$2b cut: Gunner should have seen it coming

p2422 Rolf Gerritsen OKBy ERWIN CHLANDA

 

Chief Minister Michael Gunner mounted the podium at the Alice Springs “economic summit” at 2pm on Friday last week and started his speech with the shock-horror announcement that the Feds will be cutting their contribution to the NT by $2b over four years.

 

He’d just had a call, he told the small crowd, from NT Treasurer Nicole Manison, in Canberra, and she told him the bad news.

 

In fact I heard the story doing the rounds in the lobby of the Convention Centre that morning, a few hours before.

 

And Mr Gunner could have worked out the likelihood of the cut a lot earlier, while he was in Opposition for four years until August 12 last year, and any time since.

 

The government of the Territory, because of its tiny economy, can’t do much about the volume of the GST but it can certainly predict its distribution, says Northern Institute research professor Rolf Gerritsen (pictured above).

 

Relative population figures are the main factors in deciding which state gets how much.

 

“ABS population statistics 10 years ago and five years ago clearly defined the trends which were applied in its statutory process by the Grants Commission,” he says.

 

“The interstate outflow of people from the NT and population increases in other states, partly through immigration, led to a foreseeable result.”

 

In a double whammy, less GST has been collected because it is a “pro-cyclical tax”: in times of a struggling economy people spend less – thus less GST is collected – something else that was no secret.

 

Prof Gerritsen says whilst the NT can’t do much to increase the national GST it can spend what it gets more judicially: That could include reducing money spent on the public service and diverting funds to infrastructure, which would slow down the exodus of people involved in the construction industry.

 

“The government could also ban or discourage FIFO so that people working here also live here,” says Prof Gerritsen.

 

“We need a root and branch review of the NT Government.”

 

p2168-Nicole-ManisonTreasurer Nicole Manison (pictured) did not respond to a request for comment.

 

Meanwhile Mr Gunner said yesterday he met with Federal Minister for Resources and Northern Australia Senator Matt Canavan “to secure the Federal Government’s ongoing commitment to the Northern Territory”.

 

Mr Gunner says he was confident Minister Canavan would advocate that any projects approved under that the Northern Australia Infrastructure Facility (NAIF) would not result in a loss of GST revenue.

 

“I will deliver what I promised Territorians, and that is to restore trust by creating jobs and implementing our election commitments,” making it clear that the NT can look forward to a lot more debt: “I will not risk the Territory being crippled by cutting investment. That’s why I am imploring Canberra to reaffirm their commitment to Developing the North and Closing the Gap on Indigenous Disadvantage.

 

“I am pleased that Minister Canavan has confirmed that future GST dollars are not jeopardised through NAIF loans.

 

“I am also pleased that Minister Canavan has indicated he will work with me to host a Northern Development Ministers’ meeting in Darwin sometime mid-year.”

 

IMAGE: Professor Rolf Gerritsen in an award-winning portrait by Al Strangeways.

 

 

 

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3 Comments (starting with the most recent)

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  1. James T Smerk
    Posted April 4, 2017 at 4:21 pm

    Cutting back the public service will make people leave, what kind of job is government worker going to get if they leave?
    Assuming they are office people they won’t be getting a trade with me or going into retail, they will pick up sticks and move elsewhere for office style employment.
    It’s a simple answer to the old money situation but no one wants to hear it … stop providing so many services to people that want to live away from society.
    Why spend $5m building a health clinic in a community of 150 people?
    I wish we could but we don’t have the money to be making hundreds of little communities into little towns, especially when they don’t have any financial income benefit.
    I think the Federal should be funding more in regards to communities anyway, it’s an Australia issue not an NT issue.

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  2. Evelyne Roullet
    Posted April 1, 2017 at 3:11 pm

    @ Tourism is the easy growth answer, May be, but:
    • There is a lot of work to do to attract the tourists who do not speak English.
    • By sealing all the bush roads you are cutting out the tourists who travel the world to experiences rough tracks by 4×4.
    • The Mall is dying but the tourists can buy what they need, be it clothing, hats, music, souvenirs, books, post cards, even jewellery in tourist attractions like Flying Doctor, Desert Park etc … why should they walk into the Mall?
    • The majority of travelers want more that what they can learn from Google or travel guide books. They need real local knowledge: Aborigine Culture, history, botany, geology, wildlife … anecdotes which put spices on the experience.

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  3. Tourism is the easy growth answer
    Posted April 1, 2017 at 1:48 pm

    Tourism growth via budget airline is the easy answer. Also rural start-up projects – work to be done by jail inmates at low cost.

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