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
4 Overview 2013-14 Budget at XstratasMcArthurRiver mine near Borroloola and Groote Eylandt Mining Companys manganese mine at Groote Eylandt. Growth was partly offset by strong growth in imports relating to the importation of the Montara Venture oil platform in December 2012 to service the Montara oilfields and other machinery and equipment related to the development of major projects. Declining public sector expenditure, by all tiers of government, is also expected to detract from growth in the year. Demand for goods and services in the Territory, as measured by state final demand (SFD), is estimated to increase by 26.3percent in 2012-13. Expenditure on engineering construction is expected to be the largest contributor to growth in the year and reflects activity related to major projects currently underway across the Territory and progress payments made by INPEX as highlighted above. The International Monetary Fund (IMF) is forecasting global economic growth to strengthen from 3.2percent in 2012 to 3.5percent over 2013, primarily due to an improving outlook in emerging and developing economies, especially China, and a strengthening United States (US) economy on the back of an ongoing recovery in the housing sector. Economic activity in the European Union is expected to stabilise in the firsthalf of 2013 and grow modestly in the second half of the year, reflecting the effect of accommodative monetary policies by central banks. The Australian economy is forecast to slow over 2013 reflecting a peak in mining investment, declining public investment and a high Australian dollar, which is expected to continue to have a negative impact on a number of sectors in the Australian economy. Nevertheless, growth is expected to be underpinned by exports, particularly for iron ore and coal, and low interest rates, which are expected to stimulate household consumption expenditure and dwelling investment. Annual population growth in the Territory is estimated to have strengthened from 0.8percent in 2011 to 1.9per cent in 2012, primarily driven by high levels of overseas migration to the Territory. Strong growth in overseas migration to Australia is also expected over the year and reflects the relative strength of the Australian and Territory economies compared to other nations, which have attracted migrants in search of work. The development of a number of major projects in the mining and manufacturing sectors in the Territory, which has required the importation of skilled labour, has also been a contributing factor to strong growth in overseas migration. Additionally, increasing numbers of temporary visa holders, and in particular international students, have also been key drivers of overseas migration to the Territory and Australia in recent years. Growth in the Darwin consumer price index (CPI) is forecast to strengthen from 2.0per cent in 2012 to 3.9per cent in 2013 due in part to the Territory Governments increases in utility prices on 1 January 2013 and the Commonwealth Governments introduction of the carbon price from 1July2012. Inflation will also be driven by a recovery in the Darwin housing market, which has led to strong growth in house purchase and rental prices over 2012 and into 2013. The forecast for the DarwinCPI in 2013 has been revised downward from the 4.3percent reported in the 2012-13 State Final Demand External Economic Environment Population Prices
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