NT budget boosted by GST improvements, contained spending

Chief Minister Michael Gunner has left the door open to reviewing the NT government’s controversial wage freeze amid a better-than-expected result for the 2022-23 budget. SEE WHAT’S IN IT FOR YOU.

CHIEF Minister and Treasurer Michael Gunner has unveiled a better-than-expected budget full of optimistic projections, including that the government will be almost back in surplus by 2026-27.

The NT government is projected to post a deficit of $1.11bn in 2022-23, with debt rising to $8.71bn.

Included in the budget books is a $1.7bn infrastructure spend, over half of which will be spent on transport.

Meanwhile, public health funding is expected to fall sharply as the Covid-19 pandemic fades.

And the government has raised the possibility that its controversial wage freeze could be revisited, but not just yet.

Delivering his budget speech on Tuesday morning, Mr Gunner focused on “confidence”, saying his government had provided the right settings to encourage private investment in the Territory.

“Despite all the peaks and troughs of the past two years, business confidence is still higher than it was before the onset of Covid-19,” he said.

BUDGET PROJECTIONS

In 2025-26, the NT government is projected to post a deficit of just $17m.

Net debt will peak at $9.44bn the year prior to that, well short of the $15bn debt cap put in place last year by the Chief Minister.

The budget is full of optimistic forecasts for the next five years, including that increases in the cost of living will revert back to a ‘normal’ level of around 1.3 per cent in coming years.

Inflation has soared to 5.7 per cent in the Territory this financial year following the Covid-19 pandemic and Russian invasion of Ukraine.

It will stay above 3 per cent in 2022-23.

Helpfully, the NT’s share of the goods and services tax (GST) is expected to jump this financial year by $291m.

There is also optimism that wages will grow faster than inflation by 2023-24 and that the unemployment rate will stay below 4.5 per cent.

The budget assumes there are no major economic shocks between now and 2026.

Chief Minister Michael Gunner with new son Nash. Picture: Glenn Campbell

WHAT’S IN THE BUDGET FOR YOU

$1.7bn for infrastructure, up from $1.49bn in 2021-22. Transport infrastructure ($1.65bn) is 50.4 per cent of that spending, followed by housing which makes up 27.4 per cent.

The budget includes a $300m Remote Housing Package and another $235.8m for the Remote Housing Investment Package.

$80m will be spent upgrading infrastructure in Kakadu and Jabiru.

$1.877bn will be spent on health, a $360m decrease in funding compared to 2021.22. This funding includes $7m to alleviate pressure on the Royal Darwin Hospital.

Key pieces of health infrastructure include $36.4m to upgrade the RDH mental health inpatient unit and $24.7m to continue building the new Alice Springs ambulatory care centre.

$1.18bn will be spend in education, and $510m will be spent on police, fire and emergency services.

There is $54.7m for domestic and family violence.

Cost of living relief measures include $6m for the sports voucher scheme, $150 back to school payments, $31.6m for concession and seniors recognitions schemes to cut costs on essential goods and $450,000 over five years of concessions for electric vehicles.

The budget also includes $27m for upgrading boat ramps and $27.9m to support events such as Parrtjima, Bassinthegrass and Darwin Festival.

WAGE FREEZE REVISITED … BUT NOT YET

Despite the positive figures and soaring inflation, Mr Gunner has remained unwavering in his decision to freeze public sector wages.

The measure has so far saved the government a neat $108m over three financial years, and will save $31m a year into the future.

The general public service accepted a freeze in exchange for lump sum bonuses, while other sectors such as nurses and corrections staff remain locked in negotiations.

But while Mr Gunner said now was not the right time to increase wages, he suggested the government could revisit the policy in the future.

“If we lock (strong revenues) in, and continue to make gains in future budgets, then hopefully the current wages policy is something that could be revisited down the track,” he said.

“This cannot happen right now but it could happen in the future if we stay on track.”

DEPARTMENT SPENDING

A number of government departments will need to rein in spending after running over-budget in 2021-22, despite a warning from Mr Gunner last year that chief executives risked losing their job if they couldn’t balance the books.

For instance, the Department of Industry, Tourism and Trade spent nearly $60m more than was projected in 2021-22. The Department of Infrastructure, Planning and Logistics spent nearly $40m more than projected.

$40BN ECONOMY … SOMEWHERE OVER THE RAINBOW

Mr Gunner’s goal of a $40bn economy by 2030 isn’t directly referenced in the budget papers, but it is relying on a huge raft of multi-billion dollar projects coming online.

Investments such as the Barossa gas project, the Darwin ship lift facility, the Darwin Region Water Supply infrastructure project and the US bulk fuel storage facility have been committed, worth $14.7bn in economic growth in coming years.

But there’s another $39.7bn in uncommitted projects yet to get off the ground, including the Australia-Asia Power Link (SunCable), a number of mines and the Little Mindil Beach Resort. These are not yet factored into the budget just yet.

Crucially, the NT’s population is forecast to start growing again, thanks to the resumption of overseas migration.

NT budget boosted by GST improvements, contained spending

THE Northern Territory government will be back in black by 2026, with deficits set to be reined in, according to estimates in Tuesday’s budget.

The government attributes the significant improvements in debt and deficit levels to the extra GST revenue flowing into the Territory’s coffers, as well as keeping spending under control.

Chief Minister Michael Gunner, who also holds the treasury portfolio, will hand down a $1.1bn deficit for the upcoming financial year, $100m better than previous forecasts.

The Territory’s bounce back from the Covid-19 pandemic has also been better than expected, with projects such as Core Lithium, the fuel storage tanks under construction in the harbour, and the building of the Charles Darwin University campus in the CBD helping to ensure the capital’s economy is no longer reliant on a single project to get moving.

Chief Minister Michael Gunner will hand down his third budget as treasurer on Tuesday morning. Picture: Glenn Campbell

The government has already announced $86.4m in investments in the tourism and events sector over the next 12 months.

About $27.9m will support Northern Territory Major Events Company to deliver the popular 10-day event Parrtjima, an annual NRL game in the Top End and further support for BASSINTHEGRASS.

An extra $14.2m has been earmarked for tourism marketing and advertising, including $1.3m to attract and retain workers for the tourism industry and $2m to open a third round of a grant program supporting roadhouse developments.

Territory roads will also receive a $113m funding boost in a bid to help keep the Territory open for business.

“Budget 2022 will bolster the Territory Labor government’s focus on making the Territory Australia’s comeback capital as the pandemic transitions into an endemic,” Leader of Government Business Natasha Fyles said.

Ms Fyles also flagged that the budget would “deliver” for the Territory’s frontline workers. Territorians living out bush are also expected to reap the benefits of a renewed focus on improving remote housing, health care and education.

Opposition Leader Lia Finocchiaro will deliver her budget response on Wednesday, with parliamentary sittings resuming in Darwin this week.

Opposition Whip Josh Burgoyne said Territorians should not hold high hopes for the budget. “Territorians can’t expect Labor to deliver anything in (Tuesday)’s NT budget which will give confidence that the Gunner government has a plan to pull the Territory out of $8bn of debt,” he said.

“Any cash splash will be charged to the credit card, or is likely a revote from the year before – which is funding that was earmarked for projects in the previous financial year, but was never spent.”

PREVIEW: What to expect from tomorrow’s Budget

THE Territory’s budget will be dropped tomorrow, with promises made across industries.

Here’s what you can expect to be announced tomorrow:

Tourism industry’s boost

THE 2022 tourism season is expected to receive a boost, with $86.4 million invested across the sector.

An additional $27.9 million will also be dedicated to delivering events in the Territory, provided to the Northern Territory Major Events Company.

Of the funding promised, $14.2 million will be for direct marketing, $1.3 million to attract and retain the tourism workforce and $1.9 million to help implement the NT Aboriginal Tourism strategy over the next eight years.

Tourism Minister Natasha Fyles said the funding would ensure the NT remains a priority destination for travellers, especially the unique opportunities it presents.

“We know that the Northern Territory is a bucket list destination — we know that 80 per cent of visitors want to have an Aboriginal tourism experience when they’re here and the budget delivers for that,” she said.

Ms Fyles said a new feature of this year’s budget would be money dedicated to utilising international students in the tourism workforce, which has struggles with staff shortages in the past.

“Part of this budget is working together with Study NT in those international markets so that we can attract students to the Northern Territory but also providing them with opportunities to be part of that vital workforce,” she said.

Record $690m to be spend on housing

THE upcoming Territory Budget will include a record more than $690m investment in remote housing.

The infrastructure program, to be further detailed in this week’s Northern Territory Budget, includes:

• $301m for Remote Housing Investment Package works through HomeBuild NT, Room to Breathe and Government Employee Housing;

• $235.8m for land servicing to support the Remote Housing Investment Package, and;

• $150.2m for ongoing works to build new housing and improve existing infrastructure through the national partnership agreements.

A further $9.3m has been budgeted for Government Employee Housing, constructing and upgrading teacher accommodation.

Remote Housing and Town Camps Minister Chansey Paech said the investment was crucial for better outcomes for communities.

The Territory Budget will include a record more than $690m investment in remote housing. Picture: Supplied

“This significant investment, which includes contributions from both the Territory and Australian governments, will be the biggest spend within the program so far and sets a record for the Northern Territory,” he said.

“The new financial year comes with exciting prospects for our remote housing program.

“I’m looking forward to seeing many of our projects come to fruition.”

Mr Paech said the planned return for 2022 to 2023 included at least 260 new homes and the construction of a minimum of 200 serviced lots.

Select tenders are offered to locally based Aboriginal Business Enterprises, as part of boosting and increasing the sustainability of local economies.

It comes after it was announced Alice Springs town camps would receive $34m in new homes over the next three years, in a bid to address overcrowding.

Mr Paech said at the time the 54 new homes were planned across 11 communities.

Tangentyere chief executive Walter Shaw also said at the time the announcement would address a “critical need” for the Alice Springs town camp communities.

“We have advocated on behalf of our members for many years about the critical need for more investment into town camp housing to deal with overcrowding,” he said.

Roads funding boost as port gets upgrade

THE NT government will boost infrastructure spending by $113.1m in next week’s budget.

The NT News can reveal $1.491bn will be spent on roads in 2022-23, including upgrades to the Tanami Rd Alice Springs to Halls Creek Corridor ($86m), NT gas industry roads ($104m) and the Adelaide River to Wadeye corridor ($59m).

There will also be $45m in upgrades to the Barkly Hwy as part of the Tennant Creek to Townsville corridor, $25m for the Newman to Katherine corridor, and $81m for Alice Springs to Darwin.

Infrastructure Minister Eva Lawler said sealing roads was a priority in this year’s budget and would build resilience.

“The Territory Labor Government is creating a pipeline of work to keep businesses moving and locals employed,” Ms Lawler said.

Minister Eva Lawler. Picture Glenn Campbell

The NT News can also reveal government will spend $10m over the next three years to upgrade the Gove Port, in an initiative it says will create jobs and expand our maritime industry.

The East Arnhem port will be complemented by ongoing sealing of the nearby Central Arnhem Hwy.

Mining and Industry Minister Nicole Manison said the project would turn the commercial port precinct into a “important economic driver”.

“This is more good news for the Territory’s marine industry, and for our economy,” Ms Manison said.

“This investment will support jobs in East Arnhem Land, and expand the Territory export capabilities.”

East Arnhem Economic Growth Committee chairman Klaus Helms said the funding was “great news”.

“The expansion of the Gove Port is a also key part of the Traditional Owners’ vision for the Gove Peninsula to grow current and new industry to benefit all in the region as we work to transition to a diversified economy over the next five years,” Mr Helms said.

The money will be included in next week’s budget.

13,000 homes to lose generous solar tariffs in next week’s budget

OVER 13,000 households in the Northern Territory will have their solar feed-in tariff slashed by up to a total of $12m after the NT government unveiled changes to the scheme on Friday.

Under grandfathered feed-in tariffs, anyone who installed solar panels on their roofs before April 2020 were being paid 26.65 cents for every kilowatt hour they feed back into the Territory’s power grid.

Homeowners who installed solar after April 2020 are only being paid 9.13 cents a kilowatt hour.

But on Friday, Renewables and Energy Minister Eva Lawler announced Jacana Energy would gradually transition customers off the ‘premium’ feed in tariff once they’ve been on the system for four years.

The changes, announced ahead of next week’s budget, means up to 13,000 homes will collectively be $10m to $12m worse off per year.

Only 3000 customers are currently on the standard feed-in tariff.

Only 3000 customers are currently on the standard feed-in tariff. Picture: File.

Ms Lawler said homes on the premium rate would only be transitioned to the standard rate exactly four years after they first began selling electricity to the grid, to allow them to pay off any loans to install solar.

She said the savings made by the government would be directly reinvested into schemes to roll out solar energy systems to rental homes and public housing.

“It is about making sure that we have fairness and equity across all of our solar customers,” she said.

“How do you actually then make sure some of our poorest people actually have access to solar as well? That’s what one of the key things that drives this decision.”

Ms Lawler denied the changes would hit customers during a cost-of-living crisis.

Jacana Energy chief executive Louisa Kinnear said the changes would impact “around half of the 13,000 customers” within the first few months.

“For customers who did install solar prior to April 2020 and are currently receiving the premium (feed-in tariff), they will be phased off that (feed-in tariff) as they reach their four year anniversary from the time they received their first feed in tariff payment,” Ms Kinnear said.

NTPA responds to police budget

THE NT Police Association has praised an announcement of additional funding for the force.

NTPA President Paul McCue said funding for 21 remote police officers was a positive step forward, but would eagerly await more detail on how the funding would be allocated in the budget papers.

“Members in remote communities have been forced at times to work up to 70 hours of overtime in a fortnight simply because there is no one available to help. This funding will hopefully allow members to have some respite,” he said.

“We hope to see a significant investment in improving the mental health and wellbeing services provided to members, after Police Minister Nicole Manison agreed to undertake a review of services after years of lobbying from the NTPA.

“We will wait for the budget papers to be released before commenting further on how the money is allocated.”

It came as Territory Labor said it would commit $6m in extra funds towards a youth hub in Darwin’s Northern Suburbs.

It follows Federal Labor committing the same amount to the facility if it wins government.

$400,000 would be put toward the new facility in next week’s budget.

$510m allocated for NT Police

THE Northern Territory government will pour an extra $10.1m into remote and regional policing in next week’s budget.

The NT News can reveal funding for NT Police will increase by $6.4m in the 2022-23 financial year, to $510m.

Meanwhile, Health Minister Natasha Fyles on Wednesday announced the government would spend over $2bn on the Territory’s hospital and health system next financial year, a slight decrease on 2021-22 due to the easing of pandemic measures.

The extra remote policing funding will go towards 21 additional police officers and another 30 Aboriginal liaison officers, who will be established permanently within communities.

This includes remote centres such as Wadeye, which has in recent months been the scene of unrest, with at least 37 homes destroyed.

There will be $3m to support school-based policing and $1.2m to expand and maintain CCTV across the NT.

The funding increases come after government reports last year recorded substantial jumps in attrition within the ranks of the Force.

Police Minister Nicole Manison said the additional funding showed the government was backing its officers and the “complex work they do right across the Territory, in some of the most remote regions in the country”.

“Our police deserve the best resources and infrastructure possible to support them through the tough jobs they have, that’s why we have backed them with the biggest police budget in Territory history,” Ms Manison said.

“We know that maintaining local relationships and engagements is vital for our Police and this investment is an important step in increasing safety out on our communities.”

$10m a year to underground 3500km cables in Darwin

THE Territory government will allocate $60m over the next six years to install underground power in Darwin’s suburbs that still have poles and overhead lines.

Essential Services Minister Eva Lawler is expected today to announce the money will be allocated in next week’s Territory Budget.

Power and Water say there are 3562km of power lines still attached to poles across Greater Darwin and 2153km laid underground.

The government says a large scale civil works contract is being developed for public tender and is expected to be released next month. Expected to commence with high voltage overhead infrastructure, design work is due to begin in June with work to start later this year.

The Territory government flagged it would recommence rolling out underground power in 2018 after Cyclone Marcus left thousands of homes without power.

Local schools were prioritised and so far eight have had their power buried, with St John’s College to be completed this Dry.

The eight completed schools are: Wagaman Primary School, Nemarluk Special School, Alawa Primary School, Larrakeyah Primary School, Moil Primary School, Jingili Primary School, Parap Primary School, and Stuart Park Primary School.

Wagaman Primary school students Shanti Malla and Ashaina Dela Cruz are happy that there school will be one of the first to have underground power lines as announced in 2019 by Treasurer Nicole Manison. Picture: Katrina Bridgeford.

Essential Services Minister Eva Lawler said the Government recommenced undergrounding power to Darwin suburbs in 2019.

“Territorians deserve to have secure electricity supply. This government is building a more resilient power network to ensure security is maintained during severe weather events,” she said.

Former Northern Territory chief minister Shane Stone, who now heads the Commonwealth’s National Recovery and Resilience Agency, said undergrounding powerlines was “critically important” in a cyclone zone.

He said the government could seek Commonwealth aid for undergrounding power through the Preparing Australia Program.

“The Territory didn’t apply for much under our Preparing Australia Program,” he said.

“We had $150m to spend we could have done something.

“It could have been shared. It might have actually given them the means to undertake a proper study of where we go next after Nightcliff.

“There’ll be future rounds for this sort of Commonwealth support and I’d encourage the Territory government to progress the underground power linkages.”

Originally published as NT budget boosted by GST improvements, contained spending