‘Not a glamorous budget’: Crime and work headline NT’s record pre-election cash splash

Three months out from the polls Eva Lawler is hoping the Territory’s biggest ever cash splash will help Labor secure a third term – and distract from persistent debt and deficits. FULL BREAKDOWN.

Fia Walsh and Camden Smith

6 min read

May 14, 2024 - 6:41PM

Chief Minister Eva Lawler said NT Budget 2024’s record debt and deficit was a ‘commonsense approach’.

Northern Territory

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Eva Lawler has billed her first Budget as Chief Minister as one that will lower crime and get Territorians into work, pledging record spends on police, health, education and infrastructure.

While insisting it was not an election budget, three months out from the polls Ms Lawler is hoping the Territory’s biggest ever cash splash will help Labor secure a third term – and distract from persistent debt and deficits.

“This is not a glamorous budget,” Ms Lawler told Parliament when handing down the budget on Tuesday.

“We need a responsible Budget that sets us up for long-term fixes – and that’s exactly what Budget 2024 does.

“It’s a commonsense Budget, a Budget that acknowledges our two highest priorities – keeping Territorians safe and making sure Territorians have the skills to achieve and enjoy the best work-life balance that Australia has to offer.”

RECORD $11.04bn DEBT

Territorians will be paying almost twice as much interest on debt in coming years due to a surge in net debt on the back of record government spending, with debt forecast to hit a historic high of $11.04bn by the end of the next financial year.

Labor has thrown out the conservative fiscal rule-book with an additional $2.5bn more in debt than forecast in last year’s Budget.

Total expenditure is forecast to be $11.12bn next financial year compared with $10.48bn in 2023-24.

Budget forecasts show net debt over the forward estimates ending 2027-28 will hit $12.33bn, $2.47bn more than the long range net debt forecast last year.

Chief Minister Eva Lawler hands down the 2024-25 NT Budget on May 14, 2024. Picture: Mitch Drescher.

The largest total government expenditure in NT Budget history will see a surge in net debt over the four-year forwards estimates period as well as a significant increase in interest repaid on debt.

By 2027-28, every man, woman and child in the Territory will be paying $2789 per person in debt compared to $1891 per person this financial year, as interest repayments increase from a forecast $482m this financial year to $756m in 2027-28.

Interest repayments from the Budget will increase from $482m this year to $756m in 2027-28 – diverting money that could otherwise be spent on health services, education or policing.

The government’s deficit forecasts have also been turned on their heads, with a projected $67m budget surplus in 2026-27 now forecast to be a $444m deficit as a result of increased government spending.

And the Territory’s net debt has skyrocketed from forecast $9.86bn in last year’s Budget to $12.21bn in 2027-28.

The Budget shows Territory debt could hit the $15bn ceiling in coming years if government spending doesn’t slow. Total assessable debt – the figure used as a debt ceiling trigger – is forecast to be $14.57bn in 2027-28, narrowly avoiding the ceiling.

In better news for the government, a significant surge in revenues to Treasury’s coffers from Santos’ Barossa gas project will see its $40bn gross state product target by 2030 move closer. While GSP is currently $31.6bn, income from Barossa will surge GSP to almost $37bn by 2027-28, well within reach of the $40bn target.

In the meantime, Cyclone Megan has had a significant impact on government revenues with a $171m decline in taxation and royalties anticipated in 2023-24 and an $84m drop in 2024-25.

RECORD $2.2bn SPEND

Many of the $2.2bn in new policy commitments were announced ahead of time, including an extra $90m for police, $100m for health, and $100m for education.

A further $109.2m will support vocational education and training to improve workforce skills and skilled migration initiatives.

On Tuesday, Ms Lawler announced an extra $55.2m would be invested to keep power bills in line with consumer price index, bringing the total community service obligation for utilities up to $164.2m.

The cost of living investment will save the average household $1200 and an average small business $2200, compared with not investing in the CSO.

Chief Minister of Northern Territory Eva Lawler delivers her 2024 Budget speech to parliament. Picture: Pema Tamang Pakhrin

Thirty million dollars over two years will go towards continued implementation of the Territory’s domestic violence action plan, on top of this year’s DV budget of $70m – far short of the $180m advocates say is required to meet need.

Little has been invested in environmental management, including less than a million for croc management this year, $2m to monitor activity in the Beetaloo sub-basin, $1m for gamba and buffel grass, and an extra $1m for Bushfires NT.

The Darwin Buffaloes will get a homeground at Woodroffe Oval in Palmerston, which will receive a $6.5m upgrade for a multi-sport facility that can be used in wet and dry seasons, including an oval expansion to meet AFL ground dimensions.

In total the government has committed $2.58bn to infrastructure over the coming year, with more than $4.4bn committed over the coming years.

The record spend includes $30m over three years to support the Middle Arm industrial precinct, $436.6m for the ship lift facility, $209m for the Central Arnhem Road upgrade program, $189.3m for upgrades to the Outback Way corridor, $54.12 for the National Aboriginal Art Gallery in Alice Springs, $57m for two new women’s prisons, and $50.4m to “reposition Jabiru as a tourism and regional services hub”, and the joint federal and Territory governments’ $4bn investment in remote housing.

Winners and losers of NT Budget 2024

CRIME AND COMMUNITY SAFETY - Winner.

If there’s one message to take away from the budget, it’s that the government wants to prove its bona fides on law and order. Police have won a record $570m over five years, and two new women’s prisons are in the pipeline.

$75m in response to the police review, and to fully establish the Territory Safety Division
$25m for new police infrastructure and housing
$57m for two new women’s prisons
$34m to upgrade Alice Springs prison

EDUCATION - Winner.

A joint Territory and federal government commitment of nearly $1.1bn will see NT public schools fully funded by the end of the decade.

$72.55m to bring schools up to the schooling resource standards
$19.7m for on country learning
$8.7m for new school infrastructure at Alekarenge School

HEALTH - Winner, sort of.

A record $2.2bn has been allocated to health, however due to the department’s overspending the budget will mean a paycut in practical terms.

Ms Lawler has put NT Health chief executive Marco Bricenco on notice for the “highly concerning” budget blowout.

“They’re on par to overspend by $200m, I’m not going to give them another $200m next year - that’s only going to encourage bad bad behaviour,” she said.

“They’re getting $100m and they need to work on making sure that they get their budget back into a better position - that’s the reality.”

Ms Lawler said she was also lobbying the federal government for more health funding, to try to ease the pressure on the stretched-thin system.

$100m to deliver health services across the Territory
$10m for a Borroloola health centre and morgue
$2m to plan and design an aged care facility in Holtze

COST OF LIVING - Neutral.

More money is being spent to control rising cost of living, but it won’t go so far as to ease the pinch on Territorian’s pockets.

An extra $55.2m toward the community service obligation to keep power bills below inflation. This brings the total CSO to $164.2m.
$8.2m to continue Back to School Vouchers.
$8.4m to continue the prepaid seniors cards, which will increase from $500 to $550.
$3m to continue the home and business battery scheme.

HOUSING - Winner.

Land release in urban areas and a pipeline of builds in remote communities promise to deliver more housing stock across the NT.

$223m for remote housing under the 10-year Remote Housing Agreement
$25m for the Room to Breathe program
$84m for housing and essential services on NT homelands
$25 million for government employee housing
More than $80m for housing developments at Holtze, Farrar West, and Alice Springs

DOMESTIC VIOLENCE - Loser.

Advocates calling for $180m to meet needs based funding will be disappointed by the modest funding boost, as the NT continues to battle the worst rates of domestic violence in the country.

$30m over two years for the Territory’s DV action plan
$9.9m for DV responses, jointly funded under the National Partnership agreement

ENVIRONMENT - Loser.

The government is betting on a large expansion of the local gas industry, and Budget 2024 offers little to address climate change or natural disasters.