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TASCORP – Management of COVID Debt

Cassy O'Connor MP  -  Tuesday, 30 November 2021

Tags: State Budget, COVID-19, TASCORP

Ms O'CONNOR - Premier, in the annual report it's clear that advances to Treasury and Finance rose by $950 million to $1.7 billion. We all understand that the state Government has had to undertake borrowings in order to fund the COVID-19 response. Did you want to outline to the committee what the plan is to pay down that debt?

Mr GUTWEIN - I make the point that, in terms of some of the advances to Treasury and Finance and costs to the general government sector, that's because we've actually cashed back in all of the special accounts, which is not something that's always been done. You might recall that there have been various methods used during our time in parliament, from cash backing to borrowing at the end of June to cash back on that particular but not cash back during the course of the year. But we're cash backing all of our Special Purpose Accounts (SPAs) at the moment.

In terms of paying down the debt, one of the things I've been very mindful of is that there are only two ways you can really pay down debt. One is to sell something and to pay it off. We have made a very clear commitment that we're not going to sell assets. The other is to grow your economy, to have increased revenues and, over time, to pay that debt down. That's the plan that we're working on.

Ms O'CONNOR - In terms of 'over time', did you want to project for the committee what sort of time frame we're looking at here and how much of the debt, for example, would be paid down in this term of the Government?

Mr GUTWEIN - Again, and you'd be well cognisant of this, we're not through COVID 19 yet. This will be, I still think, a difficult and challenging time as we move forward; hence, as I said in my opening remarks, one of the reasons why TASCORP is well prepared to have sufficient cash on hand should we need it to meet any emerging challenge that we might face.

Our intention would be over the course of the forward Estimates to manage the debt in line with the forecast we have in the Budget over the four years. It's certainly not my intention to see that increase markedly. I would hope that by the end of the four year period we've hit a level that would see us not need to have additional debt for the management of COVID 19 or for other challenges associated with that. Then, with growth in the economy, the growth in our overall budget, that we could see debt start to be reduced.

I make this point: in relative terms, our debt position is the best in the country, both in terms of the amount of net debt we carry and also in a net debt per capita basis. So, it's manageable and we're beginning to manage it within the confines of the fiscal strategy, which is very clearly that the cost of both debt and our contribution towards superannuation will be within six per cent of our total cash receipts moving forward, which it is currently.