2022-23 Northern Territory Budget
11 May 2022
In Brief
The 2022-23 Northern Territory (NT) Budget was delivered on 10 May 2022 by Treasurer Michael Gunner.
The 2022-23 Budget focuses on the NT as the “Comeback Capital of Australia” - locking in new investment, new industries and new jobs, strengthening essential services, and producing a great lifestyle for Territorians. To drive these efforts and support opportunities for growth, the Government has appointed dedicated Commissioners with key responsibilities in Investment, Major Projects and Infrastructure.
For the 2022-23 Budget, there is an estimated $253 million deficit, less than half of what was predicted last year. Net debt is projected to reach its peak at $9.4 billion in 2024 before net debt starts to go down from 2025.
In Detail
The Budget indicates that the NT is regaining its balance with a forecast deficit of $17 million in 2025, and a return to surplus in 2026. Investment in both the private and public sectors are forecast to be major contributors to growth for 2022‑23, driven by an ambition to build a $40 billion economy by 2030.
Key projects include Newmont’s Tanami mine expansion with capital investment worth more than $6 billion, Santos’ refurbishment of the Darwin LNG plant and INPEX’s addition of a third train. Strides also have been made in both aquaculture and agribusiness.
Darwin is the Indo-Pacific’s strategic and defence capital. Accordingly, the Federal Government continues to invest in defence capabilities in the NT. This occurs alongside International allies including America, who are building a fuel storage depot and training their marines in the NT, and Japan which has chosen the NT for self-defence force training.
The acquisition of Lasseters Casino in Alice Springs by Iris Capita, with a $70 million expansion plan and the G’Day Group’s $60 million injection into NT resorts and holiday parks evidence further growth for NT.
To support economic growth, the NT Government has committed to a number of investment initiatives, including:
- $35 million on works at Middle Arm, for marine, road and energy infrastructure and implementation of further recommendations made by Territory Economic Reconstruction Report.
- Approximately $200 million over three years toward residential and industrial land development across Greater Darwin, Alice Springs, Katherine and Tennant Creek.
- $85 million to partner with the Commonwealth on critical road upgrades.
- $58 million to support tourism through advertising to international tourists and investing in the Northern Territory Major Events Company.
- $44 million to support mental health including the development of satellite clinics for adults, services for children and two headspace centres.
- Approximately $700 million to build, expand and upgrade remote housing over the next financial year.
- An additional $10 million over four years for the Minister for the Prevention of Domestic, Family and Sexual Violence to invest in measures to support and prevent domestic, family and sexual violence.
- An additional $13 million of funding for initiatives introduced as part of the Aboriginal Justice Agreement.
As part of the 2022-23 Budget the Commonwealth will also invest $2.6 billion in infrastructure projects across the Territory, transforming it into an industrial hub for next generation exports.
Revenue Measures
The following changes to revenue policy are outlined in the 2022‑23 Budget:
- An exemption from stamp duty available for five years for individuals acquiring newly-developed land from registered building practitioners where a home is constructed.
- A stamp duty concession of up to $1,500 on registration of new and second-hand battery electric vehicles and plug-in hybrid vehicles, available for five years. These vehicles are also exempt from the registration component of vehicle registration fees.
- Property activation levy ceasing from 1 July 2022, however lodgment and payment of returns is required for the 2021-22 financial year.
- Indexation of revenue units, penalty units and monetary units to reflect policy neutral inflation in NT.
Trends in Taxation and Mining Royalties Revenue
Taxation revenue for the 2021-22 financial year is expected to total $658.5 million, and is expected to decrease by 5 per cent to $625.7 million for 2022-23.
- Payroll tax collections in 2021-22 is expected to be $212.3 million, consistent with the forecast in the 2021-22 budget. Payroll tax revenue is expected to increase in 2022‑23 to $237.7 million as major investments to support employment and income growth are expected to make an impact.
- Revenue from stamp duty is expected to be $190.3 million in 2021-22, an increase of $88.2 million from the forecast. This reflects the increase in residential property values and the large number of residential and commercial transactions that occurred in the year. The forecast for 2022-23 is a decrease to $149 million, due to expected stabilisation in the market.
- The property activation levy will cease from 1 July 2022 as government analysis and consultation concluded that the levy has achieved its purpose of improving presentation and attractiveness of the Darwin CBD. Income from the property activation levy is estimated to be $1.7 million in 2021‑22.
- Income from gambling taxes is expected to be $96.5 million in 2021-22, an increase of $1.7 million from forecast in the 2021-22 Budget. Collections are expected to increase in accordance with growth trends, however this is tempered by reductions in historically high community gaming machine revenue and the cessation of COVID-19 income stimulus measures which had contributed to an increase in gambling services. In 2022‑23, gambling tax receipts are expected to increase by 3.6 per cent to $101.1 million.
- Revenue from insurance duty is estimated to be $69.4 million in 2021-22 reflecting increased receipts. Revenue from insurance is forecast to be $59 million in 2022-23, a return to pre-COVID-19 levels, before resuming a 2.4% per annum growth trend.
- Motor vehicle tax revenue in 2021-22 is estimated to be $27.2 million. This was an increase from previous years revenue and is largely due to the extension of the Commonwealth’s instant asset write-off, which significantly brought forward demand for motor vehicles. Motor vehicle tax revenue in 2021‑22 is expected to moderate to $20.3 million. In addition, revenue from motor vehicle fees is forecast at $59 million in 2021-22 and is estimated to increase to $61.6 million in 2022-23, in line with revenue unit indexation.
Royalty receipts are forecast at $345 million in 2022-23, and average $338 million per annum over the forward estimates due to continued strength in some commodity prices and activity in the mining sector. These estimates are not including royalty revenues from new onshore gas developments.
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