In trouble? Time to dust off Statehood.

p2258-statehoodBy ERWIN CHLANDA

 

Whenever things go pear shaped the government comes up with something that nobody really understands but that gives everyone a warm feeling in the tummy.

 

Statehood fits that bill admirably. Yesterday national Treasurer Joe Hockey dared to smile when Adam Giles – who’s in more trouble than Ned Kelly on a bad day – raised the “S” word again.

 

This morning Mr Hockey was being chastised for this by Kezia Purick MLA, who’s just become a backbencher. The only thing they have in common is that they are conservatives, roughly on the same take-home pay.

 

Mr Hockey is not reported as losing any sleep – although maybe he should be, given that he’s paying about 85% of our bills.

 

The comparative figure for the states is about 50%. So where are we in the grand scheme of things?

 

The Territory currently has a debt of $2.45b. We pay interest at 5.5% which amounts to $127m a year or $350,000 a day.

 

The debt is half of our Budget which, by European standards, isn’t too bad, says Rolf Gerritsen, the CDU’s research professor in Alice Springs.

 

But it’s not so good by Australian standards where we’re occupying the bottom of the barrel, in company with our southern neighbor, South Australia. It has still not recovered from the collapse of its state bank, says Prof Gerritsen.

 

The fact that in the Northern Territory the contribution to the Gross Domestic Product by private enterprise is a laughable 15% is something people pondering statehood may like to bear in mind. In the states the number is three times that.

 

Prof Gerritsen says for the GDP bottom line, it doesn’t matter whether the dollars are contributed by someone making ball bearings or someone pushing a pen in a government office.

 

When the bean counters (Commonwealth Grants Commission) catch up with the drop of income from coal and iron ore – they’re usually two years behind, says Prof Gerritsen – WA will get 29c for every dollar they generate in GST revenue. We Territorians will get $5.50. Thank you very much.

 

But, he says, money isn’t an argument either way for statehood: We would continue to need massive Federal funding.

 

Remember when last the Alice boomed? It was during the 2007-10 Intervention, with Commonwealth money pouring into the NT.

 

The currently best state finances are in Tasmania – they have a real budget surplus. So how come they have cheap houses and ours are just on a slow decline from dizzying heights? Go figure.

 

Prof Gerritsen recalls Peter Walsh, Labor politician from 1974 to 1993 and the Hawke Government  Finance Minister, who calculated that at the then current rate of funding increases, the Territory would be gobbling up the entire Commonwealth Budget by the year 2400.

 

That’ll wipe the smile of Mr Hockey’s face!

 

 

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12 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. Evelyne Roullet
    Posted July 29, 2015 at 3:20 pm

    I cannot see the benefits of Statehood.
    Australia’s Constitution provides the basic rules for government. The Constitution (particularly section 51) confers powers to the Commonwealth Parliament to only make laws in specified areas including defence, external affairs, interstate and international trade, taxation, foreign affairs, trading and financial corporations, marriage and divorce, immigration and interstate industrial conciliation and arbitration.
    The list of Commonwealth powers in the Constitution does not specifically refer to a number of important areas such as education, the environment, criminal law and roads. However, this does not mean these subjects are outside its authority.
    State parliaments are able to legislate on a much wider range of subjects than the Commonwealth Parliament. This is why important areas such as education, crime and roads are regulated primarily by State rather than Commonwealth law.
    Although States can pass laws on a wider range of subjects than the Commonwealth, the national government is generally regarded as the more powerful partner.
    A principal reason for this is section 109, which provides that where there is an inconsistency between Commonwealth and State laws, the former prevails.
    Section 96 of the Constitution allows the Commonwealth to make conditional grants of money to the States for any purpose. This power allows the Commonwealth to influence the way things are done in areas where it has no direct power to pass laws.
    The shared roles and responsibilities between the Commonwealth and the States are problematic. They increase the risk of administrative duplication and overlap, higher administrative costs and cost shifting. They are a fertile ground for reduced efficiency, effectiveness and fairness of service delivery.
    The division of responsibilities often raises significant problems and contributes to a less functional Federation. This includes poor coordination of planning and service delivery and a lack of accountability over the quality and cost of services provided.
    http://www.ncoa.gov.au/report/phase-one/part-a/3-1-what-do-governments-do-and-who-does-what.html

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  2. Janet Brown
    Posted July 29, 2015 at 1:51 pm

    I believe we would all be better of with no state or territory government.
    Local councils would be responsible for their jurisdiction – roads, hospitals, eduction would be federal.
    Councils would operate all local services and facilities.
    As we have seen state and territory governments are normally duplicated, and what is common is the spending in capital cities to the decline in other towns.
    We are all aware of the Berrimah line. No shires. Just Federal and town councils. And watch the Alice grow and prosper.

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  3. Fred the Philistine
    Posted July 28, 2015 at 6:58 am

    @ Ray: What no one has said is what are the benefits of statehood?
    The Northern Territory does not even have a full Parliament.
    Will we hand Federal money back and stand on our own two feet? I don’t think so.

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  4. Ray
    Posted July 27, 2015 at 9:40 pm

    No Bob. What I am saying is that the NT, has a budget from where it draws money for hospitals, educations, police, the public service etc.
    Much / most of that money comes from payroll tax and stamp duty, other funding is received from the Federal government from GST disbursements, at a disproportionately higher rate than what states receive.
    The NT government also pays for infrastructure from this pool of money. The original comment implied that the $25 million project cost was drawn from this money, meaning it could have been spent on other areas.
    This is what is incorrect, in that the funding for that overpass did not come from the NT budget.
    Fred: What changed is the Federal government improving road safety by eliminating level crossings on national highways. Other states also rely on Federal government funding, which is from funds raised from the GST.
    So the “new mall and new law courts” are funded by the NT government, the overpass was not.
    That was the inaccuracy I was highlighting. Was it needed? I don’t think so, and I travel that road 15 to twenty days per month, but then again there is a bigger picture out there, and the reasons for building it may be many and varied.

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  5. Bob the Brewer
    Posted July 27, 2015 at 5:15 pm

    @ Ray: I totally agree with Fred. So are you trying to say that the NT could never fund itself?
    The NT has always relied on Federal funding, so what’s new.

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  6. Bob the Brewer
    Posted July 27, 2015 at 5:11 pm

    @ Ray: Where do you think the NT get their moneys from? The railway line has been there for many years, so what has changed to build such an extravagant structure?

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  7. Ray
    Posted July 27, 2015 at 11:05 am

    Fred: Check your facts Fred. The rail overpass is a Federal project, funded by the Federal government, not the NT government.

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  8. Bob the Brewer
    Posted July 26, 2015 at 12:09 pm

    Bring on statehood for the NT. It will end up like Greece – bankrupt – in two weeks.

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  9. Sean
    Posted July 25, 2015 at 10:40 pm

    Thanks Erwin and Alice Springs News Online. A good, informative read. I guess Statehood is Giles’s way of trying to go Federal as Senator or Member.

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  10. Fred the Philistine
    Posted July 25, 2015 at 7:55 pm

    I bet Joe Hockey pissed him self laughing when Adam Giles brought up state hood. It makes a joke out of Territory Day.
    In the past the NT government blamed every other state for their problems. Now that the Territory is self governing, whats the problem?
    One wonders if Territorians are living in a dream world?
    You can see in Alice Springs, all the wasted money that has been spent. We need to remove the sit down money and start to generate work and tax.
    The rest of Australia would be appalled to see and hear all about what really goes on with the spending in the NT.
    The prime examples are the new mall, the new law courts and the new rail overpass.
    The Territory will not be able to sustain itself if it does not pull its socks up.

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  11. Evelyne Roullet
    Posted July 24, 2015 at 3:43 pm

    Why not follow the advice of our ex-Prime Minister John Howard who declared, speaking on radio 10 years ago: “Australia would be better off without state governments”.
    What do state governments actually do?

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  12. Michael
    Posted July 24, 2015 at 3:42 pm

    NT: National Tragicomedy.
    Outstanding article, Erwin.

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