Election: Liberals, Labor and Greens answer key treasury questions

The Examiner puts three key questions to Tasmania’s treasury spokespeople ahead of the state election.

What would you see as a good time for a government to go into budget deficit?

LIBERALS’ PETER GUTWEIN: There is never a good time to go into deficit. We have worked hard to get the budget back into surplus four years ahead of schedule after Labor and the Greens trashed the state’s finances. Being in surplus means that we can cope with the unexpected shocks as well as investing more into frontline services.

LABOR’S SCOTT BACON: We are committed to responsible budget management and that’s why our spending commitments in this campaign have been very modest compared to the Liberals’ cash splash. We have prioritised health and have committed investing an additional $560 million into the health and hospital system across the state. The Liberals will have to run a budget deficit to pay for their promises. Labor is confident we can balance the budget at the same time as addressing the health crisis.  

GREENS’ CASSY O’CONNOR: Governments should run well managed surplus and deficit budgets when necessary to ensure that essential public services can be delivered despite peaks and troughs in revenue.  

Do we need to be investing more in social policy in order to improve productivity?

BACON: Labor believes a fairness agenda is a good economic agenda. If Tasmanians are healthy they are more active and contribute more to the economy. Investing in good social policies to reduce inequality will dramatically improve productivity. If we can ensure someone has a secure home, we will increase their chances of finding a job. If we invest in education, skills and training we’ll set the economy up for the future. 

O’CONNOR: Austerity budgets and trickle-down economics are a con and inevitably it is the poorest who pay the biggest price. Austerity hurts people and leads to poverty, poor health, low educational attainment and housing insecurity. When governments invest in good social infrastructure like urban renewal and community facilities, neighbourhood houses and child and family centres, they change life outcomes and lift the health and wellbeing of whole communities. 

GUTWEIN: The Hodgman government has made significant investments into social policies like addressing family violence and building more public housing and affordable housing. We have been able to make these investments because we have the budget back in surplus and a growing economy, which will support further investments in the future.

What is your contingency plan in the event that Tasmania sees a reduction in GST receipts?

O’CONNOR: Every government must plan for sudden changes in GST receipts from the Commonwealth. We sure experienced a massive decline in GST in the last term of government and worked hard to ensure essential public services weren’t affected. We believe it is responsible for governments to run managed deficit budgets to continue service delivery until GST revenue improves. Then run surplus budgets and ensure funds are put away for a rainy day. 

GUTWEIN: We are not contemplating and will not accept any cut to our GST to bail out Western Australia’s budget. Having said that, one of the key reasons we are committed to surplus budgets is so that we can deal with any unexpected events, as demonstrated by our ability to respond to issues like floods and wild fires.

BACON: We know any change to the current GST formula will hurt Tasmania. Any of the scenarios being considered by the federal Liberals would rip tens of millions away from Tasmania, making it harder for us to fund essential services like health and education. No matter who is in government, a change to the GST would be a significant challenge.