Hope fades as NT debt burden rises
Territorians have lost whatever faith they had in this government to be able to dig them out of the fiscal grave which has us borrowing just to pay public service wages
THE chance of Treasurer Nicole Manison pulling an economic miracle out of her hat on April 16 is looking increasingly remote.
That’s the date she will deliver her long, long-awaited response to John Langoulant’s excoriating review of the Territory’s financial situation.
By the time she does so — after Chief Minister Michael Gunner returns from the second worst timed holiday of the year — Territorians will have been on tenterhooks for four months.
The Labor Government has botched the response to its budget crisis from the start.
Privately, advisers have admitted the strategy of dropping the full, terrifying interim report in all its gory details and leaving the public to stew on it for a third of a year wasn’t a fantastic economic strategy.
Anecdotally, the rate of business closures has sped up since the interim review was released. Some made the decision to shut shop because they couldn’t see a way out through the doom and gloom.
We won’t know the full extent of the damage until the business department releases its business snapshot showing the rate of entries and exits. But the casualty list is long and ever growing, and includes long time Territory business survivors.
At the risk of stoking further freak outs, here’s a refresher of some of the headline figures from Langoulant’s interim report. It showed the Territory’s net debt would hit $35 billion by 2029, with an annual interest of $2 billion if the government maintained its current rate of expenditure growth.
And the situation is so bad right now that the government is borrowing money to pay the salaries of public servants and to service the interest on its existing debts.
The news was alarming and shook business confidence badly. But what was truly irresponsible was leaving the Territory on the hook for so long for a solution.
So far, we’re yet to hear what the Labor Government plans to do to dig us out of its fiscal grave, other than a vague notion to halve expenditure growth. All will be revealed in Manison and Gunner’s response, we’re told.
But a clear and achievable path out of our financial disaster towards sustainability is looking increasingly unlikely.
Manison talked expectations down further this week after her federal counterpart Josh Frydenberg released his well received budget.
According to the Territory’s creative interpretation of the figures, our GST take will be “cut” by $75 million next year (even though it’s actually a $42 million increase on GST payments made this financial year).
And we’ve already been told changes to accounting requirements will mean an increase to our debt of $1 billion over the next decade, though we’re told this won’t have an actual impact on our economic position.
One of the few budget repair measures to have been announced by the Labor Government is a public service hiring freeze. The aim is to keep staffing capped at 2018 levels, meaning 300 jobs will be shed through attrition and voluntary redundancy.
A similar cap announced last year was terribly botched, with the public service actually increasing in size. But this time they were for realzies, we were assured.
That lasted all of a fortnight, until the government advertised for three highly paid executive positions for its “masterbrand and population” unit within the Department of Chief Minister.
It’s hard to believe the public service can’t produce three from its 21,000-odd members who could be reassigned to do the job.
The Cabinet-approved positions include an opening for yet another communications adviser for this government’s expanding flock of highly paid spin doctors.
The three jobs come in at a combined annual salary of $444,000 — not exactly the bill of a government showing a hell of a lot of fiscal restraint.
No wonder Territorians have lost whatever faith they had in this government to get the economy back on track.
A clear and achievable path out of our financial disaster looks unlikely