NT Government debt to be ‘accelerated’ by coronavirus, warn economists

THE Northern Territory’s battered finances will deteriorate even faster than predicted due to the impacts of coronavirus, economists have said.

Northern Territory Treasurer Nicole Manison says it will be impossible for the NT Government to deliver a budget before the Commonwealth does. Picture: Che Chorley

THE Northern Territory’s battered finances will deteriorate even faster than predicted due to the impacts of coronavirus, economists have said.

It comes as Treasurer Nicole Manison said it was “impossible” for the NT Government, which gets about 70 per cent of its revenue from the Federal Government, to put out a budget before its Commonwealth counterparts do.

The NT’s debt this financial year was slated to grow to $6.2 billion, or $33,000 per Territorian, according to the most recent budget.

Under the Government’s own forecasts released in 2018, the NT’s net debt was projected to increase to $35.7 billion by 2029-30.

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Economics Professor Rolf Gerritsen, from CDU’s Northern Institute, said coronavirus would “accelerate the deterioration” of the NT fiscal position.

Professor Gerritsen said the $35.7 billion debt projection could now be “conservative”, considering assumptions about the NT’s economic growth had changed due to the pandemic.

This includes possible interest rates rises during recovery and the state of global commodity markets, which affect the NT’s mining sector.

Charles Darwin University researcher Rolf Gerritsen.

CDU finance and economics lecturer Dr Debajyoti Chakrabarty said the NT Government would likely have to abandon its strategy of “fiscal austerity” – or reduce the amount of government borrowing – in order to aid economic recovery.

Both economists agreed the NT Government’s stimulus packages, totalling about $400 million, were necessary.

Opposition Leader Lia Finocchiario has been pressuring the Government to release a full budget and undertake estimates, and release a pre-election fiscal outlook before August 22 so voters are aware of the Territory’s finances when they head to the polls.

Mrs Finocchiario yesterday released a list of 14 questions for the NT Government, demanding they shed light on its books in the monthly committee hearings set up to scrutinise its COVID-19 response.

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The Government is looking at how it can redivert funds across agencies to pay for its stimulus packages.

Ms Manison said the NT’s budget depended on knowing Federal Government revisions to GST revenue, and while the impact of COVID-19 to the Territory’s revenue was “expected to be substantial” the full impact wouldn’t be known until after October 6.