TREASURER Peter Gutwein says a financial report released yesterday confirms the government has some ‘‘tough choices’’ to make before its first state budget.
The report showed the state faces a net operating deficit of $399 million, leaving it $24 million worse off than was predicted in an April economic outlook.
The final figure reflected a significant blowout compared with a $354 million operating deficit forecast in the former government’s 2013-14 budget.
Mr Gutwein said no positives could be drawn from the economic report, and it was clear the Liberals were facing a ‘‘very difficult budget situation’’.
He said the figures reinforced the need to implement a wage freeze for public servants.
According to the report, Tasmania’s public sector wage bill was $153 million higher in 2013-14 than had been forecast three years earlier.
‘‘There are only two ways we can rein in public sector wage expenditure – either by letting people go or a wage pause,’’ Mr Gutwein said.
Mr Gutwein said despite the report’s findings, the government remained committed to the full suite of election spending commitments it pledged before gaining office.
‘‘What we will be doing is ensuring we meet all of our commitments, put the budget back onto a sustainable pathway and lay the foundations for the future,’’ he said.
Opposition Leader Bryan Green said the Treasurer knew GST and Mineral Royalties revenues were shrinking before the March state election but chose to ignore the issues.
‘‘They knew the budget was in a difficult situation as a result of lost revenue and yet they continued to promise all things to all people,’’ Mr Green said.
He said the government was now putting its election extravagances ahead of regard for public servants, who he said were being blackmailed into having their wages cut or losing their jobs.
Greens leader Kim Booth said the state’s bottom line would look much healthier if the carbon tax was still in place.
The budget will be handed down on August 28.