Infrastructure projects in Darwin’s CBD have been aimed at stimulating the economy. (ABC News: Andie Smith)
It was less than five years ago that Darwin was enjoying its very own rags to riches story.
- The NT Government released a plan this week designed to curb its spiralling debt crisis
- An economics professor has compared it to a crash diet — lacking in long-term solutions
- Experts say new ways need to be found to generate revenue in the Territory
Now the short-lived economic boom — brought by the construction phase of the INPEX gas plant — is over, and in its wake is a deflated property market, a stagnant population and a Government that has little to show for it all.
A Treasury report released late last year forecast the Northern Territory was headed for uncontrollable debt levels, with net debt projected to rise tenfold to $35.7 billion by 2030.
The annual interest repayments alone by then would be almost $2 billion.
Such are these dire straits that the Labor Government is claiming its new plan to repair the finances represents the most significant change to the way things are done since the NT achieved self-government 40 years ago.
The plan is a response to a forensic audit of the Government’s spending by former WA under-treasurer John Langoulant.
It nominates everything from straightforward job cuts to reining in persistent departmental overspend.
Treasurer Nicole Manison is now openly threatening department chief executives could lose their jobs if they don’t stick to their budgets, as well as implementing the millions of dollars in savings measures identified in the audit.
Budget repair plan like a crash diet
So how did we get here, and will the Government’s response be sufficient to drag the budget back to black?
According to Charles Darwin University’s Associate Professor of Economics Ram Vermuri, the answer is probably not.
Dr Vermuri said successive Northern Territory governments on both sides of the fence have struggled to understand what true structural economic reform looks like.
Much like a crash diet, while one might see quick results, the lack of forethought often means a person hasn’t addressed the underlying causes of their weight struggles.
And that matters, because the weight simply returns.
The Government-owned Waterfront Corporation manages a thriving pocket of Darwin. (ABC News: Andie Smith)
“The deficit approach never works, because all you’re doing is fixing one problem immediately, but the actual reason for that problem has not been solved,” Dr Vermuri said.
“There is a need for us to rethink what we’ve actually got, and not look at the gaps and deficits that we’re continually facing.
“We are really in a situation where we are saying, ‘We have sold our wares, we have sold our capital’ — and for the last 30 years I’ve been saying that what we need to do is look at the structure of the economy and ask where we can really expand.”
Basically, he’s begging the Government to look at what we’ve got that’s reliably going to keep generating money for decades to come.
It’s a tall order because at the moment the Government is focused on growing the population, largely so it can increase its share of the GST, rather than utilising the existing population to grow the economy.
Population efforts stuck in limbo
A government campaign aimed at growing the Territory’s population, known as “Boundless Possible”, hit the big time during last season’s AFL grand final, shouting at millions of fans that they should come get a slice of what’s on offer.
Net migration and population change to Greater Darwin have dropped in recent years. (Supplied: Charles Darwin University)
The campaign rewarded people migrating to the NT with cash bonuses if their occupation was listed as a needed skill, but so far has only had piecemeal success.
The NT has struggled to grow its population significantly but has managed to maintain a rusted-on base population — currently around 228,000 in total.
Part of that figure includes a substantial transient population — there’s a seemingly endless stream of people coming to and leaving the Territory after having “done their time”.
They’re teachers, nurses, doctors, lawyers, military personnel, public servants, journalists — all looking to break into their chosen field or to obtain unique work experience.
Paul Morgan is among a transient group of professionals in the NT who do not put down roots in Darwin. (Supplied)
In February, lawyer Paul Morgan relocated back to Melbourne after four years living and working in Darwin.
“I see Darwin as a place that I’ll keep coming back to, but right now in my life I feel like I need a fix of another city,” he said.
“It always felt a little bit to me like an expat posting where you’re kind of enjoying this incredible place with new friendships, but it did feel like I was away from home.”
Having worked for Aboriginal legal aid, Mr Morgan said the interesting work in the NT was what kept him here much longer than he anticipated.
He explained that among his friends and family in Victoria, living in Darwin was “definitely seen as very unusual”.
“Because people don’t understand what Darwin has to offer, people kind of wonder why I went up there, and it’s only when I explain that it’s got this great lifestyle, social life, and all these natural attractions right there that people understand,” he said.
“The elephant in the room for everyone living in Darwin is there’s this huge marginalised population and social inequality right around you as you live quite a nice life. And that’s quite confronting.”
Devon and Pierre Esterhuyse have just moved to Darwin from South Africa for lifestyle and safety reasons. (Supplied)
For new arrivals to Darwin, South African Devon Esterhuyse and her family said they felt as though they had arrived in the lucky country.
“My husband and I were in the Territory 10 years ago, it’s actually where we met and fell in love and we always said we’d come back,” Ms Esterhuyse said.
“I just said to him that with the crime rates and everything in South Africa, and having our neighbour murdered at his home in the middle of the afternoon when I was home from work … I don’t feel safe and I don’t want to raise our kids here.”
Taking a punt on Darwin, her husband applied for work at an airline based in the Top End and the family of four made the move.
“Living where we were, we feared for our lives every day, and here you don’t have to be looking over your shoulder worrying that someone’s going to steal your child or hurt them,” she said.
“It’s really nice to be living here.
“We originally said Australia is a five-year plan, then we’ll reassess and maybe move somewhere else overseas.
“But for now this is home and we’re making the best of it.”
A question of introspection
John Langoulant’s report noted that over the long term, the Northern Territory needs to “redress its acute reliance on Commonwealth funding, through growing the Territory economy to increase its own-source revenue base”.
The Northern Territory is heavily reliant on Federal funding. (Supplied: Australian Bureau of Statistics)
It’s a point Chief Minister Michael Gunner and Ms Manison readily agree with, but beyond the commencement of an onshore gas industry this year and vague promises to start a new manufacturing sector, there is no clear or compelling plan for new own-source revenue streams on the table.
It was this lack of concrete answers that frustrated backbenchers just before Christmas, and even threatened to destabilise the party.
At the release of the budget repair plan this week, Mr Gunner doubled down on his pledge that industries were being developed behind the scenes and said he would be personally overseeing a new office that focuses on attracting private investment.
Yet the $5 billion North Australia Infrastructure Development Fund (NAIF), which offers interest-free loans, has had only mediocre success in attracting private investment to Northern Australia.
And the Northern Territory’s similar fund — the Infrastructure Development Fund — supported only one project before the Government scrapped it.
John Langoulant led a review into the Northern Territory’s fiscal position. (ABC News: Ian Redfern)
According to Dr Vermuri, the NT Government is looking in the wrong place for long-term economic growth.
“We have to start by going back to the basics of what is the Territory economy about and where do we actually sit in the global economy,” he said.
“What we’ve got is a steady population of Indigenous people in communities, we’ve got land, and we’ve got wonderful commitment from Territorians.
“Our possibilities are boundless, so long as we recognise those boundless possibilities as being in-house — in the Territory — and for Territorians.
“And once you’ve addressed that, you’re then in a position to expand from within, rather than superimposed expansion.
“Because superimposition of the economy will only last as long as money is provided — and once the money dries up, we’re hanging dry.”
Structural lock-out of Aboriginal Australians
While the Government was sleek in its preparation of the glossy 178-page budget repair document, the glaring omission was a lack of planning around greater Aboriginal inclusion in the economy.
It’s something Joe Morrison, the former head of the Northern Land Council, said wasn’t surprising to him.
“There is absolutely nothing that I’ve seen in my time working in Aboriginal affairs over the last 25 years that’s exceptional in terms of getting Aboriginal people involved in the economy, and turning the economy around,” Mr Morrison said.
Around 30 per cent of the Northern Territory’s population is Aboriginal and Mr Morrison said he believed a lot of the Government’s plans were at the exclusion of Aboriginal people.
“Even though they own half the land mass, have native title rights and control the coastline, there are very few measures in relation to getting people participating in the economy,” Mr Morrison said.
“I think there’s an inertia in the public service and the political forces in the Northern Territory to dip their toes into Aboriginal economic development in a real and meaningful manner.”
Mr Morrison said there were some potential bright spots on the horizon for Aboriginal economic development such as the Blue Mud Bay High Court decision, which gives traditional owners control over 80 per cent of the Northern Territory’s coastline.
But he said making the most of those opportunities for the Territory’s Aboriginal residents would take a political shift he’d never seen.
“In my mind, there’s a breakdown in self-government [because] you’ve got a Government that doesn’t involve the first peoples who own the land in the future of the Northern Territory,” he said.