Matt Cunningham reflects on Closing the Gap, economic data for NT

Without a significant growth in own-source revenue, the game for the Northern Territory is up, writes Matt Cunningham

Chief Minister Lia Finocchiaro. Picture: Pema Tamang Pakhrin

There were two pieces of information delivered from Canberra last week that sum up the sad state of the Northern Territory.

The first was the productivity commission’s annual Closing the Gap data.

It will come as little surprise that the gap is barely closing at all, and in many cases, particularly here in the NT, is getting wider.

An Aboriginal Territorian can expect to die almost 15 years earlier than their non-Indigenous counterpart.

Incarceration rates are rising, suicide rates are getting worse, and only 40 per cent of Aboriginal kids are finishing year 12.

The other bit of information came from the Commonwealth Grants Commission, which delivered the NT an extra $248 million in GST funding.

That’s effectively our financial reward for failing so miserably to address Indigenous disadvantage.

The worse it gets, the more we get paid.

Northern Territory Chief Minister Lia Finocchiaro.

But despite our GST relativity (the amount we receive compared to the amount we contribute) rising above 5 to 1 for the first time, we are still in an unholy financial mess.

That mess is well articulated in a report by AEC Group released yesterday by the Darwin Major Business Group.

It notes the Territory’s net debt has grown substantially since 2015-16 and will hit $15 billion by 2028-29.

It’s now so big that the massive cheque we just received from Canberra won’t even cover a single year’s interest.

The report describes the debt situation as “unsustainable” and notes its growth has outpaced Gross Territory Product, population and employment growth.

One thing it has struggled to outpace is the growth in the size of the public service, the same body which employs almost 25,000 people, many tasked with addressing that same disadvantage for which the Commonwealth Grants Commission rewards us so richly.

And while many of them work in difficult and necessary frontline roles, almost as many work in administrative or management positions of less-tangible benefit.

As we stand at this crossroad, we are basically left with a choice.

We can reform the public service by drastically cutting its numbers, thereby reducing our wages bill and getting the budget back to a sustainable position.

According to the previous government’s 2019 report into budget repair, the size of the public service had been relatively stable – sitting between 14,000 and 15,000 full-time employees – between 1983 and 2003.

Chief Minister Lia Finocchiaro and Treasurer Bill Yan have called on the federal government to end the uncertainty about the future of Landbridges Port of Darwin lease. Picture: Pema Tamang Pakhrin

Since then the number of full-time equivalent employees has grown to 22,820 (with a paid headcount of 24,777) according to the latest State of the Service report.

Despite the huge growth in numbers over the past 20 years, most Territorians won’t have noticed a great improvement in service delivery.

There are two problems though, with making wholesale cuts to the public service.

First, it would lead to a massive decline in population.

And second, it would be political suicide for whoever attempted it.

So it’s not really an option at all.

Which leaves us with our other, perhaps only, choice.

And that is to reform the public service so it becomes an organisation that promotes and fosters economic growth, rather than seeking to stand in its way.

It needs to become an organisation that asks what we “can” do, rather than what we can’t. There’s been a great fuss made this week over the introduction of legislation for the Territory Coordinator.

But the only reason this new position exists is because of the years of inertia that have been allowed to continue within our bureaucracy.

The Territory had become a place where for many, the cost (and time) of doing business was just too much trouble.

The Territory Coordinator’s worth will be assessed, not by the few protesters who showed up at Parliament House on Tuesday, but by whether, in three years’ time, it has been able to deliver the economic growth Territorians asked the Country Liberal Party to deliver when they voted for them in droves last August.

Because in case you haven’t noticed already, without a significant growth in own-source revenue, the game for the Northern Territory is up.

Not even the big GST cheques from Canberra will be enough to save us.

Originally published as Matt Cunningham reflects on Closing the Gap, economic data for NT