14 May 2014
However, higher revenues will be matched by higher spending, prompting concerns the Territory is squandering the benefits of short-term growth.
Handing down his second budget yesterday, NT Treasurer Dave Tollner said the outlook for the economy was good.
“Growth will be underpinned by high levels of construction activity related to gas projects, which will flow through to other sectors of the economy,” he said.
The budget forecast a non-financial public sector deficit of $723 million on revenue of $6.1bn in 2014-15, in part due to booking the $521m cost of a new prison.
Figures revised up from 2013-14 show the Territory now expects to collect almost $1.7bn more by the end of 2017-18 than was predicted in last year’s forward estimates, largely due to an increased GST share, increased commonwealth grants and increases in state taxes such as stamp duty, mining royalties and payroll taxes. However, the government also expects to spend $1bn more over the same period.
Treasury modelling shows private sector investment, driven mostly by the $34bn Ichthys LNG development in Darwin Harbour, peaking now at around 55 per cent of gross state product, almost double the long-term average, before falling back to only marginally above GFC levels once the project is complete in 2016. About $11bn of the project cost is being spent onshore.
Mr Tollner denied squandering the benefits due to future generations. “I think our economic growth numbers are on the low side, because I’ve got an inkling of what’s coming down the pipeline,” he said.
“We know, for instance, that there’s going to be further expansion to LNG facilities in the Top End. We know we’re going to get a bit from agriculture (and) we know our live cattle trade is going from strength to strength.”
Labor Opposition Leader Delia Lawrie said the Country Liberal government was now the “highest taxing government in the Territory’s history”. She also attacked the CLP for failing to deliver on its promise to increase infrastructure spending.
“The CLP touted this Budget as the big spend on infrastructure yet their own figures show a reduction in the cash spend of about $10 million and their revote out (works not completed) will be larger than their revote in — an extraordinary admittance of failure,” Ms Lawrie said. k
Public sector investment is also expected to drop well below the long-term average over the forward estimates, exercising a further drag on the economy. Net non-financial public sector debt is expected to reach $4bn this financial year, 67 per cent of revenue, well below the $4.7bn, or 85 per cent of total revenue forecast in the previous budget.
Debt is expected to stabilise around 65 per cent of revenue before the budget returns to surplus midway through the next term.
There will be small funding increases for corrections, education, mines and energy, sport and recreation, and cuts to child protection, health, infrastructure and lands, planning and the environment.
Infrastructure spending in 2014-15 will drop to $1.1bn, down from $1.2bn last year, although the share of new works will increase.
There will be reductions to spending on indigenous housing and repairs and maintenance, but higher spending on roads.
Courtesy of The Australian