1 December 2022
The Northern Territory Treasurer tabled the Mid-Year Report in Parliament today.
The Mid-Year Report provides an update on the current fiscal and economic outlook for the Territory since the May Budget. Since the May Budget there have been seven increases to the cash rate by the Reserve Bank of Australia as well as persistent inflation and issues with supply chains worldwide. The 2022-23 Mid-Year Report incorporates the effects of these downward pressures with revisions to the Territory's budgetary and economic forecasts.
The updated fiscal balance deficit is expected to peak in 2022-23 at $1 billion, before declining to a deficit of $186 million by 2025-26. This represents an increase in each year by an average $170 million when compared to the May Budget. The general government operating deficit in 2022-23 is projected to be $299 million before returning to surplus in 2024-25, largely consistent with the May Budget.
Key factors influencing the updated fiscal outcomes include:
additional capital works cash required for the Darwin ship lift facility, as well as changes to the Northern Territory Public Sector Wages Policy, replacing the non-cumulative lump sum payments with an annual 2% compounding pay increaseincreased interest expenses reflecting the effects of Reserve Bank of Australia interest rate increases on the cost of borrowingsthe revised timing of Commonwealth and Territory expenditure from the prior year, now expected to be delivered in 2022-23 and future yearspartially offset by a GST revenue balancing adjustment as a result of higher national GST pool collections last financial year.
The Territory's gross state product (GSP), the headline measure of economic growth, increased by 4.7% in 2021-22, above the 4.4% growth estimated at Budget. The strong GSP result was driven by increased private investment, up 26% on the previous year. Attracting and winning private investment is key to achieving a $40 billion economy by 2030.
Quotes attributed to Treasurer, Eva Lawler:
"Two key factors have impacted the figures in this report: the change to the NT Public Sector wages policy and the Darwin Ship Lift project.
"The change to the NT Public Sector wages policy is expected to cost $245 million over four years. This money will help public servants through cost of living pressures, and it is money that will stay in the Territory.
"The ship lift budget increased by $112 million to a total of $515 million to allow the project to proceed with the full scope of works. This is a major investment in a project that will generate millions per year into the NT economy for many years to come."
Northern Territory Government
