‘The Territory is broke. We’re living way beyond our means.’

2606 Gary Higgins OKBy ERWIN CHLANDA

 

The Gunner Government has “failed miserably” on economic promises “given that there are 7882 fewer Territorians employed, businesses close down week after week, jobs have been lost and the operational cost of government has increased by $478m,” according to Opposition Leader Gary Higgins in his Budget Reply this morning.

 

“We have 903 additional public sector employees to the end of December 2018, the construction sector is halved, residential property prices dropped more than 25% and bankruptcies are up 67% in the last year alone.”

 

The following is an excerpt of Mr Higgins’s speech made available by his office as written text.

 

In Budget 2018 savings were estimated to be $234m over the forward estimates with the spurious claim that this would bring total savings to $828m.

 

The actual outcome according to the Treasurer’s Annual Financial Report for 2017/18 was an increase in operating expenses of $450m from 2016/17 to 2017/18.

 

Revenue changes included the world’s worst hybrid mining tax, a vacant land and derelict building tax, increase in motor vehicle licensing and registration; and the Repairs and Maintenance program, a historic stimulant for the construction sector, particularly tradies, was reduced.

 

The Interim Budget Repair 2018 report identified:

 

• That the current financial position is ‘unsustainable’.

 

• That budget measures have been insufficient to stem expenditure growth.

 

• A prediction of NT Debt of $35.7bn in 2029/30 unless the Territory stemmed the current level and rate of expenditure.

 

• A prediction of NT Debt to Revenue ratio of 320 % by 2029/30, noting that the CLP got it down to 27%.

 

• A prediction that interest on debt would be $2bn by 29/30.

 

• Interest forecast for 2021/22 of $506m with a quadrupled increase to $2bn per year. That’s $5.5 million every day in interest.

 

The Treasurer claims that GST funds have decreased by $75m. The truth – contained in the Federal Government’s Budget Papers – shows GST increasing by $42m to reach $2.78bn for the Territory.

 

There has been a net reduction of $102m or about $25m reduction per year not $500m per year claimed by Labor.

 

The Coalition Government provided a $260m top up payment in 2017/18 to help the NT Government deliver essential services.

 

The Coalition Government will provide a further $252m top up payment in 2019/20 to help the Northern Territory Government deliver essential services.

 

Either the Treasurer doesn’t know how to read the Budget Papers or is deliberately misleading Territorians.

 

Another fact is the deficit handed to Labor was $78m as recorded in the Treasurer’s Annual Financial Statement.

 

The CLP also had a plan to bring the budget back into surplus which can be seen in the Forward Estimates of Budget 2016.

 

Labor knew the construction phase of Inpex was winding down and our GST receipts would be down. Where was the Gunner Labor plan to deliver what they have failed to do – economic diversification and to tackle the down turn?

 

Our plan included an open for business attitude, onshore gas development, diversification of the pastoral estate, enhancing the capability and capacity of NT business to supply to major projects and industry, minimising the regulatory and red tape burden, growing and supporting our tourism industry, expanding our trade with countries to our north, developing further links to tap into the growing international student market and major projects including Project Sea Dragon, the Westin Hotel, a shiplift and we supported and continue to see mining as a major driver of our economy.

 

In the final budget repair report the government failed yet again to make the tough decisions required to rein in spending and stop the waste. They are passing the buck until after the 2020 election and beyond.

 

This government clearly lacks priorities when working through its budget and puts wasteful advertising spending above retaining teachers in the town. What is the cost to the community when those teachers leave?

 

Fast forward to today and the Langoulant Review [into budget repair] says  Government stimulus is not a sustainable substitute for private investment but Labor’s latest moves will further stymie business and industry.

 

For example, we vehemently oppose the secret plan to hit Territorians with an $80m land tax as referenced in the Langoulant report.

 

We welcome the commitment to benchmark against best practice the effects of regulation. This is what we have called for, for some time.

 

We also welcome the recommendation to establish a parliamentary committee to scrutinise agencies’ actual financial performance against the original budget, given the size of the task to reduce expenditure is a mammoth $11bn.

 

We believe this would be a positive step and one which is sorely needed.

 

The big idea in the Langoulant Review is to hit hard pressed Territorians with $100m of new taxes, and the insult to injury is that the Government will then go cap in hand to Canberra again to beg for a bail out.

 

This Labor Government has obstructed diversification of the pastoral estate.

 

How can pastoralists trust Labor when they pulled the pin at the very last minute on non-pastoral use sub leases being recorded on the title?

 

This dead of night backflip has left the pastoralist industry in “a state of paralysis”.

 

And Warren Pearce CEO of Association for Mining and Exploration Companies (AMEC) called on the Treasurer to scrap the world first, world worst hybrid mining tax that is costing the Territory $6bn of investment and 4000 jobs.

 

Let me tell you what this means in practical terms and the reaction we have received from some grant recipients who face cuts of one to three percent of their funding:–

 

• Local Government is exceedingly concerned about what the cuts mean for operational subsidies for remote and regional councils. These are the same councils you brag about including in your so-called Local Decision Making. Will they be able to continue to operate with a three percent cut to their funding?

 

• One NGO which provides domestic violence services has told us: “Having our funding cut by one percent to meet the efficiency dividend will impact on our operations and could mean reducing staffed office hours or cutting programs.”

 

• Another industry group said: “I can see no evidence that a baseline analysis was adopted. And while I accept that in austerity all rev enue streams should come under scrutiny, it’s amazing that such a large share of the burden should be lumped on mostly NGOs and community groups.”

 

At the end of this financial year, the expected debt is $ 6.2bn. This leaves our Net Debt to Revenue Ratio at 93%. When we handed over the books the ratio was 27%.

 

This is a key measure of our Territory’s ability to service our debt. I warned previously that we were on the road to insolvency. This is even worse than I feared.

 

A million dollars a day to pay the interest on the debt.

 

Policy changes, or the government’s social reform experiments have worsened the Territory’s fiscal position by almost $600m over 12 months.

 

Our Territory is a house built on shaky foundations.

 

More than 70% of NT Government funding comes from Canberra.

 

In the rest of Australia more than 80% of jobs are in the private sector, in the NT it’s not even 50%.

 

We have enough onshore gas to supply the entire energy needs of Australia for 500 years, and we should be building hi-tech petrochemical or fertiliser manufacturing industries here.

 

We should be incentivising companies to use our extensive gas reserves for manufacturing purposes with inherent wealth and job creation.

 

The Opposition believe that at this time of economic and fiscal crisis with the government spending $4m every day more than it has, then it should be government’s priority to make it easier not harder to invest in the Territory.

 

The Territory is broke. We are living way beyond our means.

 

 

 

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  1. Ian Rennie
    Posted May 10, 2019 at 9:46 pm

    Crikey! And we have Short on Brains claiming Labor will do so well running the country?

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