Health Minister Sarah Courtney has denied claims made by the opposition that $5.7 million will be cut from Ambulance Tasmania, as part of the government's $450 million efficiency dividend.
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Labor Leader Rebecca White said paramedics had been told to "brace themselves" for the cuts - which would be equal to sacking 37 full time paramedics.
Labelling the claims as a "scare campaign", Ms Courtney said Tasmanians should not be fooled.
"Ambulance Tasmania has not had a $5.7 million cut to its budget," she said.
"In fact, Ambulance Tasmania's budget has grown by approximately $19 million, from $81.9 million in 2018-19 to a record $101 million in 2019-20.
"In 2019-20 this increase includes funding to address increased staffing requirements primarily driven by demand, as well as additional election commitment funding for initiatives including the aeromedical helicopter service; more paramedics in regional areas; secondary triage and the State Operations Centre boost."
The 2019-20 state budget foreshadowed an efficiency dividend from government departments and agencies, involving $450 million worth of savings over four years.
Ms White said regional communities were continuously being left in a vulnerable position, with local ambulances ramped at hospitals, or sent to out-of-area jobs.
"Local ambulance services were chaotic last [Wednesday] night, particularly in the north, with the ambulance from Deloraine sent to Latrobe, while the ambulance from George Town was sent to Perth," she said.
"People's lives are being put at risk by a government that just does not care about regional communities."
Ms Courtney said the government was committed to employing new paramedics for rural and regional communities, to ensure better coverage.