Saying go for it to the “gas boys” is Chief Minster Michael Gunner’s only choice for dealing with the massive Budget deficit.
This is the view of Alice Springs based Professor Rolf Gerritsen (pictured), from the Northern Institute.
He says the NT’s dependence on its share in the national GST does not provide certainty: “Until growth resumes and spending goes up we will face problems,” he says.
The $55m increase in the Budget in locally raised taxes is a “drop in the ocean” but revenue from gas, obtained largely by fracking, is the only significant future source of government income available.
“I think that, even if they said let the gas industry rip now, it would still take two years to feed into government revenue.
“The real case for the gas industry is that it would immediately increase employment and so inter-state immigration, which would slow the erosion of our share of General Purpose (GST disbursements) funding.
“It is an unpalatable option for a Labor Government, with the Greens on their left, who are trying to shut down the economy, but there is not much else to create wealth and get the Budget back into balance.”
Prof Gerritsen says the major tax source available to the NT Government is the payroll tax but raising it does not seem to be an option in the current economic climate.
Mr Gunner will have to stop “doubling the tradies’ subsidies. He will need to make the hard choices, do something serious”.