'Mortgaging the future': Liberal state debt criticised

Future generations are set to pay the cost for a Liberal budget which plunges Tasmania further into debt, the state's Labor opposition and key cross bench independents say.

The Liberals, who have been in power since 2014 and were re-elected in minority in March, on Thursday handed down the 2024/25 state budget.

It forecast net debt more than doubling to $8.6 billion in 2027/28 - the government says it can turn a $1.5 billion deficit in 2023/24 into a surplus in 2029/30.

Treasurer Michael Ferguson has defended the budget spending, hanging his hat on a $5.1 billion "job-creating" infrastructure program, including road, bridge and health upgrades.

"Our infrastructure pipeline ... is good for the economy and it's good for jobs at a time where the national economy has softened," he said.

He pointed out a $2 billion COVID-19 hit and a necessary $1.1 billion to implement recommendations from an inquiry into institutional child sexual abuse.

But Labor has accused Mr Ferguson of "mortgaging" the state's future - the Liberals inherited no net debt in 2014.

"The Liberal minority government have decided to make future generations of Tasmanians pay for their budget disaster," Labor MP Josh Willie said.

The government has issued a directive for departments to find $450 million in savings over the next four years.

Australian Medical Association Tasmania president Michael Lumsden-Steel said the health system couldn't afford cuts when it was struggling to meet demand.

He said patients were spending too long in emergency departments, diagnostic services were overloaded and elective surgeries were being cancelled.

Almost a third of Tasmania's budget is spent on health, with Mr Ferguson noting a $12.9 billion spend over four years.

He said the $450 million "efficiency dividend" was modest, and was equivalent to 50 cents out of every $100 of government spending.

"The total savings measures represent just 1.6 per cent of operating expenses over the budget and forward estimates," he said.

Independent MPs Rebekah Pentland and Miriam Beswick, whose cross bench votes prop up the Liberal government, were also critical.

"The state's path back to surplus is built on some very ambitious assumptions and unfair cuts to essential services," Mrs Pentland said.

"The treasurer is asking health to cut almost $70 million in one 12-month period without any guidance."

Ms Beswick said the government would end up wasting valuable money paying off interest on the "credit card" debt.