NT’s budget blowout could get worse due to ‘bold’ assumptions on where Australia will land

THE Northern Territory’s debt will surge to a historic $8.2bn by July next year – the equivalent of $34,000 per living person in the jurisdiction. But the figures revealed in the government’s coronavirus financial report could get even worse.

Chief Minister Michael Gunner addresses the media about the NT Government's pre-election fiscal outlook. Picture: Che Chorley

• NT Government debt to hit $8.2 billion by July next year as GST revenue loss hits $609 million
• Editorial: The NT’s dire debt crisis gets even deeper
• NT’s plummeting GST pool to be biggest hit to budget, as Gunner says government ‘can take the hit’ for now

THE Northern Territory’s debt will surge to a historic $8.2bn by July next year – the equivalent of $34,000 per living person in the jurisdiction.

But the grim figures revealed in the government’s coronavirus financial report could get even worse, with Chief Minister Michael Gunner saying Treasury had to rely on “bold” assumptions about where Australia’s economy will be next year.

By July 2021 the NT Government will owe $1.34 for every dollar it makes, as its debt to revenue ratio skyrockets to a level it had not anticipated in previous forward estimates for at least another four years.

The largest whack to the NT’s revenue is the $649m in GST set to be wiped from Territory coffers across 2019/20 and 2020/21.

Combined with a fall in mining royalties and tax revenue, the NT’s expected revenue bucket this financial year is $6.1 billion, down from the estimated $6.8 billion.

“We are all in the same boat here. Just like the Feds, we are copping a big whack,” Mr Gunner said.

“It’s grim, but the alternative is unimaginable. Lost lives and more lost jobs is not an outcome I will ever accept.”

Mr Gunner did not outline any drastic cost-cutting or saving measures, instead revealing a suite of new stimulus measures, including two extra rounds of Territory tourism vouchers worth $10m, two more rounds of the MyTerritory local business voucher scheme and an extra $20m for new business adaptation grants.

There will be a further $10m in immediate work grants for not-for-profits and the extension of the business hardship register out to July 2021.

In total, the NT Government will spend $383m in coronavirus stimulus measures.

Treasurer Nicole Manison and Chief Minister Michael Gunner address the media about the NT Government's pre-election fiscal outlook. Picture: Che Chorley

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Mr Gunner, releasing the fiscal update on the last day before the government goes into caretaker mode, spruiked the NT as Australia’s “comeback capital” saying “our recovery can be the strongest”.

But Treasury’s economic outlook is sombre, stating the NT’s investment pipeline was “subdued” prior to the pandemic and weaker global economic conditions “are likely to further constrain business investment” in the short to medium term.

Unemployment in the NT currently stands at 5.7 per cent.

This is expected to rise to 6.8 per cent by July 2021.

Treasurer Nicole Manison said job losses would have been “so much worse” if not for Commonwealth and Territory stimulus measures, pointing to modelling that found 6700 more people could have been out of work today.

Mr Gunner, just like his rivals for the top job, refused the idea of slimming down the public service beyond saying it was “probably never more important to actually deliver” on the measures put forward in the Langoulant budget repair report.

Opposition Leader Lia Finocchiaro and Territory Alliance leader Terry Mills blasted the report for not revealing the whole truth, with Territorians to wait until mid-August to see a detailed breakdown of the NT’s financial position through Treasury’s preliminary outcome report.

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Ms Finocchiaro said the government had “failed to recognise” that itself was the cause of NT’s financial burden and economic decline through the loss of private sector investment and increase spending.

She said the Territory was now paying $1.13 million a day to service the interest on its debt.

Mr Mills, who described the report as “deceitful”, was the only party leader who came close to suggesting public sector reform, saying it was worth “looking” at why the NT’s public service was bloated with 600 senior executive mandarins on $200,000 a year.

He also said now was not the time for “cutbacks and austerity measures”.