CLP revokes debt ceiling as Northern Territory borrowing only set to grow

The CLP has done away with the debt cap, with borrowing expected to grow by billions in the coming years. Here’s why the Treasurer says he had no choice but to remove the goalposts entirely.

The Country Liberal government has scrapped the Northern Territory’s $15bn debt ceiling, with borrowing forecast to surpass the self-imposed cap within four years.

Treasurer Bill Yan said the NT’s already record high debt levels were expected to continue climbing over the forward estimates due to cost blowouts and previously unfunded operational costs.

The debt ceiling was set by the previous Labor government in 2021-22 when debt was $10bn.

Mr Yan said “open and transparent” costings found the Territory’s books would hit the debt ceiling in 2028-29, “showing just what a farce this debt cap was”.

“It is clear (Labor) adopted covert tactics to hide the Territory’s true debt position, budgeting for frontline services to cease and shifting costs to outer years,” he said.

NT Treasurer Bill Yan has announced the CLP will scrap the Territory’s debt ceiling, calling it ‘a farce’. Picture: Pema Tamang Pakhrin

The CLP will not impose new debt goalposts, and promised no austerity measures or public service job cuts.

The party went to the election promising to kick-start the Territory economy – a goal Mr Yan insisted was served by abandoning debt limits.

“The only way out of this mess is to grow our economy,” Mr Yan said.

“Removing Labor’s debt cap is the first step, which will allow government to invest in essential services that support our community and help grow our economy.”

Mr Yan said the CLP’s economic plan included capping public sector jobs growth in non-frontline services, and “working through our wages policy to balance service expectations along with budgetary pressures”.

The government will also aim to identify where technology can improve efficiency in non-frontline roles.

If the debt cap were to remain in place, savings of $1.8bn, or $450m per year, would need to be found across the budget and four-year forward estimates.

Mr Yan said an example of gaps discovered in previous budgets included a lack of funding allocated to run the upcoming Darwin Art Gallery ($6m a year) or Aboriginal and Torres Strait Islander Art Gallery (at least $10m a year).

He said there had also been no long-term funding for Corrections, estimated at $50m a year to maintain existing budget and service levels.

Opposition Leader Selena Uibo said Labor was always upfront about the Territory’s debt position. Picture: Fia Walsh.

Labor Leader Selena Uibo accused the CLP of having “no economic strategy - just spin”.

“The CLP was elected on a promise to rebuild the economy, yet they have no plan to do so,” she said.

“Growing the economy requires both public and private investment, but all this government has to offer are cuts and carefully worded press releases.

“Minister Yan constantly criticizes the former Labor government’s nationally significant art gallery, yet conveniently ignores that it was set to bring 53,000 tourists to the Territory every year - boosting an industry that already generates $2.7bn annually and supports 17,000 Territory jobs.

“Labor was always upfront about the Territory’s debt position, we made critical investments in community safety, police, health, and education that the public expected - while also stimulating private investment such as the $6.4bn Barossa gas project and greenlighting the Beetaloo Basin.”

On Tuesday Mr Yan, alongside Under Treasurer Tim McManus, kicked off a Territory-wide State of the Economy Roadshow.

Originally published as CLP revokes debt ceiling as Northern Territory borrowing only set to grow