Town gets a say in its economic future as $2b cut hits home

p2421 summitBy ERWIN CHLANDA

 

A $2b cut over four years in the Territory’s Federal receipts from the GST, announced by Chief Minister Michael Gunner this afternoon during the economic summit he convened in Alice Springs, added a sense of urgency to the meeting attended by 90.

 

They had split up into five groups earlier in the day to come up with a roadmap for the future, without producing much that is new, but acknowledging that the Gunner Government is prepared to listen.

 

However, while the group dealing with renewable energy made it clear that all that is certain in that field is its uncertainty, Mr Gunner said he wanted his steering group to tell him in two months’ time how his 50% renewables target can be achieved by 2030.

 

p2421 Neil McLeodNeil McLeod (at left), of the Chamber of Commerce, said it is encouraging that the government is seeking information from the local people, and “there has been a lot of consultation in the background, as well as an online method of putting your views forward”.

 

Mr Gunner told media “we need a vibrant Todd Street Mall” – a prominent issue in the 2012 town council election.

 

“We are having lively conversations at the moment … about practical, achievable things to make the mall a better place to visit,” Mr Gunner said today, adding that a public consultation process is needed.

 

The key to the growth of Alice Springs is investment and jobs, he also said.

 

Jamie de Brenni, Deputy Mayor and one of the town’s most prominent CLP supporters, has been appointed as the chairman of the newly formed Regional Economic Development Council’s southern branch.

 

“It’s a start,” he said. “At least we have a platform to work from and continue and elaborate on.”

 

What will he be aiming for?

 

“I’m pushing for anything Alice Springs, you know that,” he said to the Alice Springs News Online. “And it’s up to the community. Every person has a say.”

 

Jimmy Cocking, CEO of the Arid Lands Environment Centre, says the government is “bringing us all together, working in partnership with the business sector.

 

“The town is saying to the government that it wants to be involved … rather than pointing fingers and blaming previous governments. People feel really optimistic about it.”

 

Tourism and creative efforts need to be linked, said Scott Lovett, summing up the discussions of one of the five “breakout sessions”.

 

He said events are major draw cards and tourism needs to be expanded into the shoulder seasons.

 

Business needs to build support around government services.

 

The SA concept of industry advocates is worth looking at.

 

Mr Lovett said we are an “active destination” –  mountain biking and the triathlon are examples.

 

We need to leverage the facilities and organisers of sporting clubs, with the AFL and cricket as targets.

 

Other drivers are niche products such as food, science and education, with the Alcoota fossil beds as an example.

 

Consideration should be given to promoting the development of the Stuart Highway “spine” requiring mobil phone coverage and better rest stops.

 

David Batic says our main goals for “increased visitation, stay and spend” can be pursued using our natural landscape as the main drawcard, followed by cultural experience.

 

Further private sector investment would be looking for a stable market and confidence. There needs to be a destination management plan.

 

Greater participation of Indigenous people in the workforce would enhance the cultural experience.

 

Are we ready for the Chinese market? The Indian? These are some of the questions.

 

Consultant Martin Glass said the mineral and energy discussion group wants red tape to be reduced, and the process examined how social licence can be obtained, putting an end to several regulators doing much the same job.

 

That’s why some companies choose to go overseas where approval can be obtained “in half the time, at half the price and twice as much money can be made,” he said.

 

The resource industry needs to enhance the wealth of the NT and all Territorians, irrespective of their race. Royalties should flow back into the community.

 

Mr Glass said putting limits on FIFO would be too hard to manage although a policy should be developed.

 

Existing skills can be honed to suit the mining industry. Although this process takes time, the competent staff needs to be available the moment a project starts, with down-time costing “a million dollars a day”.

 

FIFO would need to make up for any skill deficit.

 

It’s better to have a project with FIFO than not to have a project, said Mr Glass. In any case, mining companies locally buy fuel and other needs.

 

Suzie Hillock from Westpac, Geoff Sloan from National Seniors and Steve Margetic from Sitzler Brothers spoke about social issues, ranging over “livability,” alcohol abuse, the digital economy, internet education and Aboriginal employment by large companies.

 

Mr Sloan said with a growing number of aged people in the community, “meeting other people’s needs” can turn into a viable business.

 

The dry climate in The Centre can also be an asset.

 

Mr Margetic said the digital economy can link together the CDU, Batchelor College and the CRC with other teaching or research institutions elsewhere in Australia and the world over.

 

Lyndon Frearson, reporting on the renewable energy discussion group, advocated an overarching policy dealing with how we can produce electricity.

 

Results from many years of development and research have not been documented cohesively and we are repeating the mistakes of the past.

 

p2329-ALEC-solar-towerAsked how Mr Gunner’s 50% policy can be achieved, Mr Frearson pointed out the enormous difficulties in forecasting developments.

 

He said solar costs have dropped an astonishing 95% in 10 years.

 

The cost of a large solar power station in Queensland dropped 15% in six months.

 

“Existing business models are changing,” he said. “All we know is things are changing.”

 

Luke Bowen, former director of the Cattlemen’s Association and now the general manager of the Northern Australia Development Office, said inadequate data are a problem in the agribusiness as well, and so are red tape and onerous regulations.

 

This makes it had to identify the need for products although a system of pre-approvals could help.

 

Sections of the industry complement each-other, such as live export and growers of hay feed to stock on the ships.

 

The future need for staff is another open question: The advent of robots and mechanisation may make unreliable the predictions for the need of human employment pegged to the volume of production.

 

Co-ordination is increasingly required across state and national borders, for example, as production and transport stretches all the way from South Australia to the NT to China.

 

UPDATE 2:30pm March 25.

 

Opposition Leader Gary Higgins says last year he had secured a commitment from the Federal Treasurer not to amend the GST relativities.

 

“The $2b GST cut is a huge blow to our economy,” he says.

 

“GST revenues underpin the Territory Budget and a cut of this size has enormous implications.”

 

 

 

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10 Comments (starting with the most recent)

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  1. David
    Posted September 27, 2017 at 11:37 pm

    These guys aren’t serious are they? They scrap the open speed limit which was a huge draw card. This in turn hurt so many businesses and people. In fact the open limit helped business and people. Now there’s a crisis? What a monumental stuff up electing these wreckers.

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  2. Another Observer
    Posted March 30, 2017 at 8:57 am

    All of these comments here about “our” loss, but what about the loss of those that actually pay the GST? $0.30 for every $1 collected in WA, whereas we receive $5.28 for every $1 collected.
    The only answer is MORE private industry, but I fear that we are pushing it up hill, when we see that the NTG is still using government owned / operated facilities to compete with private industry (sentenced to a job program), and we have not for profits competing against industry for work, and activism dressed up as business.

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  3. Old Maate
    Posted March 29, 2017 at 7:45 pm

    Daniel, the amount is calculated on the cost of delivering services over the state / territory.
    Hence the NT is a lot bigger and costs are higher, mixed in with numerous little communities all over the territory.
    WA’s amount takes into account their mining boom dollars they received. It’s all fair and reasonable.
    The thing that affects everything is the mining boom in WA has finished up so there will be more sharing of the GST coming in the years to come.
    This is only the start.
    The only way for the NT to get more income would be to create a revenue stream via mining … which they are slowly doing.

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  4. Daniel Davis
    Posted March 29, 2017 at 1:08 pm

    How much truth is in this $2b cut? Rolf Gerritsen on ABC radio this morning said: “The $2b black hole is conjured up with the willing acquiescence of the NT News to create a sense of crisis.”
    The cynic in me says that this “crisis” could be a convenient way of deflecting criticism onto the Feds for the NT Government’s backflips on many of its unfunded election commitments.
    Either way, any claim that this wasn’t expected is either a lie or shows incredible incompetence. WA’s massive $3b per annum decrease in mining royalties, strong population growth in eastern states and an increasing fiscal capacity of the NT Government always meant we would be facing an almost impossible task to retain all of our GST allocation.
    We will still receive $11,284 per head of population in GST allocations, more than double Tasmania’s $4,601, and twelve and a half times WA’s $878. Time for the NTG to rein in spending.

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  5. Hal Duell
    Posted March 28, 2017 at 2:16 am

    So the NT’s cut from the GST is set to drop by $2b over the next four years.
    I’m assuming every other state will experience a similar drop.
    And isn’t it the case that CHOGM has to agree to any increase in the GST?
    What odds an increase in the GST will soon be announced?

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  6. Posted March 27, 2017 at 8:56 am

    Consider these scenarios: first looking at Alice Springs – lots of empty shops, a struggling tourism industry (nothwithstanding hopeful indications to the contrary), rampant crime and chronic youth justice problems, the loss of an urban electorate in favour of a new one in the Top End, and the town’s tallest building under construction.
    At the Territory level – Darwin’s scene much the same as Alice Springs except it’s even worse in several respects: There’s a large capital works project under construction in Darwin, a new pipeline linked to the Amadeus to Darwin gas pipeline is on the verge of construction, Shane Stone is the president of the CLP, and the Chief Minister (the Member for Fannie Bay) has led his party to a remarkable election victory.
    On the national scene: A slowing economy, a rising budget deficit, record levels of personal indebtedness, unemployment trending upwards, a crisis in housing affordability, energy distribution posing serious problems for the manufacturing industry, an unstable Federal Government returned to office with the smallest majority since 1961.
    Sounds very familiar but I’m actually referring to the situation that existed in 1990.
    There are a few twists compared to the current scene, for example the Federal Government was Labor under PM Bob Hawke (we’ve just passed the 27th anniversary of Labor’s wafer-thin election victory) and the NT Government was CLP led by CM Marshall Perron.
    The biggest twist is that in the lead-up to the NT election campaign of October 1990 the CLP government had been wracked with controversy for several years and by early 1990 was set for electoral defeat for the first time.
    Instead, in an astonishing turnaround, the CLP was comfortably returned to office with an increased majority (a situation that has never been properly analysed and also had profound consequences for national politics – but that’s another story).
    However, what’s not different to now was the budgetary situation confronting the returned Perron Government with severe cutbacks of Federal funding for the NT.
    Shortly after the NT elections of October 1990 the NT Government responded to the worsening economic situation by establishing an Expenditure Review Committee, headed by Treasurer Barry Coulter. The ERC’s decisions were released in April 1991, announcing widespread cutbacks in government expenditure and the slashing of 1,220 positions in the NT public service.
    This coincided with the onset of a national economic recession, which as contemporary history now shows was the last occasion this has occurred in Australia.
    It was also in April 1991 that Alice Springs’s tallest building, the four-storey Territory Motor Inn, was officially opened to great fanfare for the tourism industry.
    Simultaneously, Magellan Petroleum announced that natural gas reserves in Central Australia “were more than adequate to supply another market on top of long-term requirements in the NT.
    “Negotiations were continuing to pipe the Central Australian gas through the national grid to Adelaide and Sydney and to supply gas to MIM operations in Mount Isa.
    “Plans are being completed to pipe gas from Katherine to Nabalco operations in Nhulunbuy”.
    A few months later the owners of the Territory Motor Inn went into receivership and of course the gas pipeline developments never proceeded.
    So what of the present? Well, NT Treasurer Nicole Manison will be announcing her first NT Budget in May, which undoubtedly will be heavily revised in light of the $2b cuts in GST revenue announced for the next four years.
    Coincidentally (perhaps) the new NT Supreme Court building in Parsons Street, the tallest building in Alice Springs, is scheduled to officially open about the same time … and as for the new pipeline from Tennant Creek to Mt Isa – well, we’ll just have to wait and see.
    Given the uncanny parallels between 1990-91 and current conditions, there should be no surprise if Australia soon enters into its next major economic recession for the first time in over a quarter of a century.
    Incidentally, one of the biggest casualties of the “recession we had to have” in 1991 was PM Bob Hawke, who was replaced by former Treasurer Paul Keating late that year. Will history repeat with the current Federal Government?
    Forewarned is forearmed.

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  7. Physics Bill
    Posted March 27, 2017 at 7:47 am

    This cut amounts to $8,140 for every inhabitant of the Territory. I used the ABS population figure for Sep 2016. “Enormous implications” is an understatement!
    Last year’s budget was $5.7b, so the choices are, eliminate whole programs and departments, cut everything by about 9%, or indebt the kids and grandkids.

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  8. Tourism growth is vital
    Posted March 25, 2017 at 5:59 pm

    Tourism growth via Budget Flights – a massive instant boost to the Alice Springs economy.

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  9. Old Maate
    Posted March 25, 2017 at 2:16 pm

    The public service keep the Government wheels turning … cutting positions opens it up to mistakes / corruption and hurts the local economies.
    In saying that I’m sure there are some positions that should be cut i.e. the ones “Appalled” talks about, bigwigs.

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  10. Appalled
    Posted March 25, 2017 at 11:57 am

    Meanwhile the NTG is advertising for not one but two deputy CEOs for the Chief Ministers Department at Executive Contract Level 5.
    Applications close March 30 if you’re keen, but it’s possible that the preferred candidates have already been identified.

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