Mr WOOD - 2002-05-23
Chief Minister, you recently returned from a meeting in Canberra to discuss Commonwealth funding for the Territory. Could you please give the House a detailed breakdown, exactly how much money the NT received in Commonwealth funding this year for next financial year, including money received as specific purpose grants? Could the Chief Minister also give the House the comparison between last year’s funding and this year’s, and highlight any increases in funding for this year?
ANSWER
A very important question, Madam Speaker, as this House is probably only too aware, and certainly 82% of our funding comes directly from the federal government. It is one of the reasons why we, as the Territory, and I say we as the Territory, because I believe that we are joined by the opposition in this, are so determined to pursue getting gas onshore from the Sunrise field, so that we can start to build our capacity for our own source revenue. Eighty-two per cent of our funds coming directly from Canberra means that we are dependent, very thoroughly dependent, on federal government funding.
Funding levels, I believe, are appropriate and I was very pleased to see that in the latest round from the Grants Commission our relativities had gone up in relation to other jurisdictions. One of the reasons for that was, that the cost of delivering key services in health and education has also risen. One of the justifications for having a Commonwealth Grants Commission is that, whether you live in the Territory in a remote area, or whether you live in a suburb of Melbourne like St Kilda, then you have a government that is funded to be able to deliver an equivalent kind of service no matter where you are. I think this is something that we are very proud of in having a Commonwealth Grants Commission that is actually looking at how to build Australia rather than let areas like Victoria and New South Wales, who have a great capacity to raise revenue, and have greater numbers, simply be able to move ahead in their areas and leave somewhere like the Territory that doesn’t have that capacity, to lag behind. I want to put on the record that we do support the horizontal fiscal equalisation principles of the Commonwealth Grants Commission.
The second part of the question from the member for Nelson was specific purpose payments, so let us just look at those, or the tied grants. They are expected to rise by $2.5m in the 2002-03 year, to $345m. Now, that very meagre amount does not keep pace with inflation and does, in effect, mean that we have a cut in real terms. The total Commonwealth grants for next year are expected to rise by $137m, and that takes us from $1.733bn this year to $1.870bn next year. That is the latest data that I can give the member for Nelson and other members of this House.
Mr Burke: Would you repeat that? Just the grants. You read them rather quickly.
Ms MARTIN: $1.733bn this current year, and that rises to $1.870bn, in round figures, for next year. That is an increase of $137m. Around half this increase has already been factored into the forward estimates for this coming year. That was in the mini-budget for anyone who refers - and I expect daily - to those mini-budget figures, and reflects a larger GST pool in the coming year, as compared with the current year.
To go to that GST pool, under the transitional arrangements that were put in place because of changed tax arrangements, the amount of the general revenue assistance that we get is also equivalent to what is called the guaranteed minimum amount. In other words, assistance from the Commonwealth that would have occurred if the tax reform had not taken place. What we have to make sure is that there is no shortfall between what we used to get and what we now get under GST. There is a budget balancing assistance exercise which is paid to states and territories to make up the amount between the GST revenue and the guaranteed minimum amount.
The increase in the General Revenue Assistance - and that is the $137m - in part reflects CPI, population and other estimates. As I said, it has already been factored into the forward estimates. The remaining $74m reflects the application of those latest Commonwealth grants relativities.
The mini-budget predicted a deficit of $43m in 2002-03, and that is after the present one of $126m. Together with the strong demand in health and education services, it means, in fact, that all those funds are virtually already accounted for when it comes to our ability to deliver services across the Territory …
Mr Burke: Oh, garbage!
Members interjecting.
Ms MARTIN: We can have the opposition say ‘Garbage, garbage’. Let us just look at how many previous years you ran deficits. Did you run deficits purely and simply because you were incompetent and extravagant, or did you run deficits because the demands in those key areas - the big consumers of dollars, Education and Health - were simply under-funded? Your estimates were wrong, and the demand to deliver the bare minimum of services in some areas was far more than the budget allocation. Well, that is the truth of it. We saw how areas were under-funded. This extra funding is simply to be able to keep our heads, collectively, above water. Anyone who thinks that the federal Treasurer - no matter whether he is your mate or not …
Mr Reed: He said you got a windfall.
Ms MARTIN: … no matter whether he is your mate or not, is going to give some kind of windfall to the Territory, then you would have to have bats in your belfry, or something equivalent.
Members interjecting.
Mr Reed: Yes, they were his exact words, the Territory got a windfall.
Madam SPEAKER: Order!
Ms MARTIN: We have – and it comes under the horizontal fiscal equalisation principles of the Grants Commission – we get the dollars to be able to deliver average state-like services across the Territory. This is what we are committed to do. This is what your large deficits show that you had to spend even to get close. So, let us not have any rubbish about windfalls. We will be delivering important services, as we committed to do, to Territorians. We will be creating jobs, we will be delivering educational outcomes that are not the disgrace of the nation; and health services that mean Territorians, no matter where they live, will have access to reasonable health services.
I thank the member for Nelson for his question. It is an excellent one, and it gives me an opportunity to demonstrate that the funds that we have will simply be able to deliver the services that Territorians need, whether you live in Nakara, Ngukurr, or Nyirripi, in the next financial year.
ANSWER
A very important question, Madam Speaker, as this House is probably only too aware, and certainly 82% of our funding comes directly from the federal government. It is one of the reasons why we, as the Territory, and I say we as the Territory, because I believe that we are joined by the opposition in this, are so determined to pursue getting gas onshore from the Sunrise field, so that we can start to build our capacity for our own source revenue. Eighty-two per cent of our funds coming directly from Canberra means that we are dependent, very thoroughly dependent, on federal government funding.
Funding levels, I believe, are appropriate and I was very pleased to see that in the latest round from the Grants Commission our relativities had gone up in relation to other jurisdictions. One of the reasons for that was, that the cost of delivering key services in health and education has also risen. One of the justifications for having a Commonwealth Grants Commission is that, whether you live in the Territory in a remote area, or whether you live in a suburb of Melbourne like St Kilda, then you have a government that is funded to be able to deliver an equivalent kind of service no matter where you are. I think this is something that we are very proud of in having a Commonwealth Grants Commission that is actually looking at how to build Australia rather than let areas like Victoria and New South Wales, who have a great capacity to raise revenue, and have greater numbers, simply be able to move ahead in their areas and leave somewhere like the Territory that doesn’t have that capacity, to lag behind. I want to put on the record that we do support the horizontal fiscal equalisation principles of the Commonwealth Grants Commission.
The second part of the question from the member for Nelson was specific purpose payments, so let us just look at those, or the tied grants. They are expected to rise by $2.5m in the 2002-03 year, to $345m. Now, that very meagre amount does not keep pace with inflation and does, in effect, mean that we have a cut in real terms. The total Commonwealth grants for next year are expected to rise by $137m, and that takes us from $1.733bn this year to $1.870bn next year. That is the latest data that I can give the member for Nelson and other members of this House.
Mr Burke: Would you repeat that? Just the grants. You read them rather quickly.
Ms MARTIN: $1.733bn this current year, and that rises to $1.870bn, in round figures, for next year. That is an increase of $137m. Around half this increase has already been factored into the forward estimates for this coming year. That was in the mini-budget for anyone who refers - and I expect daily - to those mini-budget figures, and reflects a larger GST pool in the coming year, as compared with the current year.
To go to that GST pool, under the transitional arrangements that were put in place because of changed tax arrangements, the amount of the general revenue assistance that we get is also equivalent to what is called the guaranteed minimum amount. In other words, assistance from the Commonwealth that would have occurred if the tax reform had not taken place. What we have to make sure is that there is no shortfall between what we used to get and what we now get under GST. There is a budget balancing assistance exercise which is paid to states and territories to make up the amount between the GST revenue and the guaranteed minimum amount.
The increase in the General Revenue Assistance - and that is the $137m - in part reflects CPI, population and other estimates. As I said, it has already been factored into the forward estimates. The remaining $74m reflects the application of those latest Commonwealth grants relativities.
The mini-budget predicted a deficit of $43m in 2002-03, and that is after the present one of $126m. Together with the strong demand in health and education services, it means, in fact, that all those funds are virtually already accounted for when it comes to our ability to deliver services across the Territory …
Mr Burke: Oh, garbage!
Members interjecting.
Ms MARTIN: We can have the opposition say ‘Garbage, garbage’. Let us just look at how many previous years you ran deficits. Did you run deficits purely and simply because you were incompetent and extravagant, or did you run deficits because the demands in those key areas - the big consumers of dollars, Education and Health - were simply under-funded? Your estimates were wrong, and the demand to deliver the bare minimum of services in some areas was far more than the budget allocation. Well, that is the truth of it. We saw how areas were under-funded. This extra funding is simply to be able to keep our heads, collectively, above water. Anyone who thinks that the federal Treasurer - no matter whether he is your mate or not …
Mr Reed: He said you got a windfall.
Ms MARTIN: … no matter whether he is your mate or not, is going to give some kind of windfall to the Territory, then you would have to have bats in your belfry, or something equivalent.
Members interjecting.
Mr Reed: Yes, they were his exact words, the Territory got a windfall.
Madam SPEAKER: Order!
Ms MARTIN: We have – and it comes under the horizontal fiscal equalisation principles of the Grants Commission – we get the dollars to be able to deliver average state-like services across the Territory. This is what we are committed to do. This is what your large deficits show that you had to spend even to get close. So, let us not have any rubbish about windfalls. We will be delivering important services, as we committed to do, to Territorians. We will be creating jobs, we will be delivering educational outcomes that are not the disgrace of the nation; and health services that mean Territorians, no matter where they live, will have access to reasonable health services.
I thank the member for Nelson for his question. It is an excellent one, and it gives me an opportunity to demonstrate that the funds that we have will simply be able to deliver the services that Territorians need, whether you live in Nakara, Ngukurr, or Nyirripi, in the next financial year.
Last updated: 09 Aug 2016