Budget black hole makes promises harder to keep

TASMANIA is facing a $1.1 billion budget black hole, raising the spectre of more drastic savings measures by the incoming state government.

A budget risks report, to be released today by Treasurer Peter Gutwein, reveals Tasmania's bottom line is set to plunge a further $200 million into the red over the forward estimates than was forecast only three months earlier.

That brings the state's cumulative deficit to $1.1 billion over the four-year budget period and a doubling of forecast net debt to $400 million by 2017.

An expected $270 million write down in GST receipts and mineral royalties over the period to 2017-18 has contributed to the blow-out.

Mr Gutwein said yesterday the risks report also showed the previous government failed to deliver on its ambitious savings targets in 2011-12, including massive cuts to the health budget.

"The legacy of the Labor-Green government is that Tasmania has been left with a $1.1 billion budget black hole, rising debt and rising interest payments that if not addressed will rob Tasmanians of the basic services they need," Mr Gutwein said.

The revised figures make the Liberals' pre-election promise to bring the budget back into surplus by the end of its first term in government a near impossible task.

Mr Gutwein will today outline more details about the Liberals' plans to rein in spending, but he is not expected to walk away from any of the $400 million worth of spending commitments made in the lead-up to the election.

Even if the Liberals achieved all of their savings measures, estimated at more than $500 million, they will shave just $100 million off the deficit.

"We have promised to fix the Labor-Green budget mess, Tasmanians elected us to do that, and that is what we will do," Mr Gutwein said.

Although the previous government made funding allocations to implement the Gonski education reforms and National Disability Insurance Scheme over the forward estimates, Mr Gutwein said it had made no plans to cope with the skyrocketing costs of those initiatives in the long term.

The former Labor government released the mid-year financial report in February showing the state was on track to record massive deficits, totalling $902 million over the next four years, and warned the Liberal Party would not be able to keep its election promises or would have to cut essential services.

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