Business news from across the Northern Territory: Latest highlights include Darwin still holding the highest rental vacancy rate in the country, Darwin council questioned about a supposedly unfair new procurement policy, and $20 million in venture capital for companies expanding business in the NT. Also, making resource news, new warnings from experts that the cost of Beetaloo gas is unlikely to be competitive.

Local business

Local procurement policy questioned

Darwin Councilor Brian O’Gallagher, and former deputy chief executive of the Chamber of Commerce NT, is questioning the local council’s move to give more priority to the NT Government’s procurement policies to change a 30 per cent weighting for local companies, saying not been enough consultation with the business community before a decision was made.

“I was in the Chamber of Commerce for five years and we fought long and hard to get the NT Government to lift their weighting to support local businesses. If there is one level of government that should be giving preference to local businesses across the Territory, it should be local government. I think as a minimum it should be at least that of the NT Government, if not more,” Mr Gallagher said.

In November last year, the council voted 9 to 2 to make changes to its procurement policy, one of which was a reduction in the weighting given to local benefits from 30 to 20 per cent, with an additional 10 per cent given to First Nations businesses.

Investments

$20 million funding for companies expanding business in NT

A $20 million fund will be made available for businesses looking to extend their presence in the NT. Funding of up to $5 million will be available to companies focusing on advanced manufacturing, logistics and defence, technology, mining and exploration, space and primary industries.

The new funding is a partnership between Paspalis Corporation and the NT Government, which the government says will lead to jobs while helping innovative businesses develop.

“With its track record supporting innovation and early-stage ventures in, or associated with the Northern Territory, we are pleased to partner with the Paspalis Innovation Investment Fund to diversify our economy and create more local jobs,” Chief Minister Eva Lawler said.

“Paspalis is open for business, and we welcome any funding inquiries from exciting companies with strong leadership looking to do business in the Northern Territory.” Paspalis CEO Harley Paroulakis said.

Real estate

Darwin still has the highest rental vacancy rate in the country

Darwin continues to have the highest rental vacancy in the county despite a drop in vacancy rates in February, the latest PropTrack Market Insight Report showed. Darwin’s vacancy rate fell 0.26 percentage points last month to 2.58 per cent. The figure dropped 0.21 ppt in February but climbed 0.19 ppt annually.

PropTrack senior economist and report author Paul Ryan said Darwin’s rental market was much tighter than pre-pandemic: “The vacancy rate has declined 46 per cent compared to March 2020.”

Mr Ryan said regional NT’s vacancy rate climbed 0.26 ppt month-on-month to settle at 2.2 per cent.

“Even so, regional NT’s vacancy rate was down 0.39 percentage points compared to the same time last year,” he said.

Australia’s combined capital city vacancy rate was sitting at 1.04 per cent in February. “Rental markets are proving extremely challenging for renters, with very limited availability across most of the country. Most capitals and regional areas were facing a limited or more limited availability than they were compared to a year ago,” he said.

Resources

Beetaloo gas is unlikely to be competitive – research

Research released by the Independent Institute for Energy Economics and Financial Analysis warned that taxpayers and investors could be hanging their hope for future prosperity on 500 trillion cubic feet of “uncompetitive” gas in the Beetaloo Basin since cheaper LNG is due to come online.

“Beetaloo gas is unlikely to be competitive. The unprecedented increase in LNG supply under construction means that global markets are likely to face a glut in the second half of this decade,” said Kevin Morrison, the report’s author.

He said Australia’s high LNG costs could also make Beetaloo uncompetitive against lower-cost Qatar and US projects bringing new capacity online. Some big players once active in the Basin have walked away despite the lure of multi-billion-dollar, taxpayer-funded infrastructure developments.

Beetaloo’s remoteness also means substantial new infrastructure investment would be required to pipe and process the gas and transport it to users, mostly on the East Coast, the report stated. It also warned that extraction would also rely on fracking – a risky technology that could contaminate the primary water source for the region and its agriculture.