Budget 2013/14 Northern Territory Economy
Tabled paper 295
Tabled papers for 12th Assembly 2012 - 2016; Tabled papers; ParliamentNT
Tabled by David Tollner
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.
Department of the Treasury and Finance
22 Economic Growth 2013-14 Budget offsetting transactions to the Territorys economic account that provide for the actual work done at Blaydin Point. As a result, it is likely that the volatility in the Territorys SFD will be higher than usual during the forecast period, especially during the construction phase of the Ichthys LNG plant and associated pipeline project. GSP, on the other hand, is expected to show a more orderly growth pattern peaking in 2014-15, in line with peak engineering construction activity. Territory SFD is estimated to increase by 25.9percent in 2012-13, driven by growth in private investment expenditure, which is estimated to grow by 94.5per cent. Expenditure on engineering construction is expected to be the largest contributor to growth in the year and reflects large progress payments made by INPEX for construction of machinery, equipment and PAMs primarily being built outside the Territory. It is important to note that while progress payments will have a substantial impact on SFD growth, the payments will be netted out through a balance of payments adjustment in GSP so only the physical work done in the Territory is captured in the year. Therefore, economic growth will not be of the same magnitude as SFD growth. Nevertheless, growth will be boosted by engineering construction activity in the year related to the civil works at the Ichthys LNG plant site project and other projects such as development of the: Montara oilfields; Marine Supply Base; and expansions of existing mines and refineries at the Groote Eylandt Mining Company (GEMCO) and Xstrata mines at Groote Eylandt and McArthurRiver. Construction of new non-residential structures and buildings, such as the Ichthys workers accommodation village at Howard Springs and ongoing works at the Darwin Correctional Precinct, as well as new residential construction, are also expected to contribute significantly to economic growth in 2012-13 (seeChapter11:Construction). Public investment expenditure is expected to decline in 2012-13 by 8.2percent, as the Territory Governments capital works program retreats from record levels but is more than offset by the strong growth in private sector investment. Commonwealth Government investment, including ADF, is also expected to decline following earlier stimulus programs. Total consumption expenditure in the Territory is estimated to have increased by 1.7percent to $14.8billion in 2012-13. Declining government consumption expenditure is expected to be more than offset by household consumption. Growth in household consumption is expected to increase to 3.0percent, which reflects population and residential dwelling construction growth. The largest component of household consumption is rents and other dwelling services, which is estimated to have increased by 4.0per cent in 2012-13, as demand from major projects put upward pressure on rents and house prices, particularly in the Darwin region.
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