The Northern Territory’s Labor government handed down the 2018-19 Budget on Tuesday May 1. The headlines feature of the budget is a $1.2 billion deficit for the 2018-19 and a projected net debt position at 30 June 2019 of $4.5 billion. The budget papers predict deficits of $1.1 billion per annum over the forward estimates and a net debt position of $7.5 billion at the end of 2021-22.
The NT Treasurer, Ms Nicole Manison, outlined that weakening economic conditions, reduced GST revenue and increased demand for government services had been the main factors behind the Territory’s deteriorating fiscal position. Accordingly, the Government says that the budget has been targeted at investment to grow local jobs and to bring more people to the Territory with a goal of tackling “generational change and creating a brighter future”.
Highlights of the budget include $1.45 billion spend on infrastructure investment (including $626.4 million to upgrade the Territory’s roads, $243.2 million for community safety and $210.4 million for economic and community infrastructure) and programs to increase employment of NT residents.
The 2018-19 Budget includes a number of revenue policy changes aimed at generating more jobs and business activity. These include:
- Local employment package
- A payroll tax exemption will be available for Territory resident employees hired from 1 May 2018 to 30 June 2020 who either increase the number of local employees of the business or replace a former interstate employee of the business
- Changes to the mining royalty scheme to allow mining companies to deduct the costs of providing accommodation for Territory employees and remove a royalty deduction for travel and ancillary costs for interstate-based employees
- A new derelict buildings and vacant properties levy will commence 1 July 2019 on unoccupied commercial land in the Darwin CBD at a rate of 1 per cent of unimproved capital value of buildings that are 50 per cent or more vacant and 2 per cent for undeveloped vacant land
- Hybrid Royalty Scheme – To be introduced from 1 July 2019 a new hybrid royalty scheme will require mining companies to pay a minimum royalty based on the gross value of mineral production ranging from 1% in the mine’s first mineral royalty year to 2.5% per annum ongoing.
- Amendment to apply from 1 July 2018 to the Act used to calculate most government fees so that future annual increases will be the higher of 3 per cent or CPI.
The Government has seen a reduction in revenue from mining and petroleum royalties and revenue, however no potential royalties from the recently decision to lift the moratorium on the fracking industry have been included in the budget forecasts.
How can Nexia Edwards Marshall NT help you?
For any questions or to discuss any of the above in relation to your personal situation, please contact Sarah McEachern or your Nexia Edwards Marshall NT Adviser.