THE sudden turnaround in the state’s fiscal fortunes as revealed in Treasurer Peter Gutwein’s Budget this week has everyone wondering.
Is it good management or good luck?
Only one more deficit, in 2015-2016, before we return to surplus in 2016-2017. Can this be true?
It depends on how one calculates a deficit. If one does so on a cash basis as the Federal Government does, then Tasmania will be in deficit for the next two years at least.
To most observers it is misleading to proclaim a surplus when cash outlays exceed cash receipts. That’s what Mr Gutwein has done. Cash outlays are 2 per cent more in 2015-2016 and 1 per cent more in 2016-2017.
With the State Government operating a cash in/cash out operation, it’s the only sensible prudent way to assess our situation. Thereafter cash surpluses are predicted.
But with each successive year the reliability of the forward estimates diminishes exponentially.
Even with blue sky forward estimates, the Government’s actual cash position only improves by $90 million over the next four years.