Worsening state finances demonstrate the need for public service pay cuts, claims Tasmanian Treasurer Peter Gutwein, who will hand down his first budget on August 28.
The Preliminary Outcomes Report, released Tuesday, shows that Tasmania’s net operating balance is expected to go into deficit to the tune of $157.4 million, but that its underlying net operating balance — a measure that removes the distorting impact of one-off federal funding for specific capital projects — is expected to reach $398.7 million in deficit, leaving the state $44 million worse off than earlier predictions.
In a statement, Gutwein claimed the deteriorating budget situation “clearly highlights Labor and the Green’s [sic] failure to rein in public sector wages and meet their savings targets”.
He also pointed out that public sector wages were $153 million more in 2013-14 than were forecast three years earlier. “This makes the case for public sector wages to be reined in. The only two ways to do this are either significant job losses or a pay pause,” he said.
Opposition Leader Bryan Green argues the Liberals had been aware of Tasmania’s financial position before the election, but had over-promised.
The Community and Public Sector Union has previously expressed scepticism about the proposed pay pause.