The Territory Budget miracle: achieving so little with so much

JOHN ELFERINK: “How are we to deal with the $5.5 billion projected debt left to us by Labor?”

 

COMMENT by ERWIN CHLANDA

 

It’s time again for a treasurer to perform the Northern Territory’s annual miracle: achieving so little with so much.
Prepped by all the hand wringing about black holes, the public is fearing the worst. Savage Power Water Corporation (PWC) hikes have already given a taste of what may be ahead.
Yet the NT, with less than 1% of Australia’s population, gets 5.4% of the nation’s GST. More than half the NT Budget, $2.7b, is from the GST. The Feds are also kicking in $3.4 billion over 10 years through Stronger Futures.
Add to that the millions in Federal welfare payments, and massive funding to NGOs performing – some poorly – state and local government-like functions, and we have an administration awash in public money.

Yet we are not achieving in The Centre what me must: return the region to a place where tourists have a great time in safety, where families settle and bring up kids, enjoy the magic of the outback, and make money in endeavors other than working in welfare, law enforcement and health care.
While we are enduringly on top of the pile of Australia’s Horizontal Fiscal Equalisation (HFE) beneficiaries, we’re told by the new NT Government that things are tough, tighten your belt, cough up and shut up.

There is no bigger and blacker hole than the PWC, as the Treasurer at the time, Robyn Lambley, told us when she handed down the mini budget in December last year.
She said: “By far the biggest single issue facing the Territory was the parlous financial state of the Power and Water Corporation.
“The Territory’s net debt had been allowed to grow, or had been pushed, to $2.7 billion at the start of this financial year,” she explained. The debt of the government-owned PWC was $1.2 billion.
This is raising at least two questions.
Firstly, why was it necessary and appropriate to deal with this debt through a horrendous slug of the public, rather than applying some of the HFE dollars? After all, we can’t live without power and water, especially not in this hot, dry and exceedingly remote part of the world. The HFE is precisely for the users who can’t pay, or can’t be expected to pay given the high costs resulting from operating in a vast but sparsely populated region.
And secondly, why was the PWC debt, and the way it was to be dealt with, not front and centre in the CLP’s election campaign?
True, there was much talk about the growing debt. Much of it was to the tune of, “gosh, while you’re in Opposition, the Government just won’t tell you anything” – words to the effect.
But the facts about PWC were known to the Opposition, now the Government, 65 days before the election on August 25.
The following exchange took place between PWC’s managing director Andrew Macrides, now sacked, and CLP front bencher John Elferink, in the Estimates Committee hearings on June 21, 2012:-
MACRIDES: If you are talking about the current financial year, our interest expense on our debt is $75.1m.
ELFERINK: What was it last financial year?
MACRIDES: It was $51.7m.
Mr ELFERINK: That is a pretty sharp increase. The year before that, just so we know what we are comparing, each piece?
MACRIDES: It was $44m.
ELFERINK: What is the dollar figure, sorry, of your overall debt position at the moment?
MACRIDES: Our debt position at the moment is forecast to be $1.2 billion. It was $1.081 billion last financial year, and the year before that it was $904m.
So the CLP had two choices at the time. One was to be up front with the voters and say to them: “The inept Labor government has made a hash of it, especially PWC, and we’ll fix it by applying user-pays principles, and we’ll sting you with 30% increases. Feel free to blame Labor.”
Or they could have given us the mushroom treatment.
They chose the second. Let’s see what else next week’s Budget has in store for us.

We asked Mr Elferink, now the Attorney-General and Minister for Justice and for Public Employment and Correctional Services to comment. He said: “We were aware of the issue and we flagged savings particularly in the election campaign in the area of public service numbers.
“HFE applied to PWC is how the Labor Government subsidised PWC for years. PWC needs to stand on its own two feet. The more spent on PWC via HFE means less money for everything else.
“By the way, we’ve lost another $120 million per year because of the HFE disabilities.
“How are we to deal with the $5.5 billion projected debt left to us by Labor?”

PHOTO: Part of the new Alice Springs power station at Brewer Estate – an expenditure of the “black hole” Power Water Corporation.

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4 Comments (starting with the most recent)

NB: If you want to reply to a previous comment, start your comment with this notation: @n where n is the number of the comment you want to reply to.
  1. Hal Duell
    Posted May 9, 2013 at 6:41 am

    We will soon go to the polls again, this time to elect the Federal government. Last year we elected our local Councils in March, and after that the 25 sitting members of the NT Legislative Assembly.
    And yet, isn’t it becoming increasingly clear that something’s not meshing? First we have the campaign of fervent exhortations and promises, which always include the familiar vows to be accountable and transparent. Then, once a newly elected government begin its days in office, it seems an air-bag deploys.
    More and more I wonder if our elected representatives on all three levels aren’t just playing the bye, while the main game takes place in boardrooms and back rooms around the nation.
    This is not to suggest that I think any form of government would be better or preferable to representative democracy. But I do wonder if the whole show hasn’t been hijacked somewhere along the line.

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  2. Graham Buckley
    Posted May 8, 2013 at 1:33 pm

    What is all the fiscal fuss about re the NT’s “black hole”? Lobbed in our letterbox last week was a political news sheet from the Member for Greatorex: issue 1/ April 2013. It was highlighting the achievements of the CLP government after just six months in office. The first dot-point stated: “reined in Labor’s debt”. I mean, just how good is this mob?

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  3. Roger, senior from Darwin.
    Posted May 7, 2013 at 2:29 pm

    Where do you start as there is no end to the blatant disregard of services senior concessions which has to be attributed to former CM Mills.
    He led the slash burn campaign, then grabbed Peter Chandler went on a holiday to Indonesia to visit the president’s cattle farm, left Robyn Lambley “Alone” to announce to the NT the “mini budget” which she concluded with: “We should be under no illusion that today marks the end of the trail, that everything will be fine with the Territory’s finances once this mini budget is in place.
    Later in an interview she lamented publicly: “I had no choice. It’s a terrible day.” Then next day, again “Alone” she had to face a very inquisitive media throng from which she ran away. No wonder Mills made enemies within.
    All water under the bridge for those two but the current CM Giles who is still intent on attacking services and seniors to make $1, all the while content to blame the ALP for reckless spending, whilst he resides at the Skycity accommodation complex, claims $162 per day for meals incidentals. When CLP ministers give up their own entitlements then I will. Until then, stop all cuts be accountable.

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  4. Bob Durnan
    Posted May 7, 2013 at 12:07 am

    Yes; and now that the GilesElferinkLambleyTollner (GELT) spin doctoring enterprise has been used to enable liquidation of valuable youth services, cut police force staffing, impose savage power / water / sewerage rate increases on individuals and businesses which can ill-afford these unfair imposts, reduce teacher numbers in schools, and cut back benefits for aged pensioners, the GELT has seen fit to lavish $9 million on improving the Hidden Valley race tracks for the benefit of Darwin petrol-heads.
    Shows exactly where GELT’s real priorities lie!

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