Budget Paper No.2 Fiscal and Economic Outlook 2008-2009
Tabled paper 1293
Tabled papers for 10th Assembly 2005 - 2008; Tabled papers; ParliamentNT
Tabled By Delia Lawrie
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2008-09 Budget 28 Fiscal Strategy formulate and apply spending and taxing policies so as to give rise to a reasonable degree of stability and predictability; ensure that funding for current services is provided by the current generation; and prudently manage financial risks faced by the Territory (having regard to economic circumstances), including the maintenance of Territory debt at prudent levels. These financial management principles underpin the Territorys fiscal strategy. Sustainable Service Provision Target: General Government Net Operating Balance by 2012-13 The net operating balance for 2007-08 and all forward years has significantly improved since the 2007-08 Budget with surpluses being estimated for all years. Increases are estimated for most revenue categories and additional expenditure has been allocated for both operating and capital purposes. The improvement in the net operating balance is due to the increasing allocation of additional revenue for capital rather than operating purposes. The continuing strength of the Territory and the national economy during 2007-08 has led to an upward revision to own-source revenue, particularly for mining royalties and stamp duty on conveyancing as well as higher goods and services tax (GST) revenue. There has also been an increase in Specific Purpose Payments (SPP) revenue due to finalisation of agreements with the Commonwealth in respect of strategic Indigenous housing initiatives as well as specific programs in health, community safety and education. These revenue increases have been partially offset by new initiatives introduced since the 2007-08 Budget, including the Territorys Closing the Gap commitments, as summarised in Chapter 4 of this Budget Paper. A strong operating result is essential to achieve Governments objective for a positive fiscal balance as it provides capacity to invest in infrastructure without the need for additional borrowing. Table 3.1 highlights the improved net operating balance for 2007-08 and forward years since the original 2007-08 Budget. The net operating balance as a proportion of revenue for 2007-08 and forward years likewise displays an upward trend, peaking in 2009-10 at 4.42 per cent, before declining slightly in later years. 2007-08 2008-09 2009-10 2010-11 2011-12 Estimate Budget Forward Estimates 2007-08 Budget ($M) 29 8 15 38 na 2008-09 Budget ($M) 81 111 174 170 163 2008-09 Budget as a Proportion of Total Revenue (%) 2.21 2.93 4.42 4.18 3.88 Source: Northern Territory Treasury Consistent with the improvement in the estimated operating balance, the expected cash outcome for 2007-08 and future years has also significantly improved from the 2007-08 Budget. The 2007-08 outcome is now estimated to be a small surplus due to similar factors contributing to the improved operating result. However, over the forward estimates period, the improvement in the cash outcome is not as marked Table 3.1: Net Operating Balance General Government
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