2014-15 State Budget wrap

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Welcome to Font PR’s 2014-15 State Budget wrap for the first Liberal budget handed down in 16 years.

Font Managing Director Becher Townshend has provided his insight into the budget below, drawing on his experience as a political journalist and government relations specialist.

Along with Becher, John Barker of John Barker and Associates has provided his thoughts, using his vast knowledge of the government sector to pinpoint the key take-aways.

For those with less time to spare, we have compiled a budget at a glance, outlining the key facts and figures from the budget, as well as a budget summary for the majority of the state’s portfolios.

Click below to reach a selected portfolio summary:
State Growth, Health, Education and Training, Primary Industries and Water, Resources, Tourism, Arts, Energy, Environment, Parks and Heritage, Planning and Local Government, Police and Emergency Management, Infrastructure, Human Services, Corrections.

Becher Townshend – Managing Director, Font PR
While it probably comes as no surprise to hear the State Government has adopted a steady-as-she-goes approach to its first budget, many in the business community will be disappointed there is not a more aggressive reform strategy.

With one of the strongest majorities for a Liberal State Government in generational memory, many wanted more in terms of fundamental economic reform for Tasmania.

However, in part chastened by the response to this years’ Federal Budget and the backlash to the Newman Government’s reform, the Government has understandably gone for making sure it honours their promises to the community.

Hence, the State Budget is a no-surprises budget, but there are hints that in time we will see true reform, much along the lines of New South Wales, with a hint in the Budget speech of the development of a White Paper for health, pointing to a more meaningful reform agenda in the future.

While details are scarce and the budget papers make little mention of the White Paper, it is a pointer to a root and branch review of the health system, given we have the most inefficient system in Australia.

Further, it is more than likely to be an indicator of how reform will occur under this Government – that being detailed, comprehensive and considered, as opposed to crash through.

It may well be the blueprint for further reform, with education as the second biggest spender of funds, the next one to be examined.

In the meantime, the State Government has kept its word to the community in terms of election promises, and has delivered on the undertakings it made in the lead up to the State Election.

However, this will come at a fiscal cost, with the budget set to continue to operate in deficit for the next four years, in line with Treasurer Peter Gutwein’s prediction of a six-year road to surplus.

The final number on last year’s budget was a deficit $266.9 million. This financial year it is set to come in at $285 million, and then fall to about $120 million over the remaining forward estimates.

Growth of the Tasmanian economy is predicted to be a modest 1.5 per cent, which is down from an ambition of two per cent last year, while unemployment is predicted to fall from 7.7 per cent to 7.25 per cent.

Underlying the budget strategy is a simple argument that contains expenditure increases at 0.8 per cent, while revenue is predicted to grow at two per cent each year.

Not surprisingly, there will be much debate about the size of the public service, with well over 1,000 state workers protesting on the lawns of Parliament just prior to the budget being brought down.

Treasurer Gutwein argues that by implementing a wages freeze, some 800 public service positions can be saved, meaning there will be a loss of 200 jobs over the next four years in addition to the 500 already earmarked to go.

No doubt there will be more debate on this issue.

In terms of revenue, the vast majority of funds will come compliments of the Federal Government at just over $3 billion, while the remainder will be made-up of $983 million in local taxes, $103 million in fines and fees and a further $343 million from the government businesses, with the remainder being miscelaneous funds.

These numbers inclue a special dividend of $100 million, from the MAIB due to increased returns.

The Government has used the Federal Government figures in terms of likely revenue from the GST, avoiding the schism that occurred last year, with the state predicting higher numbers than its national counterparts, but due to reform in this area is unable to predict where this revenue will go in the future.

Spending on the other hand will again see health and education attract the lion’s share of funds, with $1.465 billion for health and $1.418 billion for education, with a total budget spend of $5.25 billion.

In terms of initaitives, money has been put aside to investigate the construction of a second Basslink connection to increase power security for Tasmania as well as capitalise on more export revenue from our clean green power.

Funds have been put aside to futher investigate bio fuels and bio mass from forest residues, while it is unclear what the future of Forestry Tasmania is, with a simple agreement from the Government and the Board to continue to work to make the organisation viable.

In terms of health, the Royal Hobart Hospital reconstruction is set to continue, while the extension of year 12 to regional high schools continues in the education sector.

An extra $16 million for tourism marketing is confirmed, while job creation initiatives are funded and predict the creation of some 5,000 jobs.

Some $6.55 million has been earmarked for agriculture, to see our production doubled by 2050.

Elsewhere, we will see Mineral Resources Tasmania relocated to Burnie over the next four years, while some 16 Boards will be abolished or merged and a further 18 will have their funding cut.

For Police, Fire and Emergency Management services, these three organisations will be further integrated and some $197 million will be spent upgrading the Midlands Highway over the next four years.

Interestingly, there is no additional funding for planning reform, despite a commitment for it to continue, while TasPorts and TasRail are not for sale but have been asked to investigate working more closely together.

In summary, this is very much a no-surprises Budget that is unlikely to make many enemies, will allow the Government to deliver on its election promises and we will have to wait until next year to see if the economic reform many are hoping for comes to fruition.

John Barker – John Barker & Associates

The first Tasmanian liberal budget since 1997 is fair in the current circumstances, it delivers all of the Governments election promises and provides a solid base from which to halt the decline, grow the economy, jobs and investment and ensure essential frontline services in education, health and police are improved.

The 2014/15 budget contains no new taxes and controls past expenditure excesses by reducing Public Sector employment numbers by 700 over the four year budget cycle, imposing a 12 month freeze on Public Sector salaries and wages and receiving a special dividend of $100 million from the very successful Motor Accidents Insurance Board.

Government expenditure is estimated to increase by only 0.8 per cent with revenues estimated to increase by 2 per cent.

The budget reduces the four year cumulative estimates of $1.1 billion by $450 million and improves this year’s deficit of $325 million, forecast in the recent Budget Risks Report, by $50 million and net debt is reduced from $400 million to around $50 million.

A budget surplus is predicted in six years.

Specific initiatives include;

  • Jobs
    • Since the March election approximately 2,000 new jobs have been created.
    • Reducing the unemployment rate to at least the national average.
    • $28 million for a Jobs Creation package to create up to 5,000 new jobs including a $10 million holiday from developer headworks charges.
    • Reform of the Government tendering process to allow more Tasmanian businesses to compete fairly.
  • Tourism
    • Grow visitor numbers from 1 million to 1.5 million per year by 2020, creating up to 8,000 new jobs.
    • Invests $16 million in tourism marketing over four years.
    • Opens up national parks and world heritage areas for sensible tourism developments.
  • Education
    • Provides record spending of $5.8 billion over the budget and forward estimates, up $300 million on last year’s four year program.
    • Fully funds the Gonski reforms.
    • Progressively extend high schools to Year 12.
    • $45 million to expand 21 schools in regional areas by 2018.
    • $8 million to employ specialist literacy and numeracy teachers.
  • Health and Human Services
    • Spending will increase by $67 million this year.
    • $7.6 million injected into elective surgery, providing 15,000 more elective surgeries and shorter waiting times over the four years. This increased by a further $23 million recently received from the Federal Government.
    • $40 million to fully fund NDIS obligations.
    • $9 million to assist NGOs with rising costs.
    • Restructuring Tasmanian Health Organisations from three to one.
    • Commencing a review of the health system to overhaul service delivery methods. White Paper recommendations will be included in 2015/16 budget.
  • State Growth
    • Provides the merger of former Departments of Economic Development and Infrastructure, Energy and Resources.
    • New Department of State Growth will seek investment, job creation and economic growth.
  • Planning
    • On track to deliver a single statewide planning scheme which will encourage investment and development. More to be released shortly.
  • Infrastructure
    • Provides an infrastructure program of $1.6 billion across the four years representing a 12 per cent increase on last year’s forecasts.
    • Invests $733 million over four years in the states road networks.
    • Invests $437 million over the next four years in the Royal Hobart Hospital redevelopment.
    • Provides $197 million over four years to begin Midlands Highway upgrading.
    • $33 million over the next three years to support a solution to a direct shipping service between Tasmania and Asia ports
  • Energy
    • Invests in measures to increase Hydro Tasmania’s power output and a business case for a second Bass link.
    • Provides $500,000 to investigate alternative uses for forest residues.
    • Provides $200,000 on a dollar for dollar basis for bio fuel development.
  • Agriculture
    • $6.55 million plan to grow the agriculture sector to $10 billion by 2050.
    • Provide $24 million over four years and $30 million overall for irrigation schemes.
    • Invest $900,000 in biosecurity to protect agriculture, marine and aquaculture sectors.
  • Building and Construction
    • Extends the $30,000 First Home Builder Boost for six months followed by$20,000 for the next six months and then $10,000.
    • Previously referred to RHH and Highway developments.


The Government is to be congratulated in not over extending its enthusiasm to move quicker, perhaps a lesson learnt from its Federal colleagues.

Its plan establishes a sound footing for economic recovery. The challenges are for the Government to implement its budget in its entirety and for businesses to respond by increased activity and investment.

The budget at a glance

  • Deficit for this financial year is $286 million, and is forecast over the estimates period to be $125 million in 2015/16, $125 million for 2016/17 and $118 million in 2017/18.
  • Growth for this financial year is expected to be 1.5 per cent, down from a predicted  two per cent in the 2013/14 Budget papers.
  • Net Debt will be $188.3 as at 30 June 2015, down from a predicted $432 million last year.
  • Revenue Growth to Government is expected to be two per cent, while expenditure growth will be capped at 0.8 per cent.
  • Commonwealth Grants and GST will make up 61 per cent of total state revenue, up from 59.5 per cent last year.
  • Employment is expected to fall from 7.7 per cent to 7.25 per cent.
  • Total Tax Revenue is forecast to be $983 million – a modest increase of $43 million.

Portfolio summary

State Growth

  • Liberal government committed to increasing the state’s population to 650,000 by 2050
  • $500,000 over four years to develop a Population Strategy and a Business and Skilled Migration Strategy
  • Establishment of the Office of the Coordinator-General – $8 million over four years.
  • Point of access for investors and will be empowered to deregulate the Tasmanian business environment, promote competitiveness and facilitate the assessment and approval of investment opportunities.
  • Regional Revival Fund – $12 million over three years to facilitate construction of infrastructure required for job creating private sector projects.
  • $2 million allocated for 2014-15 for the Small Business Jobs Bonus.
  • $1 million over four years to support retailers.
  • $1,000 incentive bonus for small businesses that create and fill full-time positions for a year. The Small Business Jobs Bonus will be capped at $2 million, supporting the creation of up to 2,000 jobs.
  • Over $1 million to assist the Tasmanian retail sector adapt to the changing environment – includes $800,000 over four years to enhance the Digital Ready for Retail program.
  • Investment of $240,000 over two years to develop and establish a Tasmanian Retailer Development Program, to be delivered in partnership with local government and Chambers of Commerce.
  • $200,000 over four years to develop and provide a comprehensive Winning Government Work Program for Tasmanian businesses.
  • $100,000 New Market Expansion Program to support innovation and assist businesses to expand their markets.
  • $100,000 to create and deliver a new Think Local First Campaign to encourage Tasmanians to support local business and industry.
  • $1,000 incentive bonus for small businesses that create and fill full-time positions for a year. The Small Business Jobs Bonus will be capped at $2 million, supporting the creation of up to 2,000 jobs.
  • Over $1 million to assist the Tasmanian retail sector adapt to the changing environment – includes $800,000 over four years to enhance the Digital Ready for Retail program.
  • Investment of $240,000 over two years to develop and establish a Tasmanian Retailer Development Program, to be delivered in partnership with local government and Chambers of Commerce.
  • $200,000 over four years to develop and provide a comprehensive Winning Government Work Program for Tasmanian businesses.
  • $100,000 New Market Expansion Program to support innovation and assist businesses to expand their markets.
  • $100,000 to create and deliver a new Think Local First Campaign to encourage Tasmanians to support local business and industry.

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Health spending to increase by five per cent from last year’s Budget to sit at $1.465 billion.
The announcement of a health reform plan One State, One Health System, Better Outcomes. This reform plan includes the following highlights:

  • Merging of the current three Tasmanian Health Organisations into one single statewide Tasmanian Health Service as of 1 July 2015
  • A White Paper outlining the Government’s position to be released in March 2015
  • The establishment of a Health Council of Tasmania to provide advice on the direction of health care in the state
  • A comprehensive review of DHHS to reduce duplication and strengthen its role as system manager and purchaser of health services.

An additional $76 million will be provided over four years to perform up to an extra 15,000 elective surgeries, and working with the Federal Government will also see an additional $23.4 million provided for elective surgery.

An investment of $5.4 million over four years for additional Transition to Practice Placement for nursing graduates, will by 2017-18, see up to 85 additional graduate nurses enter the healthcare system.

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Education and Training

  • A record investment to help deliver the government’s commitment to create a job-ready generation.
  • $1.4 billion investment in education over this year and $5.8 billion over the forward estimates.
  • $134 million over six years to fund the Tasmanian Government’s contribution to the Gonski education reforms.
  • Additional funding for public schools under the Students First (Gonski) model, receiving a minimum five per cent increase in Schools Resource Packages for the next school year.
  • Non-government schools will also receive funding increases (unspecified).
  • $45.5 million investment over four years to extend 21 high schools through to year 12 in the government’s first term, beginning with six rural and regional schools from 2015 and more to follow in 2016.
  • Funding to be provided to each school extending to years 11-12 to support the roll-out, including additional teachers and resources, allocated by principals, to meet local needs.
  • $8.36 million investment over four years to employ 25 specialist teachers to improve student literacy and numeracy outcomes.
  • A plan to re-introduce child and youth health nurses across all Tasmanian Government schools. The first stage of this plan will see 10 full-time equivalent nurses working in our schools by mid-2015 and 20 by mid-2017.
  • An extra $4.4 million over four years to provide an additional week of employment per year for each Teacher Assistant, increasing the support time available for students and teachers.
  • $800,000 funding over four years for the Bravehearts child safety program, which teaches protective behaviours.
  • $150,000 over three years to give teachers restorative practice training, which has been found to reduce problem behaviour and suspension rates for at-risk students.

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Primary Industries and Water

$30 million allocated over five years for agricultural investments into irrigation.

  • Irrigation schemes set for Circular Head, Evandale, Scottsdale, Swan Valley and the Southern Highlands regions
  • $6.5 million over four years for activities in the Our Cultivating Prosperity in Agriculture Policy
  • $1.5 million to help farmers maximise their investment in irrigation through the Water for Profit program
  • $500,000 for Tasmanian Irrigation to identify the potential to further enhance and connect existing irrigation schemes.
  • $1.4 million for the Tasmanian Institute of Agriculture, including $800,000 for research to better align with the goals of farmers and industry and $600,000 to assist farmers improve on-farm productivity
  • $885,000 to improve agricultural skills and farm safety practices, which includes $450,000 allocated to TFGA to revitalise vocational agricultural training
  • $250,000 for the development of a farmer loans scheme in consultation with industry
  • $1 million investment in farm forestry, including $450,000 allocated for a Private Forest Industry Development Program lead by Private Forests Tasmania to grow the sector through practical growers initiatives (includes $100,000 for TFGA to support the agricultural sectors participation in the program)
  • $435,000 for the development of a Farm Safe Tasmania Program involving WorkSafe Tasmania, TFGA, the Proactive Agricultural Safety and Support organisation and other rural community organisations
  • $80,000 allocated for Tasmanian Women in Agriculture
  • Rural Youth Organisation of Tasmania allocated $40,000
  • Rural Alive and Well organisation allocated $1 million
  • $600,000 to extend the King Island Target 120 program, including a freight subsidy and extension officer
  • $900,000 in additional biosecurity funding.


  • Investment into salmon industry research, comprising $500,000 in the Fish Health Centre of Excellence located at Mt Pleasant Laboratories, as well as $500,000 to the University of Tasmania’s Institute for Marine and Antarctic Studies.
  • $200,000 over three years for the Tasmanian Shellfish Quality Assurance Program, as well as an a additional $100,000 a year over four years.
  • $300,000 over three years towards a Rock Lobster translocation project.
  • Additional $15,000 allocated to the recreational fishing sector to conduct a pilot program with the Tasmanian Rock Lobster Fisherman’s Association to maximise opportunities for recreational fishers.
  • $200,000 in 2014-15 Consolidated Fund allocation to the Fish Wise program.
  • $1.4 million over four years as a matching contribution with seafood industry sectors for the Fisheries Research and Development Corporation.
  • $800,000 over four years for the Abalone Industry Development Trust Fund (Grant Deed)
  • 2014-15 funding of TARFish of $137,500.
  • $50,000 in 2014-15 contributing to a socio-economic study of the Tasmanian recreational fishing sector.

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  • $1 million funding over four years for the Our Mining for Tasmania’s Future policy.
  • $500,000 over next two years to review and extend existing Regional Forest Agreement.
  • $11.9 million funding for Forest Practices Authority over four years.
  • $6.1 million funding for Private Forest Tasmania over four years.
  • No operational subsidy funding for Forestry Tasmania.
  • $2 million for Forestry Tasmania for firefighting.
  • $4 million for Forestry Tasmania for non-commercial activities.
  • Investing $752,000 over four years in biomass including $552,000 for research of value adding farm forest residues.


  • Additional $100,000 to increase mining inspectorate numbers.

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  • $16 million in additional funding for tourism marketing.
  • Target of attracting 1.5 million visitors to Tasmania by 2020 to create 8,000 new jobs.
  • Investment in a structured long-term marketing strategy in Queensland – Tasmania’s third largest source of interstate visitors.
  • A boost to our reach to international travellers, particularly through Tourism Australia’s ‘Best of Australia’ promotion.
  • Increase of the sales pitch for Tasmania’s major seasonal events.
  • Supporting and expanding Tasmania’s cooperative marketing with travel partners, such as Jetstar and Qantas.

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Today’s Budget saw the announcement of $2.8 million in funding for a revitalised Arts Organisations Investment Program, to be rolled out by Arts Tasmania later this year for projects commencing in 2016.

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$2.5 million allocated for progressing the case for a second Bass Strait interconnector and expanding Hydro Tasmania’s generation output by 10 per cent.

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Environment, Parks and Heritage
New funding for World Heritage Convict sites, including $1.9 million to be invested in Brickendon and Woolmers Estates. $1.75 million towards facilitating a world class visitor centre; $50000 towards conservation works at Brickendon and $150,000 for conservation works at Woolmers Estate. A further $430K to be invested in Highfield House.

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Planning and Local Government

  • Work is well underway to develop a single statewide planning scheme.
  • Planning reform will streamline approvals, pave the way for job-creating investments and ensure planning consistency across the state.

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Police and Emergency Management

  • Additional $1 million over four years for PCYC network.
  • $33 million funding for Tasmania Police over four years
    • $3.39 million in 2014-15
    • $6.71 million in 2015-16
    • Upwards of $10 million in 2016-17
    • $13.35 million in 2017-18
  • $5 million funding over two years for new marine police vessel.

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  • $732.6 million to be invested in Tasmania’s Road Network over four years from State and Commonwealth Governments.
  • $110 million for state road funding over five years including:
    • $50 million for the Midland Highway
    • $15 million for Rokeby Main Road Stage 2
    • $13 million for Esk Main Road – Avoca to Fingal and St Mary’s pass
    • $10 million for bridge strengthening / replacement on Esk and Tasman Highways
    • $8 million for the Huon Highway
    • $8 million for the Murchison Highway.
  • The Budget also confirmed funding over the forward estimates for other key road projects:
    • $3.7 million for Bruny Island Main Road
    • $6.5 million for Colebrook Main Road
    • $4 million for Lakes Secondary Road
    • Co-funded $32 million for the Brooker Highway – Elwick Road and Howard Road Junctions.
  • $237.9 million over four years has been allocated to vital infrastructure maintenance
  • TasRail and TasPorts will remain as state assets.
  • $33 million over the next three years to support a solution to a direct shipping service between Tasmania and Asia ports
  • $3.2 million to establish ITas to provide expert advice on infrastructure priorities and develop an integrated freight strategy.
  • $2 million allocated over four years to grow the Information Technology industry, including:
    • $800,000 for the Digital Ready for Retail program
    • $500,000 for free public WiFi across the state
    • $500,000 in training for start-ups
    • $175,000 to implement Workforce Development Plan
    • $50,000 to create a single point of contact within the Department of State Growth to work with industry to grow the ICT sector.
  • $5 million to be invested in sports infrastructure across the state in 2014-15, including:
    • $750,000 for the Burnie Aquatics Centre
    • $600,000 for the Huon Rowing Club
    • $350,000 for the Rocherlea Football Club
    • $300,000 for the Kingston Beach Surf Lifesaving Club
    • $100,000 for the Hobart Chargers
    • $100,000 for the Sorell Bowls Club.
  • $1.1 million for the States Grant Program funding for sport will also continue.

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Human Services
Community sector organisations to be supported to meet obligations under Fair Work Australia Equal Rumuneration Order as part of a six year program to rebuild essential services and support vulnerable Tasmanians. Additional $37 million allocated, which brings the total over the six years to 82.5 million.
A further $9 million to be allocated to community sector organisations over four years, which with indexation, will deliver an additional $5.3 million during 2014-15.
Funding 58.45 million worth of initiatives over four years for Tasmanians with a disability, including $41 million for NDIS roll out. National Disability Services (Tas) has been allocated $250,000 to implement its Workforce Development and Skills Plan.
A further $1 million over four years has been provided to the Autism Advisory Panel to achieve a long-term strategy and implement best practice autism care in Tasmania.
Housing Tasmania’s capital program received a boost of $17.2 million, bringing the total investment for 2014-15 to $43.9 million. Of this, $35.9 million will go to the building and construction sector, to the delivery of 287 homes and seven lots of residential land and allow for $7.3 million investment in the Trinity Hill Youth Accommodation and Training facility as well as $4 million to upgrade Neighbourhood Houses.

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  • $4.7 million in additional funding for areas identified during 2013/14 funding review of the Tasmanian Prison Service.
  • $1.994 million in additional funding to meet increase in operational costs associated with prison upgrades.

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