THE state government has announced today's state budget will cut Tasmania's net debt from $400 million to $50 million over the forward estimates.
Treasurer Peter Gutwein told Parliament yesterday the budget would not be a "slash-and-burn" budget, but would slash the state's debt.
A budget risk report released in April revealed the state's cumulative deficit hit $1.1 billion over the four-year budget period, and a doubling of forecast net debt to $400 million by 2017.
But Mr Gutwein announced in question time that his budget would reduce that figure down by a whopping $350 million.
"Labor and the Greens made promise after promise to deliver savings but failed to do so," Mr Gutwein said.
The Liberals went into the March election promising to deliver a surplus within their first term of government, but have since pushed the deadline out to six years.
Labor finance spokesman Scott Bacon said the biggest threat to the budget bottom line would be the Liberals' $500 million worth of election promises.
"No matter how they try to spin it, someone will have to pay - whether it's the people who will lose their jobs, those whose wages will be cut or the services that will suffer," Mr Bacon said.
"The Liberals have put the budget into dangerous territory because of their own political promises and cannot give assurances that their broken promise to deliver a surplus in 2015-16 won't result in a credit rating downgrade," he said.
Thousands of public sector workers are expected to gather outside Parliament at noon today to attend the "Bust the Budget" rally, organised by Unions Tasmania.
Unions Tasmania fears the Liberals' budget will cut more than 1500 public sector jobs, slash health, education and community services.
The government has committed to freezing public sector wages for one year in an effort to save 500 public sector jobs, which is fiercely opposed by unions.
Mr Gutwein has remained tight-lipped on the total figure of public sector jobs that will go in today's budget.
Funds have been promised for a direct international shipping link, elective surgery, a new police boat, extending schools to year 12 and $9 million to make up the shortfall from federal cuts to pension schemes.