Tasmanian Treasurer Peter Gutwein reveals $1.1b budget black hole (ABC)

The Tasmanian Treasurer has revealed a $1.1 billion budget black hole.

Peter Gutwein says the state budget is in a significantly worse position than the Government expected.

Treasury estimates that between now and 2017, the state will accumulate a $1.1 billion debt.

A report complied by Treasury has also predicted a revised net debt of $400 million over the forward estimates.

Treasury's report on budget risks shows an updated net deficit is $200 million more than what was predicted before the state election.

The Treasurer says it presents monumental challenges to the Government and some tough budget decisions will need to made.

The Liberals have already promised to reduce the public sector by 500 full-time equivalent positions, but Treasury has advised the government to shed an extra 1,000.

Mr Gutwein will not say if he will act on the advice.

"I'm not going to deal with hypotheticals about what may come out of the budget process," he said.

"That is Treasury's assessment about where Labor and the Greens have left us, that's their assessment."

"I don't want anybody in this room to walk out of here today and report that 1500 position to go.

"This is just advice from Treasury that outlines what they believe the forward estimates contain."

Tom Lynch from the Public Sector Union is worried.

"We don't know what the number is...is it the 500 they promised before the election, is it the 1,000 that's talked about in this report?"Departments to review spending

Mr Gutwein has instructed government agencies to review their discretionary spending on travel and consultants, and suspend all non-essential advertising.

He blames the previous Labor-Green government for the poor state of the budget.

The Liberal Government will bring down its first budget in August and Mr Gutwein expects to return the state to surplus in six years time.

The Tasmanian Chamber of Commerce and Industry is urging the State Government to get on with reducing government debt.

The TCCI's chief executive, Michael Bailey, says all Tasmanians must take responsibility.

"It is a formidable number but it can be fixed, we need to look at structural reform though, to fix that," he said.

"We also need to remember that this amount of money is owed by us all, this isn't just owed by government.

"Taxpayers generate revenue which government then spend, so it really belongs to us all to try to fix this."

The budget update comes on the same day as Deloitte releases a report showing the state's economy is starting to turn the corner.

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