Fixing state's budget 'a challenge'

TREASURER Peter Gutwein has said returning the budget to surplus in six years will be a "monumental" challenge for the new government.

Mr Gutwein said a budget risks report released yesterday revealed the previous government had left behind a $1.1 billion budget black hole and rising debt and interest payments.

"It's important that Tasmanians understand the quantum of the challenge that we face, but it's a challenge we are ready and willing to take on," Mr Gutwein said.

"We will put the budget back on a pathway to sustainability, we will grow the economy and we will meet all of our election commitments."

Mr Gutwein said the government would need to make some "tough" budget decisions.

He has instructed all government agencies to review discretionary funding and grants and suspend all non-essential advertising.

Opposition treasury spokesman Scott Bacon there were no surprises in the report, with most of the information available before the state election.

Mr Bacon said the only new figure contained in the report was a further $270 million reduction in GST and mining royalties.

He said the write-down would make it even harder for the Liberals to deliver on their "extravagant" election promises.

"Now it's incumbent on the government to get out and show us which election commitments they're not going to deliver on, or where they're going to cut further the Tasmanian budget," Mr Bacon said.

Treasury has advised the government to slash more than 1000 full-time equivalent public service jobs over the forward estimates to generate savings.

Mr Gutwein would not be drawn on whether the government would act on the advice.

"That is Treasury's assessment about where Labor and the Greens have left us, that's their assessment," Mr Gutwein said.

"I don't want anybody in this room to walk out of here today and report that 1500 positions will go - this is just advice from Treasury that outlines what they believe the forward estimates contain," he said.

Community and Public Sector Union secretary Tom Lynch said acting on the number of job cuts proposed in the report would be a massive blow.

"It wouldn't just be a blow to those working in the sector, but to services every Tasmanian relies upon," Mr Lynch said.

"It would be a major break of a state economy that is just starting to show signs of recovery."

Mr Gutwein ruled out selling state-owned assets to find savings.

"The quick fix of flogging something that you own to solve a spending problem is no fix at all. What we've got to ensure that we do is get good, solid return from our government businesses."


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