Mr HIGGINS - 2012-10-30
A key economic strategy for the Mills government is the development of a robust three-hub economy. Can you please detail to the House the importance of a strong, diverse economic base to the Territory budget?
ANSWER
Madam Speaker, I thank the member for Daly for his question. The three-hub economy came about as part of our election platform going into the election on 25 August. We felt that it was necessary to broaden our economic platform and make sure we were not completely dependent on the single-hub economy created by the former government. We felt there was great risk associated with putting all our eggs into one basket. Indeed, that basket is a good one; we are not putting down the fact that the gas industry in the Northern Territory is doing exceedingly well. Thank goodness, because the state of the Northern Territory’s financial situation is rather gloomy, but to offset that, INPEX and other gas companies have come to the rescue.
It is important that we look at a three-hub economy, not just mining and energy, but tourism and education, as well as food and an export hub. Twenty percent of the Territory’s revenue is derived from own source revenue, primarily payroll tax, stamp duties and royalties. A strong and diverse economic base generally translates into high employment, higher wages, greater prosperity, business opportunities, jobs and prosperity across the board. All of these things can generate greater own source revenue for the Territory. If business is booming then the Territory government is benefitting through taxes and various forms of revenue.
A narrow economic base, which is what we have inherited from the former government, presents risks to the Territory, in economic terms as well as in fiscal terms. I will continue to talk about that as the days and months progress. A narrow base means there are fewer sources of growth for the economy. In turn, own source revenue is vulnerable to adverse economic outcomes and external shocks. A diverse economic base is important to spread these inherent risks.
Large projects such as INPEX have carried the Northern Territory through these hard times. Over the last four years in which the mismanagement of the former government is laid very plain before us - the fact it did not recognise we were going through a global financial crisis, it ignored the fact it had to trim back expenditure. Thank goodness for INPEX; however, having said that we, as a new government, realise we have to broaden things; we have to ensure there are at least three hubs to our economy instead of one.
Offshore oil and gas developments do not contribute to the Territory’s mineral royalty revenue. Instead, royalty payments from these offshore gas developments go to the Commonwealth government.
ANSWER
Madam Speaker, I thank the member for Daly for his question. The three-hub economy came about as part of our election platform going into the election on 25 August. We felt that it was necessary to broaden our economic platform and make sure we were not completely dependent on the single-hub economy created by the former government. We felt there was great risk associated with putting all our eggs into one basket. Indeed, that basket is a good one; we are not putting down the fact that the gas industry in the Northern Territory is doing exceedingly well. Thank goodness, because the state of the Northern Territory’s financial situation is rather gloomy, but to offset that, INPEX and other gas companies have come to the rescue.
It is important that we look at a three-hub economy, not just mining and energy, but tourism and education, as well as food and an export hub. Twenty percent of the Territory’s revenue is derived from own source revenue, primarily payroll tax, stamp duties and royalties. A strong and diverse economic base generally translates into high employment, higher wages, greater prosperity, business opportunities, jobs and prosperity across the board. All of these things can generate greater own source revenue for the Territory. If business is booming then the Territory government is benefitting through taxes and various forms of revenue.
A narrow economic base, which is what we have inherited from the former government, presents risks to the Territory, in economic terms as well as in fiscal terms. I will continue to talk about that as the days and months progress. A narrow base means there are fewer sources of growth for the economy. In turn, own source revenue is vulnerable to adverse economic outcomes and external shocks. A diverse economic base is important to spread these inherent risks.
Large projects such as INPEX have carried the Northern Territory through these hard times. Over the last four years in which the mismanagement of the former government is laid very plain before us - the fact it did not recognise we were going through a global financial crisis, it ignored the fact it had to trim back expenditure. Thank goodness for INPEX; however, having said that we, as a new government, realise we have to broaden things; we have to ensure there are at least three hubs to our economy instead of one.
Offshore oil and gas developments do not contribute to the Territory’s mineral royalty revenue. Instead, royalty payments from these offshore gas developments go to the Commonwealth government.
Last updated: 09 Aug 2016