It’s the Mini Budget we had to have – Labor would have done it too, says Treasurer

Treasurer Robyn Lambley a short time ago released the following statement:

The Mini Budget sets the Northern Territory on a path towards fiscal sustainability and charts a course for long-term prosperity that was not achievable under the previous financial regime.

With net debt in the non-financial public sector projected to reach $5.54 billion by 2015-16 and the fiscal imbalance at $867 million in 2012-13 in the Pre-Election Fiscal Outlook, it is not only responsible, but also necessary, to take steps that improve the Territory’s financial position.

The Mills Government has to take urgent measures to restore the Territory’s finances. The previous Government was consistently spending beyond its means and for reasons of political expediency failed to take any tough action required to improve the budgetary position – leaving us to clean up the mess.

If Labor had been re-elected, it too would have had to make cuts – notwithstanding the Opposition Leader’s pathetic denials to the contrary. Evidence of this is found in the April 2011 letter from the former Treasurer sent to Power and Water chairwoman Judith King, committing her Government to hiking up power prices “on the basis of financial and commercial sustainability” after the 2012 election.

It is very clear from this that what Delia Lawrie was saying in private exchanges was vastly different to what she was telling Territorians. The Mini Budget refocuses Government expenditure priorities on frontline service delivery. It also honours the commitment made in our contract with the Northern Territory to cut Labor’s waste and reduce debt.

We have been able to fund our election commitments at the same time as improving the Territory’s finances over the next four years. This Mini Budget will take the fiscal imbalance in 2015-16 down to $53 million – very close to again living within our means. Compared to the PEFO, by 2015-16 employee expenses are 3% lower, meaning approximately 600 positions will go through a process of redeployment, natural attrition or non-contract renewal.

Other savings include:
• $10.9 million ongoing from 2015-16 through civilianising positions currently occupied by police officers, who will be able to return to the front line.
• Greater focus on shared services within the public sector.
• $4.2 million ongoing from 2014-15 through closure of the Smart Court and the Alcohol and Other Drugs Tribunal.
• Rationalisation of agencies’ travel, consultancies, vehicle fleets and other discretionary spending.
• Closure of the Chief Minister’s offices in Palmerston and Katherine and the relocation of the Alice Springs office to more modest facilities.
• 600,000 a year through cessation of the Council of Territory Co-operation.

These and other measures will result in a saving in interest repayment of $136 million over the forward estimates period. In future, the community can expect to see a leaner and more efficient public service capable of delivering the services and infrastructure that the community wants and needs.

The Mini Budget has allowed the Government to honour its pre-election commitments, which include:
• $52.5 million for 120 additional police officers in Darwin and Alice Springs by July 2014
• $100 million extra for repairs and maintenance for the next four years
• $14 million over four years for additional housing improvements on homelands and outstations
• $1 million in 2012-13 and $2 million ongoing from 2013-14 for early intervention and residential camps for juvenile offenders
• $300,000 to conduct a safe streets audit
• $800,000 ongoing from 2012-13 to establish and operate the Planning Commission
• $500,000 ongoing from 2012-13 to establish an independent Northern Territory Environment Protection Authority board
• $6.5 million per annum for enhanced cardiac outreach and rehabilitation services and commencement of low risk angioplasty services.
• $150,000 ongoing from 2013-14 for additional motorcycle education and training courses.
• $250,000 per annum over four years from 2013-14 for additional driver training courses.
• $220,000 from 2013-14 to develop a recreational fishing development plan.
• $1 million to support local government reform.
• $35 million to construct rehabilitation centres.

The Mini Budget gives more emphasis to Territory based small businesses by, reprioritising investment from capital works into increased repairs and maintenance over four years while delivering the new Government’s capital works commitments. We have increased spending on repairs and maintenance by $100 million over four years to ensure essential Territory infrastructure does not deteriorate further. This is good news for small businesses, tradespeople and suppliers across the Territory.

Compared to the appalling fiscal outlook left to us by the previous government, the Mini Budget improves the Territory’s fiscal imbalance by $95 million in 2012-13, increasing to a $422 million improvement by 2015-16.

As promised during the election campaign, frontline employees are exempt from the savings measures that will see some contracts lapse and staff re-deployed within the Northern Territory Public Sector. In a cost of living measure designed to put downward pressure on housing prices, particularly rents, by initiating more residential housing development, the Government is amending legislation from today to
• Increase the First Home Owner Grant to $25,000 for new homes in the greater Darwin, Palmerston and Darwin rural area and all home purchases in the remainder of the Northern Territory. The rebate for existing homes in the greater Darwin, Palmerston and Darwin rural areas will be $12,000.
• Cease the stamp duty first home owner concession.
• Increase the stamp duty principal place of residence rebate from $3500 to $7000 for the purchase of new homes or vacant land on which the new home will be built.
• Reduce the ‘threshold amount’ (value of the home) for eligibility for the first home owner grant from $750,000 to $600,000.

Under the previous Government the Territory received 22 per cent less from its own sources of taxes and charges than the state average. This was revenue lost to the Territory. A range of fees and charges will be raised over the next few months to bring the Territory closer to the average level in other parts of Australia.

This was a popularity measure pursued by the Labor Government, but Territorians were still paying in other ways such as higher debt and interest payments and lower levels of service. For example, aside from CPI increases, motor vehicle registrations have not increased in 16 years. Registration fees will rise between 4% and 18% from January 1 – meaning motorcycles and small box trailers will increase by $11, small vehicles by $67 and large 4-wheel drives by $105.

One of the outcomes of the Labor Government’s cash crisis was the large number of legacy commitments made by the Labor Government that required funding. The Country Liberals Government sought to prioritise and fund the programs we deemed important including additional funding $10 million in 2012-13 and $5 million ongoing from 2013-14 for child protection and out-of-home care services and a range of other services.

While the Mills Government will maintain substantial funding, we are being more selective about the programs we support to ensure they meet our election commitments to cut waste and reduce debt, tackle crime, create a 3-hub economy, ensure proper future planning and increase accountability.

We are bitterly disappointed to have found the state of the Territory’s books in such bad shape but are determined that the short-term pain caused by some of our measures will be offset by prosperity in the future.

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