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The proposed spending will result in an increased deficit of $1.13b, pushing out the timetable for a return to surplus to 2026-27 – still two years ahead of the Fiscal Strategy Panel’s 2028-29 target.
The NT Government remains committed to its target of a $40b economy by 2030, but with this relying on several major projects that are yet to get off the ground, the latest forecast will see the NT Government likely to still be around $13b shy of that target by 2027.
Unemployment is forecast to average 4.2 per cent through 2023-24, slightly higher than the current rate of 3.8 per cent. Inflation in the Territory peaked in the December 2022 quarter at a 32 year high of 7.1 per cent, however this has softened substantially in recent quarters and forecasted to fall to 3.8 per cent by the end of 2023. Net debt is expected to rise from $6.6b to an estimated $7.8b in 2026-27.
Total revenue is projected to remain largely stable, averaging $8.29b per annum over the forward estimates. GST revenue, the Territory’s largest revenue source, is expected to increase from $3.98b in 2022-23 to $4.37b in 2026-27, an average growth of 2.5 per cent per annum.
Taxation and mining royalties are expected to remain stable averaging $1.02b per annum, balanced between a reduction in mining royalties as mature mines approach end of life and inflationary pressures increasing operating costs, and a growth in taxation revenue from $674m in 2022-23 to $720m by 2026-27, an average growth of 1.7 per cent per annum in line with expected economic activity. Payroll tax is forecast to grow 8 per cent to $261m, reflecting anticipated employment and wages growth.
The headlining revenue measure from the 2023-24 Budget is the introduction of the Stamp Duty Amendment Bill 2023, which provides for the abolition of stamp duty on non-land property. As a result, stamp duty in the Northern Territory is no longer payable in respect of the conveyance of:
The conveyance of chattels together with an interest in land will remain subject to duty. Likewise, land and buildings and mining and petroleum interests will continue to be subject to duty in the Northern Territory.
The new changes will apply from 9 May 2023. Transitional provisions will also apply in relation to agreements or options entered into before 9 May 2023.
The Northern Territory Government is expected to forego approximately $3m per annum of stamp duty revenue as a result of the changes, which, as far as State Budgets go, is relatively low. In contrast, the economic benefits which should result from the changes, in the form of reduced ‘red tape’ for business conveyances and improved certainty for the resources industry, are expected to far outweigh the cost to the Northern Territory.
If you wish to discuss the Northern Territory Budget announcements, please reach out to a Grant Thornton Partner today.
