Territory’s net debt to blow out to more than $8.3 billion, $300 million more than predicted

THE Territory’s net debt will blow out to more than $8.3 billion within four years, according to the Government’s Mid Year Economic Fiscal Outlook – almost $300 million more than predicted at the May Budget

Chief Minister Michael Gunner and Treasurer Nicole Manison ... the Territory’s net debt will blow out to more than $8.3 billion within four years

• BUDGET blowout in 17 NT Government departments
• NET debt will hit a record $6.2 billion next financial year
• NT TREASURER wants Territorians to help fix budget blowout

THE Territory’s net debt will blow out to more than $8.3 billion within four years, according to the Government’s Mid Year Economic Fiscal Outlook – almost $300 million more than predicted at the May Budget.

Treasurer Nicole Manison pointed to the Government’s $400 million investment in the Darwin ship lift and falling GST revenue for the worsening Budget position.

But the Government has again been unable to contain public sector growth with the number of full-time equivalent public servant positions growing by almost 300 since a cap was introduced earlier this year.

Economics professor Rolf Gerritsen from Charles Darwin University’s Northern Institute said he was not surprised, saying the Government was unable to control public sector growth and had been spending “as if they didn’t have a budget”.

He pointed to more than $150 million in unbudgeted policy changes since the May Budget, which included $12 million for a grandstand at the Darwin Turf Club.

“It reminds me of the last year of the Giles government that gave money to any organisation that had any connection to the wheel, and now we have got the same,” he said.

The Government has also walked away from a commitment to sell the Territory’s Land Titles Office – a key recommendation from an independent review into budget repair released in April.

“We don’t believe that Territorians want to see the sale of public assets and we simply don’t believe that we could get the best value for the Territory by selling it,” Ms Manison said.

She said she expected the Northern Australian Infrastructure Facility to sign off on a $300 million, low-interest loan for the ship lift next month – adding to $100 million already promised by the NT Government – and this cost had now been factored into the forward estimates.

“The ship lift is going to be a game-changing project for the Darwin economy here and for the Northern Territory,” Ms Manison said. “This is a great, nation-building project.”

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The worsening financial position will see the Territory’s net debt to revenue hit 120 per cent by 2022-22 – up from 114 per cent at the May Budget.

The Federal Government’s net debt to revenue is 19 per cent.

The predicted deficit for 2019-20 has reduced slightly since the May Budget – from $1.054 billion to $1.049 billion – but forecast deficits for the next three years have increased significantly due to the ship lift investment and declining GST.

Ms Manison said worsening economic conditions across the country would see a reduction in the total GST pool, leading to less GST funding for the NT.

“We have seen significant changes in the revenues coming into the Northern Territory through the GST predominantly,” she said.