The Northern Territory’s debt will grow to $6.2 billion next financial year — the equivalent of $33,000 for every man, woman and child in the Northern Territory, according to the budget handed down on Tuesday morning.
- The NT Budget for 2019-20 forecasts a $6.2bn debt, compared to a total expenditure of $8.4bn
- A projected return to surplus is so far off, it is not shown in the Budget’s forward estimates
- But Treasurer Nicole Manison says the Budget marks a return to a “brighter future” after a period of economic woe
That is very large when viewed against a total expenditure of the year of $8.4 billion.
The projected deficit for 2019-20 is $1.1 billion, halving to $540 million by 2022-23.
A projected return to surplus is so far off, it is not shown in the Budget’s forward estimates.
The forward estimates show the NT’s debt will rise to $8 billion by 2022-23, although the introduction of a new Australian accounting standard means that figure is $871 million higher than it otherwise would have been.
The NT’s annual interest repayments on loans in 2019-20 will be $371 million, which equates to $1,479 for every Territorian each year.
Those figures mean that for the first time, the NT’s daily interest bill will soon exceed $1 million per day, a figure that is projected to rise over the next four years.
An independent audit released last month found the NT’s financial crisis caused in part by unchecked spending over successive governments and little accountability over how taxpayers’ dollars were spent .
About 80 per cent of the NT’s annual budget is funded by the Federal Government through various Commonwealth funding, grants, and a share of the GST.
The NT Government said there will be a modest return to surplus some time towards the end of the next decade, but Treasurer Nicole Manison said the Budget shows improvement in economic forecasts.
“The economy is starting to turn and things are getting better,” she said.
NT Budget not all doom and gloom
The NT’s unemployment rate is projected to improve a little — by 0.1 per cent in the next financial year, from a current rate of 4.7 per cent.
That is pretty good when you consider that Australia’s unemployment currently stands at 5 per cent nationally.
There is also positive news in employment, with the stats showing overall modest growth from next year.
When it comes to the Territory’s longstanding population crisis, there is also a tiny improvement: the Budget is forecasting a 0.2 per cent increase next financial year, after it contracted by 0.7 per cent last year, prompting the Government to release its population strategy offering southerners cash to move to the Top End .
The overall size of the Territory’s economy is projected to be 50 per cent larger in 2022-23, at $30.5 billion, compared to the size it was in 2008-09, before Darwin’s $40 billion Japanese-run INPEX gas project kicked off, sending the economy into its last boom .
Late last year, Ms Manison said she wanted to see the rate of expenditure growth drop from a high of 6 per cent to 3 per cent.
The plan followed a damning report by the former WA under-treasurer John Langoulant, who was commissioned by the NT Government last year to devise a budget repair plan .
The Budget’s forward estimates show the Government has reduced its growth in spending to an average growth rate of 0.9 per cent per annum.
“[This is] reflecting the implementation of additional budget repair and savings measures from 2019-20,” the Budget states.
Ms Manison was keen to point out that a “pipeline of agricultural and resource projects have not yet reached final investment decision”, and these are not reflected in the Budget.
Chronic agency overspend laid bare
The Treasurer has repeatedly publicly threatened the heads of NT departments who fail to stick to their agency budgets, but the 2019 papers prove that will prove difficult to enforce.
For example, the Department of Health and its related agencies of the Top End Health Service and the Central Australia Health Service cumulatively overspent on their 2018-19 budgets by a staggering $292 million.
By contrast, the Department of Education’s overspend seems modest, at $1.4 million.
Correctional Services, as part of the Department of Attorney-General and Justice is another agency grappling with out-of-control spending.
This financial year the Department overspent by $12.5 million in the area of custodial services alone.
What’s in the budget for you
What makes this budget notable is the lack of new announcements.
At the top of the list of continued funding is the NT Government’s incentives for first home buyers, and those looking to build a brand-new home.
These include stamp duty concessions of up to $18,601 for buyers of new and established homes, who have not recently owned a home in the NT.
The home-buyer incentives also include home renovation grants of up to $10,000, and household goods grants of $2,000 for first home buyers of new houses.
There’s also the continuation of existing voucher schemes, including an annual $150 voucher per student for back-to-school expenses, and two additional $100 sports vouchers.
The Government has continued its $6 million in early childhood services subsidy, as well as its $92.5 million electricity subsidy which is said to save families up to $1,200 per year off their bills.
Interestingly, Budget 2019 also includes a “Future Skills” voucher scheme of $3,000 each for the first 700 Territorians to obtain “micro-credentials and skills relevant to the needs of the changing workforce”.
The Government is also stressing it’s $1.45 billion in overall infrastructure spending, the highlights of which include:
- Continuation of $1.1b over 10 years to improve remote housing
- $131.5m over four years towards the “Jabiru Futures Package” to deliver a viable future for the ailing town
- $50m for a new Mandorah marine facility
- $49.9m to progress a National Aboriginal Art Gallery in Alice Springs
- $31.9m to develop a State Square in Darwin, including a space for outdoor events and a new multi-level carpark
- $29m for stage two of Zuccoli Primary School
- $25m for a Palmerston fire station
- $23.9m to continue upgrades to recreational fishing infrastructure
- $17.5m for upgrades to Litchfield National Park
- $6.6m to establish short-stay accommodation for vulnerable people in Darwin and Palmerston
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