The hallmark of Thursday’s state budget was a return to surplus for the first time in seven years.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
But how important is it for the state’s books to be back in the black?
The proposition of a surplus goes largely unchallenged.
A simple definition of a surplus is “an amount of something left over when requirements have been met”.
So basically, extra cash in the bank.
The Tasmanian Liberals have been almost obsessed with reaching a surplus.
The cash is handy to have for those unexpected costs like GST loss, an energy crisis and bushfires, but when we pay tax we expect that money to be spent on services.
The Liberals pride themselves on their brand as responsible financial managers.
Reaching a surplus, to them, is proof of that.
They hope it reminds Tasmanians that they made the right choice at the 2014 state election.
Treasurer Peter Gutwein’s third budget delivered a surplus of $77 million, three years ahead of what was expected.
It’s short lived, with a deficit expected again in 2018.
Three years ago there were 1200 public servants getting their marching orders and savings from all agencies to be made.
There was always reference to a billion dollar black hole, and digs at the former government for putting the state on an unsustainable path.
The heavy lifting has now been done, we’re told, and this budget was described as a “breakthrough” budget.
The message was that things are back on track and the government has a “firm eye to the future”.
Despite this, a promised motor tax reduction set to begin next year has been deferred.
It’s cheeky not to pass the reduction on to Tasmanians, but still keep their tax dollars in the bank.
The reasoning was that the government would wait until the budget was in a better position.
Mr Gutwein said Tasmanians would understand it was a sensible decision, given the state had just lost $500 million in forecast GST payments.
Wouldn’t it be better to deliver a reduced surplus than break a promise and cost the taxpayer?
By breaking the promise, the government was able to add about $30 million to the budget’s bottom line over the forward estimates.
Added to that was an $80 million payment from TT-Line.
The special dividend has been transferred from the company into state coffers so it can be kept aside in a special fund for replacement vessels.
The issue has been brought up in Parliament, with Labor accusing the government of tricky last minute accounting work to make the budget look better than it is.
The money is tied to legislation so it can only be used on new Spirits and not for other government expenses.
And yes, the budget would still have reached a surplus without it, but the transfer certainly helped.
Between the TT-Line funds and the deferred tax reduction, the surplus isn’t as impressive.
You never know what’s around the corner, the GST loss has taught us that, so contingency funds are always welcome.
But the idea of a surplus should be challenged more, and our hard earned tax dollars should be spent responsibly and not squirreled away.