Moody’s says that the State of Tasmania’s FY2015/16 budget indicates that robust revenue growth is projected to spur significant improvements in its financial performance both this fiscal year and over the medium term. Owing to large gains in GST commonwealth grants, and to a lesser degree higher tax income, deficits are set to narrow considerably, and the state is forecast to move into a surplus position by FY2018/19, a credit positive development for Tasmania. For FY2015/16, the state budget projects a general government sector deficit of $157 million, equal to 3.0% of revenues, which is below the estimate projected last year for FY2015/16 of $214 million or 4.2% of revenues. The better result is bolstered by a forecast sharp rise of 15.3% in GST-backed grants over the prior year due to both an increase in Tasmania’s share of these grants and the growth in the total size of the grant pool. Moody’s allocates long-term debt and issuer ratings of Aa1 to Tascorp.