NT economy recovers quicker than expected

·2-min read

A massive increase in GST revenue forecasts is likely to result in the Northern Territory's economic recovery happening quicker than expected.

The 2021/22 budget released on Tuesday revealed a $1.35 billion deficit and net debt of $9 billion, the equivalent to 122 per cent of revenue.

It's a $1 billion improvement on last year's forecast for 2021/22, which predicted the deficit to be $1.7 billion, with net debt of $10.1 billion.

But the Top End remains in the red and is likely to slip even further, with net debt expected to climb to $11.4 billion by 2024/25.

"We're coming back hard but we're not there yet," Chief Minister Michael Gunner told reporters.

A bigger-than-expected cut of the GST is behind the improved outlook.

It's likely to see the NT receive $2.9 billion in 2020/21 and $3.16 billion in 2021/22, an increase on projections of $379 million and $359 million respectively.

Growth is forecast to be 4.7 per cent this year and 2.3 per cent in 2021/22, up from last budget's prediction of -0.1 per cent growth.

Measures aimed at growing the economy include $60 million to boost local jobs and businesses, with a further $60 million promised the following year.

A further $26.3 million was allotted to support the tourism sector, with $7.8 million to fund resource exploration and $400 million for Territory-funded capital projects.

The Gunner government has also responded to ongoing community concerns about crime with $23 million for police recruitment, more CCTV and improving emergency services.

Ratings agency Moody's gave the budget a favourable review.

"Despite pandemic-driven economic disruption from border closures, the recovery in NT revenues has exceeded our initial expectations," Investors Services VP John Manning said.

But professional accounting body CPA Australia was less enthusiastic, saying the NT's future growth may be limited by a lack of expenditure.

"With the cost of borrowing so low at present, we don't consider the size of the Territory's debt concerning," general manager Jane Rennie said.

"Additional borrowing to properly fund some of the budget measures is preferable to under-investing."

Opposition Leader Lia Finocchiaro disagreed, saying the Gunner government was saddling Territorians with "decades of economic annihilation".

"Interest payments continue to balloon and debt per Territorian will be close to $50,000," she said.

"Labor is still putting $3.7 million on the credit card every single day just to keep the lights on."

The NT Council of Social Service was also unimpressed, saying the budget had cut funding to already stretched services across the not for profit and community sector.