According to the state's budget papers, revenue for Tasmania will drop to $2.2 billion in 2021, from $2.4 billion in 2019-20.

However, revenue is expected to rebound over the forward estimates to $2.6 billion the following financial year and to $2.8 billion in 2022-23.

What you need to know about the state budget:

Treasury says the reduction in forecast GST revenue has been partially offset by an increase in the state's forecast share of GST from about 3.68 per cent to 4 per cent.

From 2021-22, the GST distribution methodology will change.

There is a guarantee the state will not be worse off as a result of this shift until 2026-27.

Treasury says in the budget papers, there is a risk to the state's share of revenue from 2027-28 due to the finite nature of this guarantee.

The state's economy grew by 3.6 per cent in 2018-19 - the strongest growth since 2003-04.

In 2020-21, it is expected to contract by 1.5 per cent, but Treasury forecasts growth of 3.75 per cent the following year.

It says in the event that coronavirus infection rates rise and the state has to impose a similar scale of restrictions as it did in response to the initial outbreak, the economy could contract to 4.5 per cent in 2020-21.

This would correlate with a drop of 4.25 in the state's employment rate.

Regardless of this, the unemployment rate is expected to drop albeit slightly between 2020-21 and 2021-22, from 8.5 per cent to 8.25 per cent.

The rate is expected to drop to 7.75 per cent by June 2022.

Treasury anticipates employment within the state will increase by 4000 people by June 2021 with a further increase of 6000 people by June 2022.

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