NT budget recovering quicker than expected
The Northern Territory's economic recovery is happening quicker than expected but the budget remains deep in the red, despite the government reining in spending.
The 2022/23 budget released on Tuesday revealed a $1.1 billion deficit and net debt of $8.7 billion, the equivalent to 115 per cent of revenue.
It's an improvement on last year's forecast for 2022/23 for a deficit of $1.2 billion and net debt of $10.1 billion.
The trend is set to continue with the deficit continuing to fall over the forward estimates period to $17 million in 2025/26.
However, net debt will grow to $9.4 billion, or 121 per cent of revenue, due to the NT's infrastructure loans.
Outgoing Chief Minister Michael Gunner says the budget reflects the territory's journey through the tough days after the INPEX gas project construction boom ended, and the COVID-19 pandemic.
"This is a budget that sets up the future. We are going to have an amazing period of growth. More jobs in more places. It's what I've been chasing for five and half years," said Mr Gunner, who announced his resignation after handing down the budget.
"We recognise the growth in jobs and population and this brings on a whole bunch of land. We have to have a place for the people to live who are going to be taking up these jobs."
The recovery is primarily due to revenue growing more quickly than expenses, with the government's operating costs expected to fall from a $253 million deficit this year to a $60 million surplus by 2024/25.
The largest savings measure was the enforcement of the vaccine mandate, which led to about 400 public servants being sacked and projected savings of $108 million over four years.
Construction projects, like the Santos-led Barossa offshore gas development, the Finniss lithium project and US defence fuel storage facility, are expected to boost economic growth to 3.7 per cent in the coming financial year.
A "significant" improvement in GST revenue, the territory's primary source of income, since the 2021 budget has also helped reduce the estimated deficits over the coming four years.
The total commonwealth funding to the NT in 2022/23 is estimated to be $5.28 billion or 69 per cent of total revenue, with $1.7 billion tied to projects. Some $3.58 of this is GST revenue.
"The 2022 budget clearly shows that the territory economy is strong and getting stronger," Mr Gunner said.
"The budget is on the right track. Our budget discipline will continue."
Budget expenditure included $690 million for housing in remote areas to help ease chronic overcrowding in Indigenous communities.
The territory's Labor government also promised $58 million to the tourism sector to help lure domestic and international visitors and hospitality workers to the NT.
More than $110 million will be allocated to sealing, strengthening and widening strategically important roads.
Key projects include $80 million for on works between Alice Springs and Darwin along the Stuart Highway and $104 million for gas industry road upgrades.
Moody's credit rating agency said the revenue recovery exceeded expectations and reflected a strong domestic economic recovery and higher commodity prices.
But rising inflationary pressures, interest rates, as well as volatile global economic growth amid elevated geopolitical risk, will likely increase cost pressures.
NT BUDGET 2022/23
Deficit: $1.11 billion
Revenue: $7.6 billion
Expenditure: $7.86 billion
Net debt: $8.71 billion
GST revenue: $3.58 billion
Unemployment: 4.2 per cent
Growth: 3.7 per cent
Population growth: 0.6 per cent of about 246,500 people
Interest payments: $436 million or $1.19 million per day.
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