Premier Peter Gutwein has announced a $600 million additional boost to the state's health system to help address the needs of an overwhelmed public health service.
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The sweetener has been announced ahead of the budget next month, and comes as latest health dashboard data reveals slow progress on election commitment promises for elective surgery.
It also has been announced on release day of the latest preliminary budget reports, which shows unexpected revenues from taxes, and lower than expected deficit and debt.
The preliminary reports shows deficit is down to $411 million, with a $706 million improvement, while net debt sits at $495 million instead of $1118 million.
Mr Gutwein said the improved budget position allowed it to increase funding in health, to meet the additional demands of the health system, and to support vulnerable Tasmanians.
It would also ensure the government had flexibility to respond to any Covid-19 outbreaks if they occurred.
"The government's made a decision that we need to invest more into health and importantly, we need to have additional flexibility should we see the impact of Covid in terms of a lockdown, or some form of outbreak," Mr Gutwein said.
He said the latest preliminary report demonstrates the state's economic and fiscal recovery from Covid-19, with increased infrastructure investments having a part to play.
"Our strong economy is resulting in increased revenues to be able to invest more into essential services," he said."
"Despite the challenges presented by the COVID-19 pandemic, private sector construction activity has remained strong, underpinned by Government infrastructure investment of more than $640 million, which was 23 per cent higher than investment in the previous year."
The report shows revenue increases from taxation, grants and other windfalls from the departments of Health and State Growth.
Some of the greatest revenue variations came from an extra $234 million in grants, mostly arising from Federal GST funds, and a $115 million increase in taxation revenue, from land tax and conveyance.
The conveyance duty boost is worth $48.5 million, arising form an increase in property sales and arise in average property prices.
The Health department also gained $25.7 million from "additional recoveries" in relation to salaries, wages and workers compensation.
State Growth also received $23.6 million from mineral royalty income.
There was an $8 million extra pool gained from casino and license fees.