Tasmanian Treasurer Eriz Abetz has defended plans to cut thousands of public sector jobs to help address a forecast $1 billion budget deficit.
The Liberal government's interim 2025/26 budget, handed down on Thursday, forecast a deficit of $1.01 billion in 2025/26 and predicted state debt would rise from a current $5 billion to more than $10 billion in 2028/29.
Mr Abetz says 2800 public servants must be let go through to 2032 to help rebalance Tasmania's finances and has mandated state agencies find $150 million in annual savings from 2026/27.
The former federal Liberal senator said on Friday "right-sizing" the public service would ensure Tasmania's budget remained sustainable.
"You look back to pre-COVID - that's where we want to get back to. The public service was right-sized at that time," Mr Abetz said.
"We needed the influx of public servants to deal with the COVID issue at the time, and that there has been growth since, that's got to be reined in."
Tasmanian Greens leader Rosalie Woodruff said the interim budget - delivered after a snap state election stopped the 2025/26 budget from passing parliament - was the start of "deeper cuts" to come in 2026.
Ms Woodruff urged the minority government to hike taxes on large companies or ditch controversial plans to build a $1.13 billion AFL stadium in Hobart.
"It's an immediate thing they can do to fix up Tasmania's debt crisis," she said.
Labor, the state's main opposition party, said on Thursday it believed the budget set the scene for greater cuts.
"After 11 years, the Liberals have taken Tasmania from having no net debt to the worst set of financials of any state in Australia," Labor MP Dean Winter said.
TasCOSS, the peak body for community services in Tasmania, said it feared essential services would be caught up in the flagged budget tightening measures.
Premier Jeremy Rockliff narrowly retained power at the July poll, which was triggered when he lost a parliamentary no-confidence motion critical of budget management.
The Liberals have been in power in Tasmania since 2014 and have governed in a minority since 2023.
