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
Economic Growth 25 Northern Territory Economy The Territorys trade surplus is expected to narrow significantly in 2014-15, reflecting record levels of merchandise imports associated with peak construction activity at the Ichthys LNG plant. Exports of goods are also forecast to decline due to a scheduled maintenance shutdown at the ConocoPhillips Darwin LNG plant and associated Bayu-Undan field in the year. Additionally, export of alumina from the Pacific Aluminium refinery in Gove is forecast to decline due to a temporary shutdown of works to convert the refinery from being powered by oil to gas. As actual activity on the Ichthys project progresses and imports of machinery and equipment arrive for peak construction, it is expected the ABS will make a significant positive adjustment for engineering construction work actually happening in 2014-15 but previously paid for under progress payment arrangements in prior years (2012-13 and 2013-14), adding to growth in the year. Long-Term Economic Projections Economic growth is forecast to moderate to 4.5percent in 2015-16 as construction activity declines as major projects are completed, before moderating further to 3.9percent in 2016-17. Growth in 2016-17 is expected to be underpinned by the commencement of LNG exports from the newly built Ichthys LNG plant, despite construction activity forecast to decline to long-term trend levels. Nonetheless, economic growth is expected to remain buoyant due to the creation of a three-hub economy based on mining and energy, tourism and international education, and food exports and exports into Asia. SFD in the Territory is forecast to decline in both 2015-16 and 2016-17 by 4.2percent and 3.7percent, respectively, due to declining levels of construction expenditure associated with the completion of the Ichthys project in mid-2016. Nevertheless, construction activity is expected to remain well above long-term trend levels supported by activity for the gas to Gove project in 2015-16 and continued residential development in 2016-17. Growth in total consumption expenditure is expected to moderate in 2015-16, as growth in household consumption, employment, population and private sector wages growth slows in the year. Household consumption growth is expected to moderate further in 2016-17 following the conclusion of the construction phase of the Ichthys project, as both population and employment growth slow significantly. The largest component of household consumption, rent and other dwelling services, is expected to decline in 2016-17 as pressures in the housing market unwind as the Ichthys workforce reduces. The Territorys international trade surplus is forecast to increase substantially in 2015-16, reflecting a large drop in imports as the importation of PAMs declines and bunker oil imports from Kuwait cease following the conversion of the Pacific Aluminium power plant to gas. The growing trade surplus will also be supported by exports, reflecting increasing LNG, alumina, manganese and zinc/lead production (see Chapter 10: Mining and Manufacturing).
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