NT's $14 billion debt threat is an issue the Australian government should not ignore
On the top of Australia sits the Northern Territory — home to about 255,000 people, and not usually front of mind for politicians on the federal stage.
But as the Albanese government enters its second term in office, it would do well to pay close attention to the fortunes of the northern jurisdiction.
New figures reveal the Northern Territory is facing a net debt of about $14 billion by 2028-29.
It is a staggering figure considering the population; equating to roughly $55,000 per resident.
It is partly the result of a stagnant economy, which sees only a trickle of own-source revenue flowing into government coffers, in a place where population and employment growth are languishing.
Already, 71 per cent of the NT's annual revenue comes from the Commonwealth.
The NT is also trying to grapple with some of the nation's most difficult social problems, stemming from generations-long issues facing its dozens of remote Aboriginal communities.
They include overburdened remote health and housing systems, high crime, homelessness and incarceration rates — driven by decades of failed government policy and disempowerment.
The NT Country Liberal Party (CLP) government's first budget was handed down on Tuesday, with large spends to try and tackle the issues, most noticeably with record police, prisons and health budgets.
The government also says it is funding initiatives to solve root causes of crime, including $73 million to support homelessness services and $204 million for family support services.
But as billions of taxpayer dollars are poured into efforts to halt the NT's challenges, the territory is not seeing the level of significant private industry funding that could offset the spends.
In recent history, big projects promised to future-proof the NT's economy have tanked.
And major projects that do go ahead have a tendency to suffer from massive cost blow-outs.
The Darwin Ship Lift project, first pitched as a $100 million project in 2015 but now heading towards costs of $1 billion, is a case example.
NT Treasurer Bill Yan said in his budget speech there were positive signs on the horizon, pointing to a rise in residential building approvals and a pipeline of upcoming resources projects.
"Private sector confidence is back and industry is keen to get the territory moving across energy, mining, agriculture and tourism," he said.
Mr Yan also said that while reliance on the federal government was a necessity, its contributions to the north could be better targeted.
"While this Commonwealth funding is vital, it is largely to maintain the status quo," he said.
"What we need from the Commonwealth is nation-building projects, taxation reform, and changes to support increased migration."
Until significant changes hit the NT economy's bottom line, the budget numbers will continue to be dire — perhaps to the extent of giving truth to former prime minister Tony Abbott's view that parts of the jurisdiction resembled a "failed state".
In the same breath, the territory has a lot to be positive about.
Its natural beauty is second to none — from the West McDonnell Ranges near Alice Springs to the ancient culture of north-east Arnhem Land and the multicultural melting pot that is Darwin city.
It is a wonderful place where its residents are proud to call home, run businesses and raise families.
As well as the resources sector, there is growing potential in the tourism, screen and arts industries as ways to spread the word far and wide that the territory is beautiful and it is open for business.
But it is also possible that unless the NT sees significant improvement to its financial situation over the next decade, the territory's budget position will eventually become untenable.
The Albanese government needs to view the financial crisis facing the Northern Territory as one also facing the whole of Australia, and consider doing the tough lifting to bail it out now.
A strong Northern Territory would also be something that the whole of Australia could be proud of.
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