A surge in GST payments, a strong resources sector and taxes help the Territory’s budget bottom line
The Northern Territory still has an eye-watering debt despite a better than expected budget report. Find out how our economic outlook shapes up.
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The Northern Territory’s budget deficit has shrunk to a quarter of the size it was forecast at last year’s budget.
Net debt to revenue dropped from a forecast 122 per cent to 96 per cent and debt for the year was $7.6bn – $1.36bn less than forecast. Net debt to revenue ratio was 96 per cent – 26 points less than forecast.
Treasury said stronger than expected national GST collections combined with improved taxation and mining royalty revenue have resulted in a significant improvement in the Territory’s revenue base.
Covid, too, continued to impact on outcomes with “elevated operating expenses” including Commonwealth payments to operate the Howard Springs centre.
Interest payments went from $364m in 2020-2021 to $374m in 2021-22 - or about one million dollars a day.
Taxation revenues increased largely due to higher stamp duty on conveyances on the back of improved housing sale volumes and values combined with several large, unexpected commercial transactions such as the $418m sale of Casuarina Square to Sentinel Property Group, which on-its-own netted Government $24m in stamp duty.
Opposition Leader Lia Finocchiaro said the Government had also cut into the deficit by transferring $242m in expenses from 2021-22 into the 2022-23 budget cycle.
“Labor has added nearly a billion dollars of debt to the Territory every year they’ve been in Government,” Ms Finocchiaro said. “This is a very small improvement on what was predicted and it is still a $7.6bn debt that will be an eye-watering amount next year.
“The Government has no plan to get out of it or grow the economy.”
The May budget predicts the deficit this financial year will be $8.7bn and $9.2bn next year. Treasurer Eva Lawler said the better-than-expected result positions the Territory for the future.
“While there are a number of headwinds on the horizon with rising inflation and persistent increases in interest rates, the significant improvement in 2021-22 positions the Territory to tackle and overcome uncertainty and challenges ahead,” Ms Lawler said.
“Our Government continues to support Territorians with many measures to reduce the cost of living, including a range of subsidies and grant programs, and also Community Service Obligations of $123m per year to subsidise all Territorians’ power and water bills and ensure we don’t see the huge cost energy cost increases as those on the East Coast.”
The Territory is limited in its capacity to access own source revenue so Government was particularly pleased with the latest mineral production data which showed the second-highest value ever.
The value of mineral production was $4.86bn in 2021-22, up 14 per cent on last year’s figure of $4.28bn and just below the record of $4.92bn in 2018-19.
The increase was on the back of improved manganese production which rose 21 per cent to $1.78bn and zinc-lead concentrate which increased by 27 per cent to $1.15bn.
There was a 2 per cent increase in the volume of gold produced to 15.2 tonnes and a 4 per cent increase in the value of gold production to $1.24bn due to higher gold prices.
Mining Minister Nicole Manison said the strong returns from mining highlight the Territory as an exploration and mining destination.
“The minerals sector is a vital contributor to our economy, and this increased production value shows that there is no better place than the Territory for resource development.”
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