Updated
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.
Key points:
- 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.
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.
“The brighter future I’ve been talking about in my first two budgets has started to arrive.”
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.
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