Debt to increase, but Manison promised better times ahead

NET debt will hit a record $6.2 billion next financial year, up from $4.2 billion this year, the 2019 Territory Budget shows

NT Treasurer Nicole Manison with a copy of the 2019-20 Budget papers. Picture: Glenn Campbell

NET debt will hit a record $6.2 billion next financial year, up from $4.2 billion this year, the 2019 Territory Budget shows.

But Treasurer Nicole Manison says it’s not as bad as it seems. She said the increase was due largely to revised accounting standards.

Using the old standards, debt has reduced by $212 million, she said. The debt to revenue ratio is expected to be 93 per cent, compared to a historic average of 40 per cent.

Net debt is now forecast to reach $8 billion by 2022-23.

Using the new accounting standard, the deficit will be $1.05 billion this year, decreasing to $604 million in 2021-22.

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In her Budget day speech to Parliament on Tuesday, Ms Manison put a positive spin on the figures, claiming “optimism was returning” to the Territory.

“The economic outlook is in, and the economy is turning. Progress on key projects has us poised to enter a new period of growth and excitement,” she told the chamber.

But the books show the tough times are not yet over.

State final demand — the value of goods and services sold within the Territory — fell a huge 9.4 per cent this financial year. It is expected to further contract 1.7 per cent in 2019/20 before a modest recovery is forecast.

Declining business investment has taken a heavy toll. It fell 42.8 per cent this year and will decline a further 12.4 per cent in the coming year.

While total government expenditure declined 1 per cent, Ms Manison stressed the government still had money to spend on “lifestyle” initiatives.

A previously announced spend of $125 million will go to investing in Kakadu and Jabiru.

The Government will spend $81.9 million on improvements to art galleries in Darwin, Katherine, Tennant Creek and Gove and building the new indigenous art gallery in Alice Springs.

And $46.3 million will go towards “new adventure opportunities” in Litchfield National Park, cycling tracks through Tjoritja/West MacDonnell National Park, a multi-day walking track in Watarrka National Park, and new walking tracks and visitor facilities at Nitmiluk National Park.

NT Treasurer Nicole Manison with Chief Minister Michael Gunner ... Ms Manison put a positive spin on the figures while delivering today’s NT Budget, claiming “optimism was returning” to the Territory. Picture: Keri Megelus

This is the first Budget delivered since former WA under-treasurer John Langoulant delivered his blueprint to dig the Territory out of its looming fiscal disaster.

The interim Langoulant report, released in December, showed the NT was on track to hit $35 billion in debt by 2030 if expenditure growth continued at its current level.

The Territory will spend $371 million on interest repayments in the coming financial year, increasing to $482 million in 2022-23.

If expenditure is constrained to the levels advised in the Langoulant report, debt will instead peak at $8.8 billion in 2027-28.

Labor is pinning its hopes of a modest recovery in the later half of the forward estimates on the commencement of the $200 million Darwin luxury hotel project and $300 million airport expansions in Alice Springs and Darwin.

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Budget repair measures will return $63 million to the bottom line in the coming financial year, increasing to $174 million in 2022-23.

However taxation revenue will decline by 16.6 per cent to $530 million, primarily as a result of a decrease in conveyancing duties.

The Territory will reap $366 million in mining revenue, a decrease of 13.9 per cent.

Royalties from the fledgling onshore gas industry haven’t been factored into estimates. They aren’t expected to flow until after the forward estimates period.

The Government’s controversial new vacant land levy, which will punish landlords who leave CBD blocks disused, will kick in from July. It is expected to raise up to $2 million in 2020/21.

There are no surprises in the constrained $1.45 billion infrastructure program. The coming year infrastructure spend is a slight reduction on this financial year.

Highlights include $50 million for a new jetty at Mandorah and $42.6 million for a new government school in Zuccoli, including facilities to be shared with a Catholic school.

A further $1.8 million will be spent on upgrades to old and unsuitable Don Dale youth detention centre, while $70 million remains untouched to build a new facility at a yet undetermined location.