Budget challenges “a perfect storm”


2534 Budget speech OKBy ERWIN CHLANDA

 

Treasurer Nicole Manison (pictured) wasn’t kidding when she talked about a “perfect storm of economic and fiscal challenges” in her 2018/19 Budget speech this morning.

 

She announced a net operating deficit (total revenue from transactions less total expenses from transactions) of $603m, a $1.2b non financial public sector deficit, and net debt at $4.5b.

 

The total general government expenditure will be $6.2b. The biggest spender is the Department of Health with just over $1.49b; education comes in second with $1.18b; that’s 24% and 19% of the Budget, respectively.

 

Total borrowings will be $6.55b and the interest payments will be $324m.

 

Ms Manison said GST revenue, which accounts for almost half of the budget, compared to 25% in other states, lost $2b over four years and a further $1.4b in forward estimates. This is only partly offset by the recent $260m “top up” from Canberra.

 

“We are still a long way down from where the books were in the 2016 pre-election fiscal outlook,” she said.

 

The gross state product and the state final demand are expected to remain weak over the next 18 months to two years and the NT population is expected to decline by 0.7% in 2018-19.

 

The boom of the Ichthys LNG project is over.

 

2534 BudgetMs Manison said the petroleum industry will enjoy royalty deductions for providing accommodation and sporting fields and child care centres, while the government will spend $5.3m over three years implementing the recommendations of the fracking inquiry.

 

At the same time it will bring in a “hybrid royalty scheme” which has already raised the ire of the industry.

 

There will be 75 police auxiliary liquor inspectors, empowered to stop sales, and 12 police officers to target secondary supply.

 

The government will spend $230m over the next five years on the recommendations of the Royal Commission into the protection and Detention of Children.

 

On the savings side will be reductions in public service wages policy (not impacting agreements already in place), reduced budgets for government agencies, improved efficiencies, a $3m greater revenue from Territory Generation, and value-for-money driven reviews of grants.

 

Treasurer Manison said the government will not “raise power prices by 30%, slash school funding, sack teachers and important frontline staff, and sell off valuable assets” as did the CLP Government.

 

Some major expenditures in The Centre are:–

 

• City Deals project for the development of revitalising infrastructure in the Alice Springs CBD, $19.8m.

 

• Improve Outback Way roads – upgrade and seal various sections of the Plenty Highway and Tjukaruru Road, $7m.

 

• Northern Australia Roads Program – continue to extend the seal of the Plenty Highway (which is part of the Outback Way), $23.8m.

 

• Northern Australia Roads Program – continue to extend the seal on Tjukaruru Road, $8.4m.

 

All these are revotes from previous budgets.

 

Continue sealing the Tanami Road towards Yuendumu $2.5m (new).

 

Department of Justice:

• Alice Springs Correctional Centre fence upgrade, $4.2m.

• Upgrade the youth and domestic violence court in Alice Springs, $7m.

Both are revotes.

 

Health

Hospital fire protection, air-conditioning and remediation $3.6m (revote).

 

Tourism

• Central Australia – new five-day walking track, $5.6m.

• Hermannsburg historical precinct upgrades, $3m.

• West MacDonnell National Park – new adventure cycling track, $11.9m.

 

Education

• Acacia Hill School final stage of master plan to construct administration block and new classrooms, $6.3m.

• Braitling Primary School – stage 2 of the master plan to complete the new early childhood precinct with re‑purposed areas for a community centre connected to outdoor play areas and a new café to replace the old canteen, $2.3m.

 

Total Capital Works Program: Revote $91.6m; new $23.8m. (See complete list at the bottom of this report.)

 

Town Council CEO Rex Mooney says he is pleased the land tax proposal was dropped. It was something the council had objected to.

 

He also welcomed the planned expenditure on roads, including the Outback Way: “75% of the Territory’s roads are unsealed.”

 

However, some amounts are re-votes and it remains to be seen whether the money will be spent in 2018-19.

 

Steve Schwer, from Tourism Central Australia, said is very pleased with the “turbocharging tourism” investments.

 

He also says the payroll incentives “will be good for keeping people here”.

 

UPDATE 12.40pm

 

The Association of Mining and Exploration Companies says the Budget “is a blow to the hopes of mining and mineral exploration”.

 

CEO Warren Pearce says it reduces certainty and increases cost substantially.

 

“The Resourcing the Territory funding announced today is needed, but does not offset the royalty pain.

 

“The Budget is a disappointing, missed opportunity to attract investment, grow the economy, and create new jobs.

 

“The Government is putting at risk $6b of new mining project investment and 4,000 new jobs in the Territory.”

 

Mr Pearce says contrary to the Government’s claims the budget shows “the mining industry is paying it s fair share. It has provided $ 271.8m, over 34% of the Territory’s taxes and royalties, making it the largest contributor by over $30m.

 

“Changes to remove the accounting deduction for Fly – In Fly – Out workers will simply increase costs.

 

“This massive royalty increase will put an end to the economic recovery before it begins.”

 

 

INFRASTRUCTURE WORKS:

 

Department of Infrastructure, Planning and Logistics

Revote

  • City Deals project for the development of revitalising infrastructure in the Alice Springs CBD ($19.8 million).
  • Continue to upgrade and seal Maryvale Road ($1.4 million).
  • Headworks and subdivision works to support the release of residential land in Larapinta ($0.738 million).
  • Improve Outback Way roads – upgrade and seal various sections of the Plenty Highway and Tjukaruru Road ($7.01 million).
  • Improve safety at the intersection of the Stuart Highway and Tanami Road through protected turning lanes and improved line marking ($0.4 million).
  • Northern Australia Roads Program – continue to extend the seal of the Plenty Highway ($23.8 million).
  • Northern Australia Roads Program – continue to extend the seal on Tjukaruru Road ($8.42 million).

New

  • Continue sealing the Tanami Road towards Yuendumu ($2.5 million).

 

Department of the AttorneyGeneral and Justice

Revote

  • Alice Springs Correctional Centre fence upgrade ($4.2 million).
  • Upgrade the youth and domestic violence court in Alice Springs ($7 million).

 

Central Australia Health Service

Revote

Alice Springs Hospital

  • Fire protection, air-conditioning and remediation ($3.633 million).
  • Pathology and public services building asbestos removal and related relocation works ($1.585 million).
  • Refurbish old emergency department to create oncology and cardiology clinic space ($0.482 million).
  • Storm rectification works to selected buildings ($2.246 million).

New

  • Asbestos remediation works on the Alice Springs Hospital campus and Flynn Drive Community Health Centre ($0.85 million).

 

Department of Housing and Community Development

Revote

  • Room to Breathe – Santa Teresa ($1 million).

 

Department of Primary Industry and Resources

Revote

  • Replace the chiller, boiler and ducting system in the Arid Zone Research Institute main administration building ($0.47 million).

 

Department of Tourism and Culture

Revote

  • New exhibit for visitors and students of the megafauna from the Alcoota fossil collection in Alice Springs ($0.3 million).
  • Upgrade visitor facilities in West MacDonnell National Park ($0.265 million).

New

  • Central Australia – new five-day walking track ($5.6 million).
  • Hermannsburg historical precinct upgrades ($3 million).
  • West MacDonnell National Park – new adventure cycling track ($11.9 million).

 

Department of Education

Revote

  • Acacia Hill School final stage of master plan to construct administration block and new classrooms ($6.3 million).
  • Braitling Primary School – stage 2 of the master plan to complete the new early childhood precinct with re‑purposed areas for a community centre connected to outdoor play areas and a new café to replace the old canteen ($2.315 million).

 

Territory Families

Revote

  • Alice Springs Youth Detention Centre upgrades to electrical, fire and mechanical services ($0.25 million).

 

 

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