Tas govt forecasts $65m deficit in 10/11

The Tasmanian government has forecast a budget deficit of $65 million for 2010/11, after the state fought its way into the black this financial year following a lower than expected decline in revenues.

The projected net operating deficit comes after an estimated $23.9 million surplus for the 2009/10 financial year, a strong turnaround from the $117 deficit projected in last year's budget, according to budget papers tabled in parliament on Thursday.

This also compares to the projected $5 million surplus for 2009/10 given in the state's mid year financial report and the $87.3 billion deficit forecast in the 2009/10 budget.

General government net debt would be zero, Tasmanian treasurer Michael Aird forecast in his fifth budget.

The major measure in the 2010/11 budget is a $1.8 billion investment in state infrastructure over four years. This includes an estimated $579 million in 2009/10 and $725 million in 10/11.

"In the current Budget year, government infrastructure spending in Tasmania will reach record levels," Mr Aird said in his speech to parliament.

"But there is more to be done."

The state's embattled rail system, recently given an "F" rating by Engineers Australia, will get $19 million for rolling stock and infrastructure, with $315 million committed over the next four years.

The budget also contains a $117 million land tax cut over the next four years, the largest in the state's history.

Mr Aird announced the establishment of a cross party taxation review which he said would take into account proposals made in the Henry tax review.

"It will look at all aspects of state taxation, but most importantly, it will look to establish a competitive and sustainable tax system that will deliver a strong future for all Tasmanians."

The government projects $4.562 billion in revenue in 2010/11, an increase of 8.2 per cent on the 2009/10 budgeted revenue of $4.216 billion.

Expenses will amount to $4.627 billion in the financial year, 6.8 per cent above 2009/10 budgeted expenses of $4.333 billion.

This includes taxation revenue of $875.7 million, up from $810 million forecast in 2009/10.

It also factors in a less than expected $369.6 million in sales of goods and services, down from $375 million forecast in 2009/10.

It also compares to last year's estimates of $4.179 billion in revenue in revenue for the 2010/11 financial year and $4.267 billion in expenses.

The state's rate of inflation (CPI) is expected to be three per cent in the new financial year, while state final demand is expected to grow at a rate of 1.5 per cent.

The Tasmanian government is forecasting $1.002 billion in tax revenue in the 2013/14 financial year.

Meanwhile, the government also forecast a budget deficit of $82 million in 2011/12, compared to the 2009/10 budget forecast for a deficit of $24.1 million.

The state is forecast to return to a surplus of $32 million in 2012/13 and be $53.4 billion in surplus in 2013/14/

The state's unemployment rate is expected to be 5.5 per cent in 2010/11.

Australian Bureau of Statistics (ABS) figures show the state's jobless rate hit six per cent in May this year.

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