Budget Paper 1994-95 No.6 Northern Territory Economy
Tabled Paper 2156
Tabled Papers for 6th Assembly 1990 - 1994; Tabled Papers; ParliamentNT
Tabled by Barry Coulter
Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.
Economic Growth Economic Growth Outlook W hile growth rem ains subdued in m ainland Europe and Japan, with little prospect o f sustained im provem ent before the latter h a lf o f 1994/95, the return to strong growth in the USA together w ith continued dynam ism in A sian econom ies (other than Japan) can be expected to underpin im proving w orld com m odity prices in the short term . Given the T errito ry s rich endow m ent o f natural resources together w ith a grow ing contribution from the m ining sector, im proving com m odity prices bode well for future grow th in m ineral production w ith this grow th being reflected in Territory GSP. A dditional positive stim ulus will em erge as Europe and Japan return to positive grow th, further enhancing the m edium term outlook for com m odity prices and in ternational trade. Nationally, economic growth accelerated during the latter h a lf o f 1993 largely due to household dem and in the form o f consum ption expenditure and investm ent in housing together w ith a positive contribution from net exports. W hile recent grow th in em ploym ent is encouraging (and a continuation m ay support ongoing strength in household dem and), sustained econom ic grow th over the m edium term depends on a return to positive contributions from business investm ent. A com bination o f h istorically low interest rates, continued grow th in the USA and increasing trade and investm ent flows with A sian econom ies should all serve to stim ulate business investm ent over the m edium term . C om m onw ealth T reasury forecast the national econom y will grow by up to 4 .25% in 1994/95, accelerating to 4.5% in 1995/96. An im proving m edium term outlook both in ternationally and nationally, together w ith on going developm ent o f the T errito ry s existing trade and investm ent links w ith A sia, the progressive positive im pact o f m icroeconom ic reform s, increasingly liberalised inter-state trade and the C om m onw ealths continued investm ent in defence facilities over the rem ainder o f the decade are all expected to contribute to positive growth in the Territory economy. D ata for the firs t h a lf o f 1993/94 show the grow th in Territory household dem and over the past two years to be easing. However, data on private investm ent indicate a return to positive grow th. In itial estim ates and forecasts for 1993/94 and 1994/95 respectively are shown in Table 2.1. During 1993/94 Territory final dem and and GSP are estim ated to have increased in nom inal term s by 7% and 1%, respectively. Initial forecasts for 1994/95 reflect a continuation o f growth in consum ption due to relatively strong labour m arket cond itions, real g row th in w ages, increased tourism and m odest population grow th. Investm ent expenditure is also expected to show positive grow th, w ith further developm ent in the Territory m ining sector, particularly at M cA rthur R iver m ine and 1 2