Aaron Bunch Journalist with Australian Associated Press | Collection of published work | + 61 484 008 119 | abunch@aap.com.au

Aaron Bunch
NT’s budget likely to reveal more debt

The Northern Territory budget is expected to reveal net debt has ballooned to more than $10 billion despite expenditure restraint.

May 10, 2022

The Northern Territory is likely to have slipped further into the red, as Chief Minister Michael Gunner prepares to deliver his third budget as treasurer.

The Top End’s last budget revealed a $1.35 billion deficit with net debt of $9 billion in 2021/22, the equivalent to 122 per cent of revenue.

That position is likely to further deteriorate in 2022/23, as net debt rises to $10.1 billion, or 146 per cent of revenue, with a $1.21 billion deficit

It is expected to then climb to $10.8 billion, or 155 per cent of revenue, by 2024/25 but the deficit is set to fall to $807 million.

The situation would have been worse if not for a massive increase in the NT’s national GST revenue forecast last May, which is expected to speed its economic recovery.

Overall, the NT’s position improved by $1 billion last budget compared to the predicted $1.7 billion deficit with net debt of $10.1 billion for 2021/22.

The bigger-than-expected cut of the GST was linked to Australia’s speedy economic recovery from the COVID-19 pandemic.

The NT’s unemployment rate rose by 1.4 per cent to 4.1 per cent in March, which was the third-highest seasonally adjusted rate in the country.

Charles Darwin University economist Rolf Gerritsen says the NT economy is growing slowly and the economic position will remain bleak for some time “unless there is some control on the outlays”.

“This will be a holding budget and one that probably has elements designed to help federal Labor win the seat Lingiari and lesser extent of Solomon,” he told AAP.

“You can expect sweeteners in the outback but whether the money is ever spent, that’s another question.”

Prof Gerritsen said there is unlikely to be any revenue growth but expenditure could have increased from the last financial year.

“The figure to watch is the outlay on the public service, whether or not they can even try and get it under control,” he said.

A fiscal strategy report in 2019 warned the NT was heading for a $35 billion debt by 2030 unless the government tackled chronic overspending.

A key recommendation was a cap on the growth of the 20,000-strong public service, which prompted the NT government to introduce a four-year pay freeze in November 2020.

The Gunner government has already announced several of Tuesday’s budget measures, including $510 million in funding for the territory’s police force – $6.4 million more than last year’s police budget.

The budget will also include $690 million for remote housing to help ease chronic overcrowding in Indigenous communities.

The territory’s Labor government has also allotted $86.4 million in a bid to lure domestic and international tourists and hospitality workers to the NT.

“With key sectors coming back online, including airline partners, the cruise sector, … we want people to come to the territory to reconnect and enjoy our beautiful landscapes,” Minister for Major Events and Tourism Natasha Fyles said on Monday.

“Budget 2022/23 delivers the strong message that we are open for business.”

Heath will receive $2 billion, including $8 million for additional capacity at Royal Darwin Hospital and $60 million to address COVID-19 pressures in the public health sector.

Another $113.1 million will be allocated to sealing, strengthening and widening strategically important roads.

Key projects include an $86 million upgrade of Tanami Road to Western Australia and $104 million for gas industry road upgrades.

More than $80 million will be allocated for works between Alice Springs and Darwin along the Stuart Highway.

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