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Budget Paper No.6 1997/98 Northern Territory Economy



Budget Paper No.6 1997/98 Northern Territory Economy

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Tabled Paper 3223


Tabled Papers for 7th Assembly 1994 - 1997; Tabled papers; ParliamentNT




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.




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Public Sector The public sector makes a significant contribution to the Northern Territory economy. In 1995-96, 32.4 per cent of Territory Final Demand was attributed to government expenditure (see Table 15.1), indicative of the relatively high cost of providing state-like services to a small and widely dispersed population. The Territorys stage of development and sparse population base limit the ability of the Government to exploit economies of scale. The relocation of defence force personnel to the Territory in recent years has seen Commonwealth expenditure in the Territory rise, leading to increasing levels of overall government expenditure after a period of decline. While the public sector accounted for just under one third of Final Demand in 1995-96, this is down considerably from 1985-86 when 40.4% was attributed to the public sector. The 8 percentage point reduction between 1985-86 and 1995-96 is the largest drop in public sector contribution to final demand of any Australian jurisdiction and double the decline nationally, highlighting the growing contribution to final demand by the private sector in the Territory economy over the period. This trend has moderated in recent years with the transfer of defence force personnel to the Territory. There has been a fall in the number of public sector employed wage and salary earners in the Territory over recent years (see Figure 15.1). The decrease has occurred mainly in Commonwealth employment. Estimates of public sector employed wage and salary earners (excluding defence personnel) for 1996 show that the public sector accounted for 20 400 of all employed wage and salary earners in the Territory. This comprised 15 000 Territory public servants, 3 900 Commonwealth public servants and 1 500 local government employees. Government outlays in the Northern Territory (see Figure 15.2), influenced in the past by major capital works projects such as the new Parliament House and more recently the new port and expenditure related to defence force relocation, have been rising gradually in real terms. At the Council of Australian Governments meeting of April 1995, heads of government signed agreements to implement the national competition reform package. The package extends the Table 15.1 Public Expenditure as a Proportion of Final Demand % Australian Capital Territory 54.2 Northern Territory 32.4 Tasmania 26.0 South Australia 22.4 Queensland 21.1 New South Wales 20.1 Western Australia 19.7 Victoria 19.4 Australia 21.4 Source: ABS Cat. No. 5242.0, 1995-96 87