8 May 2019
Leader of the Opposition
GARY HIGGINS MLA
Budget Reply Speech 2019
Please check speech against Hansard delivery
Territorians expect strong leadership, a government they can trust to deliver on their promises, a strong economy, speedier approval processes and action ‘to get things done’.
Now, more than ever, the Northern Territory needs the steady hand of a competent government – one which is reliable, accountable and smart. And one which looks deeper than a tagline or catchy phrase.
Budget 2019 needed to deliver a series of programs that are absolutely necessary, fiscal reforms, measures to reinflate the economy through incentives and certainty for private sector investment.
Budget 2019 needed to deliver relief for Territorians and new policy settings that address and prevent the grave economic and fiscal crisis being repeated.
But Madam Speaker Budget 2019 is another failure of the Gunner Labor Government.
Budget 2019 does nothing to restore business confidence or encourage private sector investment.
Budget 2019 does not get one single Territorian back to work or bring back those who have left.
It does not grow our population or give us necessary economic reform.
Budget 2019 puts Labor and its expensive social reform first – and Territorians last.
And it is another budget of broken and empty promises, is it little wonder Territorians do not trust this Gunner Labor Government, who say one thing and do another.
Madam Speaker the most important Bill to come before this House each year is the Appropriation Bill.
It is usual for the Treasurer to set out a vison of where the Territory is headed and to instil confidence that the government is managing the economy, spending wisely and planning for the future. Budget 2019 fails to do this, as have the government’s last two budgets.
We listened with great concern in years past to the first two speeches by the Gunner Labor Government’s Treasurer and now the third.
Three important, vital Budget speeches, Madam Speaker, NONE of which have set out a vision or plan for the economic and fiscal health of the Northern Territory.
What we have heard consistently from this government is a litany of mistruths and blame attributed to either the Federal government or the previous CLP government. Well Treasurer this does not wash, and I say here today that we, the CLP, can and will deliver better economic and fiscal results than this government has done.
Madam Speaker, let’s look at Labor’s record.
Treasurer you said Budget 2017 was developed with the following principles:
- Creating and sustaining jobs for Territorians;
- Implementing your election commitments ; and
- Providing services to Territorians in a smart and efficient way, reducing the costs of government.
You have failed miserably on all counts given that there are 7882i fewer Territorians employed, businesses close down week after week, jobs have been lost, the operational cost of government has increased by $478.4 millionii. There is also a litany of broken election commitments which I will come back to later.
Treasurer your 2017 budget stated that savings measures would be $74 million for 2017/18 and $828 million over the forward estimatesiii. Well, as at 30 June 2018, it has cost Territory taxpayers an additional $478.4 millioniv in operational expenditure since this Gunner Labor government came to power in 2016 and we have 903 additional public sector employees to the end of December 2018. How can this incompetent government be trusted, they say one thing and do another.
What a hash you have made of things Treasurer, you have not delivered certainty and confidence in our economy, as you promised in Budget 2017. Instead we have seen:
- The construction sector halvedv
- Residential property prices drop more than 25%vi
- No major projects or cranes on the horizonvii
- Lowest level of business confidence in the country as confirmed by Commsec and Sensisviii
- Northern Territory bankruptcies are up 67% in the last year aloneix
- Retail trade growth down since Labor came to governmentx
So now I turn to Budget 2018 which had the tagline of:
- More jobs;
- More people; and
- A brighter future
Savings were estimated to be $234 million over the forward estimates with the spurious claim that this would bring total savings to $828 millionxi and the actual outcome according to the Treasurer’s Annual Financial Report for 2017/18 was an increase in operating expenses of $450.66 million from 2016/17 to 2017/18xii.
Revenue changes included:xiii
- The world’s worst hybrid mining tax;
- A vacant land and derelict building tax;
- Increase in motor vehicle licensing and registration; and
- The Repairs and Maintenance program, a historic stimulant for the construction sector, particularly tradies, was reduced.
And in our Budget Reply then we cautioned the government about its troubling fiscal management. We warned the government their budget was reckless and foolhardy and they decided to respond by attacking and blaming the former CLP government.
Labor bragged then they were creating a "brighter future" for Territorians…yet just seven months later, just before Christmas, we were hit with their interim Budget Repair report.
Interim Budget Repair 2018 xiv
That report identified:
- That the current financial position is ‘unsustainable’
- That budget measures have been insufficient to stem expenditure growth
- A prediction of NT Debt of $35.7 BILLION in 2029/30 unless the Territory stemmed the current level and rate of expenditure
- A prediction of NT Debt to Revenue ratio of 320 % by 2029/30, noting that the CLP got it down to 27%xv
- A prediction that interest on debt would be $2 billion by 29/30
- Interest forecast for 21/22 of $506 million with a quadrupled increase to $2 billion per year. That’s $5.5 million every day in interest.
And the Gunner Labor Government went to their happy place again blaming the Federal Government, and the previous CLP government.
They were also dishonest about GST and were found to have been so by the Auditor General and to this day have failed to acknowledge the economic and fiscal crisis that they have caused.
The Treasurer has claimed multiple different figures for the size of the reduction in the GST payment from the Commonwealth Grants Commission.
First, it was $2 billion, then it was $3.4 billionxvi and again this year, the lame Labor mistruths continue.
The Treasurer claims that GST funds have decreased by $75 million.
The truth – contained in the Federal Government’s Budget Paper Number 3xvii – shows GST increasing by $42.3 million to reach $2.78 billion for the Territory.
There has been a net reduction of $102.4 million or about $25 million reduction per year NOT $500 million per year claimed by Laborxviii
The Coalition Government provided a $259.6 million top up payment in 2017-18 to help the Northern Territory Government deliver essential services.
The Coalition Government will provide a further $252.1 million top up payment in 2019-20 to help the Northern Territory Government deliver essential services.
Either the Treasurer doesn’t know how to read the Budget Papers or is deliberately misleading Territorians.
Another fact is the deficit handed to Labor was $78 million as recorded in the Treasurer’s Annual Financial Statementxix. The CLP also had a plan to bring the budget back into surplus which can be seen in the Forward Estimates of Budget 2016.
Labor knew the construction phase of Inpex was winding down and our GST receipts would be down, where was the Gunner Labor plan to deliver what they have failed to do – economic diversification and to tackle the down turn?
Our plan included an ‘open for business attitude’, onshore gas development, diversification of the pastoral estate, enhancing the capability and capacity of NT business to supply to major projects and industry, minimizing the regulatory and red tape burden, growing and supporting our tourism industry, expanding our trade with countries to our north, developing further links to tap into the
growing international student market and major projects including Project Sea Dragon, the Westin Hotel, a shiplift and we supported and continue to see mining as a major driver of our economy.
We published a full policy and plan at the time of the 2016 election.
The Opposition has called on the Gunner Labor government time and again to show some fiscal discipline and do the following five things:
- Rein in spending
- Stop the waste
- Free up business
- Support a diversified economy and
- Support sustainable Infrastructure
Industry likewise after initiating their own economic recovery summit called on the government to do a range of things to get the economy moving including the abolition of taxes, fast tracking projects, getting moving on regulatory changes to provide certainty to industry and reining in government spending.
Final Budget Repair 2019
Madam Speaker, on 16 April the Chief Minister and Treasurer delivered the Final Report – "A Plan for Budget Repair". At the time, the Treasurer said it was- "a plan to fix the budget, which will include tough decisions to ensure Government can continue investing in local jobs, generational change and tackling crime."
We say this – don’t confuse tough decisions with terrible ones.
Not only has the Gunner Labor
Government failed yet again to make the tough decisions required to rein in spending and stop the waste, they are passing the buck until after the 2020 election and beyond.
The Government wants to be seen as doing something but this repair plan is over a time frame that includes three Territory general elections.
This is a government who said they would reduce public service numbers by 100 in Budget 2018 and yet they increased staffing by 233. In fact this government has increased public service numbers by 903 since coming to government in 2016 noting that this is up to December 2018.
Operational expenditure has grown by almost $500 millionxx since the government took office in 2016. (30 June 2016 to 30 June 2018).
We have called on the Government not to punish Territorians for their incompetence and wasteful spending by lazily increasing taxes on Territorians’ lifestyle.
The government’s move to tax lifestyle like personalized number plates, camping fees, adding museum fees and additional fees on fireworks is lip service to actual serious decisions which need to be made. This is simply not good enough and Territorians deserve better.
These are not tough decisions – just terrible ones.
Another out of touch decision they’re carrying out is the attack on teachers in Katherine. This government clearly lacks priorities when working through its budget and puts wasteful advertising spending above retaining teachers in the town.
What is the cost to the community when those teachers leave the town?
Madam Speaker, the Treasurer was in Primary School in 1990 and 1991 and I trust she was a solid student then but clearly she hasn’t done any homework recently.
She told media the government’s measures were "the biggest changes since self-government"
The fact is that the then Commonwealth Labor government who gave us ‘the recession that we had to have’ cut 26% in funding to the NT in 1990/91. And we know from last weekend’s performance what Labor think of Paul Keating - he’s their hero.
Those cuts led to a comprehensive Estimates Review Committee (ERC) process conducted by the Perron CLP government in which 1223 positions, or almost 10% of the public service were abolished over a two year period with all affected staff redeployed through a planned process.
THAT, Madam Speaker, was tough. This government wouldn’t know tough if they fell over it.
I don’t see the Treasurer making tough decisions she uses spin to mask the truth.
The Perron government also had a significant stimulus project, that being Madam Speaker, the House in which we meet here today and the Supreme Court.
The same government also ensured business and industry had the confidence to invest in and commit to the Territory.
Fast forward to today and the Langoulant Review says "Government stimulus is not a sustainable substitute for private investment" but Labor’s latest moves will further stymie business and industry in the Northern Territory.
For example, we vehemently oppose the secret plan to hit Territorians with an $80 million land tax as referenced in the Langoulant report.
And we question the value of selling off the Land Titles Office – a move which business believes will lead to increased fees for services necessary for development in the Northern Territory.
However we do agree with Mr Langoulant when he says that:
‘Territory Budget cannot be repaired in isolation’
‘Government stimulus is not a sustainable substitute for private investment’
‘The Territory urgently needs a concerted whole of Territory effort to attract private investment’; and
‘…uncertainty is… deterring private investment’
We welcome the commitment to benchmark against best practice the effects of regulation. This is what we have called for, for some time.
We also welcome the recommendation to establish a parliamentary committee to scrutinise agencies’ actual financial performance against the original budget given the size of the task to reduce expenditure is a mammoth $11.2 billion.
We believe this would be a positive step and one which is sorely needed.
The big idea in the Langoulant Review is to hit hard pressed Territorians with $100m of new taxesxxi, and the insult to injury is that the Government will then go cap in hand to Canberra again to beg for a bail out.
Where is the leadership, where are the promised tough decisions, it is no wonder Territorians don’t have any confidence in this Gunner Labor government to turn our failed economy around.
Madam Speaker, the response from business and industry to the government’s so-called budget repair has been underwhelming.
In the NT News on 17 April NT Airports boss Ian Kew said, in relation to idea to charge park entry and camping fees: "If the Government wants to upset people this is the perfect way to do it".
The CLP Opposition agree, this is a terrible idea. There has been no modelling on the short and long term effects of this decision on the tourism sector and the broader economy.
CEO of the Chamber of Commerce Greg Bicknell said in the same edition: "Look a lot of this stuff is very long term and will slip over to at least another two governments".
That’s the problem. The Treasurer is kicking the hard decisions into the long grass.
The Property Council on April 10 said its members want a ‘solution based approach’.
This Gunner Labor Government could do well to read the Property Council’s 5 point plan for prosperity, jobs and strong communities.
Madam Speaker, the NT Cattlemen’s Association President Chris Nott, said on April 3 he and his members fear "irrational government interventions" and raised ‘security of tenure and native title’ issues.
This Labor Government has obstructed diversification of the pastoral estate.
How can pastoralists trust Labor when they pulled the pin on non-pastoral use sub leases being recorded on the title at the very last minute?
This dead of night backflip has left the pastoralist industry in "a state of paralysis".
And Warren Pearce CEO of Association for Mining and Exploration Companies (AMEC) called on the Treasurer to scrap the world first, world worst hybrid mining tax that is costing the Territory $6 billion of investment and 4000 jobs.
And AMEC is scathing of Budget 19/20 with Mr Pearce saying:
"The Northern Territory Budget has not met the expectations that the Government has built with the Langoulant Report."
"The Government has pushed nearly half a billion dollars of hard choices into the future."
"Achieving that will demand an unprecedented eight years of financial discipline and streamlining of costs."
"The Northern Territory has the most complex and expensive royalty regime in Australia, it means many small projects do not get the attention that they would in other jurisdictions."
Dave Malone from the Masters Builders Association says:
"The headline economic growth figure is 6.3% - if that was the number that we were all going to experience, then we would be congratulating the Government on a fantastic effort around economic
management. It isn’t of course, it simply reflects an increase in export earnings from large projects like Inpex – and very little of that will flow through the economy."
Root and Branch Review
Madam Speaker, the government’s Root and Branch review is essentially their version of an Estimates Review process but it falls short of making any effective changes and it is a shining example of where Labor has made some really terrible decisions.
They are making savings from decreasing the Business Growth Program, Business Innovation Support grants and cessation of employer support incentives for apprentices. At the same time, the government is keeping the job killing hybrid mining tax.
Madam Speaker the question has to be asked does the Government even want business and industry to grow. How can they seriously say they support jobs when they are implementing measures which threatens jobs?
I could spend the next hour pulling apart the review’s outcomes from their lifestyle fees and charges to the crazy move of the Mitchell Street Mile to a biannual event.
The so called Root and Branch review sets out to achieve approximately $503 million net savings over the Forward Estimates.
Let me tell you what this means in practical terms and the reaction we have received from some grant recipients who face cuts of one to three percent of their funding:
- Local Government is exceedingly concerned about what the cuts mean for operational subsidies for remote and regional councils. These are the same councils you brag about including in your so-called Local Decision Making. Will they be able to continue to operate with a three percent cut to their funding?
- One NGO which provides domestic violence services has told us: "Having our funding cut by one percent to meet the efficiency dividend will impact on our operations and could mean reducing staffed office hours or cutting programs."
- Another industry group said: "I can see no evidence that a baseline analysis was adopted. And while I accept that in austerity all revenue streams should come under scrutiny, it’s amazing that such a large share of the burden should be lumped on mostly NGOs and community groups."
Madam Speaker, these cuts are clearly on Territorians who don’t deserve to pay for your mistakes.
Madam Speaker, coming back to Labor’s broken promises – and remember, they said in their first year in government that they would honour their commitments. How that tune has changed.
Here are just a handful:
- Bring the Budget to a surplus position by 2019-20, yet we now see the earliest your latest promise is another 10 years down the track
- Keep Territorians safe, yet we see a state of lawlessness right across the Northern Territory
- Grow the population yet the population has declined by 0.18 per cent over the past year, the biggest in 15 years
- Create 14, 000 new jobs each year, however there are almost 8, 000 less Territorians employed
- Build a new Don Dale, the ultimate back flip
- Not to sell government assets yet you’re going to sell or lease the Land Titles Office
- Build a National Indigenous Art Gallery in Alice Springs, and still after almost three years and a spend of more than a million dollars you haven’t even got an agreed site
- Investigate financial models and products that can help people borrow money to build their own homes in homelands and outstations, yet not one private home has been built
- Publish an annual list of interstate procurement to give support to your so called ‘Buy Local’ scheme. It hasn’t happened
- Build a museum at Myilly Point. $800,000 wasted and the project abandoned – mind you, it wasn’t a great idea in the first place.
And further Treasurer you said that your government was restoring trust, addressing population loss and the classic one Madam Speaker –‘the government will build a bridge to a better future’ and your government was ‘determined to demonstrate ongoing fiscal discipline to improve the budget bottom line’.
Budget 2019 is the worst budget in the Territory’s history.
It has seen the Territory’s Net Debt jump by the biggest amount ever in the Territory’s history.
A $2 billion increase in Net Debt in just 12 months is simply incompetent and one that can’t be dismissed by saying it is an accounting standard change, that is simply untrue.
At the end of this financial year, the expected debt is $6.2 billion.
This leaves our Net Debt to Revenue Ratio at 93%.
When we handed over the books the ratio was 27%.
This is a key measure of our Territory’s ability to service our debt.
Madam Speaker, I warned previously that we were on the road to insolvency.
This is even worse than I feared.
A million dollars a day to pay the interest on the debt.
Policy changes, or the government’s social reform experiments have worsened the Territory’s fiscal position by almost $600 million over 12 months.
Our Territory is a house built on shaky foundations.
More than 70 per cent of NT Government funding comes from Canberra.
In the rest of Australia more than 80 per cent of jobs are in the private sector, in the NT it’s not even 50 per cent.
We have enough onshore gas to supply the entire energy needs of Australia for 500 years, and we should be building hi-tech petrochemical or fertiliser manufacturing industries here.
We should be incentivising companies to use our extensive gas reserves for manufacturing purposes with inherent wealth and job creation.
The way ahead
The Opposition believe that at this time of economic and fiscal crisis with the government spending $4m every day more than it has xxii, then it should be government’s priority to make it easier not harder to invest in the Territory.
The Territory is broke. We are living way beyond our means.
Today I pledge to Territorians that a CLP Government will end the waste, axe the lazy Labor taxes, and build the roads and other infrastructure of the 21st Century.
Under a CLP government we will have smaller government and only people and programs that benefit Territorians will be funded.
It’s time to get things done in the Territory.
As a community we must show the world that we want private sector investment.
The CLP is the only party with the plan and the track record to deliver a diversified economy.
We will build the foundational infrastructure for a globally significant and competitive onshore oil and gas industry.
We will invest in transformational water infrastructure such as dams, off stream storage, managed aquifer recharge programs and water networks.
Other than the underground car park, which has no cost benefit analysis, let alone an operating model, the Opposition supports the completion of the State Square project.
And we will put making money above spending money at the heart of our government. We will focus on growing the Territory’s revenue, not through increasing taxes and destroying our lifestyle, but by growing our economy through private sector investment.
It’s time for common sense and discipline to come back to Government.
We need to make more than we spend, because ultimately we can’t provide what we can’t afford.
Read my lips there will be no cuts to front line staff. We will reduce the cost of delivering government services, we will remove the silos that dominate government service delivery, we will reduce the waste, we will speed up government approval processes, we will reduce the debt burden and we will return the Budget to surplus sooner than in a decade’s time.
The CLP believes a small government is a good government.
Because we trust Territorians to spend their money better than Government, we make this promise to all small and medium Territory businesses- we will review your payroll tax with a view to abolishing it once we see the true state of the Territory’s finances.
We will review all the alcohol reform measures imposed by this government to see what has been effective and what hasn’t, we will scrap the floor price for alcohol and bin the useless My Fuel website waste.
We will also scrap the hybrid mining tax and the vacant and derelict site property tax.
We will ensure strategic investment which creates sustainable employment in the private sector. We will invest in a diversified portfolio of infrastructure related projects such as beef and mango roads that generate real wealth and unlock opportunity.
Under the CLP with a budget in the black we will back police by reinstating work done for police exam for sergeants, reinstate sworn officers into the Intelligence Unit and put youth justice back with Corrections.
And we will cut
- Nine Ministers to eight
- Assistant Ministers and their travel and
- Abolish Team NT
And we will get the Territory off the road to ruin and back in the black.
These are just some of our ideas, we have more but in the meantime, if Members opposite want to snaffle our ideas they are quite welcome to. After all, the sooner there’s some REAL action to address budget repair, the better.
Madam Speaker, this third Gunner Labor Government Territory Budget is another bitter disappointment for those of us on this side of the House.
The CLP can and will do better.
We embrace hope and aspiration, a better life as something to aspire to, something to rise up to.
Some political parties – especially those on the Left – believe in a culture of dependency and victimhood. They like it when people are down and dependent. They want the system to fail so they can build influence and support.
The CLP will never talk down to people. We will always try to offer people a way up and way forward.
We are the party of aspiration. The CLP can and will do better because that is what Territorians deserve.
i DTBI Economy snapshot May 2017, 141544 – April 2019, 133662; https://business.nt.gov.au/business/business-and-economic-data/economy-snapshot
ii Subtract TOTAL EXPENSES FROM CONTINUING OPERATIONS in ( Non-Financial Public Sector
Comprehensive Operating Statement) for 2015/16 Treasurers Annual Financial Report p28 https://treasury.nt.gov.au/__data/assets/pdf_file/0006/477933/Treasurers-Annual-Financial-Report-2016-17.pdf from same in 2017/18 available at
iv As end note ii
ix Data from April 2019 treasury figures https://business.nt.gov.au/__data/assets/pdf_file/0003/681231/nt-key-stats-201904.pdf
CGC 2019 Update
- 19/20= $2860 million https://www.cgc.gov.au/sites/default/files/2019_update_report.pdf
- 18/19= $2755 https://www.cgc.gov.au/sites/default/files/u2018_-_final_report.pdf?v=1531100180
- 17/18= $2921 https://www.cgc.gov.au/sites/default/files/2017_update_report.pdf?v=1534214971
- 16/17= $3291 https://www.cgc.gov.au/sites/default/files/2016_update_report.pdf?v=1534139410
The Northern Territory will receive $69 million in additional top-ups in 2019-20.
This is in addition to financial assistance in this year’s Budget of $259.6 million to help the Northern Territory Government deliver essential services, including to remote communities.
Top Up $259.6m+ 69= $328.6 m
Reduction - $3291- 2860= $431,
$431- 328.6M = $102.4 m Net Reduction or approximately $25m reduction per year NOT $500m per year.
The GST payment is based on the three year period prior. So the boom years of CLP naturally mean that today’s receipts will be lower. This cycle will change again when this lean period is included in the assessment years.
- The CLP had a plan to diversify the economy and create jobs.
- The Government needs to lead, and stop going with the begging bowl to Canberra.
- 71% or $4.2 bn of the NT Income for 17/18 has come from the Commonwealth.
- The NT must do more to stand on its own two feet if the NT is to become a State
- Royalties from a shale oil and gas industry would be in hundreds of millions (according to the Pepper Inquiry/ ACIL ALLEN).
- A new industry in shale oil and gas would create thousands of jobs and bring in billions of dollars of hard investment.
- The Government must focus on making money, not just spending money. They must get on with wealth creation and economic policy not just social policy.
- The NT has world class mineral resources that are being locked up by red and green tape.
- The Federal Coalition have fixed the GST formula ensuring that the Territory will not be worse off ( Relativity frozen at 4.66)
- Government is blame shifting and basing their ‘cut’ numbers on what they would like to get as stated in the Pre-Election Fiscal Outlook 2016
- The formula for calculating the GST return to each State and Territory has been agreed upon for nearly two decades
- The formula hasn’t changed
- The Territory’s economic fortunes have- i.e. people are leaving
GST increases in Budget 19/20 BP https://www.budget.gov.au/2019-20/content/bp3/download/bp3_03.pdf
xx As per endnote ii