Royal commission bill adds to Northern Territory budget woes

The PM’s royal commission into Northern Territory juvenile detention is likely to cost about $50m.

Treasurer David Tollner says Northern Territory government is ‘on track with its economic plan’. Picture: Helen Orr

The Prime Minister’s royal commission into Northern Territory juvenile detention is likely to cost about $50 million, according to ­official Territory Treasury figures.

Malcolm Turnbull’s plan to put a “floor” under the GST to benefit Western Australia is also likely to have large cost implications for the Territory, resulting in it being “unable to deliver services at ­current standards unless substantial fiscal deficits are maintained’’.

The predictions, contained in this year’s pre-election fiscal outlook report, were delivered yesterday with warnings that the Territory was already unlikely to achieve a return to sustainable surplus four years after one was promised.

When the Country Liberals were elected in 2012 they committed to return the then beleaguered budget to balance by the end of their first term.

Instead, the party sacked its leader partly in ­response to voter anger over cuts, and then kicked the planned surplus date two years and then another two years into the next term.

Yesterday’s financial report forecast the barest of surpluses, at $1m in 2019-20, but also warned that actually achieving that would be “challenging for the next term of government”.

Earlier this month, credit ratings agency Moody’s downgraded Territory debt and also cast doubt over the government’s surplus plans.

The outlook allocated $7m for the royal commission, to be co-funded by Darwin and Canberra. “Early indications are that the total cost could be around $50m,” Treasury said.

“The costs of implementing any recommendations arising from the royal commission are likely to be substantial, however, they are unquantifiable at the time of publishing.”

The May budget contained forecast falls in overall public spending in future years just as state final demand collapses as construction of the onshore component of the $50 billion Ichthys liquefied natural gas project in Darwin Harbour winds down.

Total spending grew by more than 12 per cent last financial year, in the lead-up to an election. The 2016-17 deficit is now forecast to be almost $900m, a small increase on the May figure.

Treasurer Dave Tollner said the outlook document showed the CLP government was “on track with its economic plan”.

He sought to poke a $100m hole in Labor’s unannounced costings by claiming the party would be unable to reallocate money from an infrastructure fund as it plans.

A Labor spokesman said yesterday that Mr Tollner did not “understand the basic principles” of the fund.

The budget already factors in efficiency dividends of up to 3 per cent in the forward estimates, which Treasury warned might be hard to achieve. The next government will also have to renegotiate close to two dozen federal partnership agreements and ongoing funding for health and education.

Treasury forecast less than 1 per cent annual employment growth in the period in which the CLP has promised to create 24,000 jobs, equivalent to an 18 per cent rise in the labour force.