TASMANIA’S peak employer body, the Tasmanian Chamber of Commerce and Industry (TCCI), is concerned that the State Budget bottom line has not materially improved despite an improving revenue situation.

TCCI chief executive Robert Wallace says the State Government’s updated 2009-10 mid-year financial report shows an improvement to the bottom line for current year, yet the overall picture reveals deeper deficits and a smaller surplus.“The Budget is currently in an unsustainable position. Net operating deficits mean that the day-to-day operations of government are greater than their capacity to be funded,” Mr Wallace said.

“This compromises the government’s ability to invest funds into capital infrastructure, where they are badly needed.”

Mr Wallace said an operating surplus in the range of $200-300 million was required just to support Tasmania’s basic infrastructure needs.

“On current projections, the State is unlikely to reach a healthy surplus until around 2018.

“The right balance between infrastructure investment and recurrent expenditure like public sector wages has not been struck.

“Again we see a blow out in public sector employee wages and superannuation which now consume around half of the entire $4.5 billion Budget.”

Mr Wallace said that recently the TCCI surveyed its members on their policy priorities for the State election and responsible Budget management was their number one election priority.

“We will not support an expensive election campaign from any party. We expect that any election commitments be funded from savings within the existing Budget,” Mr Wallace said.

Premier David Bartlett and Treasurer Michael Aird used the release of the mid-year financial report to demonstrate that the State Budget position has improved by $54 million since budget time.

They claimed the report confirmed the Government’s commitment to never go back into net debt and to return the Budget to an operating surplus by 2012-13.

“At Budget time last year it was projected that there would be an Operating Deficit for 2009-10 of $117.1 million,” the two senior Labor figures said.

“In the preliminary mid-year financial report released in December this had improved to a deficit of $83 million - there has now been further improvement to a deficit of $63.4 million.

“The revised Budget figures completely supports Moody’s Investor Services recent decision to yet again confirm Tasmania’s Aaa credit rating.”

Meanwhile Shadow Treasurer Peter Gutwein said the report showed that the Government was living beyond its means and spending far more than it earned.

“The fact is that in June last year, the Government prepared a worst-case scenario Budget for 2009-10. However, this Report shows that the budget situation over the forward estimates is even worse than that predicted,” Mr Gutwein said.

“While revenues are forecast to increase by almost $690 million to the end of the forward estimates, the Government’s expenses are forecast to rise by $775 million. ”

Mr Gutwein claimed the figures did not include the purchase of the Burnie Hospital, which was expected to be up to $50 million or the Government’s $90-million commitment for roads, which meant the promised return to Budget surplus by 2012-13 would not be achieved.