Budget reply - November 2025

Tuesday 11 November 2025

Noting - Budget Papers 2025-26 & Appropriation Bills (No. 1 & No. 2)

[3.59 p.m.]

Ms ARMITAGE (Launceston) - Mr President, here we are looking at yet another budget this year, and it doesn't seem like all that much has really changed when it comes to our short‑, medium_‑ and long‑term economic outlooks.

Sitting suspended from 4.00 p.m. to 4.30 p.m.

MOTION

Noting - Budget Papers 2025-26 and Appropriation Bills (No. 1 and No. 2)

Resumed from above.

[4.30 p.m.]

Ms ARMITAGE (Launceston) - Mr President, here we are looking at yet another budget this year and it doesn't seem like all that much has really changed when it comes to our short, medium and long-term economic outlooks. In fact, it is very alarming.

It's easy to brush off a cynical and pessimistic view of our state's finances, but I don't believe it does justice to the actual raw numbers we see before us. It doesn't do justice to our children and their children who will inherit the economic mess that will pursue them in the years to come. They are disadvantaged enough already.

It doesn't help to be in denial about our state's finances or the numbers that we can clearly see in the Budget today and the forward Estimates, and I don't believe that this is catastrophising either. I believe we need to take an analytical and objective approach to the Budget and think long and hard about what we can afford, about what's fair and about good investments.

I understand why people are becoming so disengaged from politics, policy and the democratic process. From the Spirits to the stadium, the state of the health system, our education system and its staff, the government is fighting countless fires and it's affecting how the rest of Australia sees us and how Tasmanians see themselves.

The government continues to dig deep and deeper into financial messes without having any exit plans in place. In his budget speech, the Treasurer said they were confident and convinced that Tasmania's future continues to be bright.

I truly want this to be the case, and I will give credit where credit's due, but the numbers don't and can't lie. In October, Tasmania dropped to sixth place in the CommSec State of the State report due to an anaemic private sector demand and softer outcomes in household spending, population growth and economic output. I note this report emphasised that Tasmania had the strongest job market, but very importantly also noted that the state ranked eighth on annual grown as it was being held back by a slowing public investment and a shift towards budget repair. The situation is likely to get worse before it can get any better.

The State of the State report also emphasised the fact the Tasmanian housing market needed improvement, particularly in the building of houses, and that doing so would be integral to lifting the state's performance. Unfortunately, the state has performed poorly on that score. The Homes Tasmania annual report released earlier this month noted they delivered 1540 social and affordable homes towards a target of 10,000 by 2032.

The wait list for housing is thousands long with 5336 applicants as of September 2025 ‑ the highest ever ‑ with an average wait time of around 82 weeks for placement. This continues an extremely worrying trend of the number of applicants needing social housing year on year since 2021. The need for secure housing continues to grow and it seems like there's absolutely no solution in sight. According to the TasCOSS dashboard. I quote:

Demand for social housing has grown significantly over the last decade and is outstripping new supply, as reflected in continued growth in the social housing wait list. Tasmania's wait time for social housing for greatest need households is now the second highest in Australia after the Northern Territory.

This lengthy waiting period is putting financial, practical, relationship and emotional strain on many Tasmanians who urgently need access to safe, affordable and appropriate housing. [TBC]

The dashboard further notes that waiting for housing affects people's health and wellbeing, their safety, and is described by people as horrible, demoralising, traumatic, nerve-racking, tiring, dreadful, disappointing and soul-destroying. It affects people's ability to safely raise a family, get education, find meaningful work, contribute to society and feel a part of a community. We are sleepwalking into a disaster.

Yet public discourse is overwhelmingly concerned with large amounts of capital expenditure on projects which people can't really believe are being prioritised. I do believe the government can walk and chew gum at the same time. That is to say that you can fund and pursue big projects while also looking after the basics, but we have too many expensive capital projects coming up with an ever-growing urgent need for those basics ‑ health, housing and education ‑ going underfunded. This is just wrong.

How do we expect a stadium, even when it's built, to be used by Tasmanians when they can't afford the basics themselves? Do we think that people in insecure housing are going to be wanting to spend their money on attending a football match or a concert. If trends continue, we're going to have more and more people who can't afford a safe place to live. The government still cannot tell us how much the stadium is going to cost. The TPC report stated and I quote:

There is substantial evidence that final costs are likely to be significantly greater than concept design stage costs, as has particularly been the case in recent years for major public construction projects both in Australia and overseas. [TBC]

Is this bill the stadium at any cost, a blank cheque which leeches resources and construction capability from things like the construction of affordable and social housing, towards something whose full benefits can't really be quantified, or at least not without significant argument?

Additionally, we are bailing out and extending lines of credit for already struggling organisations. In October, it was confirmed that TT‑Line would receive a $75 million cash bailout, with the possibility of a further $25 million. As noted in an editorial in the Mercury of 28 October this year, the size of this bailout raises questions about planning, accountability and the growing cost of major infrastructure projects in the state. It additionally noted the costs behind this extra funding were clear, and I quote:

A major terminal project in East Devonport that's blown out from $90 million to a staggering $493 million and an early misstep in the specifications of the fenders that's now required hull strengthening work on both new vessels. [TBC]

Of course, not to forget the Auditor-General's comments on insolvency. Later in the piece it stated:

TT‑Line is a public asset. If it falters, the economic flow-on effects would ripple across tourism operators, farmers, exporters and families. [TBC]

It finally noted that a bailout may be the responsible decision as a result.

I don't disagree. This is what I'm referring to when I note the madness of building things at any cost ‑ of signing blank cheques and just assuming that everything will work out. The Tasmanian people pay for this and will continue paying for this for years to come. What the responsible thing to do is, I can't say. The proof of the pudding will be in the eating. My point remains that greater oversight, transparency, accountability, responsibility and governance is required over these organisations and processes. What has been done to date clearly has not worked the way it was supposed to.

Ms Forrest - That's confirmed in the PAC report today. You will notice when you get a chance to have a look at it.

Ms ARMITAGE - I will, thank you. This Budget allocates more than $3.5 billion to our healthcare system with $351.6 million for community health, $251.3 million for mental health services, $286 million to our emergency departments, $182.4 million for ambulance services, $2.5 million for The Bubble in Launceston for expanded offerings for women's health services, including antenatal care, pelvic health and gynaecological care, $20 million for digital health transformation, $4.7 million to fund the surgical robot and $4.6 million to upgrade Tasmanian rural hospital and ambulance stations. Additionally, over the forward Estimates $2.54 billion, $3.59 billion and $3.699 billion will be allocated until the 2028‑29 financial year.

In the Education portfolio, the government has allocated $1.45 billion for in‑school education, $225.2 million for children's services, $49 million for Libraries Tasmania, $32.7 million for early education, $1.63 million for the Commissioner for Children and Young People, and $24.7 million to fund the Better and Fairer Schools Agreement. Pleasingly, $1.3 million for the Breakfast in Schools Program is being allocated. As we all know, and has been mentioned, I believe, by the member for Montgomery: children do perform better when they have a full tummy.

Interestingly, one issue I believe I raised when the current Premier was Education minister, that I always believe takes a lot of money - and I am not sure that we can actually go backwards now - is the extension of years 11 and 12 to high schools in cities such as Hobart and Launceston. I know that has been raised with me by people as well, the fact that we have in Launceston two really good higher education options, Launceston College and Newstead College, yet we have a number of high schools that go to years 11 and 12.

It was interesting last week talking to some of the students who came and asking their opinions on years 11 and 12, and whether they considered it was worthwhile. Without exception, the students I spoke to said no, they would not stay at the school, and it was a really good thing for you to be pushed that little bit, to change from the current high school you are going to, to a college.

The other issue is the difficulty in getting experienced teachers in the high schools, when the colleges have difficulty themselves, particularly in getting science teachers and other specialised teachers. It has been an issue that I have raised time and time again, generally at Estimates with previous Education ministers, and I probably will raise it again in Estimates coming up. It is an area that I don't think is working all that well from the statistics that we see. I am sure many of the students are very happy to go to the colleges, particularly in the cities. I certainly understand why we do it in country areas, but cannot understand why we do it in the city areas.

The Budget has also allocated $125,000 to the 26Ten literacy program, but has not indicated any funding in the forward Estimates. I implore the Treasurer, the Premier and the Education minister to ensure that funding for literacy help for our community's most vulnerable people is funded. It would be a very sad outcome indeed if we lost this organisation which helps to coordinate, educate and train people to better use and understand words and numbers.

Unfortunately, there has been quite worrisome discontent amongst our health and education workers, which is not a good sign. Just looking at the Health KPIs, I note that the target for patients admitted through the ED in four hours was 60 per cent, but the actual was 9.8 per cent seen within four hours. The target for mental health patients admitted through the ED within eight hours was 90 per cent; the actual was 23.5 per cent. The target for elective surgeries seen on time was 95 per cent, but the actual was 65 per cent. I think everyone knows, particularly those that have been in health, including the member for Murchison, someone in this House who has certain health experience, that the sooner you have surgery or the sooner you actually treat a condition, the better outcome you get.

It is a bit like the emergency department; you're going with an issue or maybe you're going on a waiting list and be seen, then you're going to have a far better outcome than if you go into emergency, which takes much longer to recover and often has a much worse outcome. I know how much money we actually spend on health, but when you consider the outcomes for people in our community to be able to recover more quickly, it's certainly money well spent. The other target, waiting beyond recommended times for elective surgery: the target was 270 patients; the actual number is 3282 people statewide who waited longer than recommended.

Another issue that has been raised with me was that the state's public service grew by 3.3 per cent last financial year, again defying government attempts to rein in costs by trimming numbers. There were 36,158 public sector workers in Tasmania at the end of the 2024-25 financial year, up by 1200 workers. The State Service annual report says it grew by 4.7 per cent the year before. The real concern that we have - and I've spoken to people particularly in in the area of Police, Fire and Emergency Management - is that to cut people in those areas where safety is paramount for people, it's a real concern when there's a budget cut or they have to find where they're going to cut. How do you cut money out of police, out of fire, out of emergency management? It's something that you just can't do. I have great concern over these issues.

The other area that I was reading - I won't go into all the details here because I know that other people are fairly close to being ready to speak - but the amount of money that's spent on locums. In reading some of these articles, the word is out on the mainland, 'Don't go to Tasmania, you're going to be overworked, you're going to be burnt out, so don't go and work there.' Then what do they do? They have to employ locums. The amount of money that's spent on locums, when it actually could be spent on paying our own workers to stay and get a decent wage, is pretty upsetting for most people.

I have to read these off the board because the print is too small for me when I print them out. It's the reason I do need to take a little bit more time. This is a report from Martin Goddard in the Sunday Tasmanian:

The word about working conditions in this state got around and it became harder than ever to recruit new people to replace those who'd left, so permanent staff were replaced by locum doctors and agency nurses: people whose talents were of variable quality, but who could cost three or four times as much. [TBC]

They might not even be as good as our workers, but they cost three or four times as much. In 2023‑24 alone, outside doctors and nurses cost $183 million. They accounted for 21 per cent of the salary bill for doctors and 11 per cent of the bill for nurses. The extra strain on the state Budget has been remarkable. If our cost efficiency had stayed in line with the national average as it was back in 2014, the government would now be spending around $400 million less.

Costs have been increasing at almost 11 per cent a year. At that rate, the extra and avoidable hit to the Budget will be over $1 billion this financial year, and $1.4 billion by the end of the decade. All this can be fixed, but it will need a different approach. Of course, concern by the people is the approach that it might need is increasing taxes. How do you find extra money? The only way you can find extra money is by increasing taxes. I also find that's a real concern, particularly for those disadvantaged and for those struggling and now having trouble finding the money to pay their mortgages. Even public schooling, people might think it's free, but there is such a lot of cost for people with their children at school while putting food on the table.

Looking to the future, I started out talking about how we need to be looking at this Budget with a critical, analytical eye. Being realistic, pragmatic and unemotional about the state of the Tasmanian economy is vital. However, I understand that being overly and unnecessarily pessimistic is unhelpful, but so is unjustified optimism. We can't be in denial about what's in store for our state's future. Many have flagged that we should be concerned about what our next budget will look like in about six months time. We knew this was an interim Budget and that we would need to be rolling our sleeves up and making hard decisions for the 2026-27 Budget.

According to Saul Eslake, the formidable task of budget repair has been kicked down the road to the 2026‑27 Budget, and further went on to state to the Mercury last week that, properly measured, Tasmania's financial position is worse than that of any other state or territory.

Saul Eslake notes that the interest on the state's debts, spending, revenue raising and paying down debt will be factors to repairing our state's finances in the shorter and longer terms. There's going to be a lot we need to do, and the longer we leave it, the worse it's going to be. Additionally, the Treasury's pre‑election outlook report stated the following:[tbc]

The State Budget has a structural problem. Expenses, significantly driven by health demand and costs, are growing at a faster rate than the state's current sources of revenue.

It goes on to say:

This structural imbalance has developed over a number of years. Recent State Budgets and forward Estimates have been defined by increasing deficits and debt. As a state, we are spending more than we earn, and the gap is growing.

You may recall, I said earlier how little sense it made to me that we are signing blank cheques for major projects without any clear, defined benefit to the state, and that we are digging ourselves into debt trenches that will be extremely difficult to climb out of. It's clear that significant work is going to be required, both at the surface level and at the deeper foundational and structural levels too. To put it plainly, it certainly worries me.

A very interesting article by senior economics correspondent Shane Wright last month discusses the possible outcomes of Tasmania defaulting on its debts. Mr Wright correctly notes that Tasmania defaulting on its debts would affect every other state. Can we imagine that the federal government would allow this to occur?

What next? Would the entire state be placed into administration? Drastic, yes, but I think it's something we need to at least consider. The state's finances are truly that bad and, at this time, I don't see a clear path out of it. The Budget due to be handed down next year is going to have to contain some very serious measures indeed.

It's with a great sense of apprehension that I note the Budget.