NT’s economy set for ‘steady recovery’ Moody’s analysis shows but budget repair ‘unachievable’

The NT is poised for “steady economic recovery” over the next two years because of the way it and Australia as a whole has handled COVID-19, an international credit rating agency has said.

THE Northern Territory is poised for “steady economic recovery” over the next two years because of the way it and Australia as a whole has handled COVID-19, an international credit rating agency has said.

Australia’s fiscally weakest jurisdiction will keep its “stable” Aa3 credit rating according to Moody’s Investors Service latest credit opinion, with the Territory suffering only “moderate economic disruption” due to COVID-19.

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While Moody’s latest analysis is less dire than usual, the agency doesn’t believe the NT government will achieve its budget repair and savings measures as outlined in the 2019 Langoulant report.

Those adopted measures, however, will “likely” help the Territory’s relationship with the commonwealth when it needs to secure additional cash.

Moody’s has maintained the stability of NT’s credit rating comes from the “high likelihood” the commonwealth would effectively come in and save the Territory’s bacon if its financial situation became dire enough to be embarrassing for the country.

According to Moody’s the “effective management” of the pandemic had minimised economic disruption in the NT, with the jurisdiction entering 2021 in a “stronger position than initially anticipated”.

Moody’s believes the Territory’s economy will continue to benefit from “considerable” mining and energy resources, and its “large public sector” and defence presence.

“The Territory’s decision to lift the moratorium on hydraulic fracturing of its onshore gas reserves will over time provide support future economic stimulus,” the report stated.

NT Chief Minister Michael Gunner. Picture Glenn Campbell

Opposition Leader Lia Finocchiaro. Picture Glenn Campbell

Chief Minister Michael Gunner framed the report as proof the NT was “leading the nation” on the health and economic front, highlighting the NT’s unemployment rate – the second lowest in the nation.

He held firm that the NT’s fiscal strategy included repairing the budget.

“It’s the Territory’s time,” Mr Gunner said.

Opposition Leader Lia Finocchiaro said the report proved the NT government was “completely reliant” on the commonwealth and had “absolutely no hope” of reining in net debt – projected to hit $16bn by the end of the decade.