NT Treasurer Nicole Manison criticised for coronavirus budget claim
The NT Treasurer’s claim that a better-than-expected deficit for last financial year is linked to the Government’s budget-repair initiatives is inaccurate, an independent budget policy analyst says.
The Government yesterday released its COVID-19 Financial Report, which included a fiscal update showing a severe deterioration in debt and deficit estimates for the current financial year.
The update also revealed an improvement for the previous financial year, including an estimated $79 million reduction in the deficit compared with the forecast last November.
Treasurer Nicole Manison pointed to the 2019-20 figure as proof the Government’s policies were having a positive effect on the books prior to the coronavirus pandemic.
“This is confirmation that we were delivering our budget-repair plan,” Ms Manison said at the launch of the fiscal update.
But the Grattan Institute’s budget policy fellow, Kate Griffiths, said the deficit improvement was not specifically related to the Government’s expenditure-restraint measures, which included a reduction in executive staffing levels and salary freezes.
“If that’s what the Treasurer is referring to, then it wouldn’t be fair to sort of claim credit for that [deficit] improvement because the improvement isn’t related to decisions made by Government,” she said.
Instead, Ms Griffiths said the improvement had more to do with a delay in spending.
She noted yesterday’s fiscal update showed the transfer of expenses and capital projects from 2019-20 to 2020-21 amounted to $179 million.
“There’s a real question here about governments claiming credit for the good and not accepting responsibility for the bad,” Ms Griffiths said.
“This is not a budget-repair story and it shouldn’t be like that.
“Because right now, what we need is governments responding to the COVID crisis.”
More than 9,000 expected to be unemployed
To date, the Government has committed $383 million in coronavirus-related stimulus and support measures, including $43 million worth of packages unveiled yesterday.
But its budget has been severely impacted by a $649 million reduction in GST revenue over two years, as well as significant falls in mining royalties, payroll tax and other own-source revenue.
The Treasurer said budget-repair initiatives enacted prior to the pandemic had put the Territory in a better position to respond to the health and economic emergency.
“Where we had seen that improvement is because we’ve been doing the hard work to manage what is an ever-changing budget and a very dynamic situation … and had we not put in the hard work that we had, we wouldn’t be in this position,” Ms Manison told the ABC.
While yesterday’s fiscal update noted several positive signs in the pre-pandemic economy — including growth in state final demand as well as upwards trends in employment and retail spending — it foreshadowed a coronavirus-related slump over the coming year.
Notably, unemployment is forecast to rise from 5.6 per cent to 6.8 per cent.
In real terms, that equates to an increase from 7,778 Territorians to 9,454.
Ms Griffiths warned the unemployment estimates could prove to be even worse because the fiscal update couldn’t factor in unexpected developments.
“We don’t yet know if we’re going to need more lockdowns to manage the health situation, whether more states are going to be in the position that Victoria is in right now,” she said.
“And if any of those sort of second-wave risks or third-wave risks eventuate for the Northern Territory, then that will affect the unemployment rate beyond what’s in the current forecast.”