The 2025-26 Tasmanian Budget was delivered on 29 May 2025 by Treasurer Guy Barnett.
The Budget does not propose any new taxation initiatives or increases, instead focusing on increased investment and additional funding over the 2025-26 Budget and Forward Estimates towards:
- Infrastructure – over $5.2bn in total infrastructure funding for roads and bridges ($1.6m), hospitals and health ($692m), law and order ($344m), school, education and skills ($308m), ICT to support service delivery ($239m), tourism, recreation and culture ($227m) and other infrastructure ($42m).
This includes new funding for construction of the Northern Access Road, a key enabling project of the Macquarie Point Urban Renewal project, and additional funding for the development of new Youth Justice Facilities. - Health – over $1bn in the public health sector, including to support the impact of demand pressures on the public health system, delivery of the Elective Surgery Four-Year Plan 2025-29 and to extend Home and Community Care Programs.
- Education – over $150m towards primary and secondary education, support for differently abled students and upgrades to school infrastructure and information management systems.
- Housing – $52.9m for Homes Tasmania to support the provision of 10,000 new social and affordable homes by 2032.
- Public order and safety – $58m to support police and emergency workers in response to increased workers compensation premiums, as well as $31.5m to alleviate cost pressures on the prison and corrections system.
- Energy – total equity funding of $1.8bn for Government businesses and other entities for infrastructure investment, with over $719m in the 2025-26 Budget, including for Marinus Link ($98.5m), TasNetwork’s North-West Transmission Development ($197.6m) and Hydro Tasmania ($42.2m).
Budget revenue forecasts
The Budget projects a net operating deficit of $1.008bn for 2025-26, with projected revenue of $9.452bn primarily comprising GST revenue ($3.778bn), Federal Government funding ($2.545bn) and State taxation ($1.907bn).
Whilst annual revenue is forecast to grow to almost $10.1bn by the 2028-29 financial year, the Budget acknowledges that these revenue sources are sensitive to economic factors such as consumer spending patterns and interest rates, although the ‘relative stability’ of the current Tasmanian property market is noted in the Budget.
The Budget also reiterates the Government’s commitment to reach a Net Operating Balance surplus by 2029-30, including through strategic infrastructure investment and new Fiscal Performance Initiatives to manage the Government’s progress towards achieving its targets for economic stability.
State taxation revenue
In 2025-26, State taxation is estimated to be $1.907bn, which represents an increase of $85m compared to the 2024-25 Budget of $1.822bn.
Over the 2025-26 Budget and Forward Estimates, State taxation is forecast to grow by $352.9m, due mainly to forecast increases in conveyance duty from the strength in the Tasmanian property market in response to interest rate reductions, and partially due to growth in payroll and land tax revenues and Government guarantee fees.
Land tax forecasts over the 2025-26 Budget and Forward Estimates show a decline in land tax revenue compared to the 2024-25 Budget. This primarily reflects slower growth in taxable land values than previously estimated for 2025-26. The outlook for other key State taxation components remains positive across the 2025-26 Budget and Forward Estimates. Payroll tax forecasts reflect historical growth rates, supported by strong growth in wages. Insurance duty forecasts reflect national trends, attributable to historical inflation rates, with growth across the Forward Estimates resulting from increased natural disaster costs due to extreme weather events such as flooding and fires.
Treasury is progressing the Government’s 2024 Election Commitment to introduce a five per cent short-stay accommodation levy. Given that this policy is still in development, it is not reflected in the 2025-26 Budget.
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