Tasmania’s financial position is on track to “become worse than that of any other state or territory over the next three years”, and the deterioration is “entirely attributable” to state government policy, an independent review of the state’s finances has found.

Economist Saul Eslake’s review has warned against slashing the budget — instead calling for higher taxes — but admits returning to a sustainable position will be a “substantial” and “politically challenging” task.

The Treasury Department’s own preliminary outcomes report for 2023-24, released last week, revealed Tasmania’s net debt currently stands at $3.5 billion.

Mr Eslake’s report projected net debt would hit $16 billion by 2035, at which time, the state would be paying $750 million per year in interest payments — more than the estimated total cost of the Macquarie Point stadium.