Add Category
The Northern Territory was already facing the highest debt levels in Australia per capita.
Now, NT Treasury officials have sounded a warning that the territory's economic pain may continue to worsen, as it tracks towards its debt ceiling of $15 billion in the coming years.
With a current net debt of more than $11 billion, the NT's under-treasurer Tim McManus this week said the NT was not projected to hit a budget surplus until the 2030-31 financial year.
Building approvals are at an all-time low, he said, population growth remains stagnant and labour shortages protracted, with about 5,100 unfilled positions throughout the territory.
The local residential construction industry has struggled in recent years. (ABC News: Jack Hislop )
Mr McManus said resourcing the territory's strained prison, police and health departments at their current rates threatened to push the NT towards its debt ceiling.
"There are significant areas of the territory's spending that are currently budgeted to reduce or cease over the forward estimates period," Mr McManus said.
"These include funding to support cost pressures in hospitals, courts and corrections.
"Where these service levels or programs are continued at current levels that are not beyond what's factored into the future budget, and not managed through savings or re-prioritisation of other existing funding, the territory's outlooks will further deteriorate."
Mr McManus pointed to some economic "green shoots" for the future, including a major rare earths project in Central Australia, but such projects are still unconfirmed.
The rare earths project north of Alice Springs is being backed by the federal government with $840 million in loans and grants. (Supplied: Arafura Resources Ltd)
'Tightening the belt' from CLP
The new Country Liberal Party (CLP) government has promised to try and turn around the NT's grim economic prospects through "responsible fiscal spending" and "responsible investment".
Treasurer Bill Yan was asked at a press conference how it would be possible to find savings, especially when his government is already planning to spend hundreds of millions building new prisons and has introduced a suite of new anti-crime measures set to put further demand on NT Police.
"[It's] about tightening the belt," Mr Yan said.
"We need to be very, very clear on how we're spending the money, the money that's coming from the federal government and our own-source revenue, to make sure we can fund those all-important agencies."
Bill Yan says departments will stick to their budgets under the new CLP government. (ABC News: Hamish Harty)
Mr Yan also put the onus on departmental heads to ensure their annual budgets were kept in check – a mantra previously stated by his NT Labor government predecessors.
He also said the CLP would stop paying for "pet projects" such as a number funded by NT Labor, including a Darwin Turf Club grandstand, shade structure and new State Square art gallery.
Chief Minister Lia Finocchiaro also cited the CLP's planned Territory Coordinator position as a tool the government would use, if and when it passes parliament, to drive stronger economic investment in the region.
NT remains weakest economy: CommSec
Earlier this week, CommSec released its latest State of the States report, which again ranked the NT economy as the weakest performing in Australia, coming eighth on five indicators.
However, in his report, economist Ryan Felsman acknowledged that CommSec's "economic performance ranking criteria disadvantages this small, open economy".
"If we focus just on annual growth rates, on an aggregate basis … resources-focused states and territories Western Australia, Queensland and the Northern Territory all have the strongest annual economic momentum," the report read.
The indicators used to rank Australia's economies include population and economic growth, construction work, unemployment, equipment investment and retail spending.