We are in deep trouble and 2017 will be worse: Gerritsen

p2301-Rolf-GerritsenBy ERWIN CHLANDA

 

“This is an election year budget, just when we needed fiscal responsibility,” says Rolf Gerritsen (pictured), Professorial Research Fellow at the Northern Institute.

 

“The family jewels – TIO, Darwin Port, and so on – have been sold but pitifully little has been saved.

 

“Most of the proceeds are in election sweeteners. The next government is going to face a deficit close to $1b, not $800m,” says Prof Gerritsen.

 

“Deficits are a problem for the NT in the way they are not for the Commonwealth. The Commonwealth – though neither party will tell you this – can reduce its deficit by simply allowing bracket creep to solve the problem, at least in off-election years.

 

“The Territory is locked into the GST disbursement being its main source of revenue, usually between 60% and 65%.

 

“That is a counter-cyclical tax. At a time when metropolitan Australians are not spending the GST receipts are flat and the deficit goes up, irrespective of additional recurrent expenditure.

 

“Additionally, the disbursement is affected by our decline in the relativities disadvantage measures because more people in the eastern metropolises are identifying as Indigenous.

 

“This factor also reduces our share of specific purpose grants addressing Indigenous disadvantage.

 

“We are in deep trouble and 2017 will be worse,” says Prof Gerritsen.

 

p2102elferinkjohnokMeanwhile the NT Budget 2017-17 has committed an additional $10m for the Department of Children and Families to address the growing demand for Out of Home Care services in the Northern Territory,” says Minister for Children and Families, John Elferink (at right).

 

“It is a harsh reality that the number of Territory children on Protection Orders has grown by an average of 11% per year over the past five years and in 2015-16, the number of children on care and protection orders has reached over 1,000 for the very first time.

 

“It is the experience of trauma and neglect that sadly results in children finding themselves in the Child Protection Out of Home Care system.”

 

p2154-Adam-GilesA whopping $768m has been allocated “to reduce crime, support police and emergency services, strengthen law and order, and protect vulnerable Territorians,” says Chief Minister and Minister for Police and Emergency Services, Adam Giles (pictured).

 

Highlights include:-

 

• $149m through a five-year agreement with St John Ambulance that will see St John deliver about 55 additional staff and equipment.

 

• $7m to support domestic violence prevention initiatives as part of the Domestic and Family Violence Reduction Strategy.

 

• $4m over two years to continue and expand the electronic monitoring program for offenders.

 

• $2m for upgrades at the Alice Springs Correctional Centre.

 

Mr Giles also says $500,000 has been allocated to examine the feasibility of the Northern Territory making fuel from onshore gas.

 

“We see potential from turning that gas into a synthetic diesel that’s cleaner and greener than diesel that’s currently burned in our cars and in our power stations out bush.

 

“If we can make our own fuel for those generators and cars in the Northern Territory we can get cleaner-burning fuel which helps our environment.”

 

Currently, the NT imports 630 million liters of diesel per year, which equates to 10,856 barrels per day.
“A gas-to-liquid processing facility could feasibly be located at Tennant Creek, in partnership with the gas pipeline and a processing facility, in Alice Springs or in Darwin at East Arm,” Mr Giles said.

 

p22100-Naomi-HoganMeanwhile Naomi Hogan (at right), of the Lock the Gate Alliance, says this Budget spends $6m on gas industry grants and accelerated assessment of the Territory’s shale gas.

 

“Have Territory residents been consulted on whether they want to prop up the uncommercial and polluting onshore shale gas industry? If the onshore gas fracking industry is so viable, why can’t they spend their own money on gas exploration and assessment?”

 

p2142-Jimmy-CockingJimmy Cocking (at left), director of the Arid Lands Environment Centre, says the government “has demonstrated it is operating in a gas-fired echo chamber with no new investment into climate action or protecting the environment in the budget delivered yesterday.

“It’s totally astounding that in 2016, when world leaders have agreed to try and limit global temperature rise to two degrees, there is no mention of climate in the NT budget, no investment into renewable energy and no further investment into ensuring the health of our environment.”

 

This Budget continues the trend of dramatic under-investment in public education, says the Australian Education Union, NT Branch.

 

“Overall spending on government education has actually fallen from $701 million in the 2013 financial year to $697 million in this budget.

 

“The government is projected to spend less on public schools in the coming year than it did four years ago.

 

“Far from championing public education, the Giles Government has dramatically cut the education workforce, with more than 500 staff slashed since the government came to power in 2012.”

 

p2312-Neilia-Ginnane-1By contrast, Neilia Ginnane (pictured at left), of the Housing Industry Association, the voice of the residential building industry, welcomed stamp duty discounts and the home improvement scheme.

 

p2215-Robyn-Lambley-SMRobyn Lambley (pictured at right), Independent Member for Araluen, says what’s missing from the Budget is a new bridge across the river giving all weather access from the Golf Course estate to the CBD; a complete upgrading of the Todd Mall and CBD “which has been promised for over 10 years;” a rail overpass at the Larapinta / Stuart Highway intersection; and an upgrading of the old Flynn Drive Community Health Centre.

 

But she said: “I do applaud the government for allocating funds to the establishment of a Smart Grid trial to reduce energy consumption for households and businesses.”

 

 

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8 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. Fred the Philistine
    Posted May 30, 2016 at 6:53 pm

    @ Peter and Andrew Reynolds: I was quite impressed by what you two had to say. No-one can tell use how many dollars we are going to make out of this gas pipeline. I think we need to find gas first.

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  2. Peter
    Posted May 30, 2016 at 4:17 pm

    So the private company that is spending $800m on the pipeline with no cost to the NT has made a monumental error?
    I don’t think so.
    The pipeline size wasn’t reduced because of a lack of customers.
    It was reduced because of a lack of gas supply.
    And the lack of future gas is down to the fracking controls and fear of them.
    Yes, Queensland LNG is running at a loss but their costs are $6 a GJ.
    Central Petroleum production costs are $1.92 a GJ, at the other end of the pipeline NT gas will be less than half the cost of Queensland gas.
    We will put them out of business and NT gas will earn all the players, Central Petroleum, the gas brokers, the pipeline operator and us a great deal of money over the next 20 years.
    Beyond the new LNG superpower – the NT!

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  3. Andrew Reynolds
    Posted May 30, 2016 at 7:56 am

    What fairy land are you living in? The Northern Territory gas pipeline is a white elephant.
    Do you take Alice Springs News Online readers for naive idiots?
    Every part of the CLP’s fracking gas plan has proven to be bonkers.
    Read the report by the Institute for Energy Economics and Financial Analysis.
    “The economic case for the $800 million is questionable as the gas delivered through the line will be too expensive for east coast buyers.”
    “The lack of customers for the project other than the foundation customer Incitec Pivot has already seen the size of the pipeline reduced, and underscores that it is not needed.”
    “The line would be able to supply NT gas to the LNG export projects in Queensland but the glut in the global LNG sector means the Queensland gas export industry is running at a loss.”
    “The pipeline project has been conceived to compensate for a ‘poor decision’ by the NT government utility Power and Water Corporation to over-contract on its gas supplies, given gas from PWC will provide the foundation volumes to be transported through NEGI.”
    “The Northern Territory shale gas industry is in its infancy and the reality is that production of this onshore gas would come at significantly higher cost than even the east coast onshore gas export industry, which is already too expensive in a global context.”
    “The construction of NEGI is based on a set of fundamental misunderstandings, the most glaring the lack of customers for the line.”
    What is this new sales agreement you refer to Peter? Anyone can sell stuff. Tell us about the quality of the deal!
    Here are some more quotes for you:
    “The shining hope of increased royalties through the establishment of a shale gas industry appears to have blinded the Northern Territory government to economic reality.”
    The NEGI line is “the whitest of white elephants”.

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  4. Peter
    Posted May 28, 2016 at 7:50 am

    Don’t rule out the possibility that Giles will break through with his bold plans.
    Our CM’s much criticised gas play is paying off big time.
    A gas sales agreement has just been signed for 5.2PJs of pre-paid gas supplied over three years, with up to an additional 3.5PJ of additional gas sales possible over two subsequent years.
    Gas sales will reap the NT millions in the short term and perhaps $100m over the next five years.
    Meanwhile the Gas To Liquid (GLA) proposal offers the possibility of dirt cheap diesel from our own gas.
    No other state or territory is having a go at this, we are leading the way.
    Giles doesn’t get everything right but he is willing to take a risk, likes a bold gamble and may just succeed.

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  5. Roger W Miller, Senior from Darwin.
    Posted May 27, 2016 at 2:08 pm

    I find the whole presentation of fiscal responsibility by Tollner and Elferink to be astoundingly unbelievable, being presented by one who has already announced his departure quite some time ago, whilst the other has been publicly informed of his departure in no uncertain terms by the CLP executive.
    All this supported by a Chief Minister who is in dire danger of losing his seat.
    No doubt this trio have already calculated the total payout each will receive and have calculated future payments in other forms by just being there for four years. Hopefully they will all take Mr Giles’s own advice and “Piss of Down South”.

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  6. Fred the Philistine
    Posted May 26, 2016 at 7:13 pm

    @ Chandra: One agrees with you, but that $926m brings more money than tourism. The problem has been like this for many years, and will get worse.
    What I laugh about is Adam Gilles saying the Territory should become a state. It would be broke in the first day. I am amazed to see Adam Giles wanting too spend $500,000 on gas to reduce diesel fumes, when his treasurer, David Tollner, has said it won’t hurt if we increase carbon pollution in the budget. There is little about attracting industry.

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  7. Peter
    Posted May 26, 2016 at 9:22 am

    If Prof. Gerritsen can be accused of anything in his comments, it’s that he will be proven to have been very conservative in his estimations.
    Even a casual interrogation of the Budget Papers (and trust me, if you can’t find a suitable motherhood statement to tell your boss there’s plenty in there to borrow) highlights the issues Prof. Rolf has raised.
    Because he’s the one who wants to crow about it, let’s have a look at Elf’s comments:
    He claims the Budget commits an extra $10 million to Children and Families for out of home care.
    Wrong and wrong. Budget book number three, Agency Statements, page 155: total overall DCF funding has gone up by a little over $5m and out of home care funding has actually risen by a tick over $13m.
    But they are the budgeted figures. Have a look at the middle column – estimated spend in real terms for this financial year – and you see what the Professor is talking about.
    DCF is estimated to spend more this financial year than it has been allocated for next year, while the real out of home care allocation is a less than CPI increase for next year.
    That starts getting a bit squirelly when you look at the key performance indicators, which show notifications are expected to rise more than 15% on those budgeted for this year and by 1500 on the real terms for this year.
    To put that in perspective, DCF has 620 staff. In 2013-14 – Dastardly Dave’s first attempt at number crunching – the Office of Children and Families had 654 staff and received $2m more than is budgeted next year.
    A total of 9400 notifications were received in 2012-13 against the 21,000 budgeted for next year. Almost twice as many cases are expected to be finalised next year compared to 2012-13.
    All on fewer staff and less money. Amazing.
    Yes, it could be argued that the figures show Elf is a wonderful custodian of the portfolio.
    It could be equally argued that if that is the case, KPIs in other key agencies such as health and education would be the envy of the known universe.
    They are not.
    In something as complex as the operations of DCF, you will simply not find anything as simple as black and white figures on a page.
    To put it bluntly, however, DCF will spend more money next year than the Government is saying it will give them – and if they are expecting a bail-out from the Feds after the Chief Minister’s comments on radio recently about bunging it on, let’s see where the bottom line ends up this time next year.
    It will be ugly.
    @ Chandra: Perhaps you can sell your home to DCF for an out of care placement?

    View Comment
  8. Chandra
    Posted May 25, 2016 at 5:55 pm

    So this is the amount allocated to control people who cannot behave themselves, run a normal family or get a job and fit into society:
    $768m to prevent criminals from injuring others.
    $149m to cart injured criminals and their victims to hospital.
    $7m to try and stop men hitting women.
    $2m to accommodate more crims.
    Total: $926million.
    It is probably realistic too, but it means there is no place for hard working, normal people in this totally dysfunctional place … and no rewards for being a good citizen.
    At the first opportunity, I will attempt to sell my old home to any first home buyer to make me offer, regardless of which government hands out the money post election.

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