NT budget reform measures not meeting all targets, unchecked spending continues: progress report

by | May 8, 2020 | Business, News, NT Politics | 2 comments

The Gunner Government quietly dropped a budget reform progress update Thursday night that shows major recommendations of the Budget Repair report are not being met.

Of 74 recommendations made in the Langoulant report, 25 have been completed, according to the status update for the March 2020 quarter. A further 39 are counted as underway, three “nearly completed” and seven not yet started.

Actual financial figures were not included and the government also declined to comment on the report.

The “fix the budget” status update was prepared before the coronavirus pandemic halted the Territory’s economy, raising questions of where the reforms currently sit with a delayed budget not expected until after the August election.

Among the items not yet completed is setting clear and strict guidelines over the use of Treasurer’s Advances which were found to have resulted in perennial budget blow-outs and questionable spending, including last year when the Turf Club was awarded $12 million in unbudgeted money for its grandstand.

Report author and former WA under-treasurer John Langoulant found the Territory’s elected officials engaged in a “continuous budget process” over many years that saw cash approved outside of annual budgets without proper scrutiny over how the money was being spent.

NT public service culture of avoiding open and transparent scrutiny of spending: Langoulant Report

Through his report, Mr Langoulant uncovered a culture in the NT public service that was fostered over the last decade to avoid open and transparent scrutiny of its spending, with business cases not consistently developed by departments before obtaining funding from ministers, insufficient reviews into how money was being spent and highly paid departmental executives operating with no accountability measures.

“Without regular and robust evaluation, there is a high risk that ineffective and inefficient programs will continue to utilise the scarce resources available,” the report stated.

Yearly expenditure increases of six per cent were putting the NT on track to reaching a $35 billion debt by the end of the decade.

At the time of releasing the report, Mr Langoulant said it was crucial that the NT Government cut its spending.

“With the reductions in the GST funding, that no longer is a sustainable level of operating expenditure,” he said. “Measures must be taken to wind that back. Because if we don’t … the growth in the Northern Territory’s debt will reach a level which will be unsustainable.”

The last full mid-year financial report released late last year found the Gunner Government overspent its budget by $170 million in the first two months of the financial year.

It was unclear what the total budget overspend will be now and exactly how much in savings the government found before the pandemic.

Key items won’t be enacted until the delayed Territory budget is released after the election

Another key recommendation was to wean the Territory off federal money by attracting private investment. According to the status update, the government established a body to attract private investment last July, but no details of its effectiveness were released.

The update also shows the Gunner Government has, in theory, agreed to publish 10-year budget and forward estimates information, and agreed to publish five-year agency output info. But since the 2020 budget has not been released, those items and others have not been made public.

They’ve also agreed to publish a list of approved Treasurer’s Advance items, but it was unclear when the latest list would be released.

Another key item that won’t be implemented until the 2020 budget is a policy to reward departments that keep within their budget by allowing them to retain a share of underspends.

The public service recruitment freeze was also on the list of completed recommendations but no figures were offered to suggest it was achieved.

Developing key performance indicators for departmental chief executives was completed last year, the report stated, but reviewing executive contracts and their values was listed as still being “underway”.

Wage freezes for executives and parliamentarians was also listed as still being underway, although the report stated a working group has been struck.

“No wonder the government tried to hide this implementation status update.”

Lia Finocchiaro, Opposition leader

Opposition CLP leader Lia Finocchiaro said delaying the budget until after the election will mean many of the key recommendations aren’t being officially implemented at a crucial time for the Territory.

“The Langoulant report made recommendations that will improve government processes in the Territory,” she said.

“No wonder the government tried to hide this implementation status update. It shows how reform will be slowed because of the Chief Minister’s arrogant decision to cancel the 2020 Budget prior to the election, stopping accountability and transparency on the management of the Territory’s finances.”

Territory Alliance leader Terry Mills blasted Chief Minister Michael Gunner for quietly dropping unfavourable budgetary information and not answering questions.

“It’s a clear demonstration that he’s more interested in popularity than dealing with the issues of governance,” he said.

“Now we have this (status update) out on a Friday, on the eve of easing of restrictions, perfectly timed so we don’t twig to what’s going on. He’s playing a game with us, you need to take this very seriously. 

“Any good will the Chief Minister has gained through his handling of the health crisis will evaporate in a flash when the truth of this (budget) comes out.”

Questions to Treasurer Nicole Manison and Mr Gunner’s offices went unanswered.

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