Tasmanian Council of Social Services chief executive Tony Reidy yesterday released the organisation's annual budget submission, urging the government to adopt a strategic economic approach rather than implementing across-the-board austerity measures.

"Last state budget the concentration of the government was on delivering its election promises, and we applaud them for doing that, but that is going to come at a cost," Mr Reidy said.

"We now know that the state government will be decreasing frontline services as a result of its fiscal strategy and that's simply the wrong way to go about things."

Mr Reidy insisted people on low incomes or suffering from disadvantage were disproportionately affected by frontline cuts to health, education and social services.

"Adopting spending reductions across the board on the principle of making an equal contribution to budget cuts is a simplistic approach," he said.

"Tasmania lacks a strategic approach to reducing government expenditure, one that targets expenditure on areas that reduce costs in the longer term."

TasCOSS yesterday recommended spending more on public housing, transport, mental health and education.

The body's key revenue-raising measure was broadening the land tax, including the owner-occupied residences of middle and upper income households.

Broadening the land tax was a key recommendation of several leading economists ahead of the Liberal government's first state budget last year.

Economists urged Treasurer Peter Gutwein to scrap stamp duty and expand the land tax base, saying it would be much fairer and simpler, and make the state's revenue stream vastly more predictable and stable.

However, Mr Gutwein flatly ruled out the idea last August, and did so again yesterday.

"I want to make it very clear that the Liberal Party is the party of lower taxes and we will not be changing the land tax structure," Mr Gutwein said.

"Extending land tax to the principal place of residence would have serious consequences for the Tasmanian community and would significantly raise the cost of living.

"It would hurt business confidence, it would damage the fragile recovery in our economy and it would impact on job creation," he said.