Tasmania to carry $4.3 billion in net debt by 2024

The papers have detailed a massive spending program in the key area of infrastructure which will be supported by a record amount of borrowing.

To do this, borrowing will jump from $867.8 million in 2020 to $3 billion in 2021.

It is expected to increase to $5.2 billion by 2024.

As a result, the state's net debt will reach $4.38 billion over the forward estimates.

This means roughly $8265 of debt for each Tasmanian man, woman and child.

Premier Peter Gutwein, in handing down the budget, said the COVID-19 pandemic had been one of the largest shocks to the Tasmanian way of life, the state's economy and the budget.

He described it as the most important of the seven budgets he and state Treasury had prepared.

"I won't sugar coat the situation," Mr Gutwein said.

"Now is not the time to step back, now is the time to step up."

He said the level net debt of $4.3 billion by 2023-24 was manageable with interest rates at record lows.

The government will spend $1 billion on infrastructure in 2020-21 and $2.8 billion over the forward estimates.

There is an additional $777 million in equity investments in government businesses and another $246 million for the emergency services network and public building maintainence.

This will take the total infrastructure spend over four years to $5 billion.

Mr Gutwein said the state's spending on infrastructure was $324 million in 2014.

"We will more than triple that this year," he said.

Mr Gutwein said the government's infrastructure investment over four years would support about 25,000 jobs.

The Premier could not put a timeline on when the government would start to pay down its net debt.

"This is debt that is funding intergenerational assets and it will be paid off in an intergenerational way," Mr Gutwein said.

A deficit of $1.1 billion to the budget's net operating balance is expected to move into a surplus of $17.2 million by 2023-24 while net debt balloons.

The deficit was $337 million in 2019-20 when a surplus had been expected.

He said in addition to budget commitments, the government would provide $145 million in 2020-21 to the Finance-General as a central COVID provision.

This is similar to the provision for COVID in 2019-20.

Mr Gutwein said $50 million of this would be allocated to initiatives to support businesses and the remainder would be kept to enable a response to any further COVID-related challenges.

The government will receive a budgeted $6.4 billion in 2020-21, but spend $7.5 billion.

Expenditure has increased this year by $795 million - or 11.8 per cent.

Sixty-three per cent of the budget is reliant on federal government grants.

Mr Gutwein said there was no intention to look at broadening the state's tax base in the future.