The Budget has forecasted a $297m deficit in 2023-24 and is predicted to deliver a thin surplus of $12.7m in 2025-26, increasing to $61.2m in 2026-27, and net debt will increase from $2.3b in 2022-23 to $5.6b in 2026-27.
With inflation increasing nationally, Tasmania’s economy has slowed with growth in gross state product falling to 1.5 per cent in 2022-23 and rising again to 2.5 per cent by 2026-27, and the unemployment rate expected to rise from 4 per cent in 2022-23 to 4.5 per cent from 2023-24 onwards.
- $12.1b over four years for healthcare, including $682.9m for healthcare infrastructure initiatives.
- $8.9b for education including new infrastructure, and recruiting and retaining teachers.
- $5.5b over four years for road and transport infrastructure, including $2.2b for new and upgraded roads and bridges.
- $660m over four years for skills and workplace growth.
- $347m for cost-of-living measures.
- $3.75m for the Renewable Energy Plan, including the implementation of Renewable Energy Zones and the Renewable Hydrogen Action Plan.
- $3.5m for the Business Energy Efficiency Scheme for large electricity customers.
- $2m of additional funding for the Agriculture Innovation Fund.
- $1.5m for the Private Rental Incentive Program.
The State Budget includes some modest changes to stamp duty, land tax and payroll tax.
Continued Housing Support
To support Tasmanian housing affordability, the Government has announced an extension to the 50 per cent stamp duty concession for first home buyers and downsizing pensioners where the purchase price of the property is less than $600,000. The concession will apply for a further 12 months to 30 June 2024.
Similarly, the land tax exemption which applies to newly constructed properties made available for long-term rental, and short-stay accommodation converted into long-term rentals will continue to be available for a further 12 months to 30 June 2024.
The Taxation And Miscellaneous Amendments Bill 2023 has also been introduced, which seeks to extend the $30,000 First Home Owner Grant for a further 12 months to 30 June 2024. The grant now applies to all eligible contracts entered into from 1 April 2021 until 30 June 2024.
The Government is also continuing to support the uptake of electric and hydrogen-cell vehicles in Tasmania, with the duty waiver on the purchase of eligible vehicles extended to 31 December 2023. However, the waiver is limited to new vehicles that were contracted for purchase prior to 25 May 2023.
Road User Charge
The Tasmanian Government has affirmed its previously announced commitment to introducing a road user charge for zero and low emission vehicles. Legislation will be introduced to Parliament in 2024 subject to the outcome of the High Court challenge to Victoria’s zero and low emission vehicle distance-based charge. However – even if introduced – the measure will not be brought into force until 1 July 2027, or when zero to low emission vehicles make up 30 per cent of all new vehicle sales.
Other highlights include:
- As announced previously, the Payroll Tax Rebate Scheme that provides relief to Tasmanian businesses which employ apprentices, trainees and youth employees, has been extended to 30 June 2024. The payroll tax rebate is available for two years from the date on which the apprentices and trainees are employed, and one year from the date on which youth employees are employed.
- In recognition of the strong labour market, the tax-free threshold for payroll tax has been increased. However, no details regarding the new threshold have yet been disclosed.
If you wish to discuss the Tasmanian Budget announcements, please reach out to a Grant Thornton Partner today.