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Budget Overview 2006-07 budget Budget Overview Contents Budget at a Glance 2 A Growing Economy 4 Acknowledgements Skills and Jobs 6 The photographs in this publication are reproduced with the kind permission of: Better Education 8 Department of the Chief Minister Regional Highlights 10 Department of Employment, Education and Training Department of Health and Community Services A Safer Community 12 Department of Local Government, Housing and Sport Department of Natural Resources, Environment and the Arts Healthier Communities 14 Department of Planning and Infrastructure Living in the Territory 16 Northern Territory Police, Fire and Emergency Services Power and Water Corporation Fiscal Outlook 18 Territory Housing Tourism NT Industry Investment 20 2006-07 budget Budget Overview Budget at a Glance Budget 2006 builds on the Government’s priorities of: Infrastructure Spending • supporting and growing business; Total infrastructure spending of $482 million is estimated for 2006-07, • improving educational outcomes; including: • building a healthier Territory; • a capital works program of $268 million, with estimated • providing a safer community for all Territorians; and expenditure of $167 million; • enhancing our great lifestyle. • capital grants spending of $53 million; • Power and Water Corporation capital Building the Territory’s Future expenditure of $83 million; and The Government has committed significant investment funds • repairs and maintenance totalling to strategic infrastructure: $172 million (including Power and Water Corporation). • roads and transport infrastructure; • schools and the Desert People’s Centre; • Darwin Waterfront Development; and • public, Indigenous and Government employee housing. The 2006-07 Budget supports Territorians and local business by: • lifting the payroll tax threshold from $1 million to $1.25 million; • completion of the four year $15.2 million Building the Territory’s Resource Base investment attraction program for the minerals and energy sectors; • additional $10 million a year for the Investing in the Future of the Territory tourism marketing and development strategy; • abolishing stamp duty payable on rent paid for the grant and renewal of leases and franchises and unquoted marketable securities from 1 July 2006; and • implementing the Buy Territory policy requiring at least a 20 per cent weighting on local tenderers for Government works and services, to build the capacity of Territory business. Record Budgets: Health, Education and Police The Government’s commitment to the key priority areas of health, education and police is strengthened with record budgets in 2006-07: • $789 million for health and community services; • $631 million for employment, education and training; and • $212 million for police, fire and emergency services. 2 Budget at a Glance Local Jobs and Better Skills Building a stronger future for the Territory through the development of a skilled workforce is a key priority for Government. The 2006-07 Budget continues the focus on building a skilled workforce. It injects funding of $84 million to support key jobs programs as well as encouraging employees to upgrade or maintain existing skills through nationally recognised programs. The emphasis on training ensures that skilled workers are available into the future to expand and grow the Territory economy. The 2006-07 Budget also focuses on infrastructure, ensuring that jobs are provided both directly and indirectly for 2006-07 Major Works Program Territorians. The Government’s high level of infrastructure Roads and other transport infrastructure $74.47M spending supports jobs for Territorians, work for local business Schools $33.81M and a flow-on effect through the whole economy. This includes: Housing $21.60M • delivery of economic investment such as the Darwin Darwin Waterfront Development $15.54M Waterfront Development and the Desert Knowledge Precinct; Desert Knowledge Precinct $14.16M • continued upgrading of the Mereenie and Litcheld loops Hospitals – Darwin, Alice Springs and $12.94M roads, the Victoria Highway and other strategic Territory roads; Tennant Creek and Health centres $8.97M Lifestyle and environment $11.49M • facilitation and delivery of complementary infrastructure for Darwin Port and Business Park $5.89M East Arm Wharf, including completion of the bulk handling Police, fire and emergency services $4.99M and shiploader facilities, an interim quarantine waste disposal Land developments $2.98M facility and an upgraded control system for the container crane. The Territory’s low tax regime also assists with business and economic growth, which translates into jobs for Territorians. Recurrent Taxes for a business with 80 sta Recurrent Taxes for a business with 100 sta $000 $000 320 400 240 300 160 200 80 100 0 0 NSW VIC QLD WA SA TAS ACT NT NSW VIC QLD WA SA TAS ACT NT Budget at a Glance 3 2006-07 budget Budget Overview A Growing Economy Since 2001, the Government’s program of tax reform has made the Territory the most competitive of all the states for recurrent taxes paid by small business. Together with its focus on development, the Government’s tax policies have stimulated economic growth and generated prosperity across the Territory. Lower Taxes Budget 2006 will see the implementation of the latest tranche of tax cuts designed to directly benefit Territory business. Since 2001, these cuts have delivered a total savings of $74 million. The Territory is now the lowest taxing jurisdiction in Australia in relation to recurrent taxes for small business. Northern Territory Payroll Tax • The payroll tax-free threshold will rise from $1 million to $1.25 million $M % 1.4 6.6 from 1 July 2006, releasing another 58 businesses from the payroll 1.2 6.5 1.0 6.4 tax net. This brings the total to 187 businesses relieved of the payroll 0.8 6.3 tax burden since 2001. More than 1300 businesses will benefit from 0.6 6.2 0.4 the increased payroll tax threshold, with locally-based Territory 6.1 0.2 0 6 businesses that continue to pay payroll tax expected to save, on 2002 2003 2004 2005 2006 2007 30 June average, an additional $13 500 in payroll tax a year. Tax Rate Tax-Free Threshold • The Government has also committed to reducing the payroll tax rate from 6.2 per cent to 5.9 per cent, at an estimated value of $6.2 million, during its current term. • From 1 July 2006, stamp duty payable on the rent paid for the grant and renewal of leases and franchises and on unquoted marketable securities will be abolished. This will save Territorians, including Territory businesses, about $2 million each year. • Stamp duty on hiring arrangements is also set to cease from 1 July 2007, worth $5.3 million a year. The Government’s commitment to tax reform also extends to abolishing stamp duty on the non-land component of business conveyances, worth about $6.8 million a year. Residential Construction is Strong Over the past two years, the value of residential construction work done increased by 37 per cent and residential building approvals have grown by 36 per cent. These strong figures have translated into jobs and business opportunities for the construction industry, suppliers and related support services across the Territory. Such strong growth has been supported in large part by Government programs: • the first home owner grant scheme ($7000) and stamp duty first home owner concession (up to $8015); • principal place of residence stamp duty rebate (up to $2500) on other home purchases; A Growing Economy • HomeNorth schemes to enable low and middle income earners to purchase a home (estimated $80 million in 2006-07); and • public, Indigenous and Government employee housing construction and upgrade programs across the Territory (about $86 million in 2006-07). The outlook for residential housing sales, prices and construction is solid, based on recovering population growth in the Darwin region. Economic Growth The major inuence on estimated economic growth of 6.7 per cent in 2005-06 has been strong onshore activity, with work on major projects, most notably construction of the liquefied natural gas (LNG) plant at Wickham Point and the Alcan G3 renery expansion. The mining and energy sectors have strengthened and population growth has been supporting solid residential construction. Employment is growing and the tourism industry continues to recover. Economic growth – forecast to remain strong at 5.8 per cent in 2006-07. A full year of LNG production, peak production at the Bayu-Undan gas and condensate fields, increased alumina production from the Alcan G3 renery and a full year of production at the new Bootu Creek mine near Tennant Creek will be the major contributors to growth. Exports – strong growth will largely offset the significant decline in business investment as work on the Alcan expansion and the LNG plant finishes. These projects were substantial, and investment on this scale again is unlikely, at least in the short term. Employment – forecast to increase by 2.3 per cent in 2006-07, supported by construction work on the Darwin Waterfront Development, continuing high levels of residential construction and the continuing rebound in international visitor numbers. It is expected to be partially offset by a drop in fly in y out employment associated with Summary of Territory Economic Indicators the Alcan G3 renery expansion and Year on Year estimate forecast Percentage Change 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 construction of the LNG plant. Real GSP 1.2 0.1 0.2 3.6 6.7 5.8 Population – strong growth over the Resident 5.4 -0.1 -2.2 -2.0 2.1 2.3 past year, estimated at 1.7 per cent in employment 2005-06, and forecast to keep growing Population1 0.9 0.1 0.3 1.1 1.7 1.5 by 1.5 per cent in 2006-07, buoyed Darwin CPI2 3.6 2.2 2.1 1.6 2.6 2.9 by a positive economic outlook and 1 As at December, annual percentage change employment opportunities.
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