Treasurer Nicole Manison has today announced budget repair measures to address the unprecedented fiscal challenges facing the NT.
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Ms Manison said the recent $1.4 billion cut to the Territory’s GST revenues over four years, on top of the $2 billion reduction announced last year are having a serious impact.
“The massive reduction in GST means the Territory has lost more than $800 million per year in critical funding,” she said.
“It is simply not possible to match these cuts with savings or revenue measures – to do so would mean shutting down every school or hospital the Territory or unfairly taxing Territorians. This Government will not do that.
“Budget 2018 will support and create jobs, grow our population and invest in a brighter future for Territorians in a fiscally sustainable manner.”
The 2018 Budget savings measures include:
- A reduction in the public sector wages policy from 2.5% to 2% to reflect wages growth in the Territory, from October 1, 2018 (for enterprise agreements not already in place or that have gone to ballot)
- A reduction in departments’ operational budget indexation to reflect CPI
- Establishment of a targeted, voluntary redundancy scheme across government
- Consideration of a position freeze within the public sector to limit FTE growth
- Additional efficiencies from the Territory’s Government-owned Corporations
- Reviewing grant arrangements to ensure value for money
- Reducing repairs and maintenance expenditure following record stimulus programs in 2017-18
“These measures are needed and are additional to the targets set in the 2017 Budget. They will result in around $800 million in total savings by 2021-22,” she said.
Ms Manison said a new Budget Review Committee has been established which will identify further opportunities for efficiencies across the public service and ways to minimise recurrent expenditure.
The Treasurer also outlined new revenue measures as part of Budget 2018, following the Territory’s first-ever comprehensive review of own-source revenue in 2017-18.
“We know that many Territory businesses and families are doing it tough right now. Our changes to revenue, following a frank discussion with the Territory community,” Ms Manison said.
Changes to revenue in Budget 2018 include:
The introduction of a hybrid royalty scheme to ensure all operating mines in the Territory pay a minimum royalty to Territorians for the value of minerals they extract. From 1 July 2019, the new scheme requires mining companies to pay the greater of the existing 20 per cent profits-based scheme, or a value-based royalty on their gross mineral production revenue at a rate of:
1 per cent in a mine’s first mineral royalty year on or after 1 July 2019,
2 per cent in the second mineral royalty year, and
2.5 per cent in the third and following mineral royalty years.
Government fees and charges linked to revenue units will increase by a minimum of 3 per cent per annum or CPI (currently only linked to CPI) from 1 July 2018. Due to the Territory’s low CPI, revenue units have not increased for three years.
Working with industry to encourage the revitalisation of the Darwin CBD through innovative land use, a Derelict and Vacant Property Levy will commence from 1 July 2019. A rate of 1% will be levied on buildings which have a 50 per cent vacancy rate or more, and a rate of 2% will be levied on undeveloped land, based on the unimproved capital value
Stamp duty exemptions have been abolished for the transfer of a petroleum lease, pipeline interest, licence, or permit. This brings treatment into line with other similar property transactions in the Territory which are subject to stamp duty.
Other revenue decisions include the delaying, for one year, the implementation of increases to community gaming machine tax currently legislated to take effect from 1 July 2018 in order to assess the capital investment by the hotel industry in 2018-19
“These changes represent a fair and balanced approach to Budget repair, and I thank the Territory business community and other peak bodies for their contribution to the Revenue Discussion Paper.
“We are a responsible Government and we will not hurt Territorians by imposing drastic tax hikes like a land tax and selling off Territory assets.
“This Government supports Territorians, and that’s why we want to see more jobs, more people and a brighter future for all.”