The Tasmanian Liberal Fiscal Strategy provides an effective and appropriate framework for the ongoing management of the State’s Budget position. It is focused on the achievement of long-term fiscal principles that are embedded within the Charter of Budget Responsibility Act 2007. These principles are:
- manage the State’s finances responsibly for the wellbeing of all Tasmanians;
- provide for the future for the next generation of Tasmanians;
- prepare for unexpected events by building a robust financial position;
- improve services to Tasmanians by building a strong economy and efficiently allocating resources to gain the maximum community benefit;
- formulate spending and taxation policies that ensure a reasonable degree of equity, stability and predictability; and
- ensure transparency and accountability in developing, implementing and reporting fiscal objectives.
A focus on these principles reflects responsible financial management and drives the achievement of long-term Budget sustainability.
Through the need to prepare for the unexpected, a focus on these principles also recognises that Tasmania’s economic and fiscal circumstances can change quickly and significantly.
The occurrence and impact of the COVID-19 pandemic demonstrates the speed with which circumstances can change.
The use of a principles based approach also recognises that a government can, in the short-term, legitimately depart from fiscal objectives in response to changing circumstances, as long as that departure is necessary, transparent and justifiable.
The Tasmanian Liberal Fiscal Strategy has stood us in good stead for the last seven Budgets we have delivered and includes six important strategic actions that are aimed at achieving the long-term fiscal principles. These strategic actions are detailed below:
- Annual growth in General Government operating expenses will be lower than the long-term average growth in revenue.
- General Government debt and defined benefit superannuation liabilities will be managed to ensure the combined annual servicing cost is less than six per cent of General Government cash receipts.
- A competitive tax environment will be maintained with an objective for state taxes to be efficient, fair, simple, stable and sustainable.
- Government businesses will be required to deliver services to Tasmanians at the lowest sustainable cost, while also providing an appropriate financial return to the Government.
- Tasmanian Government infrastructure investment will maintain existing assets, respond to economic and population growth and reflect the changing needs of the community.
- Public sector efficiency, productivity and financial transparency will be improved.