THE Tasmanian Government today released its State Budget for 2011-2012, with Premier and Treasurer, Lara Giddings, saying the government is committed to building a better future through strong financial management.
Primarily blaming the ongoing impact of the global financial crisis for a significant deterioration in the State's financial position, the government has forecast a budget deficit of $113.8 million for 2011-12, with widespread cuts announced across the public sector.
Ms Giddings said the budget sets out a plan to achieve almost $1.4 billion worth of savings over 2011-12 Budget and Forward Estimates to avoid the devastating effects of net debt on investor confidence and the wider economy.
"In this year's Budget we have been faced with a choice," Ms Giddings said.
"The easy way out would be to continue to spend, ignoring the magnitude of this problem and driving the state into a debt spiral that would send business confidence plummeting."
"The difficult path is to make the strong decisions now so that we can build a better future for all Tasmanians."
In addition to public sector cutbacks, the budget seeks to achieve savings of $14 million in 2011-12, increasing to $15.8 million in 2014-15, through changes to land and housing taxes and concessions.
The First Home Buyer Duty Concession will be abolished (the First Home Owners Grant will not be affected), broad land tax concessions on general land will be revised, land tax exemptions on holiday homes will be abolished and the refund of duty paid by first home buyers on vacant land will be removed.
In 2011-12, the planned level of infrastructure investment is $490.2 million, including $67 million for the construction of affordable housing and $151 million for roads. The road funding includes $19 million for the Brighton Bypass and nearly $8 million for the North East Freight Roads.
An additional $6 million over the next four years will be provided to the Tasmanian Planning Commission to progress planning reform.
Planning Minister Bryan Green said the funding would ensure planning laws keep pace with the aspirations of local communities and potential investors.
"The government is undertaking major restructuring of the planning system which will streamline approvals and facilitate sustainable development," Mr Green said.
"The extra funding will make sure we not only develop but maintain a contemporary planning system."
The Property Council of Australia called the budget "a bitter sweet economic plan to address the tough financial times that lie ahead for Tasmania."
Mary Massina, Executive Director, Property Council of Australia's Tasmanian Division, said the budget highlighted some stark fiscal and political realities about the state's ability to be competitive and raise revenue.
While welcoming the $6 million in additional funding for the Tasmanian Planning Commission, the Council said it was disappointing that $15 million of important land tax reforms have been taken away.
"This will hurt Tasmanians who are already struggling to get a foot hold in the residential market as well as an industry which is dealing with a down turn in residential development and sales," said Ms Massina.