The Northern Territory might have so far avoided a health crisis due to the COVID-19 pandemic but it is causing a fiscal and economic crisis, with the government borrowing $600 million earlier than planned.
The NT government revealed at a public hearing this week it had brought forward $600 million in borrowing in May and June, intended for next financial year.
“The Northern Territory Treasury Corporation completed its borrowing program for 2019-20 in February which had contributed to the funding response to COVID-19,” Chief Minister Michael Gunner said.
Before the pandemic hit, the NT was already facing a budget crisis with record forecast deficit and net debt levels this year of $1.049 billion and $5.93 billion respectively.
The independent Langoulant Report found it was in structural deficit and must find $11.2 billion in savings over a decade.
It now expects to spend or forego an extra $408 million as a result of COVID-19, Gunner told the hearing.
That includes economic stimulus measures such as a home improvement scheme providing grants of up to $6000, a business improvement scheme, small business survival fund and others.
It also includes the estimated loss of $109 million in forgone revenue due to the freezing of fees and charges until July 2021 and payroll tax waivers and deferrals.
The NT’s unemployment rate jumped to a seasonally-adjusted 7.4 percent in May from 5.6 percent, a 16-year high, this week’s official figures show.
Chamber of Commerce NT chief executive Greg Ireland warned the actual number of jobless would be higher than the 10,400 officially looking for work, estimating that another 20,000 people were being supported by the JobKeeper subsidy that ends in less than 100 days.
Gunner was bullish about the future through the NT’s natural gas resources and said the Territory Economic Reconstruction Commission headed by former Dow Chemical president Andrew Liveris would help the “Territory economy grow its own sources of revenues … towards five percent growth”.
However he also acknowledged he might need help from the Commonwealth, which provides 70 percent of the NT’s budget, with Prime Minister Scott Morrison warning this week it could take five years for the economy to recover.
Country Liberal Party Opposition leader Lia Finocchiaro accused Gunner of damaging NT businesses by delaying reopening the borders until July 17.
“Your government caused the economic crisis, it was exacerbated by COVID-19 but it has been the worst performing economy for years, the budget is through the roof,” she said.
Thursday marked 28 days since the last of the 30 people to have COVID-19 in the Territory recovered, with no deaths recorded so far.
By Greg Roberts