Australian politics

Mar 16, 2016

The NT Economy – On-Track or off the rails?

Darwin lawyer Matt Punch has a look at the recent economic indicators and the CLP government’s ‘stimulus’ that tell us all is not well in the Territory.

Bob Gosford — Likes birds and people, not necessarily in that order.

Bob Gosford

Likes birds and people, not necessarily in that order.

On Track CLP

This is a guest post by Darwin based lawyer Matt Punch

The NT's minority Country Liberal Party government spent much of the last year extolling the economic strength of the Northern Territory economy under their watch. This included a noxious taxpayer funded government advertisement campaign called ‘On Track’ which told Territorians that the CLP government was successfully growing the Territory. The ‘On Track’ campaign featured regular glossy ads in the NT News, local television advertising and a flash new website. The campaign reportedly ended up chewing through $428,000 of taxpayers money.[1] In contrast, for some time, the dominant topic of conversation in and around Darwin has been the downturn being felt across much of the Territory economy. For anybody who works in the private sector or has a small business, this has been the BBQ-stopper conversation for at least 6 months now. The latest Commsec ‘State of States’ report still ranks the Territory third amongst the eight state/territory economies. We have higher than average wage growth and economic growth, and lower than average unemployment.[2] However, these headline statistics don’t give the full story. The wages and economic growth figures come with a big asterisk – the $40 billion Inpex LNG project in Darwin harbour. The Inpex mega-project is currently in the thick of peak construction. Wages and economic growth in our small economy are effectively propped up by this huge once-in-a-lifetime statistical outlier. So it’s only when you look beyond the headline economic numbers – and you’re not in the well-paid and secure public service – that you begin to understand why people in Darwin are saying that the place feels like it’s in a big slump. The previously mentioned Commsec report shows measurements from the back-half of last year where dwelling starts were already going backwards and Territory housing finance continued to be the weakest in the nation. The Northern Territory  Treasury department’s latest update is also very sobering on this front.[3] In 2015, there was a 32.9% decrease in housing finance commitments for first home buyers. This was matched by dwelling sales in the Territory (houses and units) decreasing by 31.9% in the year to December 2015. These figures paint a bleak picture – the Darwin real estate market has collapsed. In fact, real estate sales figures look eerily similar to the Global Financial Crisis (GFC) period:

Territory overall dwelling sales, moving annual total, 2005-06 to 2015-16

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4 thoughts on “The NT Economy – On-Track or off the rails?

  1. Norman Hanscombe

    Instead of bleating about this wouldn’t it be a more worthy project to initiate campaigns to place tighter, more effective restrictions on all Australian Governments?

  2. Bo Gainsbourg

    Interesting review, some more analysis like this of the NT, which will continue to be a very strange and particular economy, would be great. I’d say the beneficiaries of Inpex at a guess would be in the main not longer term territory residents. Its a blip, like many of the mines have turned out to be, rather than part of any kind of longer term economic strategy. There has been zero vision on a longer term strategy from Darwin for many years under either CLP or Labor. Some decent thinking on tourism (rather than just marketing, where’s the infrastructure? the new parks or Indigenous supported tourims/protected areas etc?, some thought towards renewables, getting a more effective govt dollar spend (it will always be the mainstay of that economy) rather than white paper fantasy land. (see Tony Windsor’s recent comments on Ord scheme-its trivial in terms of contribution now or potentially, those kinds of schemes are just subsidy holes for no lasting benefit) Its not easy, but we have to get past begging mining companies for crumbs (or bankrolling via the taxpayer them a-la rehabilitation, free fuel, -see McArthur River, Mount Todd etc etc) and on to a more realistic vision.

  3. GeeBee

    The apartment market has been hammered by the downturn but the situation has been made worse by the CLP’s reckless approval of thousands of new units throughout Darwin city and suburbs. Did they think the boom would last forever? Or was the CLP just the *ahem* beneficiaries of close relationships with Darwin’s biggest developers? Just one reason among many to give the CLP a thorough pineappling when the NT votes next. Please God, grant us an early election!

  4. graybul

    Matt, Territory has survived many boom/busts, and so we will do so again. But on this occasion we have been well and truly raped. Who to blame? The new best friend carpetbaggers flashing gold teeth; ill-informed/mis-informed populace; mandarins who open and close doors to power; long term territorians who remained disengaged, ‘observing’; beneficiaries, having seen it all before, employing canny, pragmatic local knowledge to enrich selves; fifo extractors . . . . Blame is merely a tool to redirect vision as far from self as possible. $428000 is a minor cost of this particular train wreck. What happens when the next “big wind” hits and Insurance Funds retreat to home state offices?

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