitments are made today. That is not reform; that is deferral.

Consider the effects on health and homelessness. Health is over a third of the budget and year after year this government has underestimated its costs by as much as 16 per cent in one year. In the most recent budget, health costs were revised output by $773 million, almost exactly the amount the Treasurer now claims he will save. Yet in this budget, Health costs are projected to grow by less than 1 per cent per year, across the forward estimates. No one believes this will happen.

The AMA says inflation is between four per cent and eight per cent with demand growing by six per cent annually. If that trend continues, and there is every reason it will, then there will be no surplus. Not in this budget, not in the forward Estimates. The Treasurer says he will find $700 million in savings in Health, but he has not accounted for already-agreed wage increases of $300 million. The true task is closer to $1 billion in cuts. What does that mean in practice? The ANMF has warned these cuts would decimate the health system. Non-frontline staff to go, meaning nurses pick up the work. More pressure, more burnout, less care, and while the system is already overwhelmed.

Local costs are rising, staff shortages persist, patients are waiting longer. The AMA has said it plainly: the system is overwhelmed, staff are exhausted and patients are harmed. The question remains, not how much will be cut but who will suffer as a result?

There is one area of health spending that could genuinely bend the curve, and that is real action on preventive health. I cautiously welcome the 20-year strategy, but let's be honest about scale, $5 million per year, that's 0.1 per cent of the Health budget. The national benchmark spending target is 5 per cent of the Health budget per annum

The secretary has told us that the government is meeting that target when you count the spending on measures across multiple departments. But if this is true, it is money that has not been well spent looking at our health outcomes. That's why there needs to be accountability in the preventive health budget. It needs to be visible in the budget so we can assess whether the government is properly resourcing preventative health or if it is a strategy in name only. I call on the Health minister to ensure this is reported next year as a specific line item. This will tell us if it is real reform or just another strategy.

Another area of reform that could improve our health system. Hospitals are not functioning well just by demand but by flow. We need investment in step-down care, rehabilitation, hospital-in-the-home, and aged care capacity. There are proven solutions to reducing demand in our hospitals, but don't look for them in this budget because they aren't there. In the last budget there was $11.2 million set aside for care-at-home to establish a virtual emergency department and increases in the number of virtual care beds across the state.

Hospital in the home. In line with the independent review of Tasmania's major hospital emergency departments recommendations to increase access to virtual care options, which has been demonstrated in other states to alleviate emergency department overcrowding and improve access and flow. Sounds great. It's worked in Victoria with a cost benefit of $9 to every $1 spent, but there's no mention of virtual ED in this budget.

The housing crisis has been ignored by Treasurer Abetz's austerity budget. Homelessness is rising, waiting lists are growing, building approvals are stagnant, and short-stay conversions are on the rise.

I commend the government's additional funding for two family violence service providers in the south of the state. The $1.2 million they are providing over four years will enable employment of extra staff in those facilities, but the situation is far more dire than the modest contribution suggested. According to a recent report by Shelter Tas, 933 women in this state are returning to violence or homelessness due to lack of housing. There are currently 670 homeless people on the social housing waiting list. It's taking an average of 104 weeks to house priority applicants. This is up from 72 weeks at the same time last year. Anglicare Tasmania has reported an increase of 64 per cent in the number of people sleeping rough over the past 12 months. Yet there is no meaningful response in this Budget. It will be business as usual, which is cold comfort for those sleeping with their children in cars and tents around this state tonight.

I want to mention the area of the environment and climate. The Department of Natural Resources and Environment will lose 20 per cent of its budget. This is the government department responsible for primary industries, biosecurity, water, Aboriginal affairs, the environment, our national parks, our World Heritage Areas and our state forests. There doesn't seem to be any funding in the Budget for any of its climate change actions. In fact, the budget of the Climate Office, which co-ordinates the government's work on climate change and its interactions with business community and other levels of government is halved, and the Climate Change Office is moving to the NRE, so it's hardly a priority, which is a travesty.

Free public transport is extended for 12 months and this is welcome but behind the headlines, regional bus funding general access services is down 31 per cent, passenger transport funding down is down 63 per cent, and for rural communities in the Huon Valley and elsewhere this raises urgent questions about service viability, equity of access and economic resilience and, as far as active transport goes, it's gone. At a time of rising fuel costs this is a missed opportunity.

There is a better, more responsible approach. Tasmania's problem is not just how we spend; it is whether that spending delivers results. Rather than delivering sharp cuts, a more credible approach would focus on improving how services are delivered while gradually bringing the size of the public service back into line with our population over time. It would seek to independently and transparently evaluate the effectiveness of the services that's being delivered. It would ensure those services delivered what was promised and if it weren't, it would have the courage to end them.

I commend the Silver Review commissioned by the Victorian Government and one has to ask, is this Budget reasonable, sound, achievable or realistic? The answer is no.