UPDATED: Treasurer Bill Yan has handed down the Finocchiaro CLP Government’s first budget this morning that will see more big spending and increased debt, with next year’s deficit alone estimated to be $1.31 billion and the Territory’s net debt projected to blow out from its current $10.5 billion figure to $14 billion within three years.

There was not much in new spending announcements that hadn’t already been announced in the last two weeks, including record spending in corrections, courts, domestic and family violence prevention, health and other law and order measures.

Mr Yan said the 2025-26 Budget “restores confidence and rebuilds the Territory”, while “repairing Labor’s mess”, but the speech was light on what the CLP is actively doing to rein in spending and address the massive debt level.

The Northern Territory now has the highest net debt per capita in the country with no restraint in sight, with the figures showing its net debt is higher than the revenue it is bringing in, raising serious concerns about its financial sustainability moving forward.

Mr Yan blamed the previous Labor government for the sad state of the Territory’s finances, but committed to growing the debt.

“We need a budget that is centred around reducing waste and prioritising spending on what matters most to Territorians,” Mr Yan said in his budget speech.

“Despite the crisis and Labor’s failure, now is not the time for austerity. Instead, we must grow our economy by outpacing the nation, playing to our strengths in mining, gas, agriculture, tourism and defence to benefit all Territorians.

“Today’s budget deals with the situation the Territory is in now so we can reset and rebuild for tomorrow.”

Despite next year’s startling $1.31 billion annual deficit, Mr Yan claimed that the CLP Government will get the fiscal deficit reduced to $531 million in 2028-29 thanks to its undefined “responsible budget measures and reprioritisation”.

Last year, the Labor government was forecasting a $410 million deficit for this year, which has increased significantly under the CLP.

The net debt was forecast to increase to $12.3 billion by 2027-28, but budget figures show that figure will now be reached by the end of the 2025-26 financial year, and continue to grow to $14 billion by 2028-29.

The current $10.5 billion net debt has seen the Territory continue to pay $586 million a year to cover the interest on borrowings – or $1.6 million a day – increasing to more than $2 million a day by next financial year, when the net debt is forecast to top $12 billion.

Mr Yan acknowledged the Commonwealth’s revenue to the Territory is projected to be $7.14 billion in 2025-26, roughly 70 per cent of the Territory’s expected $10.04 billion in total revenue next year.

“While this Commonwealth funding is vital, it is largely to maintain the status quo,” Mr Yan said. “What we need from the Commonwealth is nation-building projects, taxation reform and changes to support increased migration.”

Figures show the NT’s average economic growth increased by just one per cent over the last eight years, below the national average of two per cent, with four years of decline.

Mr Yan claimed Gross State Product is expected to “surge by 7.8 per cent in 2025-26, followed by a further 5.9 per cent” the next year, but did not explain how those ambitious figures were arrived at. Budget papers show GSP will reduce by 2.6 per cent in the current financial year “relating to unplanned maintenance work at the Ichthys liquified natural gas plant” and is expected to grow as a result of LNG exports as part of the Barossa offshore gas project.

He also pointed to future major projects coming online as crucial for the Territory’s growth, which has been a feature of successive Territory budgets, with little action occurring. He forecast a total project pipeline of $12.9 billion.

Mr Yan said he expects the NT’s population will grow by 2,600 next financial year, but did not explain how he arrived at that figure or what would bring people here following years of stagnant population growth.

“Private sector confidence is back and industry is keen to get the Territory moving across energy, mining, agriculture and tourism,” he said in his speech. “We are working side by side with businesses through our industry-focused agencies and the Territory Coordinator, through tax relief, land release and streamlined approvals.

“As part of our measures of success, our annual targets include that the Territory’s economic growth exceeds national economic growth, population growth exceeds business as usual forecasts and the Territory is recognised as the best place to invest.”

The only apparent budget repair measure involves departments being directed to cut $20 million per year “in operating savings, focused on reducing consultancies, travel, communications and marketing, and other discretionary funding”.

Project funding blowouts revealed

Mr Yan will say this morning that the CLP Government will cut back on the previous Labor government’s infrastructure funding promises, but will not provide the amount it is looking to cut back on.

Infrastructure projects delivered under Labor have had massive cost blowouts, including the Aboriginal and Torres Strait Islander Art Gallery in Alice Springs jumping from $50 million to $300 million; the Tiger Brennan Driver overpass ballooned from $61.5 million to now $161 million; the State Square art gallery jumped from $47 million to $143 million; the new Darwin Youth Justice Centre rose from $50 million to $135.2 million; the new mental health unit at RDH jumped from $38 million to $86.3 million; the Mandorah marine facilities project went from $50 million to $84.3 million; the Maningrida police station jumped from $16 million to $37.4 million; and the Nightcliff “police station” grew from $45 million to $63.3 million.

“We’ve uncovered the full scale of the mess and we’re fixing it,” Mr Yan said. “We’ve scaled back Labor’s bloated, undeliverable infrastructure promises and replaced them with a realistic program.”

The budget papers showed the government is committed to providing an additional $305 million for the Darwin ship lift on top of the $515 million price tag. The project was referred to the Public Accounts Committee earlier this week due to ballooning costs, but it is clear the government is still moving ahead with it regardless of the price.

Mr Yan also pointed to $4.34 billion in this year’s capital works program for Territory roads, including $289 million for the Tanami Road, $223 million for Territory “national network highway upgrades” and $205 million for Central Arnhem Road, but the government is notorious for not getting that spending out the door in any one financial year.

That figure was also roughly $1 billion less that was previously expected to be spent on infrastructure next year, but it was not immediately clear which projects will be scrapped.

There is also $615 million in next year’s budget for remote housing.

The government has also pledged to increase the Health Department’s budget by $100 million, “to support safer, high quality services right across the Territory”.

“Two-hundred-and-62 days ago – that’s nine months and 11 days – Territorians entrusted the CLP to reduce crime, rebuild the economy, and restore our unique lifestyle,” Mr Yan said. “The Finocchiaro CLP Government has the passion, the discipline, and the determination to do the hard work – fix Labor’s failures, restore confidence and deliver the Territory’s future.”

The CLP outlined its objective to ensuring it can manage its debt at “prudent” levels in its budget papers, however it recognised under a section titled “financial risks” that its current net debt to revenue ratio is projected to be 121 per cent next year, above other states’ average, which would suggest the debt is not being managed “prudently”.

This could also result in a downgrading of the Territory’s credit rating, which will be reassessed in the last quarter of 2025.

Opposition Labor Leader Selena Uibo said the CLP’s Budget 2025 “lacks a vision for the future”.

“It’s the most expensive budget in our history, leaving Territorians with the highest net debt per capita in the nation – yet it still manages to deliver hundreds of millions in cuts,” she said.

“And while these cuts effect tourism, agriculture, housing, infrastructure and more, there’s no detail. Are public service jobs on the chopping block? Which projects are being axed? Territorians deserve answers.”

Note: This story was updated from its original form which was written before the budget was delivered and relied on a copy of the Treasurer’s speech obtained by the NT Independent. More figures have been added following the release of the budget papers.