Hobart's AFL stadium vote to pass Tasmania's upper house, but at what cost?

More than three and a half years after the Tasmanian government first announced plans to build a new Hobart stadium, it has finally got the parliamentary numbers to make it a reality.

And fittingly for a project that has been hard to sell to politicians and characterised by constantly shifting cost estimates, there needed to be one more government concession to get undecided upper house MPs over the line.

The order to approve the stadium is set to pass the Tasmanian parliament after four Independents — one more than the required three — announced they would vote for it.

In order to get Independent Bec Thomas on board, the government made a series of commitments.

The biggest was a guarantee that public funding for the stadium, last estimated to cost $1.13 billion, will be capped.

The cap will be set at $875 million, which is the cost estimate minus a $240 million federal government commitment and $15 million from the AFL.

Ms Thomas says the cap requires the government to do one of two things if there is a cost blowout: seek additional money from the federal government, AFL, Cricket Tasmania or private investors, or decide to reduce the scope of the project if that extra funding does not materialise.

"One of the most significant concerns for the community is the cost and the unknowns of cost blowouts. Tasmanians deserve certainty," she said.

Independent Casey Hiscutt also extracted a guarantee that any extra public funding from the stadium would have to be endorsed by both houses of parliament.

So, after all that, a deal has been guaranteed, and the stadium will go ahead.

But at what cost?

Treasurer Eric Abetz, who is also the minister in charge of the stadium development, says he is confident the stadium can be delivered for that $1.13 billion estimate.

"The figures that we have are on the very best of professional advice from quantity surveyors, and we do not at this stage see any blowout," he said.

But economist Saul Eslake says that assuming that there will not be further cost overruns is pretty optimistic.

He points out that the cost of the stadium has grown considerably since it was first promised, when the initial Macquarie Point stadium proposal was costed at $715 million.

"It's certainly true that construction cost inflation has slowed over the last couple of years, but it is still positive, and there are some indications that inflation may be picking up again," he said.

So, if you accept Mr Eslake's warnings that further cost escalations are likely to occur, there are only really four ways the government can respond.

The first is that they achieve something they have so far found very difficult, and extract further money from a federal government that keeps stressing its funding was for the wider Macquarie Point precinct, or from sporting organisations who are usually loath to invest in stadium infrastructure.

Then there is the task of securing private investment, which Mr Rockliff said was a central part of his 2024 election pledge to cap taxpayer funding at "$375 million and not a red cent more".

So far, no private investment has been secured.

The second path for the government is to revise what the stadium looks like.

The exact design of the stadium is yet to be locked in, and Mr Abetz said on Tuesday that it can continue to be changed in a bid to reduce costs.

"What you can do is look at the design and ask exactly what is needed and not needed, and see if the cost can be managed," he said.

But how much can tinkering with the design save? There's only so much that costs can be scaled down before you only have half a structure, or no stadium at all.

More radical options include removing the costly roof, a condition of Tasmania receiving the 19th AFL licence.

Option three involves the government breaking its word or receiving parliamentary approval to increase the project's budget.

Imagine, in 2027 or 2028, that the government discovers that the stadium is going to blow its budget, and they cannot find a way to bring it back under the cap by either securing new investment or reducing costs.

What do they do then? Abandon the stadium halfway through the build? Or do what they can to make it a reality, and ask for the forgiveness of other politicians and the community?

That approach certainly seems more likely than the nuclear fourth option of walking away from the project mid-build.

This stadium vote is a historic win for Premier Jeremy Rockliff, who has long said he would be happy to be "sent back to the spud farm" over the contentious project.

It ends a turbulent three-and-a-half-year period that included two Liberal MPs citing the stadium as a major reason for quitting the party and moving to the crossbench, two different proposed locations, five different price tags, numerous bad opinion polls, and two damning independent assessments of the project.

Mr Rockliff will be front and centre as Tasmania finally realises its dream of entering the AFL.

But he and his government will not be breathing sighs of relief for long.

The scrutiny on every stage of this stadium build will be intense.

And lots of good luck will be required for the stadium to be delivered on time and on budget.

But more likely, plenty of political manoeuvring and deal-making will be required when the cost inevitably blows out again.