NT deficits due for rest of the decade

Robert Baird
·4-min read

Michael Gunner is bracing for union resistance to his public sector wage freeze, which the chief minister is relying on to rein in the Northern Territory's COVID-19-driven budget deficit.

The Top End's 2020/21 budget was released on Tuesday, revealing a $2.45 billion deficit, plus a forecast that it will take almost a decade to balance the books.

Net debt is also forecast to reach record levels: $8.4 billion this financial year - equivalent to 132 per cent of revenue - climbing to $12 billion, or 167 per cent, by 2023/24.

Mr Gunner, presenting his first budget since taking over as treasurer this year, acknowledged the numbers were dire but reflected the national recession.

"There's no hiding it, debt and deficit, a bit like the federal government's (budget) ... it hurts," he said.

Mr Gunner said health measures in response to the pandemic, and stimulus measures to deal with the economic consequences, had already cost nearly $400 million.

"This is the cost of controlling the virus ... the government will keep taking this hit for now - we have to," he said.

The costs include border controls, running the Howard Springs quarantine facility near Darwin, and associated expenses of $63 million last year and $120 million this financial year.

Net revenue will fall two per cent in 2020/21 to $6.38 billion. But the government is banking on a sharp increase in overall revenue, including GST, to $6.79 billion in 2021/22.

The NT's GST share - $2.52 billion - is $341 million less than expected, largely due to a smaller national pool of funding and declining Territory population. However the government is banking on population growth - which has been declining for years - with a 0.2 per cent increase this year.

Government salaries and benefits will peak at $2.64 billion this financial year, before an election promise to freeze government wage increases for four years begins in 2021/22.

The freeze - with a $1000 "retention" bonus - is expected to save $424 million over the following four years, but depends on negotiations with public sector unions.

Mr Gunner acknowledged there was "not much room to move" in wage negotiations. But he remained confident unions will not bring "massive wage rises" to the negotiating table.

"They might be a bit feisty, as they always are. (But) the longer they look at the numbers, the more they'll realise that we are acting to save jobs," he said.

Community and Public Sector Union NT secretary Kay Densley warned the wage agreement hasn't been finalised.

The union will survey members this week about the indexation freeze, and pending the result, might oppose the measure at next year's enterprise negotiations.

"This is from a chief minister that thanked (workers) in May for all the work that they've been doing, the long hours that they've put in to keep Territorians safe (during the pandemic)," Ms Densley said.

The union welcomed the government retaining its 21,000-strong workforce numbers for 2020/21.

Other new measures under the government's "Jobs First" plan include an extension of stamp duty discounts for homebuyers, expected to cost $10.8 million.

There will also be $18 million in new small business grants, and $10 million to assist the launch of online food and retail applications.

Overall expenditure is forecast to be $1 billion lower in 2023/24 than that of 2020/21.

Opposition leader Lia Finocchiaro said those figures are dwarfed by the forecast debt levels of $12 billion the same year.

"Debt per Territorian will be close to $50,000 and our daily interest payment $1.4 million," she said.

"(Mr Gunner) is clearly devoid of a plan to secure our future."

Ms Finocchiaro said Mr Gunner's speech largely neglected a huge slice of the NT economy - the resources sector.

"We should be fast-tracking mining investment and growing the size of the pie," she said.

The opposition leader will present her budget reply in parliament on Wednesday.

NT BUDGET 2020/21

Deficit: $2.45 billion

Revenue: $6.38 billion

Expenditure: $8.04 billion

Net debt (2020/21): $8.4 billion

GST revenue: $2.52 billion

Unemployment: 6.3 per cent

Growth: -0.1 per cent