A drop of nearly $1 billion in federal transfers in Wednesday's budget will have "significant consequences" for Tasmania, Treasurer Michael Ferguson has said.
"The federal budget last night was extremely disappointing from a Tasmanian point of view in terms of Commonwealth payments," Mr Ferguson said.
"Taking the GST and specific-purpose payments together ... we've seen a significant write-down in Commonwealth transfers to Tasmania, particularly in the GST stakes," he said.
Federal payments to the state will be about $940 million lower in the coming budget year and the forward estimates compared to what the state was expecting to receive, Mr Ferguson said.
"That has significant implications for Tasmania and it shows a reduction in support for our state, and it is the material issue that is embedded in last night's federal budget that we will have to respond to further," he said.
The nearly $1 billion shortfall in transfers was mostly due to lower GST revenue, Mr Ferguson said.
Commonwealth transfers accounted for about 65 per cent of the state's budget last year, with the bulk of that in the form of GST revenue.
He said revenue from the tax was "notoriously volatile", and was calculated based on the size of the national GST pool, and "state relativities" including population growth and economic circumstances.
"It does appear that we are being punished for our strong economy here in Tasmania," Mr Ferguson said.
Despite the setback, the government would work through the issue with Treasury.
"But our budget that we bring down in two weeks' time will naturally, there are implications for that from last night's federal budget," he said.
Mr Ferguson sought to reassure Tasmanians that, despite the federal setback, the state's finances would remain stable.
"The budget that we bring down in two weeks' time will absolutely maintain economic security and strong economic support," he said.
"It will provide strong business conditions so that our business community will continue to prosper and be able to take on employees."
Mr Ferguson said there were positives from Wednesday's budget.
"I'm pleased to see that the inflation forecasts have been reduced," he said.
"On infrastructure, broadly, I'm satisfied - the commitments from the previous Liberal government are being honoured," he said.
But he said he was "skeptical" of the federal government's proposed review of infrastructure spending.
"We'll be watching that like a hawk, because we don't want to see the federal government walking away from any of our projects."
He said the state government has staged its pipeline of infrastructure projects deliberately over 20 years.
"The review that's being talked about, we will watch that very closely, participate, and defend out projects."
He also noted the criticism that the big-spending budget might stoke inflation.
"If that's the case, Tasmanian households will be further punished with increases because the [Reserve Bank of Australia's] task just got a little bit harder."
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