‘Dead letter’: Budget repair measures fail ahead of 2020 NT Budget

by | Nov 5, 2020 | NT Politics | 2 comments

Taxpayers were charged nearly $18 million for fifth floor ministerial staffers and media managers last financial year, newly released government documents show, that helped contribute to another departmental budget blow-out.

According to the Department of Chief Minister’s annual report, the department has blown its budget for the 2019-20 financial year, despite strict measures placed on chief executives to reign in spending in the face of the ongoing financial crisis.

The figures come as Chief Minister Michael Gunner is set to announce his first budget as Treasurer on Tuesday, that is expected to show little to no progress has been made on reigning in government expenditure, as per the recommendations laid out in the Langoulant Budget Repair report.

The DCM figures show department chief executive Jodie Ryan ran a deficit of $587,000 despite projecting a $1.07 million surplus, with spending that included nearly $20 million on “purchases of goods and services” and nearly $9 million on “other administrative expenses” – more than double the budgeted forecast.

Of the department’s nearly $110 million in expenses, its largest expense was employee costs which came in at $47 million – $1.7 million higher than budgeted, which the department said was “predominantly due to ministerial offices and office of the leader of the Opposition [employee costs]” among other reasons.

Mr Gunner has already used COVID-19 as an excuse for his government’s failure to live within its means and address the fiscal crisis it’s been facing since at least 2018.

The NT Independent first revealed that despite Mr Gunner’s pledge to institute a staffing cap and hiring freeze, the NT Public Service grew by more than 400 positions in the last financial year.

Mr Gunner told the ABC last week the increase in positions was due to COVID-19 related hirings, but the figures released by the Office of the Public Employment Commissioner show that contract and casual positions have actually decreased, raising questions over why pandemic appointments were permanent positions.

‘The Langoulant report is now a dead letter’: Gerritsen

CDU research fellow Rolf Gerritsen said he expected Mr Gunner’s first budget as Treasurer to be the end of the fiscal restraint measures he had committed to implementing last year.

“I would predict that there will be plenty of rhetorical obfuscation but there is no doubt that the Langoulant report is now a dead letter,” Mr Gerritsen said.

“The Public Service Commissioner’s annual report reveals that the growth of on-going appointments in the NT Public Service is continuing unchecked. That has severe implications, one of which is a certainty of increased deficits. When interest rates return to normal levels, that will presage disaster.”

In January last year, Mr Gunner said he was committed to keeping public service numbers from getting out of hand and would crack down on departments that overspend.

“We’ve got to stop the growth in public service numbers, that’s the important message out of this,” he said at the time.

“What the current fiscal situation does, it provides us with a line in the sand moment, we can go to these agencies and say: ‘You can’t blow your budgets because the money you’re looking at spending is money that doesn’t actually exist’.”

The government had forecast in late 2018 that if action was not taken to control its spending, the net debt would hit $35.7 billion by 2029-30. While some savings have been made in executive staffing and an executive pay freeze, that is not expected to be enough to keep the government off its projected trajectory, which could now be hastened by COVID-19 spending and hiring.

Mr Gunner released financial figures in July that suggested the net debt would reach $8.2 billion this year, but many political observers expect it to tip more than $10 billion this financial year.

A recent shake-up on the fifth floor saw many media and policy advisors sacked, but highly placed sources said any savings found through the purge would be offset by shifting the responsibility for paying liaison officers working on the fifth floor to departments.

Mr Gunner’s office did not respond to questions. The 2020 NT Budget will be released on Tuesday.

Editor’s note: This story was updated to reflect the projected $35.7 billion net debt is estimated to be achieved in 2029-30, not 2028-29 as incorrectly stated in the original version.

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