Budget Reply Speech 2018

Budget in Reply Speech

Gary Higgins – Wednesday 2 May, 2018

 

 

 

Madam Speaker,

 

Last year the Treasurer said that Budget 17/18 was one for the optimists.

 

We wanted one for the realists,

-and we still do.

 

This is the worst ever set of peace time public finances.

 

This Labor Government’s economic credibility is dead, buried, and cremated!!!!!

 

The deficit for 18/19 will be $1.2 BILLION.

 

Let us look at the facts.

 

 

 

The CLP handed over only $1.8 bn of debt, Budget 18/19 pushes debt this year to $4.5 bn.

 

The CLP plan saw net debt being paid down with surpluses.

 

This Labor Government has no plan  to ever deliver a surplus. Instead debt will rocket to $7.5 bn by 2021/22.

 

Similarly, under Labor net debt to revenue is on track to hit 119 % in 2021/22,

unbelievable, and unprecedented. 

 

Under the CLP the net debt to revenue percentage was 27%.

 

We are on a path to insolvency if current trends continue.

 

The years ahead are Labor’s decade of debt.

 

With debt like $7.5 bn our children will be in debt for decades

 

Labor is throwing Territorian’s hard earned dollars around like it is monopoly money and without consequence.

 

It has failed to make the hard and necessary decisions.

 

 

Since coming to government in 2016, Labor has failed…

  • Failed to manage the economy,
  • Failed to grow the Territory population
  • Failed to keep its pre-election commitment to create 14000 jobs per year. 

This Government has failed to grasp with any urgency the scale of the challenge or actions required to dig us out of this hole.

 

The Opposition have been calling for urgent action on population for a very long time.

 

 

In fact, in May 2017 I bought a motion to this Parliament calling for an urgent population plan.

 

We were shocked by the .3% population decline forecast in Budget 17/18. The first time in 14 years.

 

This motion passed the parliament in May 2017.

 

So in spite of a whole of parliament approach, with unanimous support there has been silence.

 

Yesterday’s welcome population announcements are a case of too little, too late.

 

 

Target the population strategy towards young women – great.

 

Very welcome.

 

 

 

But what about the very real community safety concerns and increasing rates of crime and alcohol fuelled violence that are plaguing the Northern Territory?

 

The Government should address the increasing cost of living in the Territory, including the spiralling cost of fuel.  

 

 

These areas of concern will play on the minds of anyone wanting to come to the Territory.

 

Query assumptions

Madam Speaker, I query assumptions for population growth, GST revenue growth and economic growth over the forward estimates.

 

When I analyse the figures what I see are numbers that have no basis in reality and don’t match up with the trend.

 

 

The Treasurer’s forecasts show consumer demand set to bounce back.

 

This wouldn’t be a u shape recovery, but a trampoline recovery.

 

We welcome the focus on population growth however this won’t be achieved by gloss, by marketing, by a website, by an app, by cold calling ex Territorians.

 

 

Population growth will be achieved by the way we have always done it by offering world class opportunities for people to get ahead, to achieve real sustainable jobs.

 

The CLP want Territorians to get ahead. 

 

 

 

 

Madam Speaker, the ‘Manison Mastercard’ is out again and the Territory is on a path to insolvency.

 

 

Budget 18/19 is the worst budget in the Territory’s history.

 

 

 

The Treasurer must tell Territorians what emergency action the Government will take to deal with our impending insolvency?

 

Where is their plan to pay down the debt?

 

Will they ever deliver a surplus?

 

Can they tell Territorians how their budget will now impact the Territory’s credit rating?

 

At the end of this financial year, the expected debt is $4.5 billion, blowing out to $7.5 billion at the end of the forward estimates.

 

That means interest payments of $1.4 million per day.

 

With $506 million set to be spent on interest payments in 21/22 we could have built:

  • 3 Palmerston Hospitals,
  • 16 Underground Carparks
  • 20 new Warren Park Stadiums
  • 506 kms of sealed roads across the Territory
  • 6747 Bus stops

 

 

We welcome the announcement on underground power of $5m in 17/18, and $10m per year thereafter.

 

The Opposition have been continuously calling for the Government to underground powerlines not carparks.

 

 

We welcome the temporary two year payroll tax cut for hiring a new employee who lives and works in the Territory, but why not extend payroll tax reductions to reward existing businesses that are doing it tough?

 

Madam Speaker, we note that there have been some reductions in the health budget in certain areas.

 

This remains a concern.

 

Additionally, it’s disappointing that the budget for biosecurity has also been cut.

 

This is surprising and short sighted given the critical importance of bio-security to the Territory.

 

And then there is the waste.

 

 

Clearly, given the size of the Territory deficit and recurrent expenditure listed in the Budget Papers there are significant structural reforms needed to get the Territory back on track. 

 

The Budget 18/19 savings measures won’t save enough.

 

In fact these savings measures a drop in the debt ocean.

 

We’ve had nearly two years of reckless and foolhardy waste. For example:

  • $800,000 spent on a plan for a museum for Myilly Point and then scrapping it
  • flying a delegation to Singapore in 2017 to look at plants
  • Economic Summit Series talkfest at a cost of $1.2m
  • A MyFuel website that made petrol prices rise
  • 50% Renewables Panel Report costing $1.4m and no impact study on electricity prices
  • Water Licence Review (thousands of dollars but no case to answer)

 

 

 

  • Hydraulic Fracturing Inquiry ( in spite of comprehensive Hunter, Hawke, Hunter Reports) at an initial cost of $3m, plus $5.5m for the implementation taskforce
  • $60,000 to advertise a decision on Anzac Oval in Alice Springs and then call it consultation
  • and the list goes on!

 

 

 

While the $1.2m over next two years for a customer relationship management database and marketing strategy targeting former Territorians looks interesting – it sounds like an annoying call centre.

 

Likewise establishing a web portal and creating a smartphone app sounds like a repeat of the MyFuel NT waste.

 

It would appear that this Labor Government are absent minded when it comes to how private sector investment decisions are made.

 

The vacant property and derelict site levy is a prime example.

 

Economic Landscape

 

Returning to long term average economic and population growth rates will not be easy or automatic.

 

 

The Government is overseeing a transition in the economy from good to bad, and bad to worse.

 

At some point Government needs to start talking about wealth creation and support industries that unlock wealth.

 

The Labor Government need to address economic policy, not just social policy.

 

Given the constraints on the sources of revenue – why not also examine government spending?

 

 

In April we learned that general business confidence as measured by Sensis Business Index is the lowest ever.

 

The true test of economic activity is to ask yourself- how many cranes are in the sky over Darwin or Alice?

 

Do we feel better off now than two years ago?

 

 

Infrastructure

Madam Speaker, this government brags about the “biggest ever infrastructure spend”.

 

Last Budget they talked about one-point-seven-five billion dollars for total infrastructure payments.

 

They neglected to tell Territorians that expenditure included re-announced works – capital works initiated in previous years carried forward.

 

We’re also yet to see solid evidence of exactly how much has gone out the door into the pockets of local businesses.

 

In this year’s Budget the Treasurer has again tried to boast about the Government’s infrastructure spend….but she was a touch more subdued when she announced a 300-million-dollar drop in Infrastructure Program funding.

The CASH figures in Budget Paper 4 show not just the 300-million-dollar drop but a clear cash slash in capital works projects from 967-million-dollars in the 17/18 Budget to 863-million-dollars in this year’s budget.

 

It’s hard to get excited when the government are obviously again playing with the numbers, the language and the spin.

I look forward to seeing how the bush projects are rolled out and urge the government to start with the Electorate of Daly with the new Remote Telecommunications Co-Investment Program.

 

 

 

 

 

Housing and Community Development

Madam Speaker, it was surprising to see in Budget Paper Two that the allocation for undergrounding powerlines will be “offset by redirected funding …from the Remote Housing Investment Package”.

 

 

The simple truth is that fewer Territorians are employed now, than when Labor took office.

 

This budget will push up the cost of living for Territory families.

 

 

According to Commsec the NT has gone from first in the nation to now being the second worst performing economy in the country.

 

Madam Speaker, two years of indecision, inaction and lost opportunity.

 

Remember the CLP Tradie scheme- it was direct, immediate, and available to all.

 

It leveraged private capital to achieve significant economic impact – estimated by Treasury to be in the order of $90m.

 

Government needs urgency, and urgency with the right priorities.

 

This Labor government has the wrong priorities.

 

  • A museum nobody wants, Then one year and nearly a million dollars later the backflip!

 

  • A 32-million-dollar underground carpark.

 

  • An onshore gas development moratorium stifling a major industry, despite 4 reviews in 5 years in the NT saying that it could be done safely. Two years and over $ 5.1 million later, common sense prevails.

 

 

  • Half day public holidays- how has that gown the population Chief Minister?

 

  • Endless reviews, a land tax, and work projects for bored backbenchers.

 

 

Then there is the enormous overspend every year resulting in historic deficits and huge debt.

 

Interest payments at over $1.4m a day is a lost opportunity to build new roads, hospitals and schools.

 

It is unsustainable.

 

No Government or family can continue to pay the mortgage with the credit card.

 

Our children, grandchildren and great grandchildren will be left with the bill.

 

 

 

Hopeless Hybrid/ World’s Worst Mining Tax

The Treasurer’s hybrid mining tax proposal will be a first. A world first, a world worst.

 

We know from the Association of Mining & Exploration Companies (AMEC) that there is over $5 billion worth of investment at stake.

 

The Opposition agree with the CEO of the Minerals Council NT Drew Wagner when he says that the Government should not “impose measures which reduce its investment attractiveness”.[1]

 

Mr Wagner is joined in his criticism of the world’s worst mining tax by CEO of AMEC Warren Pearce.

 

Mr Pearce calls the world’s worst mining tax an “absolute disaster”, saying the decision immediately threatened the viability of new mining projects that would have delivered around 4 000 new jobs and millions in royalty revenues.[2]

 

Treasurer Manison’s hopeless halfway house mining tax will immediately put at risk 4000 jobs and $5 billion worth of investment.

 

It is important to recognise the importance of stability and certainty when it comes to investment decisions.

 

To this end political risk and fiscal policy uncertainty undermines efforts to attract private investment to the NT.

 

One of the most significant industry risk reports is the Mining Journal’s inaugural World Risk Report[3] which claimed that mining investment in the NT was perceived to be riskier for investors when compared to parts of Central America and Africa.

 

The resources sector will be critical to securing the NT’s long term economic success.

We oppose this new tax, the world’s biggest tax increase at the worst possible time.

 

One of the key messages of the CLP is that a future CLP Government will keep taxes down to lift the economy up.

 

 

 

 

CLP Approach

 

We know that the best form of welfare is a job, and we know that a rising tide lifts all boats.

 

Our philosophy is that taxes should be as low and as broad as possible.

 

 

 

The CLP Opposition recognise that a strong society is built upon a strong economy.

 

This Government simply doesn’t understand private enterprise or commercial investment criteria.

 

The Government doesn’t understand business FULL STOP.

 

The CLP’s Budget Response 2017 – 2018 Refresh

 

The only way for the Territory to grow is to allow private enterprise to invest, to take advantage of our natural advantages of geography, climate, people and resources, and to do what private industry does best: get on with the job. 

 

Again I say, the CLP Opposition want to see the government get back to the Northern Territory’s strengths on trade with Asia.   

 

The expeditious development of a safe, sustainable on-shore gas sector that delivers benefits for us all must be a key priority.

 

One of the most important ingredients in any business is the cost of energy.

 

Reliable, affordable power is a critical component for success in private enterprise.

 

 

 

 

 

The former CLP Government put in place pipelines to prosperity- literally through partnerships with Jemena to build a 622km gas pipeline from Tennant Creek to Mount Isa.

 

 

 

 

 

CLP policies also supported a pipeline of private sector investment and growth.

 

This has been, and will continue to be done through pro-business policies such as a focus on competitive tax levels, reducing cost of living and removing red tape.

 

 

We have the cheapest source of energy in the world in the form of our shale gas resources.

 

We should use this resource to spur on a petrochemical industry.

 

Politicians must remember that investment is not guaranteed.

 

Population growth is not guaranteed.

 

Private companies are not Government ATMs. 

 

Madam Speaker, in the final analysis spending is increasing exponentially while outcomes are progressing excrementally!

 

The CLP has always been about a low tax, low spend government.

 

The CLP has always been a responsible government with a plan to achieve budget surpluses.

 

The people, not the government, should decide how they spend their money.

 

Budget 18/19 is a textbook lesson in waste and wasted opportunities.

 

Where are the structural reforms and structural savings?

 

Where is the strong leadership to deliver a strong economy?

 

And it’s not just reducing wage increases from 2.5% to 2% every year! (As we see in Budget 18/19)

 

 

The massive increases in recurrent expenditure in Budget 18/19 and across the forward estimates fail to realise the simple fact-

 

Governments can’t deliver what they can’t pay for.

 

Eventually debts have to be paid back.

 

Madam Speaker, I have outlined why the Opposition does not support this budget in its current form.

 

 

 

 

[1] Minerals Council NT Press Release xxxx April 2018

[2] AEMC Media release xxxApril 2018

[3] http://www.mining-journal.com/static/world-risk-report-2017