Barossa, gas blamed for NT’s poor economic report card

The Territory economy is officially the nation’s worst after the release of ABS figures on Tuesday. See where we’ve underperformed.

A massive slump in the Territory’s gas revenues was a key contributor to an alarming decline in the NT’s gross state product, the only jurisdiction to record a decrease.

Figures released on Tuesday by the Australian Bureau of Statistics showed the NT recorded by far the nation’s worst gross state product with a 5.3 per cent year-on-year decline.

Nationally, gross state product increased by 3 per cent for the year, with Tasmania second worst with a 1.1 per cent increase and the ACT with the best result recording a 4.3 per cent jump in GSP.

The biggest factor in the NT’s decline was an 11.5 per cent drop in net exports, driven by a serious drop in gas sales.

The ABS data said Territory GSP fell 5.3 per cent in 2022-23 following a rise of 5.1 per cent in the 2022-23 financial year.

The Barossa project was slated as being very important for the NT economy. Supplied

It said the fall in GSP was entirely driven by mining gross value added which declined 17.1 per cent. Oil and gas extraction drove the decrease with weaker production volumes due to a combination of factors at key facilities including the ENI’s Black Tip gas field.

This was reflected in a 25.1 per cent decline in the international exports of goods from the Northern Territory.

Partly offsetting the falls was growth in transport, postal and warehousing at 17.9 per cent, boosted by the full return of international air travel. There was also a 6.6 per cent increase in construction with strong demand from increased public capital investment increasing by 12.3 per cent.

Stephen Goodall, chief policy officer with NT Chamber of Commerce, said interest rates were hitting the economy and would continue to do so with him expecting at least one more rise to the cash rate in coming months.

He said the figures reflected the lack of major projects that reach final investment in the Territory and the delay in getting resource projects up-and-running.

“We have not had a very strong pre-wet season shoulder period this year,” he said. “The town seems quiet, people are talking about this and this could be a result of national economic conditions.

Treasurer Eva Lawler said the recorded decrease in gross state product was expected.

“The commercial activity generated by resources, aside from GST revenues, is fundamentally what drives the NT economy.”

The Territory government placed huge store in development of Santos’ Barossa gas project which is currently stalled after a claim by the Environmental Defenders Office forced a delay in the rollout of a subsea pipeline about 10km off the Tiwi Islands coast.

The government’s 2022 budget highlighted the importance of Barossa, stating gas would average 2.9 per cent up to 2025-26 “and will be heavily influenced by the Barossa Project”.

Santos also experienced production delays at its ageing Bayu-Undan field.

Treasurer Eva Lawler said the decrease was in line with forecasts in the 2023 budget and they would be updated in the 2023-24 mid year budget later this month.

“As production at the Ichthys plant returns to regular levels, the NT’s economy is expected to rebound strongly in 2023-24,” Ms Lawler said.

Shadow Treasurer Bill Yan said the Territory economy is going backwards while the rest of Australia moves ahead. “It is clear that the Chief Minister and the Treasurer have no idea when it comes to creating economic growth, how to attract investments, or foster sustainable development,” Mr Yan said.

“Today’s figures show the Labor government has failed to deliver policies that support our mining and gas industries, and help drive international exports. The continual decline of the economy under Labor means less certainty for business, less opportunities for Territorians and even more pressure on the increasing cost of living.”