Territory Stories

Budget Paper No.2 Fiscal and Economic Outlook 2008-2009

Details:

Title

Budget Paper No.2 Fiscal and Economic Outlook 2008-2009

Other title

Tabled paper 1293

Collection

Tabled papers for 10th Assembly 2005 - 2008; Tabled papers; ParliamentNT

Date

2008-05-06

Description

Tabled By Delia Lawrie

Notes

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.

Language

English

Subject

Tabled papers

File type

application/pdf

Use

Copyright

Copyright owner

See publication

License

https://www.legislation.gov.au/Series/C1968A00063

Parent handle

https://hdl.handle.net/10070/283912

Citation address

https://hdl.handle.net/10070/410393

Page content

17 The majority of the Territorys revenue is from the Commonwealth in the form of GST revenue (around 64 per cent) and SPPs (around 17 per cent). Therefore, the greatest exposure to the Territorys budget and forward estimates is the volatility of GST revenue. This risk is discussed later in the chapter, and in Chapter 5 of this Budget Paper. The average increase in grants and subsidies revenue from the Commonwealth over the forward estimate period of 4 per cent is due predominantly to an expected growth in GST revenue of 5 per cent. This growth in GST largely reflects an upward revision to relativities as assessed by the Commonwealth Grants Commission in its 2008 Update, together with anticipated growth in the GST pool and the Territorys population, based on latest estimates provided by the Commonwealth. This growth in GST revenue is slightly offset by a decline in SPPs of less than 1 per cent per annum. The decline in SPPs over the forward estimates is traditionally higher at around 4-5 per cent per annum as many of these agreements are for fixed periods and are not included in the forward estimates beyond the life of the agreement. The smaller decline over the forward estimates is mainly attributed to the increase in capital SPPs and in particular SIHIP, which will provide new and upgraded housing in remote communities across the Territory over the next five years. During each budget year, there are significant changes in SPP estimates as agreements are finalised. These adjustments tend not to affect the fiscal outcome as increases in revenue are generally matched by a corresponding increase in expenditure. However, timing differences may eventuate between years that introduce a degree of volatility affecting actual outcomes, as mentioned previously in this chapter. As part of the reforms of Commonwealth-State financial relations, the structure and financial arrangements of SPP are currently being reviewed by the Council of Australian Governments. This, together with further commentary on SPPs, is discussed in Chapter 5 of this Budget Paper. Other own-source revenue is collected from a number of sources to include sales of goods and services, interest, revenue from government trading entities and mining royalties. Both sales of goods and services and interest are projected to marginally increase over the forward years. Revenue from government trading enterprises is expected to decrease by 5 per cent over the forward estimates, due largely to anticipated reductions in dividends from the Power and Water Corporation associated with its significant capital investment program. The balance of own-source revenue is mainly collected from mining royalties, which is expected to increase by an average of 1.5 per cent over the forward estimates to $92 million by 2011-12. This increase is lower than projected at the time of the Mid-Year Report due in part to the effect of the Australian dollar exchange rate on mining profits. Further analysis of the effect of changing exchange rates on mining royalties is provided in the Statement of Risks section of this chapter. The Cash Flow Statement also includes capital receipts. These are largely sales of vehicles and land and are at more usual levels in 2009-10 and 2010-11. However, in 2008-09 and 2011-12, higher receipts are expected in line with increased land development, including light industrial land sales in 2011-12 and the next stage of the residential component of the Darwin Waterfront.


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