Tasmania's economy will need stimulus for some time as the fightback from the coronavirus crash continues, state Labor believes.
As the May 1 election nears, Labor's fiscal strategy includes further stimulus and growth-seeking spending, with a return to budget surplus by 2023.
Labor says its fiscal strategy would create 35,000 jobs and create a better balance between economic growth and social needs.
"We have Australia's lowest GSP (gross state product) per capita (79 per cent of the national average), lowest average wages ($12,000 below the national average) and lowest labour force participation rate (4 per cent below the national average)," Shadow Treasurer David O'Byrne said.
"And on key social indicators - educational attainment, life expectancy, obesity rates, literacy and numeracy rates, health waiting lists and housing affordability - Tasmania lags the rest of the nation by a substantial margin.
"Tasmania can and should do much better.
"Labor's fiscal policy is designed to achieve this.
"Labor will lift public and private investment to drive economic growth and job creation in a more diversified Tasmania economy.
"And our social investments will close the gap between Tasmania and the rest of Australia in health, education and housing."
He said the economy had long-term structural and social challenges that pre-dated the coronavirus crisis.
"Tasmania's improved economic position is fragile and wider economic conditions are volatile," he said.
"And there are plausible downside risks to Tasmania's economy, including the impact of JobKeeper withdrawal, delays in vaccine rollouts, an earlier than expected rise in interest rates, a possible downturn in the property market and continuing geopolitical tensions.
Any combination of the risks could undermine growth and employment.
"Fiscal policy should strike the right balance between returning to surplus and lower debt levels and continuing to provide economic stimulus in uncertain economic conditions."
He said a Labor government would deliver a surplus in 2023 and have larger surpluses from 2024 onwards.
"These surpluses will be more modest than the most recent 2023-24 Treasury budget forecasts, but Labor believes it has struck the right balance in the prevailing economic and social climate," he said.
"Tasmania needs urgent investment in better health, housing and schools outcomes while maintaining realistic surpluses."
Labor's strategy argues a balanced program of infrastructure and capital spending would drive productivity growth.