The greatest economic challenge facing Tasmania is its crushing debt
burden.
This was recognised in the Nixon Report which recommended sale of
the HEC and a contribution from the Commonwealth in support of that
sale.
The Tasmanian Premier, Mr Rundle, is to be applauded for his courage
in committing his Government, through the sale of the HEC, to throwing
off Tasmania's debt shackles and creating a more competitive
Tasmanian economy.
In the spirit of the Nixon Report, I announce today that the Commonwealth
is prepared to write-off $150 million of debt currently owed to it
by the State of Tasmania. This represents about half of Tasmania's
debt to the Commonwealth.
This offer is conditional on the passage through the Tasmanian Parliament
by 31 December 1998 of legislation to sell the Hydro's transmission
and distribution businesses and to lease for 99 years its dams and
generation assets.
Naturally, the offer stands irrespective of the election outcome.
The State's heavy debt burden wastes Government money on debt
repayments, drives up taxes, discourages investment and results in
people leaving Tasmania. In 1997 alone, Tasmania's population
fell by 4,500 people.
Those who stick their heads in the sand and pretend that the problem
can be solved without resolute action are selling the long-term interests
of Tasmanians short.
That is why the visionary and bold plan put forward by Mr Rundle deserves
the support of all Tasmanians.
He alone has exhibited the courage to tackle the core problem
of Tasmania's economic malaise its debt burden.
Sale of the HEC will eliminate State debt, thus freeing the Government
to spend more money on schools, hospitals, police and other community
services.
This offer from the Federal Government follows earlier initiatives
of great benefit to Tasmania. These have included the hugely successful
ferry subsidy, $110 million for the regional forest agreement, $125
million from the Natural Heritage Trust, $58 million for regional
communications and $20.5 million for the ABT Railway which will stimulate
more tourist jobs.
The Government's recently announced tax plan will massively benefit
Tasmanians. The major reductions in fuel costs proposed under the
plan will greatly benefit Tasmania's growth industries, such
as tourism.
20 August 1998