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

77 The Territory Economy The Northern Territory economy reports amongst the highest economic growth rates of the Australian jurisdictions over the past three years. Economic activity in the Territory continues to be dominated by mineral and energy production, construction activity, tourism and the public sector. The small size of the Territory economy means that large, typically resource-based, projects can have a substantial impact on investment and production, resulting in volatile growth patterns. The structure of the economy reflects significant natural resources, the Territorys importance in national defence and the relatively large tourism and public sectors. The significance of the mining and tourism industries makes the Territory economy particularly reliant on exports and susceptible to developments in key export markets and the world economy generally. This chapter outlines the economic growth outlook for the Territory for 2007-08 and 2008-09. A more detailed analysis of the Territory economy is included in the 2008-09 Northern Territory Economy Budget-related paper. In 2007-08, Territory state final demand (SFD) is estimated to increase by 2.1 per cent, driven by very strong levels of total consumption expenditure which more than offset the significant decline in total investment expenditure associated with the completion of the Wickham Point liquefied natural gas (LNG) plant and Alcan alumina refinery mega projects. Household consumption expenditure is estimated to grow by 6.4 per cent in 2007-08, supported by strong employment and population growth and high levels of consumer confidence. Business investment is estimated to decline by 9.2 per cent in 2007-08, reflecting significant declines in engineering construction activity associated with major projects and despite increased machinery and equipment investment by several key mining operations. In addition, the level of dwellings investment is estimated to decline by 3.3 per cent in 2007-08, as housing affordability and interest rates dampen activity. The level of public consumption expenditure reflects the significance of spending on both Closing the Gap and the Northern Territory Emergency Response in 2007-08. Public investment in 2007-08 is being supported by upgrades to the road network, including commencement of stage 1 of the Tiger Brennan Drive extension, and the ongoing delivery of the Middle Years schooling program, as well as continued development of the Desert Knowledge Precinct in Alice Springs. Chart 7.1 shows the relative growth rates of private and public investment in the Territory. Both exhibit substantial volatility, with private investment in particular impacted by major resource projects. The most recent cycle of private investment peaked in early 2006, and has been declining since, reflecting the completion of both the Wickham Point LNG plant, and the Alcan refinery expansion. The estimated and forecast growth in public investment reflects defence expenditure and initiatives for Closing the Gap and the Emergency Response, as well as the Governments capital works program including expenditure on roads, schools and other social infrastructure. Chapter 7 The Economy in 2007-08


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