Territory Stories

Debates Day 6 - Thursday 19 October 2017



Debates Day 6 - Thursday 19 October 2017

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Parliamentary Record 8


Debates for 13th Assembly 2016 - 2018; ParliamentNT; Parliamentary Record; 13th Assembly 2016 - 2020




Made available by the Legislative Assembly of the Northern Territory





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Legislative Assembly of the Northern Territory

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Attribution International 4.0 (CC BY 4.0)

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Legislative Assembly of the Northern Territory



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DEBATES Thursday 19 October 2017 2689 Government made the decision to weather the s torm and not make a knee jerk reaction to cut recurrent expenditure in line with the GST cuts we saw, because we know cutting the expenditure in line with the drop in GST would have plunged the Territory into a deep and dark economic downward spiral. We wo uld have had to cut thousands of jobs and vital services. We would have seen this deeply impact business confidence in the Northern Territory and flow on to deeply impact the economy. Two-billion dollars over four years is a huge amount of money that can have a deep impact on the Territorys budget. This should be put into perspective. It is really important to ensure we have all members of this parliament working together on this issue because it is important that we address this challenge head on and take responsible steps together. This government is part of our financial management going forward. When faced with this challenge we took responsible steps to constrain government recurrent expenditure and took appropriate steps to raise more revenue. In the 2017 budget, general government recurrent operating expenses are forecast to grow by only 0.1% over the forward estimates. This is the lowest growth in recurrent expenses on record for any Territory government. Through the budget the government also announced several own-source revenue raising measures including changing the tax rates on thresholds on pokies, raising stamp duty rates on properties with a value of over $3m, and our responsible and modest increase on motor vehicle registrations. These were not easy decisions and they were carefully considered. All up, these changes will lead to an increase in own -source revenue of around $14m per annum ongoing. You can see how challenging it is when there is a cut of this size to the GST. Despite these efforts we now face new challenges on the GST front. In a bid to win favour with Western Australian voters, on 30 April the federal Treasurer announced he had tasked the Productivity Commission to undertake an inquiry into horizontal fiscal equalisation, or HFE as we know it. HFE is the bedrock on how GST is distributed. It is premised on the belief that all Australians should get equal access to essential services no matter where they live. Let us be very clear about the intentions of this inquiry. It is a political stunt to try to come up with reasons to take money away from the smaller states to give it to the richer states. The Territory government agreed to work with this inquiry, but we knew there were risks. We made a strong submission, and the Terr itory reiterated the stance that has been held by all Territory governments for a very long time, that the Territory remains a strong supporter of horizontal fiscal equalisation. Our submissions spoke to the importance of the GST for the Territory and rejected some of the assertions put to the Productivity Commission. For example, our submissions showed that HFE is not acting as an impediment to economic development. The Icthys LNG project provides a great example. The fact is, the majority of taxation revenue from that LNG project will flow through to the Commonwealth. The Territory government cannot levy the royalties from the offshore gas. However, that did not stop the government at that time from doing everything it could to deliver the project, because governments make decisions based on the best interests of their constituents. It is about delivering jobs and the broader economic development opportunities for the community, not just GST dollars. On 9 October the Productivity Commission released its draft report and, unfortunately, the Productivity Commission did not listen to the people of the Northern Territory. It did not seem to listen to many of the people from the smaller jurisdictions. Worryingly, the Productivity Commission recommends the federal government depart from full equalisation of the GST and move to reasonable equalisation. What this really says is, the federal government should forget about equality for all people in Australia, developing the north and closing the gap on Indigenous disadvantage. If the Commonwealth Government agrees to the Productivity Commissions recommendations, it could cost the Territory hundreds of millions of dollars in GST, and not just a temporary or transitionary change in revenue, but a permanent drop in funds available for the Territory government to deliver key services. The Territory government would not be able to weather this storm in the same way we tackled the $2bn cut from earlier this year. These proposed changes would be permanenta cut in the GST every year across the future. This would have unavoidable consequences for the delivery of important services across the Northern Territory. These