2006-07 budget · 2006-07 budget the economy a relatively high proportion of gsp is attributed to...

Northern Territory Economy2006-07 budget

Darwin

Canberra

SydneyAdelaide

Hobart

Melbourne

Perth

Brisbane

PortMoresby

Jakarta

Singapore

Kuala Lumpur

Bangkok Manila

Tokyo

Taipei

HongKong

Beijing

Seoul

Hanoi

2650km

2850km

3150km

3150km3150

km

3750km

2600km

2700 km

3350 km

3650 km

4450 km

3200km

4300km

4250km

5450km

6000km

5550km

4650km

1800 km

2700km

Brunei

Dili

Alice Springs

700 km

1500 km

iii

Contents

Overview 1

Chapter1 StructureoftheEconomy 5

Chapter2 EconomicGrowth 11

Chapter3 Population 19

Chapter4 LabourMarket 33

Chapter5 PricesandWages 43

Chapter6 ExternalEconomicEnvironment 51

Chapter7 InternationalTrade 55

Chapter8 MiningandEnergy 61

Chapter9 Tourism 71

Chapter10 RuralIndustriesandFisheries 81

Chapter11 Construction 89

Chapter12 Manufacturing 101

Chapter13 RetailandWholesale 105

Chapter14 TransportandCommunication 111

Chapter15 ThePublicSector 119

Chapter16 Defence 125

Abbreviations 133

Glossary 136

Charts 139

Tables 141

Maps 142

Table of Contents

�Overview

OverviewThesmallsizeoftheNorthernTerritoryeconomymeansthatlarge,typically

resource‑basedprojectscanhaveasubstantialimpactoninvestmentandincome

streams,resultinginvolatilegrowthpatterns.Thestructureoftheeconomyreflects

significantnaturalresources,theTerritory’simportanceinnationaldefenceandthe

relativelylargetourismandpublicsectors.Thesignificanceoftheminingandtourism

industriesmakestheTerritoryeconomyparticularlyreliantonexportsandsusceptible

todevelopmentsinkeyexportmarketsandtheworldeconomygenerally.

TheEconomyin2005‑06Theonshoreeconomycontinuedtostrengthenin2005‑06,boostedbystrong

incomegrowthassociatedwithworkformajorprojects,notablyconstructionofthe

liquefiednaturalgas(LNG)plantatWickhamPointandworkontheAlcanG3refinery

expansion.Strongerpopulationgrowthsupportedincreasedresidentialconstruction

activityandthetourismsectorcontinuedtorebound,withstronggrowthin

internationalvisitorarrivals.

Followinganincreaseof3.6percentin2004‑05,Territorygrossstateproduct(GSP)

increasedbyanestimated6.7percentin2005‑06.Themajorcontributortogrowth

wasstrongonshoreactivity,withworkonmajorprojectsleadingtostronginvestment

andstatefinaldemand(SFD)growth.SFDincreasedbyanestimated6.3percent,with

consumptionincreasingby4.2percentandinvestmentby11.8percent.

Populationgrowthstrengthenedto1.1percentin2004,andfurthertoanestimated

1.7percentin2005,withnetinterstatemigrationinflowsforthefirsttimesince1997.

TheincreaseinpopulationreflectstheimprovingprospectsfortheTerritoryeconomy

andemployment,particularlyinconstructionandtourism.

TheTerritorylabourmarketcontinuedtostrengthenin2005‑06asbuoyantonshore

economicconditionsprevailed.AlthoughthereisnoquantitativemeasureofTerritory

jobs,relatedindicatorsallpointtostrongemploymentgrowthandashortageof

skilledlabour.Residentemploymentincreasedbyanestimated2.1percentin

2005‑06,whileoveralljobsgrowth,includingthehighnumberofflyinflyoutworkers

fortheAlcanG3refineryexpansionandtheLNGplant,wasprobablymuchstronger.

Darwin’sConsumerPriceIndex(CPI)increasedby2.6percentintheyearto

December2005,comparedtoa2.7percentincreasenationally.Thisisinsharp

contrasttothepreviousfiveyearswhereyearonyearCPIinflationintheTerritoryhad

been,onaverage,0.6percentagepointsbelowthenationallevel,dueinparttothe

weakerlocaleconomy.TheconvergencereflectssolidgrowthintheTerritoryeconomy

andamorepronouncedlabourskillsshortagethannationally.

Solidwagesgrowthin2005,bothintheTerritoryandnationally,reflectstightlabour

marketconditionsandskilledlabourshortagesprevalentthroughouttheyear.

IntheyeartoDecember2005,theTerritoryLabourPriceIndex(LPI)increasedby

4.5percent,comparedto4.1percentnationally.

OnshoreEconomyOnshoreEconomy

GrossStateProductGrossStateProduct

PopulationPopulation

EmploymentEmployment

PricesPrices

WagesWages

2 Overview

2006-07 budget The Economy

Outlookfor2006‑07andBeyondGrowthisforecasttoremainstrong,butisexpectedtomoderateto5.8percent

in2006‑07.GrowthwillbepredominantlydrivenbyproductionofLNGforexport.

IncreasedaluminaproductionfromtheAlcanG3refineryexpansionandafullyearof

productionatthenewBootuCreekminenearTennantCreekwillalsoboostoutput.

Thestronggrowthinexportswillacttolargelyoffsetthesignificantdeclinein

businessinvestmentresultingfromthecompletionofworkontheAlcanG3refinery

expansionandtheLNGplant.Theseprojectsweresubstantial,andinvestment

onthisscaleagainisunlikely,atleastintheshortterm.Continuedgrowthwill

besupportedbythepositiveemploymentandpopulationoutlook,linkedtothe

strengtheningoutlookforthetourismindustry,residentialconstructionandmajor

employment‑creatingprojectssuchastheDarwinWaterfrontDevelopmentandthe

condensateprocessingfacility.

TerritorySFDisforecasttodecreaseby9.1percentin2006‑07,duetothesignificant

declineintotalinvestmentexpenditureasmajorprojectsarecompleted.Engineering

constructionactivityintheTerritorywillbesubstantiallylowerin2006‑07,withthe

AlcanG3refineryexpansionduetobecompletedinOctober2006andconstruction

workontheLNGplantalreadycompleted.However,engineeringworkfortheDarwin

WaterfrontDevelopmentandnewprojectssuchasthedevelopmentoftheBlacktip

gasfieldandthecondensateprocessingfacilitywillensurethatengineeringactivityin

theTerritoryremainsatlevelswellabovehistoricalaverages.

Thepositiveeconomicoutlook,employmentopportunitiesandcontinuingnet

migrationinflowsunderpinforecastpopulationgrowthof1.5and1.2percentin2006

and2007respectively.

Residentemploymentisforecasttoincreaseby2.3percentin2006‑07,supportedby

constructionworkontheDarwinWaterfrontDevelopment,continuinghighlevelsof

residentialconstructionandthecontinuingreboundininternationalvisitornumbers.

Theincreaseinresidentemploymentwillbepartiallyoffsetbyanexpectedfallinflyin

flyoutemploymentassociatedwiththeAlcanG3refineryexpansionandconstruction

oftheLNGplant.

InflationintheTerritoryisexpectedtocontinuetotrackcloselytothenationalrate,

andremainatthehigherendoftheReserveBank’stargetbandof2to3percent

intheshorttomediumterm.DarwinCPIgrowthof2.9percentand2.6percent

isforecastfor2006and2007respectively.Wagesgrowthisexpectedtomoderate

in2006and2007,butremainhighaseconomicactivityremainsstrongandskilled

labourshortagespersist.

2001‑02%

2002‑03%

2003‑04%

2004‑05%

2005‑06e%

2006‑07f%

RealGSP 1.2 0.1 0.2 3.6 6.7 5.8

Employment 5.4 ‑0.1 ‑2.2 ‑2.0 2.1 2.3

Population* 0.9 0.1 0.3 1.1 1.7 1.5

DarwinCPI# 3.6 2.2 2.1 1.6 2.6 2.9

e:estimate;f:forecast

*AsatDecember,annualpercentagechange

#AsatDecember,yearonyearpercentagechange


StateFinalDemandStateFinalDemand



PricesandWagesPricesandWages

Summary of Territory Economic Indicators (year on year

percentage change)

Summary of Territory Economic Indicators (year on year

percentage change)

�Overview

TheeconomicbaseoftheTerritoryisexpectedtoexpandsignificantlyoverthenext

decade:

• ThecompletionoftheAdelaidetoDarwinraillinkin2004wasamilestoneinthe

developmentoftheTerritory’stransportinfrastructure.Itprovidessignificant

opportunitiesforregionaldevelopment,particularlyasacost‑effectivemethodfor

thetransportofbulkcommoditiesfromminingproduction,andbetteraccessto

southernmarketsforlocalmanufacturers.

• Astrongworldeconomyandcontinuationofthecurrentresourcesboomwill

encouragefurthersubstantialgrowthinmining‑relatedactivity.Existingprojects

areexpectedtoincreaseproduction,whiletheprospectofnewprojectscomingon

lineissupportedbyanincreaseinexplorationactivityinrecentyears.

• TheTerritoryremainsonthevergeofamajordevelopmentphaseforgasreserves

andforgas‑basedmanufacturing.ShouldeffortstobringmoreTimorSeagas

onshoreprovesuccessful,itcouldbeusedasfeedstockforfurtherproduction

ofLNGorothergas‑basedproductssuchasmethanol,ethane,ammonia/urea

fertilisersandvariouspetrochemicals.Italsohasthepotentialtoprovidecheap

andefficientenergyforthemanufactureofalumina,magnesiumandother

oreconcentrates,andfortheproductionofelectricitythatcouldadvancelocal

value‑addingopportunities.

• Themediumtermoutlookfortourism,whichisanimportantsourceoflocal

employment,ispositive.Therecentsteadyincreaseinvisitornumbersisexpected

tocontinue,andwillbesupportedbymajortourism‑relatedprojects,includingthe

DarwinConventionandExhibitionCentreandaplannedlow‑risetropicalresortat

LittleMindil.

LookingAheadLookingAhead

� Overview


�Structure of the Economy

StructureoftheEconomy

• TheNorthernTerritoryeconomyismarkedlydifferenttootherAustralian

jurisdictions.Ithasanabundanceofnaturalresources,alargepublicsectoranda

significantdefencepresence.

• TheTerritoryeconomyishighlyinfluencedbyglobaleconomicconditionsdueto

itsrelativelysmallsizeandcommodity‑focusedbase.

• Theimportanceofminingandmining‑relatedproductionwillgrowas

productionreachesfullcapacityfollowingthecompletionofmajorinfrastructure

projects.

• ArelativelylargemineralandenergysectormeansthattheTerritoryeconomyis

capableofhighgrowthasresourcesaredeveloped.

Atabout$9.7billion,Territorygrossstateproduct(GSP)accountsforapproximately

1.1percentofnationalgrossdomesticproduct(GDP).KeyactivitiesintheTerritory

economyincludemining,defence,aluminaproductionandgovernmentservices.

NotabledifferencesbetweentheTerritoryandthenationaleconomyincludea

greatercontributionfrommining,tourism,constructionandownershipofdwellings

andacomparativelysmallcontributionfrommanufacturingandbusinessservices

(Chart1.1).

InternationalexportsofgoodsandservicesfromtheTerritoryareanimportantsource

ofdemand,averagingaround33percentofTerritoryGSPformostofthepastdecade

comparedto18percentnationally.

Source:ABSCat.No.5220.0

IndustryStructureMiningisthemostsignificantNorthernTerritoryindustry,accountingforabout

19percentofGSP,almostfourtimesthenationalfigure(Table1.1).Thisfigureis

heavilyinfluencedbyactivityassociatedwiththeLaminaria‑Corallinaoilfieldsinthe

TimorSea,productionfromwhichisattributedtotheTerritory.

Chapter 1Chapter 1

KeyPointsKeyPoints

Chart 1.1: Industry Proportions of GSP/GDP,

2000-01 to 2004-05

0

5

10

15

20

25

A

gric

ultu

re

M

inin

g

M

anuf

actu

ring

Util

ities

and

othe

r ser

vice

s

Co

nstr

uctio

n

Re

tail

and

who

lesa

le tr

ade

To

uris

m

Tr

ansp

ort a

ndco

mm

unic

atio

n

Bu

sine

ssse

rvic

es

G

over

nmen

tad

min

istr

atio

nan

d de

fenc

e

H

ealth

and

educ

atio

n

GSP Northern Territory GDP Australia

%

6 Structure of the Economy


ArelativelyhighproportionofGSPisattributedtogovernmentadministrationand

defenceservices.Thisreflectsthediseconomiesofprovidingpublicservicestoa

smallanddispersedpopulationandthehighneedsoftheTerritory’srelativelylarge

Indigenouspopulation.TheTerritoryalsohasaveryhighdefencepresencecompared

tootherjurisdictions.

OthernotabledifferencesbetweentheTerritoryeconomyandthenationaleconomy

arethegreaterproportionoftourism‑relatedoutput(accommodation,cafes

andrestaurants,andculturalandrecreationalservices)intheTerritoryandthe

higherproportionofconstructionoutputcomparedtoallotherjurisdictions.The

contributionofthemanufacturingsectorisalsosignificantlylowerintheTerritory

thaninmostotherjurisdictions.

TheproportionoftheTerritoryeconomicoutputattributedtoserviceindustries

isthesecondlowestinAustraliaat57percent.Theproportionofthenational

economicoutputattributedtoserviceindustriesis63percent(Table1.1).However,

inemploymentterms,theTerritoryhasahighproportionofpeopleemployedinthe

servicessector,representing91percentofemploymentcomparedto83percent

nationally.

NSW Vic Qld SA WA Tas NT ACT Aus

Agriculture,forestryandfishing 1.6 2.9 3.8 5.4 4.1 6.2 2.8 0.1 2.9

Mining 1.8 1.2 7.3 2.1 19.5 1.6 19.2 0.0 4.8

Manufacturing 10.8 13.5 9.4 14.2 8.5 14.6 7.1 2.1 11.0

Ownershipofdwellings 8.1 7.1 7.3 7.5 5.9 6.5 8.4 8.0 7.4

Taxeslesssubsidies 11.8 12.5 10.8 12.9 8.9 10.3 5.3 7.3 11.3

Total non-service industries 34.1 37.1 38.6 42.1 46.9 39.2 42.7 17.4 37.5

Electricity,gas,andwater 1.8 2.5 1.7 2.6 2.8 4.5 1.6 2.3 2.2

Construction 6.2 5.4 7.0 5.3 6.4 4.5 7.2 6.5 6.1

Wholesaletrade 4.7 5.0 4.4 3.7 3.6 3.1 1.9 1.7 4.4

Retailtrade 5.5 5.6 7.2 5.6 5.1 6.9 4.7 4.9 5.8

Accommodation,cafesandrestaurants

2.4 1.6 2.9 2.0 1.4 2.5 2.5 2.2 2.1

Transportandstorage 3.7 3.5 4.4 4.0 4.2 4.0 3.8 2.1 3.8

Communication 2.6 3.3 2.5 2.3 2.3 2.5 2.5 2.7 2.7

Financeandinsurance 8.8 7.6 4.5 5.0 3.5 5.2 2.5 3.3 6.6

Propertyandbusinessservices 13.4 12.0 9.1 8.9 9.9 5.3 8.0 12.5 11.3

Governmentadministrationanddefence

3.0 2.0 3.6 2.8 2.0 4.8 7.0 24.5 3.2

Education 3.7 4.1 3.9 4.1 2.8 4.5 3.7 5.3 3.8

Healthandcommunityservices 5.4 5.9 5.4 6.7 5.1 7.9 5.5 5.7 5.6

Culturalandrecreationalservices 1.4 1.4 0.9 1.2 0.9 1.0 1.7 2.4 1.3

Personalandotherservices 1.6 1.6 1.8 2.0 1.6 1.7 1.9 2.5 1.7

Generalgovernment 1.7 1.5 2.1 1.7 1.4 2.3 2.8 4.1 1.8

Total service industries 65.9 62.9 61.4 57.9 53.1 60.8 57.3 82.6 62.5

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


Table 1.1: Industry Proportions of GSP/GDP, 2004-05

Table 1.1: Industry Proportions of GSP/GDP, 2004-05

7Structure of the Economy

Chart1.2comparestherelativecontributionsofdifferentindustriestoGSPand

employmentintheTerritory,andshowstheimportanceofserviceindustriesto

employment.Incontrast,theminingindustryisarelativelysmallemployer,despiteits

majorcontributiontoGSP.Thehealthandeducationsectoristhelargestemployerin

theTerritory,followedbygovernmentadministrationanddefence.

Source:ABSCat.Nos.5220.0,6291.0.04.001

ExportPropensityIn2004‑05,internationalexportsaccountedfor25percentofGSP,followingagradual

declineoverthelasttwoyears,mainlyduetotheexpectedfallinoilproductionfrom

theLaminaria‑Corallinaoilfields.However,theproportionofexportstoGSPinthe

Territoryisstillhigherthanthenationalfigureof17percent.

ThesignificanceofinternationalexportstotheTerritoryeconomymeansthatitis

somewhatmoreexposedtoconditionsinworldmarketsthanotherjurisdictions.

Furthermore,Territorymerchandiseexportsareprimarilyminerals,energyand

agriculturalcommodities,whicharepronetosignificantpricefluctuations.Global

supplyanddemandconditions,andtheimpactofexchangeratemovementson

competitiveness,arekeyfactorsaffectingproductionandincome.Intheshortto

mediumterm,continuedstrengthinglobaldemandisexpectedtoleadtoincreased

demandforminerals.

ExpenditurePatternsOverall,thebalancebetweenconsumptionandinvestmentexpenditureinthe

Territoryandnationallyisquitesimilar,withconsumptionexpenditureaccountingfor

aboutthree‑quartersofstatefinaldemand(SFD).

Publicsectorconsumptionaccountsforasignificantlyhighershareoftotal

consumptionexpenditurecomparedtothenationalfigure,whilehousehold

consumptionismuchlower(Chart1.3).Thisreflectsthelargerpresenceof

governmentadministrationanddefenceintheTerritorycomparedtoother

jurisdictions.

Chart 1.2: Territory Employment and GSP Proportions,

2000-01 to 2004-05

0

5

10

15

20

25

Agr

icul

ture

Min

ing

Man

ufac

turin

g

Util

ities

and

othe

r ser

vice

s

Cons

truc

tion

Reta

il an

dw

hole

sale

tra

de

Tour

ism

Tran

spor

t and

com

mun

icat

ion

Busi

ness

serv

ices

Gov

ernm

ent

adm

inis

trat

ion

and

defe

nce

Hea

lth a

nded

ucat

ion

GSP Employment

%Chart 1.2: Territory Employment and GSP Proportions,

2000-01 to 2004-05

0

5

10

15

20

25

Agr

icul

ture

Min

ing

Man

ufac

turin

g

Util

ities

and

othe

r ser

vice

s

Cons

truc

tion

Reta

il an

dw

hole

sale

tra

de

Tour

ism

Tran

spor

t and

com

mun

icat

ion

Busi

ness

serv

ices

Gov

ernm

ent

adm

inis

trat

ion

and

defe

nce

Hea

lth a

nded

ucat

ion

GSP Employment

%

ConsumptionConsumption

� Structure of the Economy



PatternsofhouseholdconsumptionarequitedifferentintheTerritory(Chart1.4).

Territoryconsumersspendrelativelymore(asaproportionofconsumption

expenditure)onfood,recreationandculturethanAustralianconsumersingeneral.

Inrelationtofood,thisreflectshigherpricesassociatedwithhigherfreightcosts

formostgoods,combinedwithweakercompetitivepressuresrelatingtothesmall

marketsize.


Lowerproportionalexpenditureonclothingispresumablyduetoclimate,whilelower

transportexpendituremayreflectshortercommutingdistancesforurban‑dwelling

Territorians.Lowerexpenditureonelectricity,gasandotherfuelsreflectssubsidies

providedbytheTerritoryGovernmentandalargerhouseholdsize,combined

withrelativelyhighhouseholdincomes.Lowerprivateconsumptionofhealthand

educationservicesintheTerritoryreflectsthelackofprivatesectorservicesrelativeto

elsewhere.

Chart 1.3: Proportion of SFD,2000-01 to 2004-05

0

10

20

30

40

50

60

Householdconsumption

General governmentconsumption

Private capitalformation

Public capitalformation

Northern Territory Australia

%Chart 1.3: Proportion of SFD,2000-01 to 2004-05

0

10

20

30

40

50

60

Householdconsumption

General governmentconsumption

Private capitalformation

Public capitalformation


%

Chart 1.4: Household Final Consumption Expenditure, 2004-05

0

5

10

15

20

Food

Alc

ohol

,be

vera

ges

and

toba

cco

Clot

hing

and

foot

wea

r

Elec

tric

ity,

gas

,an

d ot

her f

uel

Furn

ishi

ngs

and

othe

r hou

seho

ldeq

uipm

ent

Hea

lth

Tran

spor

t

Com

mun

icat

ions

Recr

eatio

nan

d cu

lture

Educ

atio

nse

rvic

es

Acc

omm

, caf

esan

d re

stau

rant

s

Mis

cella

neou

sgo

ods

and

serv

ices


%Chart 1.4: Household Final Consumption Expenditure, 2004-05

0

5

10

15

20

Food

Alc

ohol

,be

vera

ges

and

toba

cco

Clot

hing

and

foot

wea

r

Elec

tric

ity,

gas

,an

d ot

her f

uel

Furn

ishi

ngs

and

othe

r hou

seho

ldeq

uipm

ent

Hea

lth

Tran

spor

t

Com

mun

icat

ions

Recr

eatio

nan

d cu

lture

Educ

atio

nse

rvic

es

Acc

omm

, caf

esan

d re

stau

rant

s

Mis

cella

neou

sgo

ods

and

serv

ices


%

�Structure of the Economy

PrivatesectorcapitalinvestmentintheTerritoryhasincreasedsteadilyfrom10percentof

SFDin1994‑95to19percentin2004‑05.PrivateinvestmentintheTerritoryisextremely

volatile,asthetimingofinvestmentonmajorresourceprojectssuchastheAlcanG3

refineryexpansionatGoveandtheWickhamPointliquefiednaturalgasplant(Chart1.5)

continuestohaveamajorimpactonbusinessinvestment.Privateinvestmentisexpected

toremainhighoverthemediumtermasanumberoflarge‑scaleminingandgas‑related

projectsproceed.Defenceandsocialinfrastructureprojectsareexpectedtoboostpublic

sectorinvestmentincomingyears,aswillcontributionstomajorprojectssuchasthe

DarwinWaterfrontDevelopment.

Source:NorthernTerritoryTreasury,ABSCat.No.5220.0

CapitalInvestmentCapitalInvestment

Chart 1.5: Territory Business Investment (moving annual total)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Business investment

$B

Year ended June

Treasury estimate of business investment, excluding Laminaria-Corallina and Bayu-Undan stage one

and Bayu-Undan stage two pipeline

Chart 1.5: Territory Business Investment (moving annual total)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Business investment

$B

Year ended June

Treasury estimate of business investment, excluding Laminaria-Corallina and Bayu-Undan stage one

and Bayu-Undan stage two pipeline

�0 Structure of the Economy


��Economic Growth

EconomicGrowth

• EconomicgrowthintheNorthernTerritorytendstobevolatilefromyeartoyear.

Thesmallsizeoftheeconomymeanslarge,typicallyresource‑basedprojectscan

haveasubstantialimpactoninvestmentandincomestreams.

• Duringthemidtolate1990s,theTerritory’sstronggrowthwaspredominately

duetothedefencerelocationprogram.Growthbegantoweakenin1999‑2000.

• In2000‑01and2001‑02,therelativeweaknessoftheonshoreeconomywas

maskedbysignificantincreasesinoffshoreoilproductionleadingtosolidgross

stateproduct(GSP)growth.Thissituationwasreversedin2002‑03and2003‑04,

whenthestrengtheningoftheonshoreeconomywasmaskedbyasignificant

declineinoffshoreoil.

• In2004‑05GSPgrewby3.6percentwithstrengtheningconstruction,mining

andtourism.

• ThemajorinfluenceonestimatedGSPgrowthof6.7percentin2005‑06isstrong

onshoreactivity,withworkonmajorprojectsleadingtostronginvestmentand

statefinaldemandgrowth.

• Economicgrowthisforecastat5.8percentin2006‑07.Afullyearofliquefied

naturalgas(LNG)production,peakproductionattheBayu‑Undangasand

condensatefieldsandincreasedaluminaproductionfromAlcan,arethemajor

contributorstogrowth.

Period GSPGrowth% Comment

1995‑96to1999‑2000

3.6 Stronggrowthphase,associatedwithimpetusfromdefenceforcerelocationprogram.

2000‑01 5.2 Weakonshoreactivity.HeadlineGSPboostedbyoffshoreoilproduction.

2001‑02 1.2 Pickupinonshoreactivity.Rail‑relatedinvestmentsurgeboostsconstructionandpropertyandbusinessservices.

2002‑03 0.1 Sharpfallinoffshoreoilproductionamajorinfluenceonweakheadlineresult.

2003‑04 0.2 Offshoreoilproductioncontinuestofall.Recoveryinonshoreeconomygainsmomentum,boostedbystrongconstructionactivity.

2004‑05 3.6 Onshorerecoverybroadens.Strengtheninginconstruction,miningandtourism.Privateconsumptiongrowthmoderates.Businessinvestmentfalls,butgreaterleveloflocalvalueadding.Populationgrowthcontinuestorecover.Skillsshortagesleadtoincreasedflyinflyoutemployment.Residentemploymentreportedasdeclining.

2005‑06e 6.7 Constructionformajorprojectscontinues,andliquefiednaturalgas(LNG)productioncommences.Strengtheninginminingandenergysectors.Populationgrowthsupportssolidresidentialconstruction.DarwinWaterfrontDevelopmentproceeds.Recoveryintourismcontinues.Residentemploymentgrowth.

2006‑07f 5.8 PickupineconomyledbyexportsofLNGandaluminawilllargelyoffsetsloweronshoreeconomy,asinvestmentfortheLNGplantandAlcanG3refineryexpansionconcludes.Solidpopulationandemploymentgrowth.



Chapter 2Chapter 2

KeyPointsKeyPoints

Table 2.1: Territory Economic Growth Profile

Table 2.1: Territory Economic Growth Profile

�2 Economic Growth


Table 2.2: Territory State Final Demand (SFD) and Gross State Product (GSP)96‑97 97‑98 98‑99 99‑00 00‑01 01‑02 02‑03 03‑04 04‑05 05‑06e 06‑07f

$millions*

Privateconsumption 3156 3558 3747 3997 4144 4391 4573 4936 5133 5339 5570

Publicconsumption 2647 2901 3041 3208 3210 3226 3308 3386 3526 3678 3705

Total consumption 5 803 6 464 6 792 7 207 7 354 7 614 7 881 8 323 8 658 9 018 9 275

Privateinvestment

Dwellings 406 460 660 493 294 304 340 332 414 500 465

Businessinvestment 898 1181 2284 1309 1277 2006 2191 2366 2330 2540 1257

Totalprivateinvestment# 1426 1747 3003 1899 1692 2426 2626 2799 2850 3156 1830

Publicinvestment 352 391 257 369 539 641 412 411 535 629 533

Total investment 1 778 2 138 3 260 2 268 2 231 3 067 3 038 3 210 3 385 3 785 2 363

State final demand 7 585 8 614 10 072 9 468 9 587 10 681 10 919 11 533 12 043 12 803 11 638

Internationaltrade–exportofgoods 2101 2092 2060 3032 3942 3051 2715 2070 1942 2638 3700

Internationaltrade–importofgoods ‑485 ‑757 ‑547 ‑1520 ‑577 ‑665 ‑864 ‑899 ‑1865 ‑2327 ‑1792

Balancingitem ‑1247 ‑1713 ‑2764 ‑2190 ‑3704 ‑3712 ‑3404 ‑3323 ‑2402 ‑2745 ‑2575

Gross state product 7 954 8 236 8 821 8 790 9 248 9 355 9 366 9 381 9 718 10 369 10 971

PercentageChange

Privateconsumption ‑1.0 12.7 5.3 6.7 3.7 6.0 4.1 7.9 4.0 4.0 4.3

Publicconsumption ‑0.4 9.6 4.8 5.5 0.1 0.5 2.5 2.4 4.1 4.3 0.7

Total consumption -0.8 11.4 5.1 6.1 2.0 3.5 3.5 5.6 4.0 4.2 2.8

Privateinvestment

Dwellings ‑6.5 13.3 43.5 ‑25.3 ‑40.4 3.4 11.8 ‑2.4 24.7 20.8 ‑7.0

Businessinvestment ‑14.7 31.5 93.4 ‑42.7 ‑2.4 57.1 9.2 8.0 ‑1.5 9.0 ‑50.5

Totalprivateinvestment# ‑12.4 22.5 71.9 ‑36.8 ‑10.9 43.4 8.2 6.6 1.8 10.7 ‑42.0

Publicinvestment 11.4 11.1 ‑34.3 43.6 46.1 18.9 ‑35.7 ‑0.2 30.2 17.6 ‑15.3

Total investment -8.5 20.2 52.5 -30.4 -1.6 37.5 -0.9 5.7 5.5 11.8 -37.6

State final demand -2.7 13.6 16.9 -6.0 1.3 11.4 2.2 5.6 4.4 6.3 -9.1

Internationaltrade–exportofgoods 11.3 ‑0.4 ‑1.5 47.2 30.0 ‑22.6 ‑11.0 ‑23.8 ‑6.2 35.8 40.3

Internationaltrade–importofgoods 8.0 56.1 ‑27.7 177.9 ‑62.0 15.3 29.9 4.1 107.5 24.8 ‑23.0

Balancingitem ‑7.6 37.4 61.4 ‑20.8 69.1 0.2 ‑8.3 ‑2.4 ‑27.7 14.3 ‑6.2

Gross state product 0.8 3.5 7.1 -0.4 5.2 1.2 0.1 0.2 3.6 6.7 5.8

PercentagePointContributiontoGrossStateProduct

Privateconsumption ‑0.4 5.1 2.3 2.8 1.7 2.7 1.9 3.9 2.1 2.1 2.2

Publicconsumption ‑0.1 3.2 1.7 1.9 0.0 0.2 0.9 0.8 1.5 1.6 0.3

Total consumption -0.6 8.3 4.0 4.7 1.7 2.8 2.9 4.7 3.6 3.7 2.5

Privateinvestment

Dwellings ‑0.4 0.7 2.4 ‑1.9 ‑2.3 0.1 0.4 ‑0.1 0.9 0.9 ‑0.3

Businessinvestment ‑2.0 3.6 13.4 ‑11.1 ‑0.4 7.9 2.0 1.9 ‑0.4 2.2 ‑12.4

Totalprivateinvestment# ‑2.6 4.0 15.3 ‑12.5 ‑2.4 7.9 2.1 1.8 0.5 3.1 ‑12.8

Publicinvestment 0.5 0.5 ‑1.6 1.3 1.9 1.1 ‑2.4 ‑0.0 1.3 1.0 ‑0.9

Total investment -2.1 4.5 13.6 -11.2 -0.4 9.0 -0.3 1.8 1.9 4.1 -13.7

State final demand -2.7 12.9 17.7 -6.8 1.4 11.8 2.5 6.6 5.4 7.8 -11.2

Internationaltrade–exportofgoods 2.7 ‑0.1 ‑0.4 11.0 10.4 ‑9.6 ‑3.6 ‑6.9 ‑1.4 7.2 10.2

Internationaltrade–importofgoods ‑0.5 ‑3.4 2.5 ‑11.0 10.7 ‑1.0 ‑2.1 ‑0.4 ‑10.3 ‑4.8 5.2

Balancingitem 1.3 ‑5.9 ‑12.8 6.5 ‑17.2 ‑0.1 3.3 0.9 9.8 ‑3.5 1.6

Gross state product 0.8 3.5 7.1 -0.4 5.2 1.2 0.1 0.2 3.6 6.7 5.8

*2003‑04baseyear

#Totalprivateinvestmentisequaltobusinessinvestmentplusdwellingsinvestmentandownershiptransfercosts.

Source:NorthernTerrittoryTreasury,ABSCat.Nos.5206.0,5220.0


MeasurementofEconomicGrowthAtthenationallevel,aneconomy’ssizeismeasuredbygrossdomesticproduct(GDP).

Australia’sstatesandterritorieshaveanequivalentconceptinthegrossstateproduct

(GSP).Bothmeasuretheproductionundertakeninaneconomyinaparticularyear.

Thevalueofproductioncanbeestimatedusingdifferentapproaches.

The‘expenditureapproach’forcalculatingGDPandGSPisthesumofallfinal

expendituresbyresidents(Table2.2).Itincludesfinalconsumptionexpenditureby

householdsandgovernment,grossfixedcapitalexpenditure(investment)bythe

privateandpublicsectors,changesininventories(thatis,outputproducedinthe

yearbutnotyetsold)andnetexports.AnothermethodofestimatingGDPandGSPis

the‘incomeapproach’,whichsumstheincomeaccruingtothefactorsofproduction

(primarilylabourandcapital).TheincomemeasureofGDPandGSPalsoincludesnet

taxesonproductionandnettaxesonimports.The‘incomeapproach’isusedbythe

AustralianBureauofStatistics(ABS)toprovidetheyearlyGSPestimateforeachstate

andterritory.

AlljurisdictionsreportontheGSPmeasureofeconomicgrowth.Nonetheless,theGSP

measureisexperimentalandvolatile,withtheseriesopentosignificantrevisions.This

canbeexacerbatedintheTerritoryduetothedominanceofafewindustriesandthe

smallsizeoftheeconomy.

AcomponentofGSP,calculatedusingthe‘expenditureapproach’,isstatefinal

demand(SFD).SFDisameasureofthedemandforgoodsandservicesinaneconomy.

SFDdataisreleasedquarterly,incontrasttoGSP,whichisreleasedonceayear

andassuchisamorereadilyavailablemeasureofeconomicactivity.SFDincludes

expenditureforbothconsumptionandinvestmentpurposes.AsshowninTable2.2,

theinvestmentcomponentofSFDcanbevolatile,particularlywiththeinfluence

oflargeprojectsontheTerritory’srelativelysmalleconomy.Consumptionisamore

stableelementofeconomicactivityandisinfluencedbypopulation,employmentand

incomegrowthaswellasinterestratesandconsumerconfidence.Publicconsumption

includesdefence‑relatedconsumptionexpenditure.

ComplicatingtheinterpretationofTerritoryGSPistheimpactofoffshoreeconomic

activity.Ineffect,therehavebeendualeconomiesreportedinGSPdata.Forexample,

SFDgrowthwasweakin2000‑01(consumptiongrowthmoderatedto2.0percentand

dwellingsinvestmentfellbymorethan40percent),butGSPincreasedby5.2percent

drivenbyincreasedexports,largelyduetothehugeimpactofLaminaria‑Corallina

(offshore)oilproduction.Laminaria‑Corallinaoilproductionpeakedin2000‑01andhas

sincebeendeclining.

InasmalljurisdictionsuchastheTerritory,itispossibleformajorprojectstohave

asubstantialimpactonSFD,particularlyviabusinessinvestment,andonGSPvia

incomeearnedbyfactorsofproduction.However,iftheacquiredmachineryand

equipmentisassembledoverseas,theinvestmentexpenditureattributedtothe

Territorycanhavealimitedimpactonthelocaleconomy,despitealargeimpacton

SFD.ExamplesincludetheimportationoftheNorthernEndeavourforoilproductionin

theTimorSeain1998‑99,andtheimportationofthepre‑assembledmodules(PAMs)

fortheAlcanG3refineryexpansionatGoveprimarilyin2005‑06.Inthesameway,the

incomeaccruingtofactorsofproductionemployedonmajorprojectswillbereported

inGSPbutmaynotflowonfullytothelocaleconomythroughprivateconsumption

expenditureanddwellingsinvestment,asmanyoftheemployeesarenotpermanent

residentsoftheTerritory.


VolatilityofGSPVolatilityofGSP


OnshoreandOffshoreActivityOnshoreandOffshoreActivity

MajorProjectsMajorProjects

�� Economic Growth


EconomicPerformanceTheTerritoryeconomycontinuedtoexperiencestronggrowthin2004‑05,witha

recoveryinnetinterstatemigrationandpopulationgrowth,solidincomegrowth

andstrongresidentialpropertymarkets.Businessconfidencealsoimprovedover

theyearandacrossabroadrangeofindustries.SFDincreasedby4.4percentin

2004‑05,reflectingrobustonshoreeconomicactivity,withconsumptionincreasing

by4.0percentandinvestmentby5.5percent.Dwellingsinvestmentreportedstrong

growthof24.7percent,followingweakgrowthinthesameperiodayearearlier,while

businessinvestmentdecreasedby1.5percent.

GrowthinGSPof3.6percentin2004‑05wasbelowthe5.8percentestimatedat

thetimeofthe2005‑06MidYearReport.Themajorinfluenceforthelowerthan

expectedGSPfigurewasthedownwardrevisionbytheABStoonecomponent,

compensationofemployeesgrowth,from19percentto9percent,duetoconcerns

aboutthereliabilityofthedatainanumberofjurisdictionsand,toalesserextent,the

Trans‑TerritoryPipelinefromWadeyetoGovenotproceeding.

NorthernTerritoryGSPgrowthfor2005‑06isestimatedat6.7percent,reflecting

strongeremploymentandpopulationgrowth,withoutputalsoboostedbythe

commencementofLNGproductionandBayu‑Undanstage1outputdoublingas

productionreachesdesigncapacity,contributingtostronggrowthintheminingand

energyindustry.

Theonshoreeconomycontinuedtostrengthenin2005‑06,withSFDestimatedto

increaseby6.3percent,boostedlargelybyactivityassociatedwiththeconstruction

oftheLNGplantatWickhamPoint(completedinDecember2005),peakconstruction

activityfortheAlcanG3refineryexpansionatGoveandthecommencementofthe

DarwinWaterfrontDevelopment.Withresidentemploymentshowingpositivesigns

in2005‑06,followingthreeyearsofreporteddecline,householdconsumptionis

expectedtoreportsolidgrowthforthefourthconsecutiveyear.Strongerpopulation

growthof1.7percentin2005‑06andsolidincomegrowthsupportedstrong

residentialconstructionandpropertymarketsintheTerritory.Businessinvestmentis

estimatedtoincreaseby9.0percent,boostedbyinvestmentassociatedwithmajor

projects.

In2005‑06,thepredominantdriverofeconomicgrowthintheTerritoryhasbeen

theonshoreeconomy,withasignificantcontributionfromLNGproductionat

WickhamPoint.By2006‑07,thecontributionofLNGproductionisforecasttoincrease

substantiallywithafullyearofproductionfromWickhamPoint.Thiswilllargelyoffset

thesignificantdeclineintotalinvestment(associatedwiththecompletionofmajor

projectsin2006‑07)andthemoremodestdeclineintotalconsumption.Fullcapacity

productionofLNG,spreadevenlyoverthenext15years,willmorethancompensate

forthedecliningoilproductionfromtheLaminaria‑Corallinaoilfields.

2004‑052004‑05

2005‑062005‑06

OnshoreEconomyOnshoreEconomy

LNGProductionLNGProduction


Table 2.3: Northern Territory Economic IndicatorsEconomicIndicators* 1998‑99 1999‑00 2000‑01 2001‑02 2002‑03 2003‑04 2004‑05

Realretailturnover 5.9 5.9 ‑0.7 4.1 2.2 5.1 5.3

Newmotorvehiclesales ‑3.4 ‑8.8 ‑4.2 ‑0.3 3.3 8.4 10.7

Touristaccommodationtakings 7.0 16.8 1.5 ‑1.0 ‑0.1 2.8 13.6

Numberofdwellingsapproved 0.0 ‑30.6 ‑28.4 ‑13.8 0.0 23.4 18.4

Numberofdwellingscommenced ‑9.7 ‑21.1 ‑34.0 0.1 ‑4.1 6.0 28.2

DarwinConsumerPriceIndex 0.9 1.4 5.4 2.2 2.3 1.4 2.2

AWOTE# 3.1 4.6 3.7 2.3 5.0 6.5 7.0

LabourPriceIndex 2.8 2.5 2.8 3.1 3.0 3.3 3.7

Employment 5.3 ‑2.3 1.1 5.4 ‑0.1 ‑2.2 ‑2.0

Unemploymentrate(yearaverage) 4.0 4.4 5.6 6.8 5.8 5.2 6.3

PopulationasatJune(thousands) 192.7 195.6 197.8 198.7 198.5 199.8 201.8

Population(annual%change) 1.5 1.5 1.1 0.5 ‑0.1 0.6 1.5

Netinterstatemigration(number) ‑953 ‑907 ‑1592 ‑2596 ‑3389 ‑2108 5.0

FinancialIndicators

Interest rates

90daybankbill(asat30June) 4.9 6.2 5.0 5.1 4.7 5.5 5.7

10yeargovernmentbondyield(asat30June) 6.3 6.2 6.0 6.0 5.0 5.9 5.1

Exchange Rates

US$perA$(yearaverage) 0.63 0.63 0.54 0.52 0.58 0.71 0.75

US$perA$(asat30June) 0.66 0.60 0.51 0.56 0.67 0.69 0.76

SpecialdrawingrightsperA$(asat30June) 0.49 0.45 0.41 0.43 0.48 0.47 0.52

TradeWeightedIndexofA$(asat30June) 58.4 53.6 49.7 52.3 59.4 59.1 64.5

*Yearonyearpercentagechangeunlessindicatedotherwise

#Averageweeklyordinaryfull‑timeearnings

Source:NorthernTerritoryTreasury,ReserveBankofAustralia,ABSdata

Finalconsumptionexpenditureprovidesanindicationofhouseholdandgovernment

demandandisakeyelementofeconomicgrowth.Consumptionalsotendstoreflect

householdandbusinessconfidence.Consumptiontypicallyaccountsforaround

three‑quartersoffinalexpenditureintheTerritory,withhouseholdconsumptionjust

over58percentoftotalconsumption(comparedtoabout75percentnationally).

Giventhedistortionaryeffectoflarge,oftenoffshoreresourceprojectsonbroad

economicindicators,consumptionexpenditureisoftenusedasamorestable

indicatorofthestateoftheTerritoryonshoreeconomy.In2005‑06,totalconsumption

expenditurebyhouseholdsandgovernmentincreasedbyanestimated4.2percent.

Since1990‑91,governmentconsumptionhasdeclinedasaproportionoftotal

consumption,fromabout45percentto41percentin2005‑06.Thisreflectsthe

growingsignificanceofprivatesector(household)consumptionexpenditureinthe

Territory(Chart2.1).


�6 Economic Growth


0

2

4

6

8

10

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07fYear ended June

Total

Household

Government

$B



InvestmentistheothercomponentofSFDandincludesprivateinvestmentfor

dwellings,businessinvestmentandpublicexpenditureforeconomicandsocial

infrastructure.Investmentistypicallymorevolatilethanconsumption,reflecting

theimpactofcapital‑intensiveresourceprojectsontherelativelysmallTerritory

economy.Remainingataveryhighlevel,Territoryinvestmentincreasedbyan

estimated11.8percentin2005‑06.BusinessinvestmentintheTerritorycontinues

tobeheavilyinfluencedbymajorinfrastructureworksandresourceprojects.Major

projectscurrentlyunderwayincludetheAlcanG3refineryexpansionatGoveandthe

DarwinWaterfrontDevelopment.TheLNGplantatWickhamPointwascompleted

inDecember2005.Otherprojectsthatcommencedin2005‑06includethebiodiesel

plantandassociatedstoragefacilityatEastArm.

Strongdwellingconstructionover2005‑06hasbeenassociatedwithstronger

populationandemploymentgrowth,supportedbylowinterestratesandTerritory

Governmentincentives.TheseincludetheFirstHomeOwnersGrant,thestampduty

concessionthresholdandtheHomeNorthScheme.Afterseveralyearsofhousing

stocksurplusassociatedwithoverinvestmentinthelate1990s,amorebalanced

Territoryhousingmarketisreflectedinlowerresidentialvacancyrates.Solidrental

yieldsandaboomingpropertymarkethavealsoencouragedinvestorstoenterthe

marketoverthepasttwoyears.

Non‑residentialbuildingalsostrengthenedin2005‑06,duelargelytoinvestment

expenditureassociatedwiththecommencementoftheDarwinWaterfront

Development,stage1oftheDarwinChinatowndevelopmentandtheOutrigger

Pandanasservicedapartments.

Chart 2.1: Territory Consumption (chain volume measure,

moving annual total)

Chart 2.1: Territory Consumption (chain volume measure,

moving annual total)

InvestmentInvestment

�7Economic Growth

0.0

0.5

1.0

1.5

2.0

2.5

3.0

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Year ended June

Business investment*excluding o�shore investment

Dwellings investment

$B

Business investment*including o�shore investment

*Privateinvestmentlessdwellinginvestmentandownershiptransfercosts


EconomicOutlookFollowingstronggrowthin2005‑06,GSPisforecasttoincreasebyafurther

5.8percentin2006‑07,whichwillbepredominantlydrivenbyproductionandexport

ofLNG.Stronggrowthinexportswillacttolargelyoffsettheimpactoftheweakening

onshoreeconomy,particularlythesignificantdeclineinbusinessinvestment.

Nevertheless,continuedgrowthwillbesupportedbythepositiveemploymentand

populationoutlook,linkedtoemployment‑creatingprojectssuchastheDarwin

WaterfrontDevelopment.AlthoughafullyearofLNGproductionfromBayu‑Undan

willbethemostsignificantfactor,growthwillalsobesupportedbymanganese

productionfromthenewBootuCreekmineandincreasedproductionfromtheAlcan

G3refineryexpansionatGove.

Employmentassociatedwithmajorprojects,notablytheAlcanG3refineryexpansion

andtheDarwinWaterfrontDevelopment,willcontinuethrough2006‑07,although

thefocusofactivitywillshifttotheWaterfrontDevelopmentasworkontheAlcan

expansionconcludesinlate2006.Althoughresidentemploymentisforecastto

experiencesolidgrowthin2006‑07,thenumberofflyinflyoutworkerswilldecline

andthecompositionofemploymentisexpectedtochangesubstantially,resultingin

lowergrowthinemploymentincome,downto3.5percentin2006‑07from5percent

in2005‑06.

Afterpeakingin2003‑04,privateconsumptiongrowthmoderatedin2004‑05with

growthremainingunchangedin2005‑06beforerecoveringin2006‑07.Household

consumptionisforecasttoincreaseby4.3percentin2006‑07.Continuedlowinterest

rates,thestrengtheningoutlookforemploymentandcontinuingsolidpopulation

growthunderpinstrengtheningconsumption.Publicconsumptionisexpectedto

moderatewithforecastgrowthof0.7percentin2006‑07.

Chart 2.2: Territory Dwelling and Business Investment (chain volume

measure, moving annual total)

Chart 2.2: Territory Dwelling and Business Investment (chain volume

measure, moving annual total)


�� Economic Growth


Totalinvestmentisforecasttodeclineby38percentin2006‑07.Althoughthe

decreasemainlyreflectslowerprivatesectorbusinessinvestment,publicinvestment

isalsoforecasttodecline.Privateinvestmentisforecasttodeclineby42percent

fromthehistoricallyhighlevelsof2005‑06.Thetwomega‑projects,theAlcanG3

refineryexpansionandtheLNGplant,raisedprivateinvestmentintheTerritoryto

unprecedentedlevelsin2005‑06.Dwellingsinvestmentisalsoforecasttodecrease

by7percentin2006‑07,followingstronggrowthof21percentin2005‑06.The

expecteddeclineinpublicinvestmentexpenditure,of15percentin2006‑07,reflects

thesignificantdropinexpenditurefordefence‑relatedprojects,withtheBradshaw

FieldTrainingAreacompletedin2005‑06.TheRobertsonBarracksdevelopment

was70percentcompletein2005‑06,withtheremaining30percentofworktobe

completedin2006‑07.

TerritorySFDisforecasttodecreaseby9.1percentin2006‑07,duetothesignificant

declineintotalinvestmentexpenditure.Althoughtotalconsumptionisforecastto

increaseby2.8percentin2006‑07,makingasignificantcontributiontogrowth,total

investmentisforecasttodecreasebyabout38percent,morethanoffsettingthe

increaseinconsumption.

WithmajorengineeringworkforBayu‑Undanstage2completeandtheAlcanG3

refineryexpansionatGovedrawingtoacloseinlate2006,engineeringconstruction

activityintheTerritorywillreturntomorenormallevelsin2006‑07.However,

engineeringworkfortheDarwinWaterfrontDevelopmentandnewprojectssuchas

theTerritory’sproportionofthe$750milliondevelopmentoftheBlacktipgasfield

(expectedtobeginin2007‑08)andthe$450millioncondensateprocessingfacility,

willensurethatengineeringactivityintheTerritoryremainsatlevelswellabove

historicalaverages.

Territoryexports,whichhavebeendominatedbyoilinrecentyears,areforecastto

increasebyaround40percentin2006‑07,contributingsubstantiallytogrowthin

GSP.Theincreasewillbedrivenbymineralfuelsexportsassociatedwithafullyearof

LNGproductionfromBayu‑UndanandincreasedaluminaproductionfromtheAlcan

refineryatGove.ExternaldemandforTerritorycommoditiesisexpectedtoremain

strongintheshortterm,butmoderatesomewhatinvalueinthemediumtermas

commoditypricesbackawayfromcurrenthighs,withapredicteddeclineinglobal

demand(especiallyfromChina)andincreasedsupplycapacity.

-10

-5

0

5

10

15

20

25

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Year ended June

SFD excluding o�shoreinvestment

Gross state product

%

SFD including o�shoreinvestment


Source:NorthernTerritoryTreasury,ABSCat.No.5206.0,5220.0



EngineeringWorkEngineeringWork

ExportsExports

Chart 2.3: Territory State Final Demand and Gross State Product

(chain volume, annual percentage change)

Chart 2.3: Territory State Final Demand and Gross State Product

(chain volume, annual percentage change)

��Population

Population

• TheNorthernTerritoryissparselysettled,witharelativelyyoungandhighly

urbanisedpopulation.AfarhigherproportionoftheTerritorypopulationis

Indigenous(29percent)thananyotherjurisdiction.

• Naturalincrease(birthsminusdeaths)isahighercontributortototalgrowthin

theTerritoryduetohighratesofIndigenousfertility.

• Interstatemigrationisthemostvariablecomponentofpopulationgrowth,but

hascontributedtostrongergrowthduring2005‑06.

• Populationgrowthstrengthenedto1.1percentin2004,andfurthertoan

estimated1.7percentin2005,withpositivenetinterstatemigrationinflowsfor

thefirsttimesince1997.

• Populationgrowthof1.5percentisforecastfor2006,easingto1.2percentin

2007.

PopulationgrowthisanimportantdriverofeconomicgrowthintheTerritory,asboth

asupplyoflabourandsourceofdemandforlocallyproducedgoodsandservices.It

isimportanttonote,however,thatsignificanteconomicgrowthcanstilloccurinthe

absenceofincreasesintheresidentpopulation.Thishasbeenevidentrecentlywith

thegreaterrelianceonflyinflyoutworkersasasourceoflabourformajorprojectsin

theTerritory.

TheaccurateestimationofpopulationisofcriticalimportancetotheTerritory,asthe

populationestimatesproducedbytheAustralianBureauofStatistics(ABS)areused

bytheCommonwealthGrantsCommissiontoapportiongoodsandservicestax(GST)

revenues.GiventheTerritory’sgreaterrelianceonGSTrevenuesasasourceoffunding

relativetootherjurisdictions,changesintheestimatednumberofresidentscanhave

adisproportionateimpactontheTerritorybudget.

Forsometime,theNorthernTerritoryTreasuryhashadconcernsaboutenumeration

methodsusedbytheABStoestimatetheTerritory’spopulation.Theseconcernsrelate

tothelikelihoodofunderestimationofthepopulationandtherelativelyhighlevelsof

uncertaintyattachedtoestimates.Fortheseandotherreasons,theNorthernTerritory

GovernmentandtheABSareworkinginpartnershiptoimprovetheenumeration

associatedwiththe2006Census.Thesearrangementsarediscussedbrieflyattheend

ofthischapter.

f:forecast


Chapter 3Chapter 3

KeyPointsKeyPoints

Chart 3.1: Annual Population Growth

-1

0

1

2

3

4

5

6

7

81 83 85 87 89 91 93 95 97 99 01 03 05 07f

%

Northern Territory

Australia

Year ended June

Chart 3.1: Annual Population Growth

-1

0

1

2

3

4

5

6

7

81 83 85 87 89 91 93 95 97 99 01 03 05 07f

%

Northern Territory

Australia

Year ended June

20 Population


NorthernTerritory Australia

ToDecember Population(000) Annual%Change Population(000) Annual%Change

1987 159.0 1.6 16394.6 1.6

1988 160.5 0.9 16687.1 1.8

1989 162.1 1.0 16936.7 1.5

1990 165.0 1.8 17169.8 1.4

1991 166.8 1.1 17387.0 1.3

1992 169.7 1.7 17581.3 1.1

1993 172.3 1.5 17760.0 1.0

1994 175.0 1.5 17951.5 1.1

1995 180.5 3.2 18196.1 1.4

1996 184.6 2.3 18420.3 1.2

1997 188.3 2.0 18609.1 1.0

1998 191.3 1.6 18814.3 1.1

1999 194.3 1.6 19038.3 1.2

2000 196.3 1.0 19272.6 1.2

2001 198.0 0.9 19529.3 1.3

2002 198.2 0.1 19754.8 1.2

2003 198.7 0.3 19982.5 1.2

2004 200.8 1.1 20210.0 1.1

2005e 204.3 1.7 20452.2 1.2

2006f 207.3 1.5 20689.0 1.2

2007f 209.8 1.2 20923.5 1.1


Source:NorthernTerritoryTreasury,AccessEconomics,ABSCatNo.3101.0

BasedonABSpreliminaryestimatedresidentpopulation(ERP)estimates,Territory

populationgrowthincreasedto1.1percentin2004,followinggrowthof0.3percent

in2003and0.1percentin2002(Chart3.1).OvertheyeartoJune2005,Territory

estimatedpopulationgrowthwas1.5percent,risingabovethenationalgrowthrate

forthefirsttimeinfiveyears.PopulationgrowthintheTerritoryisexpectedto

continueabovethenationalgrowthrateduring2006and2007.

TheTerritoryrecordedthehighestpopulationgrowthofalljurisdictionsoverthe

fiveyearstoJune2000,primarilyduetopositiveinterstatemigrationresultingfrom

theArmyPresenceintheNorth(APIN)defenceexpansion.Thecurrentperiodof

strengtheningpopulationgrowthintheTerritoryfollowsweakgrowthconsistent

withincreasednetinterstatemigrationlosscausedbythedownturnintheTerritory

onshoreeconomyin1999‑2000and2000‑01.Interstatemigrationoutflowsbeganto

declinein2003,andby2005haddecreasedtoalevelnotseenfor15years(Chart3.7).

TheTerritory’spopulationisexpectedtoincreaseby1.7percentintheyearto

December2005.

Overthepast10years,theNorthernTerritoryhadthethirdhighestpopulationgrowth

ofthejurisdictions,at1.3percentperyear,behindQueenslandandWesternAustralia

(Chart3.2).Nationally,growthaveraged1.2percentoverthesameperiod.However,

theTerritory’saveragepopulationgrowthoverthepastfiveyearswaswellbelowthe

nationalrate,at0.7percent,andwasthefifthhighestofthejurisdictions.Intheyear

toJune2005,populationgrowthintheTerritoryreturnedtothelongertermstronger

levels,andat1.5percentwasthethirdhighestgrowthrateofthejurisdictions,

behindQueenslandandWesternAustralia.

Table 3.1: Annual PopulationTable 3.1: Annual Population

RecentPopulationGrowthRecentPopulationGrowth

InterstateComparisonInterstateComparison

2�Population


Between2001and2005,theDarwinregion,comprisingDarwin,Palmerstonand

Litchfield,experiencedmoderatepopulationgrowth,withPalmerstonincreasingby

9.1percentandLitchfieldby6.9percent,comparedwithDarwin’s2.0percent.The

veryhighgrowthlevelsexperiencedbyPalmerstonbetween1996and2001

(11.0percentperannum)haveslowedtoaverageannualgrowthof2.0percentsince

2001.

OtherregionalcentresintheTerritoryexperiencedmixedgrowthresultsoverthe

2001‑05period.Jabiru,KatherineandAliceSpringsfellby1.4percent,0.7percent

and0.1percentrespectively,whilethepopulationsofNhulunbuyandTennantCreek

grewby5.0percentand0.2percentrespectively.Thepopulationoftheremainderof

theTerritoryincreasedby1.0percentoverthesameperiod(Chart3.3).

Source:ABSCat.No.3218.0.55.001

Chart 3.2: State and Territory Population Growth Rates

to June 2005 (average annual growth)

0.0

0.5

1.0

1.5

2.0

2.5

NSW Vic Qld SA WA Tas NT ACT Australia

10 Years 5 Years 2005

%Chart 3.2: State and Territory Population Growth Rates

to June 2005 (average annual growth)

0.0

0.5

1.0

1.5

2.0

2.5

NSW Vic Qld SA WA Tas NT ACT Australia

10 Years 5 Years 2005

%

RegionalGrowthRegionalGrowth

Chart 3.3: Territory Population Growth by Main Centre

-20

-15

-10

-5

0

5

10

15

Darwinregion

Jabiru Katherine Nhulunbuy TennantCreek

AliceSprings

Rest ofTerritory

Total NT

1996-2001 2001-2005

%Chart 3.3: Territory Population Growth by Main Centre

-20

-15

-10

-5

0

5

10

15

Darwinregion

Jabiru Katherine Nhulunbuy TennantCreek

AliceSprings

Rest ofTerritory

Total NT

1996-2001 2001-2005

%

22 Population


1991 1996 2001 2005p

Population % Population % Population % Population %

Darwin 68188 41.2 68889 37.9 68710 34.7 70055 34.5

Palmerston 8557 5.2 13343 7.3 22559 11.4 24603 12.1

Litchfield 9670 5.8 13597 7.5 15573 7.9 16642 8.2

Darwin Region 86 415 52.2 95 829 52.7 106 842 54.0 111 300 54.9

Jabiru 1454 0.9 1457 0.8 1181 0.6 1165 0.6

Katherine 8347 5.0 9443 5.2 8956 4.5 8895 4.4

Nhulunbuy 4020 2.4 3759 2.1 3800 1.9 3990 2.0

TennantCreek 3238 2.0 3694 2.0 3002 1.5 3009 1.5

AliceSprings 24250 14.7 25040 13.8 26520 13.4 26486 13.1

Rest of NT 37 769 22.8 42 621 23.4 47 467 24.0 47 948 23.6

Total NT 165 493 100.0 181 843 100.0 197 768 100.0 202 793 100.0

p:ABSpreliminaryestimate

Source:ABSCat.No.3218.0.55.001

PopulationCharacteristicsPopulationscanbemeasuredinavarietyofways.Themainconceptofpopulation

usedinthischapteris‘estimatedresidentpopulation’(ERP),whichistheofficial

populationfigureasmeasuredbytheABS.Itincludesallpeoplewhousuallylive

inaplace.TomeasureERP,theABSneedsinformationaboutthenumberofusual

residentsaswellasinformationaboutthenumbersofbirthsanddeathsandinterstate

andoverseasmigrants.ERPdoesnotincludethemanyflyinflyoutworkerswhoare

broughtintoworkonmajorprojectswhenlocalskilledlabourisinsufficient.Therefore,

economicgrowthcanstilloccurintheabsenceofincreasesintheresidentpopulation.

Thereareanumberofotherpopulationconceptsthatcanbeofinterest,forexample,

populationcountsfromtheABSCensusofPopulationandHousing.Thesecanbe

basedonplaceofenumeration(wherepeopleareactuallycountedonCensusnight)

orplaceofusualresidence(theplacewherepeoplehavelivedorintendtoreside

foratleastsixmonths).Theformerareparticularlyusefulforserviceprovidersand

plannerstoknowthesizeofthe‘servicepopulation’,whichmayincludetouristsand

othervisitors.ThelatterformthebasisofERPmentionedabove.

TheTerritoryissparselypopulated,withadensityof0.15personspersquare

kilometre,lowerthananyotherjurisdictionandwellbelowthenationaldensityof

2.6peoplepersquarekilometre.

Despitethelowoverallpopulationdensity,morethanthree‑quartersoftheTerritory’s

populationlivesintheurbancentres.Asat30June2005,theDarwinregion

accountedforaround55percentoftheTerritory’spopulation.AliceSprings

accountedforafurther13percent,whiletheothermainadministrativecentres

(Katherine,Nhulunbuy,TennantCreekandJabiru)accountedforabout9percent

(Table3.2).

TheincreasingpopulationconcentrationintheDarwinregionmirrorsthenational

trendofgreaterpopulationconcentrationinstatecapitals.Theunderlyingcauses

ofhigherpopulationdensityinurbanareasincludebetteremploymentprospects,

higherstandardsofliving,improvedamenitiesandservicesandchangingsocial

values.IntheTerritory,itmayalsoreflectapatternofurbanmigrationwhichisdriven

inpartbytheneedtoaccesshealthservicesandothersocialandemployment

opportunities.Withoutthismigration,growthinremoteareaswouldhavebeen

higherinrecentyears.

Table 3.2: Territory Population Estimates by Main Centre,

as at 30 June

Table 3.2: Territory Population Estimates by Main Centre,

as at 30 June

SmallPopulation,LargeLandArea

SmallPopulation,LargeLandArea

HighlyUrbanisedHighlyUrbanised

2�Population

TheTerritory’spopulationisthemostyouthfulofanyjurisdictioninAustralia

(Chart3.4).Itconsistentlyhasthelargestproportionunder15yearsofageandthe

smallestproportionaged65andoverofanystateorterritory.TheTerritoryhasa

higherproportion(71percent)ofitspopulationinthetypicalworkingagegroupof

15‑64years,comparedtotheAustralianpopulation(67percent).

Asat30June2005,themedianageofTerritorianswasestimatedtobe30.9years.This

istheyoungestofanyjurisdictionandalmostsixyearsbelowthenationalmedian

ageof36.6years.However,overthepastfiveyears,theTerritory’spopulationhas

agedmarkedlyfasterthanthenationalpopulation.ThemedianageintheTerritory

rosefrom29.2yearsin2000to30.9yearsin2005,comparedtoanincreasenationally

from35.4yearsto36.6yearsoverthesameperiod.Chart3.4illustratesthedifferent

patternsofageingexperiencedbytheTerritoryandAustralianpopulationsoverthe

past10years.

TheIndigenouspopulationmakesup29percentoftheTerritory’stotalpopulation,

accordingtoABSexperimentalestimatesoftheIndigenouspopulationfor2001.This

isproportionatelyfarlargerthananyotherjurisdiction,withmorethanoneinfour

peopleintheTerritoryidentifyingasIndigenous.TheIndigenouspopulationismuch

youngerthanthenon‑Indigenouspopulation,withamedianageof21.8atJune2001

comparedwith32.4yearsforthenon‑Indigenouspopulation.

TheABSexperimentalestimatesandprojectionsarebasedonthe2001Censususual

residencecountsandtakeintoaccountinstancesinwhichIndigenousstatusisnot

stated,theextenttowhichABSestimatesIndigenouspeopleareundercounted

andanumberofotherdemographicadjustments.At30June2001,theIndigenous

populationintheTerritorywasestimatedtobe56875persons,accountingfor

12percentofthenationalIndigenouspopulationof458520,whichwas2.4percent

ofAustralia’stotalpopulation.Between1991and2001,theTerritory’sIndigenous

populationhashadaverageannualgrowthof2percentcomparedto1.7percent

forthenon‑Indigenouspopulation.Chart3.5showsexperimentalprojectionsofthe

IndigenouspopulationasatJune2005andshowspatternsofageingintheTerritory

Indigenousandnon‑Indigenouspopulationsoverthepastdecade.


YoungPopulationYoungPopulation

IndigenousPopulationIndigenousPopulation

Chart 3.4: Age Distribution of Population

12 10 8 6 4 2 0 2 4 6 8 10 120-4

10-14

20-24

30-34

40-44

50-54

60-64

70-74

80-84

Australia June 1995Northern Territory June 1995Northern Territory June 2005 Australia June 2005

% of population

Age group(years)

2� Population


Note:ABSexperimentalIndigenousestimatesarenotavailablefor1995

Source:ABSCat.No.3201.0and3238.0

InthefiveyearperiodbetweenJune1996andJune2001,thenumberofresident

householdsintheTerritorywasestimatedbyABStohaveincreasedby11percent

(basedon1996and2001Censusdata).Householdgrowthwassignificantlyfaster

thanpopulationgrowthof9percentbasedon1996and2001Censusdata,andis

associatedwithadropintheaveragenumberofpeopleperhouseholdfrom3.1

to3.0.TheongoingdeclineintheaveragesizeofTerritoryhouseholdsreflectan

ageingpopulation,afallingfertilityrateandanincreasingproportionofsingle‑person

households,whichisconsistentwithnationaltrends.Despitethedecline,household

sizeintheTerritoryremainsthelargestofalljurisdictions,partlyreflectinghighrates

ofovercrowdingamongIndigenoushouseholdsaswellaslargerfamilies,particularly

inremotecommunities.

TheTerritoryhassignificantlymoremalesthanfemales,withanestimated111males

(52.6percent)forevery100females(47.4percent)asat30June2004.Thiscontrasts

withthenationalratioof99malesforevery100females.Theratiobecomesmore

extremeinolderagegroups,progressingfrom108malesforevery100femalesin

0‑19yearolds,to127malesto100femalesin55‑74yearolds.Correspondingnational

figuresare105malesforevery100femalesforthe0‑19yearsagegroupand99males

forevery100femalesforthe55‑74agegroup.

2001Censusresultsshowthat22percentoftheenumeratedTerritoryresident

populationwasbornoverseas,withmanyfromnon‑Englishspeakingbackgrounds.

Thisissimilartotheproportionofoverseas‑bornrecordedinboththe1991and1996

Censuses(21percent),andissimilartothetotalAustralianproportion.IntheTerritory,

ofthosebornoverseas,themaincountriesofbirthweretheUnitedKingdom

(17.7percent),NewZealand(8.2percent),thePhilippines(3.9percent),the

UnitedStates(2.8percent),Germany(2.4percent)andGreece(2.4percent).

Chart 3.5: Age Distribution of Territory Population

14 12 10 8 6 4 2 0 2 4 6 8 10 12 140-4

10-14

20-24

30-34

40-44

50-54

60-64

70-74

Indigenous June 1996


Non-Indigenous June 1996


% of population

Age group(years)

Chart 3.5: Age Distribution of Territory Population

14 12 10 8 6 4 2 0 2 4 6 8 10 12 140-4

10-14

20-24

30-34

40-44

50-54

60-64

70-74





% of population

Age group(years)

FallingHouseholdSizeFallingHouseholdSize

MaletoFemaleRatioMaletoFemaleRatio

OverseasBornOverseasBorn

2�Population

InApril2005,theProductivityCommissionreleaseditsreport,EconomicImplications

ofanAgeingAustralia,whichexplorestheimpactthatAustralia’sageingpopulation

mayhaveonvariousaspectsoftheeconomy,stateandnationalbudgets.Likeother

developedcountries,Australia’spopulationisageing.By2045,oneinfourAustralian

residentswillbeagedover65,comparedwithaboutoneineightcurrently.Ageingof

thepopulationistheresultofpasttrendsinfertilityandmortalityandcannotbe

reversed.Populationpoliciessuchasincreasedimmigrationwillhavelittleeffecton

thefutureagestructureofthepopulation.Intheabsenceofsignificantchange,

ageingwillmeanlowerlabourforceparticipation,potentiallyreducedproductivity

andincreasedcostssuchashealthcare.

AlthoughtheTerritoryhasayoungerpopulationthanthoseofotherjurisdictions,the

populationisageingatafasterrate.TheproportionofTerritoriansagedover65may

haveincreasedthree‑foldin40yearstime,whereastheproportioninthisagegroup

intheAustralianpopulationisexpectedtodouble.

SomeoftheeconomicimpactsofageingwillbemoremarkedintheTerritory.For

example,theriseinhealthandaged‑carecostsisexpectedtohaveagreaterimpact

intheTerritorythanmostofAustraliabecauseoftherapidriseintheTerritory’saged

population.AlthoughtheProductivityCommissionreportpredictsthateducation

costswillfallinalljurisdictions,itisunlikelythiswillbethecaseintheTerritory,

particularlybecauseofeducationcostsassociatedwiththelargeyouthfulIndigenous

population.

TheeconomicconsequencesofdemographicchangewithintheIndigenous

populationwillbedivergent.Thegrowingsizeoftheyoungersectionsofthe

populationwillcontinuetocreateincreaseddemandforeducationservices,while

demandforhealthserviceswillalsoincreaseastheoldersectionofthepopulation

growsrapidly.PoorhealthamongtheIndigenouspopulationwillcompoundthis

situation.

Thecreationofemploymentandeconomicdevelopmentopportunitiesforthe

fast‑growing,workingaged(15‑64years)segmentofthepopulationwillpresent

challengesfortheTerritory.Anotherareaofgrowingdemandassociatedwiththe

changingdemographyoftheTerritory’sIndigenouspopulationwillbetheprovision

ofeducationandhousingfortheseTerritoriansandtheirdependants.

Themaindemographicchallengeforthenon‑IndigenouspopulationintheTerritory

arisesfrominterstatemigration.Naturalincrease(birthslessdeaths)forthe

non‑IndigenoussectionoftheTerritorypopulationislikelytofollowasimilartrendto

thatobservednationally.

Thenon‑IndigenoussectionoftheTerritory’spopulationhashighlevelsofmobility.

Duringtheyoungadultyears,mobilitytypicallyresultsinnetmigrationinflowsbut,at

mostotherages,usuallyresultsinnetmigrationoutflows.

Thefuturechallengesassociatedwiththesemajordemographicmovementsareto

maintainaneconomicandsocialenvironmentthatcontinuestoattractyoungadult

Australians,inthefaceofgrowingcompetitionfromotherstatesandterritoriesfor

thediminishingnumberofyoungworkingageAustralians.TheTerritoryalsofacesa

challengetofurtherdevelopitseconomicandsocialinfrastructureandenvironment

inanefforttochangethelong‑standingtrendofolderagegroupsmigratingaway

fromtheTerritory.

PopulationAgeingPopulationAgeing

IndigenousPopulationIndigenousPopulation

Non‑IndigenousPopulationNon‑IndigenousPopulation

26 Population


Forsometimeintothefuture,theTerritoryislikelytofaceanexpanding,ratherthana

contracting,workingagepopulationasaproportionofthetotalpopulation.Thisis

uniqueamongthejurisdictionsinAustralia.TheexpectedgrowthintheIndigenous

populationhasthepotentialtoexpandtheTerritoryworkforceifopportunitiesto

participatefullyineconomicdevelopmentareprovidedandaccepted.Thiswill

providetheTerritorywithacompetitiveadvantagecomparedwiththerestof

Australia.

ComponentsofPopulationGrowthPopulationgrowthconsistsofnaturalincrease(birthsminusdeaths),netoverseas

migrationandnetinterstatemigration.


NaturalincreaseisthemaincontributortogrowthintheTerritory(Table3.3).On

average,naturalincreasecontributed1.4percentagepointstoannualgrowthoverthe

fiveyearperiodtoJune2005,decliningfrom1.5percentoverthefiveyearperiodto

June2000(Chart3.6).

1998 1999 2000 2001 2002 2003 2004 2005

(000)

Northern Territory 189.9 192.7 195.6 197.8 198.7 198.5 199.8 202.8

Naturalincrease 2.8 2.7 2.7 2.9 2.8 2.9 2.8 2.6

Births 3.7 3.6 3.6 3.7 3.8 3.8 3.6 3.5

Deaths 0.8 0.8 0.9 0.9 0.9 0.9 0.9 0.9

Overseasmigration 0.6 1.0 0.9 0.9 0.7 0.3 0.6 0.4

Netinterstatemigration ‑0.5 ‑1.0 ‑0.9 ‑1.6 ‑2.6 ‑3.4 ‑2.1 0.0

NewSouthWales 6339 6411 6486 6575 6634 6682 6721 6774

Victoria 4638 4686 4741 4805 4857 4911 4963 5022

Queensland 3448 3501 3562 3629 3711 3801 3888 3964

SouthAustralia 1490 1498 1505 1512 1519 1526 1533 1542

WesternAustralia 1823 1850 1874 1901 1925 1950 1978 2010

Tasmania 472 471 471 472 473 477 482 485

AustralianCapitalTerritory 310 312 315 319 322 323 324 325

Australia 18 711 18 926 19 153 19 413 19 641 19 873 20 092 20 329

Note:Growthcomponentsdonotequalpopulationchangeduetointer‑censaldiscrepancy.Issuesrelatingtothe

registrationofbirthsanddeathsleadstodiscrepanciesbetweenbirths/deathsandnaturalincreaseintheTerritory.


WorkingAgePopulationWorkingAgePopulation

-4

-2

0

2

4

6

8

81 83 85 87 89 91 93 95 97 99 01 03 05

Natural increase

Total growth

Net interstatemigration

Year ended June

number (000)

Net overseasmigration

Chart 3.6: Territory Population Growth by Component

-4

-2

0

2

4

6

8

81 83 85 87 89 91 93 95 97 99 01 03 05

Natural increase

Total growth

Net interstatemigration

Year ended June

number (000)

Net overseasmigration

Chart 3.6: Territory Population Growth by Component

NaturalIncreaseNaturalIncrease

Table 3.3: Population Components, as at 30 June

Table 3.3: Population Components, as at 30 June

27Population

TheTerritoryischaracterisedbyhighfertilityrates,particularlyamongtheIndigenous

population.Since1986,totalfertility(childrenperwomanduringlifetime)forall

Territoryfemaleshasfluctuatedaround2.3,whilenationallyithasfallenfrom1.9

to1.8. In2004,thetotalfertilityforIndigenouswomenintheTerritorywas2.6,while

thetotalfertilityforallTerritorywomenwas2.2.Forthesameperiod,theAustralian

fertilityrateswere2.1and1.8respectively.ThetotalfertilityforIndigenousfemalesin

theTerritoryremainsthehighestofalljurisdictions.

In2004,42percentofallbirthsintheNorthernTerritorywererecordedasIndigenous,

comparedto44percentin2001.Nationally,4.6percentand4.7percentofallbirths

wererecordedasIndigenousin2001and2004respectively.

OneofthemoststrikingdifferencesbetweentheIndigenouspopulationofthetotal

Territorypopulationisinthe19yearsandunderagegroup,wheretheage‑specific

fertilityratesofIndigenouswomenaretwicethatofallTerritorywomen.

InDarwin,the2004totalfertilityratewas2.0,comparedto2.5forthebalanceofthe

Territory.

Crudedeathrates(thatis,deathsper1000peoplewithnoadjustmentforageprofiles)

intheTerritoryarethesecondlowestofalljurisdictions,reflectingtheyoungerage

profileofthepopulationandthetendencyforretireestoleavetheTerritory.Thishas

beenamajorfactorintheTerritoryhavingthelowestcrudedeathrateofany

jurisdictioninAustralia,despitehighmortalityamongIndigenousTerritorians.

Onanage‑standardisedbasis,whichtakesintoaccounttheagestructureofthe

population,mortalityratesaresignificantlyhigherintheTerritory(8.2per1000)than

inanyotherjurisdictionandnationally(6.3per1000).TheIndigenouspopulation

experiencesmuchpoorerhealthoutcomesthanthenon‑Indigenouspopulation.

Overtheperiod1996‑2000,age‑standardiseddeathratesforIndigenousTerritorians

weretwotothreetimeshigherthanthosefornon‑IndigenousTerritorians.Forthe

period2002‑04,theinfantmortalityrateintheTerritoryforIndigenouspersonswas

15per1000births,comparedto10per1000forthetotalTerritorypopulation.In2004,

Indigenousinfantdeathsaccountedforover70percentofallinfantdeaths.

ReflectingthehigherstandardisedmortalityratesintheIndigenouspopulation,life

expectancyintheTerritoryisbelowtheAustralianlevelandisthelowestofall

jurisdictions.LifeexpectancyforTerritoriansbornin2004was72.3yearsformalesand

78.0forfemales,comparedtoAustralianratesof78.1yearsformalesand83.0years

forfemales.IndigenousTerritorianlifeexpectancyatbirthfor1996‑2000isestimated

bytheNorthernTerritoryDepartmentofHealthandCommunityServicestobe

59.4yearsformalesand65.0yearsforfemales.

LifeexpectancyinDarwinin2004was76.9yearsformalesand81.5yearsforfemales,

significantlyhigherthantheremainderoftheTerritory,wherelifeexpectancywas

estimatedat68.4yearsformalesand73.4yearsforfemales,largelyreflectingthe

geographicdistributionofIndigenousandnon‑IndigenousTerritorians.

ThemedianageatdeathintheTerritoryiswellbelowtheAustralianmedianage.This

isaresultofayoungpopulation,incombinationwithhighmortalityintheIndigenous

population.In2004,themedianageatdeathintheTerritorywasthelowestofall

jurisdictionsforIndigenousmalesandfemalesat43.8and54.0yearsrespectively,

comparedto63.0and71.3fornon‑Indigenousmalesandfemales.

FertilityFertility

MortalityRatesMortalityRates

LifeExpectancyLifeExpectancy

MedianAgeatDeathMedianAgeatDeath

2� Population


OverseasmigrationhastypicallymadeasmallpositivecontributiontoTerritory

populationgrowth(Chart3.6) and,inthefiveyearstoJune2005,itsaverage

contributiontogrowthwas0.3ofapercentagepointperannum.Theannual

contributiontogrowthwasrelativelyvolatileoverthepastfiveyears,rangingfrom

0.2to0.5ofapercentagepoint.

Oneyearago%

Fiveyearsago%

NewSouthWales 2.4 7.6

Victoria 2.3 7.0

Queensland 3.4 10.8

SouthAustralia 2.0 6.1

WesternAustralia 2.5 8.4

Tasmania 2.5 6.6

Northern Territory 7.5 20.9

AustralianCapitalTerritory 6.7 19.2


TheTerritory’spopulationshowsgreaterinterstatemobilitythananyother

jurisdiction,withanestimated21percentoftheTerritory’spopulationin2001not

livingintheTerritoryfiveyearspreviously(Table3.4).OverthefiveyearstoJune2005,

around9percentofthepopulationmovedinterstateeachyear.Nationally,around

2percentofthepopulationmoveinterstateeachyear.TheTerritorytendstoattract

youngmobileinterstatemigrants;in2003‑04themedianageofinterstatemigrants

wasthelowestofthejurisdictions,at27yearsofage.Thetendencyofpeopletoleave

theTerritoryonretirement,however,reducesthemagnitudeofnetmigrationtothe

Territory.


Giventherelativelystablenatureofnaturalincreaseandoverseasmigration,change

inTerritorypopulationgrowthislargelydeterminedbymovementsininterstate

migration.OverthefiveyearstoJune2005,quarterlyestimatesofnetinterstate

migrationrangedfromagainof233intheJunequarter2005toalossof1160persons

intheMarchquarter2003.Onaverage,netinterstatemigrationsubtractedone

percentagepointfromannualgrowthoverthefive‑yearperiodtoJune2005.

OverseasMigrationOverseasMigration

Table 3.4: Estimated Proportion of 2001 Population Previously not

Resident in the State or Territory

Table 3.4: Estimated Proportion of 2001 Population Previously not

Resident in the State or Territory

InterstateMigrationInterstateMigration

8

12

16

20

83 85 87 89 91 93 95 97 99 01 03 05

In�ow

Out�ow

Year ended June

number (000)Chart 3.7: Territory Interstate Migration Flows

8

12

16

20

83 85 87 89 91 93 95 97 99 01 03 05

In�ow

Out�ow

Year ended June

number (000)Chart 3.7: Territory Interstate Migration Flows

2�Population

Until2005,thepatternoverthepasttwodecadeshasbeenofconsistentnet

interstatemigrationoutflows,exceptfortheperiodofthedefencebuildupduring

1995to1998.Ifthegrowthindefencepersonnelandfamilymembersoverthepast

12yearswasexcludedfromtheTerritory’spopulationfigures,theTerritory’saverage

annualpopulationgrowthratesince1992of1.5percentwouldbeapproximately

1.2percent,0.3ofapercentagepointlower.

OverthepasttwoyearstherehasbeenasignificantturnaroundintheTerritory’snet

interstatemigrationoutflows(Chart3.7).Netinterstatemigrationturnedpositivein

theMarchquarter2005forthefirsttimesinceDecember1999,andtwoyearsafter

thelargestnetinterstatemigrationoutflowintheMarchquarter2003(1160persons).

Recentimprovementinnetinterstatemigrationreflectstheimprovingprospectsfor

theTerritoryeconomy,particularlyinconstructionandtourism.

OverthefiveyearstoJune2005,onaverage,31percentofthecombinedpopulation

flowintoandoutoftheTerritorywaswithQueensland(Chart3.8).NewSouthWales,

Victoria,SouthAustraliaandWesternAustraliaaccountforthemajorityofthe

remainder.Innetterms,strongoutflowswererecordedtoQueensland,South

AustraliaandWesternAustraliaoverthefiveyearstoJune2005.Theonlynetinflow

wasfromNewSouthWales.

TheestimationofinterstatemigrationremainsanareaofconcernfortheNorthern

TerritoryGovernment.TheABScalculatesinterstatemigrationflowsusingMedicare

changeofaddressrecordsprovidedbyMedicareAustralia(formerlytheHealth

InsuranceCommission).TheABSmakesadjustmentstotherawrecordsfortimelags

betweenapersonmovinginterstateandupdatingtheirMedicarerecord,andfor

otherfactorssuchasfailuretoupdateMedicarerecordsbycertainsegmentsofthe

population.TheupdatingofMedicarepersonalrecordsusuallytakesplacewhenan

individuallodgesaclaimwithMedicare.Anecdotalevidencesuggestsmanynew

residentsdonotupdatetheirMedicareaddressdetails.Youngpeoplemovingoutof

homeforthefirsttimemaycontinuetousetheirparents’interstatepostaladdressfor

muchcorrespondence.Further,youngadultsandmalesdonottendtousemedical

servicesasfrequentlyasothersegmentsofthepopulation.NorthernTerritory

TreasuryisworkingtounderstandmoreaboutMedicarechangeofaddressdataand

useofthisdatabyABSinpopulationestimation,andtopromotetheneedfornew

residentstotheTerritorytoupdatetheiraddressrecordspromptlywithMedicare.


Chart 3.8: Territory Interstate Migration Flows, by Jurisdiction,

2000-01 to 2004-05(annual average)

0

1

2

3

4

5

6

7

NSW Vic Qld SA WA Tas ACT

In�ows Out�ows

number (000)Chart 3.8: Territory Interstate Migration Flows, by Jurisdiction,

2000-01 to 2004-05(annual average)

0

1

2

3

4

5

6

7

NSW Vic Qld SA WA Tas ACT

In�ows Out�ows

number (000)

�0 Population


DemographicChallengesandPopulationInitiativesThefive‑yearlyCensusofPopulationandHousingwillbeheldonTuesday

8August2006.Byearly2006,theABSwasalreadywellintotherecruitmentand

operationalphasesassociatedwithconductingthiscomplextask.IntheNorthern

Territory,about1100peoplewillberecruitedtoassistwiththeCensuscount.

CensuscountsprovideabasefromwhichtheABSderivesestimatesofAustralia’s

residentpopulation(ERP)forthesubsequentfiveyears.Thecountofthepopulationis

adjustedforusualresidence(thatis,wherepeopleusuallylive),visitorsfromoverseas,

AustralianresidentstemporarilyoverseasonCensusnight,andanestimateofthe

numberofpeoplemissedintheCensusandthosecountedmorethanonce.

BetweenCensusyears,adjustmentsaremadeeverythreemonthsforbirths,deaths

andoverseasandinterstatemigrationforeachstateandterritory,toobtainuptodate

residentpopulationestimates.

TheabilitytoaccuratelymonitorandforecastthesizeanddistributionoftheNorthern

Territory’spopulationisvitalinplanningforthefutureoftheTerritory.TheTerritoryis

heavilydependentonAustralianGovernmentgrantsforitsrevenuesources(mainly

GSTrevenues).GSTrevenuesareapportionedannuallytothestatesandterritories

usingamodeldrivenbypopulationestimates.Therefore,accuratepopulation

estimatesarecriticaltoensuretheTerritoryreceivesitsshareoftheGSTrevenues.

Secondly,reliablepopulationforecastsarecrucialforthedevelopmentofeffective

policyresponsesandtoensuretheneedsoftheTerritory’suniquepopulationaremet.

AnotherimportantuseofABSpopulationestimatesisfortheallocationofHouseof

RepresentativeseatstothestatesandterritoriesintheAustralianparliament.Thisis

determinedlargelybypopulationsize.Priortothe2001federalelection,theTerritory

hadjustonememberintheHouseofRepresentatives,howeveradeterminationby

theAustralianElectoralCommissionin2000resultedintheallocationofasecondseat

totheTerritory.Slowerpopulationgrowthin2002,anddownwardadjustmentsto

preliminaryestimates,resultedinadeterminationthatcouldhaveledtothelossof

thesecondseatinfuturefederalelections.Thiscausedconsiderablepublicand

politicalobjection.AninquirybytheJointStandingCommitteeforElectoralMatters

resultedinanunusualamendmenttotheElectoral Act thatacknowledgeduncertainty

intheofficialpopulationestimatesandintroducedtheconceptofaconfidence

intervalinNorthernTerritoryandAustralianCapitalTerritorypopulationestimates.

The2003determinationwassetasideandtheTerritorywasallowedtoretainitstwo

seatsuntilthesubsequentdeterminationheldon17November2005.Atthat

determination,thepopulationhadincreasedsufficientlyfortheTerritorytoretainits

secondseatbecauseofthenewamendments.WhethertheTerritoryretainsitssecond

seatwilldependonitsfuturepopulationgrowthrelativetotheotherjurisdictions.

Morethananyotherjurisdiction,theTerritoryfacesthechallengeofcounting,

estimatingandpredictingthesizeandcompositionofitspopulationwith,inrelative

terms,moreatstakethanotherjurisdictions.TheTerritorycoversavastgeographical

areaandmuchofitsresidentpopulationissparselydistributedandisolated.The

populationisculturallydiverse,bringingchallengesofcommunication.TheTerritory

experienceshighmobility,bothlocallywiththemovementofIndigenouspeople,and

acrossborders,withrelativelylargenumbersofvisitorsandshort‑termresidents.

2006CensusandPopulationEstimation

2006CensusandPopulationEstimation

PopulationEstimatesandFederalRepresentation

PopulationEstimatesandFederalRepresentation

TerritoryGovernmentSupportfortheCensus

TerritoryGovernmentSupportfortheCensus

��Population

Forthesereasons,NorthernTerritoryTreasuryisworkingcloselywiththeABS

todevelopmoreeffectivemechanismsforTerritoryGovernmentagencies(and

otherTerritory‑basedorganisations)tobettersupportABStoconductCensusfield

activities.InDecember2005,theChiefMinisterandtheAustralianStatisticiansigned

aMemorandumofUnderstandingtoguidecollaborationbetweentheagencies

onstatisticalmatters,includingcooperationontheCensus.ACensusCoordination

PlanhasbeendevelopedforTerritoryGovernmentinvolvementintheCensus.It

includesstrategiesforwholeofgovernmentengagement,employmentofTerritory

GovernmentstaffontheCensusandacommunicationscampaign.

Inmostplaces,peoplewillcompletetheirCensusformonCensusnight,butinremote

Indigenouscommunitiesandtowncamps,enumerationisconductedbyhousehold

interviewandtakesplaceoveraperiodofseveralweeks.TheTerritoryGovernment

willworkwiththeABStoencouragepeopletocompletetheirformonCensusnight,

andtoassisttheABStofindandsupportthebestpossibleinterviewersinremote

communities.

Althoughthebestmethodofobtainingaccuratepopulationestimatesistocountthe

populationcorrectlyinthefirstinstance,someunderorover‑countofthepopulation

inevitablyoccursintheCensus.Toestimatethesizeoftheunderorover‑count,the

ABSconductsaPost‑EnumerationSurvey(PES)soonaftertheCensus.Asampleof

householdsisvisitedandsurveyedusingasubsetofthequestionsontheCensus

form.Theserecordsarethenmatched,wherepossible,toCensusrecordsandan

estimateofthosemissedorcountedtwiceisobtained.Untilnow,thePEShasbeen

conductedinurbanandregionalpartsofAustraliaonly,andcrudeadjustmentsare

madeforundercountingthe25percentoftheTerritory’spopulationwholivein

remoteareas.TheTerritoryhashistoricallyhadthelargestundercountestimateofall

jurisdictions,beingestimatedbytheABSin2001tobe4percentcomparedwith

1.8percentforotherpartsofAustralia.NorthernTerritoryTreasuryhaslongheld

concernsoverthemethodologyforestimatingtheundercountanditsapplicationto

thewholeoftheTerritory.

In2006,ABSisexploringthepossibilityofconductingaPESinremoteareas.Subject

topotentialmethodologicalandoperationalconstraints,theaimistoimprovethe

estimateoftheundercountfortheTerritory.TheTerritorysupportstheABSdecision

toexplorethisoption,recognisingthedifficultiesofconductingsuchanexercise,

andthesignificanceofthepotentialeffectontheTerritory’spopulationestimates.

TreasurywillexplorealloptionswithABStofullyunderstandanddevelopconfidence

intheproceduresproposedforthePESinremoteareas.

NorthernTerritoryTreasuryisworkingwiththeSchoolforSocialandPolicyResearch

atCharlesDarwinUniversity(CDU)onademographicresearchprogram.Amajorpart

oftheworkprogramistobetterunderstandthefactorsunderpinningthehighlevels

ofmobilitydemonstratedbymanyTerritorians.Thiswillassistthedevelopmentof

effectivestrategiesandprogramstoimprovetheTerritory’sabilitytoattractpotential

newresidentsandretainexistingresidentsforlongerperiods.InJuly2005,the

AustralianResearchCouncil(ARC)awardedagranttoCDUinpartnershipwith

NorthernTerritoryTreasury,theDepartmentofBusiness,EconomicandRegional

DevelopmentandtheABS,toinvestigatepopulationmobilityanditsconsequences,

suchasthelossofprofessionalexpertiseandsocialmemory.Theresearchgroup’s

currentworkincludesanalysinghistoricalmobilitytrendsintheTerritory,exploring

themobilityofparticularprofessionalgroupsanddevelopingatelephonesurvey

aboutmobility.

Post‑EnumerationSurveyPost‑EnumerationSurvey

PartnershipwithCharlesDarwinUniversity

PartnershipwithCharlesDarwinUniversity

�2 Population


CDUisworkingwithNorthernTerritoryTreasuryandotherTerritoryGovernment

agenciestoimproveandextendpopulationestimationandprojectionmethodologies

appropriatetotheTerritory’spopulation.Theseimprovedmethodologieswillbeused

tomakemoredetailedpopulationestimatesandprojectionsavailabletoTerritory

Governmentagencies.

In2005,theNorthernTerritoryStatisticalLiaisonCommitteeformedapopulation

sub‑committeetoprogresspopulationissues,includingthedevelopmentofa

commonsetofpopulationprojectionstobemadeavailableforuseacrossTerritory

Governmentagencies.CDUhasdevelopedapopulationprojectionsmodelto

produceprojectionsfrom2001‑02to2050‑51.The2001Censusisusedasthebase

year.Themodelcalculatesfuturebirths,deaths,internationalandinterstatemigration

foreachageandsexcohortoftheIndigenousandnon‑Indigenouspopulationsofthe

TerritoryandtherestofAustralia.Inasecondphase,themodelwillproduceregional

projectionsfortheTerritory.

Thesub‑committee’staskistosettheparametersforthemodelandagreeonthe

underlyingassumptions.Astatisticalevidence‑basedmethodisbeingappliedto

guidethiswork.Challengesincludepredictingfuturefertilityandmortalitypatterns

oftheIndigenouspopulation.Furtherchallengeslieinsettingtheparametersforthe

regionalprojections.

Despitethechallenges,theprojectwillprovideusefulandrelevantTerritory

populationprojectionsforGovernmentbusiness.Theprojectionswillbesubjectto

aregularreviewprocess,andasetoftechnicalpapersaroundtheassumptionswill

beproducedtodescribecurrentthinkingandtoexplorealternativescenarios.The

firstsetofprojectionsshouldbeavailableinmid2006andtheinterdepartmental

committeewillproduceaninformationpapertocoincidewiththeirrelease.

PopulationOutlookDuring2005,populationgrowthintheTerritorygainedmomentum,withNorthern

TerritoryTreasuryestimatinggrowthof1.7percenttoDecember2005.Further

out,populationgrowthisexpectedtoremainstrongat1.5percentintheyearto

December2006.ThecompletionoftheconstructionoftheWickhamPointliquefied

naturalgas(LNG)plantinDecember2005willbepartlyoffsetbyemployment

opportunitiesontheDarwinWaterfrontDevelopment.Alcan’sG3refineryexpansion

shouldcontinuetoprovidestrongemploymentopportunitiesuntiltheendof

2006.Normalcyclicalmovementsindefenceforcepersonnelareexpected.Housing

vacancyrateshaverecentlyshownsignsofincreasingfromthehistoricallylowlevels

experiencedinmid2005,anditwillbeimportanttomonitorthedirectionofthese

andothereconomicindicatorsoverthecomingmonths.Fortheremainderofthe

decade,populationgrowthisforecasttoaveragearound1.2percent.

Beyond2007,predictionisdifficultduetouncertaintysurroundingthelikelihoodof

futuremajoremployment‑creatingprojects,whichwillbethemajordeterminantof

netmigrationtotheTerritory.

TheeffectivenessofcurrentTerritoryGovernmentpoliciessuchasBuildingour

PopulationandtheBusinessandSkilledMigrationStrategytoaddresssomeofthe

Territory’sdemographicchallengeswillhaveasignificantimpactontheTerritory’s

futurepopulationgrowth.

Inrelationtopopulationestimation,supportingeffortstoobtainanaccuratecount

intheforthcoming2006CensusisapriorityfortheTerritoryGovernmentandits

agencies.

PopulationProjectionsModelling

PopulationProjectionsModelling

��Labour Market

LabourMarket

• TheNorthernTerritorylabourmarketcontinuedtostrengthenin2005‑06as

buoyantonshoreeconomicconditionsprevailed.

• AlthoughthereisnoquantitativemeasureofTerritoryjobs,relatedindicators

pointtostrongemploymentgrowthandashortageofskilledlabourin2005‑06,

whichisexpectedtocontinueinto2006‑07.

• Followingadeclineof2percentin2004‑05,asreportedbytheAustralianBureau

ofStatistics(ABS),residentemploymentisexpectedtoincreaseby2.1percentin

2005‑06.

• Residentemploymentgrowthof2.3percentisforecastfor2006‑07,supported

byconstructionworkontheDarwinWaterfrontDevelopment,residential

constructionandtourismgrowth.

• ABS‑reportedemploymentdatadoesnotincludedefencepersonnelorflyin

flyoutworkersandissubjecttosignificantvolatility.Therefore,itisnotagood

measureofthenumberofjobsintheTerritory.

LabourmarketstatisticsfortheTerritoryaresubjecttoextremevolatilityandoften

appeartobeinconsistentwithbroaderindicatorsofeconomicperformanceand

anecdotalevidence.

Thetraditionalmeasureoflabourmarketstrengthisresidentemploymentasreported

intheABSLabourForceSurvey(LFS).TheLFSdoesnotmeasurethenumberofjobs

intheeconomy,asissometimespresumed,butprovidesestimatesofthelabourforce

statusoftheresidentcivilianpopulation.

Nationally,thedifferencebetweenresidentemploymentlevelsandthenumberof

jobsintheeconomyisnegligible,however,intheTerritoryresidentemployment

numberscandiffersubstantiallyfromthenumberofjobs.Thishasbeenparticularly

evidentoverthepasttwoyears,withtheLFSreportingdecreasingresident

employmentlevels,whilenumerousothereconomicindicatorssuggeststrengthening

jobnumbers.

Further,LFSestimatesofTerritoryresidentemploymentaresubjecttolargesampling

errorsthatresultinlessaccurateestimatesoftrueresidentemploymentlevels.There

iscurrentlynoquantitativemeasureforthenumberofjobsintheTerritory.

TerritoryJobsAftertwoyearsofsubduedeconomicgrowth,theTerritory’seconomyrebounded

in2004‑05,withstatefinaldemand(SFD)andgrossstateproduct(GSP)increasing

by4.4percentand3.6percentrespectively.Growthwasboostedbyhighlevels

ofdefenceinfrastructurespending,increasedresidentialconstructionactivityand

constructionworkformajorprojects,mostnotably,theConocoPhillipsliquefied

naturalgas(LNG)plantatWickhamPointandtheAlcanG3refineryexpansionat

Gove.

TheSensisBusinessIndexforSmallandMediumEnterprisesreportedstrongnet

employmentgrowthandacuteskilledlabourshortages.Thiswasreinforcedbythe

ANZjobadvertisementseriesthatreportednearrecordlevelsofnewspaperjob

advertisementsandtheDepartmentofEmploymentandWorkplaceRelations(DEWR)

skilledvacancyindex,whichpeakedatrecordlevelsinthisperiod.

Chapter 4Chapter 4

KeyPointsKeyPoints

2004‑052004‑05

�� Labour Market


TheTerritory’slabourmarketstrengthenedin2005‑06,asbuoyantonshoreeconomic

conditionsprevailed.SFDandGSPareestimatedtohaveincreasedby6.3percent

and6.7percentrespectively.Constructionactivityremainednearrecordlevels

despiteconstructionfortheLNGplantconcluding,asworkontheAlcanG3refinery

expansionpeakedandresidentialconstructionactivitycontinuedtostrengthen.

Constructionactivitywasalsosupportedbythecommencementofworksforthe

$1billionDarwinWaterfrontDevelopment,the$60millionDarwinChinatown

precinctandongoingdefenceinfrastructurespending.

TheFebruary2006SensisBusinessIndexforSmallandMediumEnterprisesreported

thatTerritorybusinesseshadthestrongestemploymentexpectationsofallthe

jurisdictionsfortheyearahead.Additionally,thenumberofANZnewspaperjob

advertisementsremainednearhistoricallyhighlevels,asdidtheDEWRskilledvacancy

index.

Thestronggrowthineconomicactivityoverthepasttwoyearsisnot,however,

reflectedinthereportedresidentemploymentlevelsortheresidentunemployment

rate.In2004‑05,theABSLFSreporteda2percentdeclineinresidentemployment,

andcontinuedtoreportnegativegrowth(inyearonyearterms)throughto

December2005.Thisdivergenceisalsoreflectedintheresidentunemployment

rate,whichincreasedby1.1percentagepointstoanannualaverageof6.3percent

in2004‑05,thehighestlevelseenintheTerritorysince2001‑02.Since2004‑05,

theresidentunemploymentratehasmoderatedto5.6percentintheyearto

February2006,largelyasaresultofalowerparticipationrate.

TheABSLFSmeasureofresidentemploymentisapoorindicatorofthenumberof

jobsintheTerritoryeconomybecause:

• thescopeofthesurveyislimitedtothe‘usuallyresident’population;and

• thedesignofthesurveyincludesverylargestandarderrorsfortheTerritory.

ResidentEmploymentThegeneralstandardsandguidelinesusedbytheABSformeasuringnationallabour

statisticsaresetoutintheInternationalLabourOrganisationConvention160andthe

InternationalConferenceofLabourStatisticiansResolution170of1982andrelateto

theeconomicallyactivepopulation.Theeconomicallyactivepopulationreferstoall

peoplewho,duringaspecifiedtime,contributeto,orareavailabletocontributeto,

productionofeconomicgoods,asdefinedbytheUnitedNationssystemsofnational

accounts.Itdoesnotrelatetoallthejobsinaneconomy,asitexcludesdomesticand

personalservicesforconsumptionwithinthesamehouseholdandvoluntaryunpaid

workassociatedwithcommunitycharitywork.

TheABSLFSreportsonthosepartsofthecurrentlyeconomicallyactivepopulation

definedasemployed,unemployedornotinthelabourforce.Itdoesnotreportonthe

numberofjobsintheeconomy,asissometimespresumed.ThescopeoftheLFSis

limitedtothecivilian,usuallyresident,populationoftheTerritoryaged15yearsand

overanddoesnotinclude:

• flyinflyout(FIFO)personnelwhoareusuallyresidentinotherjurisdictions;

• full‑timeAustraliandefencepersonnel;

• personnelusuallyresidentoverseasandtemporarilyresidinginAustralia;and

• diplomaticpersonnelofoverseasgovernmentsandnon‑Australiandefence

personnel(andtheirdependants)stationedinAustralia.

2005‑062005‑06

��Labour Market

Nationally,theseexcludedgroupshaveanegligibleimpactonthenumberofjobs

intheeconomy,astheymakeuparelativelysmallpercentageoftheAustralian

population.HoweverintheTerritory,duetoitsrelativelysmallandtransient

population,thesegroupscanaccountforasignificantproportionofjobs.The

exclusionofthesegroupsfromthescopeoftheABSLFSleadstoasignificant

differentialbetweenresidentemploymentandthenumberofTerritoryjobs.

Historically,majorconstructionandminingprojectswouldinvolveacompany

investinglargeamountsofcapitaltoformacommunitywithfacilities(housing,

schools,roads)foremployeesandtheirfamilies.Incontrast,overthepastdecade,the

worldwidetrendhasbeentosetupworkcampsintheareaandemployworkerson

aFIFObasis.FIFOemploymenthasproventobeacost‑effectivewayforacompany

toundertakelargeprojects,wherethereisalimitedsupplyofappropriatelyskilled

labour,especiallyinremote,sparselypopulatedlocations.TheTerritory’srelatively

smallpopulationbasemakesitparticularlysuitedforthistypeofemployment,

especiallyformajorprojectsrequiringspecialisedlaboursuchastheconstructionof

theWickhamPointLNGplantandtheAlcanG3refineryexpansion.

Forexample,employmentfortheconstructionoftheLNGplanttotalledabout

1750employeesinFebruary2005,ofwhomanestimated930wereemployedfrom

outsidetheTerritoryonaFIFObasis.Therefore,only820,orlessthan50percent,

wouldhavethepotentialtobecountedintheresidentemploymentnumbers

reportedbytheABS.TheproportionofworkersemployedonaFIFObasisforthe

AlcanG3refineryexpansionisevengreater.Whenemploymentontheprojectreaches

itsexpectedpeakofaround1700employeesin2006,Alcananticipatesthatabout

85percentofemployeeswillbeengagedonaFIFObasis.

Futuremajorprojects,suchastheproposed$450millioncondensateprocessing

facilityatEastArmandpossibleexpansionofprocessingcapacityattheLNGplant,

arealsolikelytoengageasignificantnumberofemployeesonaFIFObasis.

Despitebeinganeconomicallyactivesectionofthepopulationandbeingdefinedas

employedunderinternationalguidelines,full‑timeAustraliandefencepersonnelare

notincludedinthescopeoftheABSLFS.Theguidelinesallowforthisexclusionas

thereisrecognitionthattheremaybedifficultiesadministeringalabourforcesurvey

tothearmedforces(forbothpracticalandsecurityreasons).

Nationally,full‑timeAustraliandefencepersonneltotalabout51000persons,

equivalenttojust0.5percentoftheAustralianlabourforce.Therefore,anychanges

inpersonnelnumberswouldhaveanegligibleimpactonresidentemployment.

Incontrast,thenumberoffull‑timeAustraliandefencepersonnelstationedinthe

Territoryiscurrentlyaround5000persons,whichisequivalentto4.7percentof

theTerritorylabourforce.Consequently,largechangesinthenumberofAustralian

defencepersonnel,asoccurredduringthe1990s,haveasubstantialimpacton

residentialemploymentintheTerritory,butarenotcapturedbytheABSLFS.

TheLFSexcludesbackpackersandotherextendedstayvisitorstotheTerritorywho

areusuallyresidentoverseas.Thesetypesofworkerstendtobeasignificantsourceof

labourduringthepeakmonthsofthetouristseasonbutarenotincludedintheABS

surveyofresidentemployment.

Adisproportionatelylargenumberofnon‑Australiandefencepersonnel(andtheir

dependants)arestationedintheTerritorycomparedtonationally.Althoughan

exactnumberisunknown(forsecurityreasons),450full‑timeUnitedStatesdefence

personnelareestimatedtobeemployedattheJointDefenceFacilityatPineGapnear

AliceSprings.ThisrepresentsasubstantialnumberofjobsinAliceSpringsthatarenot

includedinthescopeoftheLFS.

FlyInFlyOutFlyInFlyOut

Full‑timeAustralianDefencePersonnel

Full‑timeAustralianDefencePersonnel

UsuallyResidentOverseasandTemporarilyResiding

inAustralia

UsuallyResidentOverseasandTemporarilyResiding

inAustralia

Non‑AustralianDefencePersonnel

Non‑AustralianDefencePersonnel

�6 Labour Market


ABSLFSDataQualityIssuesInadditiontotheissueofscopethatcreatesadiscrepancybetweenthenumberofjobsandresidentemploymentlevelsasreportedbytheABS,therearealsoissuesspecificallyrelatedtothedesignandmethodologyoftheABSLFSthatlimitsitsaccuracyfortheTerritory.TheLFSisasamplesurveyanddoesnotdirectlymeasurethewholepopulation.Consistentwiththemethodusedforotherjurisdictions,theABSexpandsthesurveyresultstoconformtopopulationdistributionbenchmarksgeneratedfromtheCensusofPopulationandHousing.TheprimarygoaloftheLFSistoprovidereliablenationalestimatesofkeylabourforceparametersand,secondly,estimatesforeachstateandterritory.

AlthoughtheABSsamples1in98dwellingsfortheTerritory,arelativelyhighsamplingfraction,theresultinglabourforceestimatesarestillbasedonarelativelysmallsamplesizeandarethereforevolatile(thatis,haveverylargesamplingerrors).

Volatilityismadeworsebythe:

• heterogeneousnatureofthepopulation;

• constraintsimposedonsamplingdesignasaconsequenceofmanydispersedremotecommunities;and

• transientnatureofthepopulation.

InAugust2005,theABSintroducednewmodelsforestimatingstandarderrors.AlthoughtheABSisconfidentthenewmodelsforcalculatingstandarderrorsaremoreaccurate,theyhaveresultedinaverylargeincreaseinthestandarderrorsforTerritoryestimates.Standarderrorsfornationalestimates,theABS’sprimaryconcern,haveimprovedmarginally,whileforotherjurisdictionsonlyslightdeteriorationhasoccurred(Chart4.1).


SuchlargestandarderrorssignificantlyunderminethevaluethatwaspreviouslyplacedonABSresidentemploymentandunemploymentestimatesfortheTerritory.InJanuary2006,theLFSestimateofTerritoryresidentemploymentwas94400people,withastandarderrorof4700peopleanda95percentconfidenceintervalof85000to103800.The95percentconfidenceintervalistherangewithinwhichwecanbe95percentconfidentthatthetruevaluelies,andisequivalenttotheestimateplusorminustwostandarderrors.Confidenceintervalsofthiswidthareofnovalueforinterpretingshort‑termchangesinemploymentlevels.

CombinedwiththelargenumberofemployedpersonsnotincludedinthescopeoftheLFS,thevolatilityofreporteddataleavestheTerritorywithnorobustestimatesorindicatorsofthenumberofjobsintheTerritory.

LargeSamplingErrorLargeSamplingError

RevisedStandardErrorsRevisedStandardErrors

Chart 4.1: Employment Estimates Relative Standard Errors, July 2005

0

1

2

3

4

5

NSW Qld Vic WA SA ACT Tas NT Aust

RSE using old standard error model RSE using new standard error model

%Chart 4.1: Employment Estimates Relative Standard Errors, July 2005

0

1

2

3

4

5

NSW Qld Vic WA SA ACT Tas NT Aust

RSE using old standard error model RSE using new standard error model

%

�7Labour Market

ABS‑ReportedResidentEmploymentNotwithstandingthelimitationsoftheABS‑reportedresidentemploymentdatafor

theTerritory,ananalysisoftheyearlydataandlongertermtrendshassomemerit.

Overthelast20years,thesizeofthelabourforcehasexhibitedsignificantvolatility,

consistentwiththetransientnatureoftheTerritoryworkforceandpopulation.The

sizeofthelabourforceisheavilyinfluencedbyprevailingeconomicconditionsand

tendstobepro‑cyclical.

Afterthreeyearsofnegativegrowth,theTerritorylabourforceisstartingtoincrease,

withgrowthestimatedat1.6percentin2005‑06,althoughtheTerritorylabourforce

remains3.2percentbelowits2001‑02peak.

YearendedJune

Civilians15yrsandOver LabourForce

ParticipationRate

EmployedPersons

UnemploymentRate

000 %Change 000 %Change % 000 %Change %

1986 105.4 5.8 75.1 14.4 71.2 69.6 14.0 7.3 1987 109.2 3.6 78.2 4.1 71.6 73.3 5.3 6.2

1988 110.1 0.9 74.4 ‑4.8 67.6 67.2 ‑8.4 9.8

1989 111.9 1.6 80.9 8.7 72.2 75.6 12.5 6.5

1990 114.7 2.5 83.2 2.8 72.5 77.7 2.8 6.5

1991 116.8 1.9 83.0 ‑0.1 71.1 76.4 ‑1.7 8.0 1992 118.2 1.1 86.2 3.8 73.0 78.8 3.1 8.6

1993 119.0 0.7 83.1 ‑3.6 69.9 76.4 ‑3.0 8.1

1994 119.9 0.8 80.8 ‑2.8 67.4 75.0 ‑1.8 7.1

1995 123.5 2.9 89.1 10.4 72.2 82.6 10.1 7.3

1996 128.3 3.9 90.6 1.7 70.6 84.3 2.1 7.0 1997 131.4 2.5 92.1 1.6 70.1 87.0 3.2 5.6

1998 134.4 2.2 94.5 2.6 70.3 89.8 3.3 4.9

1999 137.3 2.2 98.5 4.3 71.7 94.5 5.3 4.0

2000 139.9 1.9 96.6 ‑1.9 69.0 92.3 ‑2.3 4.4

2001 141.5 1.1 99.0 2.5 69.9 93.4 1.1 5.6 2002 142.5 0.7 105.6 6.7 74.1 98.4 5.4 6.8

2003 143.0 0.3 104.4 ‑1.1 73.0 98.3 ‑0.1 5.8

2004 143.3 0.2 101.4 ‑2.8 70.8 96.1 ‑2.2 5.2

2005 145.1 1.2 100.5 ‑0.9 69.3 94.2 ‑2.0 6.3

2006e 148.4 2.3 102.2 1.6 69.6 96.2 2.1 6.0

CompoundAnnualGrowth%

1985‑86to2005‑06e 1.7 1.6 1.6

2000‑01to2005‑06e 1.0 0.6 0.6

e:estimate


WhilerecognisingthelimitationsofABS‑reportedresidentemployment,itis

influencedbytheprevailingeconomicconditionsofthedayandexternalfactors.The

clearestexampleofthisistheeffectofthedefencebuildupinthemid1990swhen,

despitedefencepersonnelbeingexcludedfromABSfigures,theTerritoryrecorded

employmentgrownofmorethan10percentin1994‑95(Table4.1).

LabourForceLabourForce

Table 4.1: Territory ABS-reported Labour Force and Employment

(annual average)

Table 4.1: Territory ABS-reported Labour Force and Employment

(annual average)


�� Labour Market


However,seeminglyatoddswiththeprevailingstrengthintheTerritoryeconomy,

residentemploymentfellby2percentin2004‑05.Witheconomicgrowthcontinuing

in2005‑06,residentemploymentreboundedwithestimatedgrowthof2.1percent.

GiventhesmallsizeoftheTerritory’slabourforce,theTerritoryunemployment

ratecanbevolatile;nonethelesstheTerritoryunemploymentratehastendedto

follownationalcyclesformuchofthepasttwodecades.Since1999,theTerritory

unemploymentratehasmovedawayfromthenationalcycleandexhibitedamuch

greaterlevelofvolatility,reflectinganumberofTerritory‑specificdrivers.

Despitestrongeconomicconditions,theTerritoryaverageunemploymentrate

increasedfrom5.2percentto6.3percentin2004‑05,thekeydriverbeinganincrease

intheparticipationrate.ThecontinuedstimulusprovidedbytheDarwinWaterfront

DevelopmentandAlcanG3refineryexpansionisexpectedtoleadtoareductionin

theTerritoryunemploymentratetoanestimated6.0percentin2005‑06.

StateFinalDemandandEmploymentGrowthThescopeoftheABSLFS,combinedwithissuesofvolatilityandreliabilityofthe

residentemploymentseries,cansometimescreatea‘contradictory’pictureofthestate

oftheTerritoryeconomy,particularlyevidentwhenresidentemploymentisanalysed

inconjunctionwithothereconomicactivitydata.

Employmentispro‑cyclical,increasingduringperiodsofstrengtheningeconomic

activityandcontractingduringperiodsoflowgrowth.However,economicactivity

indicatorsinsmallerjurisdictionscanbeimpactedbythepurchaseoflarge,

sometimesone‑offitems.AnexamplefortheTerritorywastheNorthern Endeavour,

anoffshorefloatingproductionstorageandoffloadfacilitypurchasedtodevelopthe

Laminaria‑Corallinaoilfields.Thispurchasewasrecordedinthe‘businessinvestment’

componentofTerritorySFDin1998‑99.DuetotherelativelysmallsizeoftheTerritory

economy,ithadasignificantimpactonSFDgrowth.However,asconstructionof

machineryandequipmentfortheLaminaria‑Corallinaoilfieldswasundertaken

primarilyoverseas,ithadlittleimpactonresidentemployment.

Theimportationofpre‑assembledmodules(PAMs)fortheAlcanG3refinery

expansionfrom2005tolate2006hasledtoasimilaroutcome,thatis,arelatively

largerimpactonTerritorySFDthanonresidentemployment.Infact,resident

employmentwasreportedtohavedeclinedby0.1percentincalendaryear2005,

inapparentcontradictiontothe11percentgrowthinTerritorySFDoverthesame

period(Chart4.2).

TheAlcanG3refineryexpansionhashadasignificantimpactontheTerritory

businessesinvolved,withmorethan$70millioninpurchaseordersandcontracts

beingawardedinthe15monthstoDecember2005.Anadditional$40millionwill

beinvestedinDarwin’sPAMyardoverthelifeoftheproject,witharoundseven

PAMsbeingconstructedinDarwin.Businessesinvolvedarereportingthatthey

haveexhaustedthelocalsupplyofskilledlabourandarerecruitingworkersfrom

interstateandoverseas.Nevertheless,theoverwhelmingmajorityofworkdone

constructingPAMswilloccurinMalaysia,ThailandandNewSouthWales.Oncethe

PAMsaretransportedtoGoveandconnectedtotheexistingrefinery,theinvestment

componentwillbeattributedtoTerritorySFD.ThiswillboostSFDgrowthwhileatthe

sametimehavinglittleimpactonTerritoryresidentemployment.

UnemploymentUnemployment

��Labour Market

Source:NorthernTerritoryTreasury,ABSCat.Nos.5206.0,6202.0

TheTerritory’sLabourMarketProfileTheTerritory’slabourmarketprofiledifferssignificantlyfromthatoftherestofAustralia,

largelyasaresultofremoteness,transienceandseasonalityoflabourdemand.

About24percent(or47948)oftheTerritory’sresidentpopulationlivesoutsidemajor

regionalcentresandisthereforeconsideredtoliveina‘remote’area.Ofthistotal,

32125peopleareIndigenous,and15823arenon‑Indigenous.Lackingcriticalmass,

employmentopportunitiesarelimitedinmanyoftheseareas.Additionally,remote

areas,bydefinition,aregeographicallydistantfromthemajoremploymentmarkets.

Creatinglinksbetweenresidentsofremoteareasandemploymentmarketsisamajor

challenge.

ComparedtotherestofAustralia,theTerritoryattractsadisproportionatelylarge

numberofyoung,mobileworkerswhooftenviewtheirstayasshorttomediumterm.

Thisisreflectedinlargeinterstatemigrationflows,wherebyabout8to10percentof

theTerritory’spopulationrelocatesinterstateeachyear,aroundfourtimesthelevel

ofotherjurisdictions(apartfromtheAustralianCapitalTerritory).Thisleadstoahigh

rateofemployeeturnoverwhichimposessignificantrecruitmentandtrainingcosts

onemployers.Italsoresultsinalossofexpertiseandskillshortages,whichcanbe

accentuatedbylargeprojectsrequiringspecialisedlabour.

Consistentwithotherjurisdictions,aproportionoftheTerritory’seconomic

activityanddemandforlabourisseasonal,inparticular,activityandemployment

inthetourismandagriculturalindustries.However,theseseasonaleffectscanbe

exacerbatedintheTerritoryduetotherelativelysmallsizeoftheresidentpopulation

andpoolofavailablelabour.Thesetwoindustrieshavehistoricallysupplemented

theirworkforceusingbackpackersandothernon‑residentlabourtofillvacancies.

Chart 4.2: Territory State Final Demand and Employment Growth

(year on year)

-10

-5

0

5

10

15

20

25

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

State �nal demand

Employment

%

Year ended June

Chart 4.2: Territory State Final Demand and Employment Growth

(year on year)

-10

-5

0

5

10

15

20

25

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

State �nal demand

Employment

%

Year ended June

RemotenessRemoteness

YoungandMobileWorkforceYoungandMobileWorkforce

SeasonalityofDemandSeasonalityofDemand

�0 Labour Market


Majorprojectscurrentlyunderwaywillexacerbateskillshortagesinsomeindustries

intheshorttomediumterm.TheTerritoryGovernment’spolicyJobsPlan–Building

theNorthernTerritoryWorkforce,aimstoreducetheshortageofskilledtradespeople

byexpandingpre‑vocationaltrainingforapprentices,providingfinancialincentives

foremployerstotakeonapprenticesandincreasingthenumberandrangeof

school‑basedapprenticeships.

Inthe2005‑06Budget,theTerritoryGovernmentcommittedtobegintraining10000

Territoriansoverfouryears.In2005,morethan2600Territorianscommencedtraining,

bringingthetotalnumberoftraineesto3152.Amongcurrenttrainees,1261were

apprenticesintraditionaltrades,1024werewomenand693wereIndigenous.

Inearly2005,toaddresstheimmediateskilledlabourshortages,theTerritory

GovernmentintroducedaTerritorySkilledWorkercampaignthatfeaturedanational,

includingNewZealand,advertisingcampaigndesignedtoattractskilledworkersand

theirfamiliestotheTerritory.Highlightingthesuccessofthecampaign,196skilled

migrantsmovedtotheTerritoryin2004‑05,up133percentfrom2003‑04.This

successcontinuedinto2005‑06withanadditional157skilledworkersmigratingto

theTerritoryinthefirstsixmonthsofthefinancialyear.

AsignificantproportionofAboriginalandTorresStraitIslandersintheTerritoryare

employedundertheCommunityDevelopmentEmploymentProjects(CDEP)scheme,

fundedbytheAustralianGovernment.Underthescheme,Indigenouscommunities

andorganisationsreceiveagrant,similarinvaluetothecollectiveunemployment

benefitentitlementsofparticipatingcommunitymembers,inordertoundertake

arangeofcommunitydevelopmentprojects.CDEPparticipantsareemployed

bycommunitiestoundertakeworkinreturnforawageatleastequivalenttothe

unemploymentbenefitandarecountedasemployedintheABSLFS.Inthepastnine

years,CDEPparticipantnumbershaveincreasedfromabout6000tothecurrentlevel

ofabout8500participants.Thisrepresentsabout8.5percentoftheTerritory’slabour

force,asignificantlyhigherproportionthanotherjurisdictions.

Since2005,theDepartmentofEmploymentandWorkplaceRelationshasbeen

reformingtheCDEPprogramtofocusonemployment,communityactivitiesand

businessdevelopment.ThelikelyimpactofthesereformsonCDEPnumbersinthe

Territoryisunknown.

EmploymentbyIndustryTheTerritory’slabourmarketprofilealsodiffersfromthenationalprofileinits

distributionofemploymentacrossindustries(Table4.2).

SkillShortagesSkillShortages

CommunityDevelopmentEmploymentProjects

CommunityDevelopmentEmploymentProjects

��Labour Market

Australia NorthernTerritory

EmploymentLevel

ProportionofTotal

EmploymentLevel

ProportionofTotal

000 % 000 %

Agriculture, forestry and fishing 330.8 4.0 2.8 3.1

Mining 75.2 0.9 2.2 2.4

Manufacturing 1 010.2 12.2 4.1 4.5

Services (including defence) 6 689.6 80.6 78.9 87.2

Electricity,gasandwater 60.7 0.7 0.8 0.9

Construction 558.6 6.7 5.6 6.2

Wholesaletrade 437.1 5.3 3.3 3.6

Retailtrade 1211.3 14.6 10.7 11.9

Accommodation,cafesandrestaurants 410.6 4.9 5.4 6.0

Transportandstorage 355.9 4.3 4.8 5.3

Communicationservices 148.5 1.8 1.0 1.1

Financeandinsurance 312.4 3.8 1.5 1.7

Propertyandbusinessservices 920.3 11.1 7.7 8.5

Governmentadministration 307.2 3.7 9.8 10.8

Defence 62.2 0.8 6.1 6.8

Education 595.4 7.2 7.2 7.9

Healthandcommunityservices 806.2 9.7 8.0 8.8

Culturalandrecreationalservices 202.5 2.4 2.7 2.9

Personalandotherservices 300.7 3.6 4.3 4.8

Non‑classifiableeconomicunits 47.9 0.6 0.9 1.0

Notstated 144.6 1.7 1.6 1.8

Total 8 298.2 100.0 90.4 100.0

Source:ABS2001CensusofPopulationandHousing

AsignificantlyhigherproportionoftheTerritoryworkforceisemployedintheservices

sectorcomparedtonationally.The2001CensusofPopulationandHousingreported

that87percentofemploymentintheTerritorywasinserviceindustriescompared

to80percentnationally.TheservicesindustriesthatdominateintheTerritoryare

thepublicsector(governmentadministration,education,healthandcommunity

services),retailtrade,propertyandbusinessservicesanddefence(Table4.2).

In2001,employmentingovernmentadministrationintheTerritoryaccountedfor

about11percentoftotalemploymentcomparedtoonly4percentnationally.The

highshareofemploymentattributedtogovernmentadministrationintheTerritory

reflectsthediseconomiesofprovidingpublicservicestoasmallandwidelydispersed

populationandthehighneedsoftheTerritory’slargeIndigenouspopulation.

Duringthe1990s,theAustralianGovernmentsoughttorelocatesubstantialdefence

resourcestotheTerritory.ThisresultedintheArmyPresenceintheNorthprogram

whichsawthenumberofdefencepersonnel,includingcivilians,stationedinthe

Territoryincreasefromaround2300in1990to6149in2001.Consequently,the

proportionofTerritoryresidentsemployedindefenceoverthisperiodincreasedto

6.8percentcomparedtoanationalincreaseof0.8percent.

Historically,themanufacturingsectorhasemployedarelativelylargeproportion

ofthenationalworkforceinadiverserangeofindustries.IntheTerritory,however,

remotenessfrommajormarketsandasmallpopulationbasehasresultedina

relativelysmallmanufacturingsectorandamuchlowerproportionofpeople

employedcomparedtothenationalproportion(one‑thirdofthenationalfigure).

Table 4.2: Employment by IndustryTable 4.2: Employment by Industry

ServicesServices

GovernmentAdministrationGovernmentAdministration

DefenceDefence

ManufacturingManufacturing

�2 Labour Market


ReflectingtheTerritory’sabundantmineralandenergyresources,theproportionof

peopleemployedintheminingindustryisalmostthreetimeshigherthannationally.

GivenrecordcommoditypricesandexplorationexpenditureintheTerritoryinthepast

year,asurgeinminingactivityandemploymentisexpectedatsometimeinthefuture.

IndustrialRelationsandWelfareReformsInlate2005,theAustralianGovernment’sWorkplace Relations Amendment (Work

Choices) Act 2005waspassed.Itincludestheremovalofunfairdismissalprotection

foremployeesofcompanieswith100employeesorless.Thelikelyimpactofthe

changes,whichhavebeenpromotedbytheAustralianGovernmentasimproving

simplicityandflexibility,areuncertain.Thecomplexityofthelegislationandongoing

uncertaintyregardingitsconstitutionalvalidityhasresultedinamutedresponsefrom

businesstodate.

Inthe2005‑06Budget,theAustralianGovernmentannouncedapackageofmeasuresaimedatincreasingtheAustralianlabourforceparticipationrate.AchievingthisgoalwillbecomeincreasinglyimportantastheAustralianpopulationagesandgrowthintheworkingagepopulationisexceededbygrowthintheoldersegmentsofthepopulation,particularlyasthe‘babyboom’generationretires.Thelegislationspecificallyaddressedtheemploymentrequirementsassociatedwiththereceiptofincomesupport.The‘welfaretowork’measures,tobefullyimplementedfrom1July2006,willseektoincreasetheparticipationrateofolderAustralians,parents,peoplewithadisabilityandthelong‑termunemployed.AlthoughintheshorttermthisisexpectedtohaveanegligibleimpactonemploymentgrowthintheTerritory,itisexpectedtoresultinanexpansionofthelabourforceandanincreaseinthelong‑termaverageparticipationrate.

OutlookUnderstandingthelabourmarketwithintheTerritoryisnotpossiblewithoutanalysis

ofseveraleconomicindicatorsandrelateddatasources.Nonetheless,forecastingis

basedonLFSdataandthereadershouldbeawareofvolatilityandaccuracyissues.

Residentemploymentgrowthof2.3percentisforecastfor2006‑07.Thecompletion

ofconstructionoftheAlcanG3refineryexpansionwillhavelittleimpactonreported

residentemploymentlevelsasabout85percentofthelabourforceisemployedon

aFIFObasis.TheDarwinWaterfrontDevelopmentwillapproachpeakemployment

levelsbytheendof2006‑07andisexpectedtoemploysubstantiallymoreresident

TerritoriansthantheAlcanG3expansionproject.Residentemploymentwillalsobe

boostedbytheDefenceHousingAuthorityandCanberraInvestmentCorporation

jointventureresidentialdevelopmentinthenewDarwinsuburbofLyons,ongoing

constructionofmajorresidentialapartmentcomplexesinDarwin’scentralbusiness

districtandtheDarwinChinatowncommercialdevelopment.InAliceSprings,

employmentwillbesupportedbyongoingworkforthesealingoftheMereenie

LooproadandresidentialconstructionatthenewsuburbofStirlingHeights.The

continuingreboundofvisitors,inparticularinternationalvisitors,isalsoexpectedto

contributesignificantlytoemploymentintheTerritory.

MiningMining

WorkChoicesWorkChoices

WelfaretoWorkWelfaretoWork

��Prices and Wages

PricesandWages

• In2005,Darwin’sConsumerPriceIndex(CPI)increasedby2.6percent,compared

toa2.7percentincreasenationally.

• InflationintheTerritoryisexpectedtocontinuetotrackcloselytothenational

rate,andremainatthehigherendoftheReserveBank’stargetbandof2to

3percentintheshorttomediumterm.

• DarwinCPIgrowthof2.9percentand2.6percentisforecastfor2006and2007

respectively.

• In2005,theTerritoryLabourPriceIndex(LPI)increasedby4.5percentcompared

to4.1percentnationally.

• StrongwagesgrowthintheTerritoryandnationallyin2005reflectsthetight

labourmarketandskilledlabourshortages,especiallyinconstruction,mining,

educationandhealth.

• WagesgrowthintheTerritoryisexpectedtomoderatein2006and2007,but

remainaround4percentaseconomicactivityremainsstrongandskilledlabour

shortagespersist.

PricesandwagesintheTerritorygenerallymoveinlinewithnationaltrends.

Nevertheless,therehavebeenshortrunvariationsthatreflectperiodsofweakeror

strongereconomicgrowthintheTerritorycomparedtogrowthexperiencedatthe

nationallevel.Thiswasparticularlyevidentin2005,withstrongereconomicgrowthin

theTerritorythannationally,leadingtohigherwagesandpricesoutcomes.

ConsumerPriceIndexIn2005,Darwin’sConsumerPriceIndex(CPI)increasedby2.6percentin2005

comparedtoa2.7percentincreasenationally(Table5.1).Thisisinsharpcontrast

tothepreviousfivecalendaryearswhereyearonyearCPIinflationintheTerritory

hadbeen,onaverage,0.6percentagepointsbelowthenationallevel,dueinpart

totheweakerlocaleconomy.TheconvergenceofTerritoryandnationalinflationin

2005wasprimarilyduetostrongergrowthintheTerritoryeconomy,especiallyin

theconstructionandpropertysectors.Thenationalskillsshortagehasbeenmore

pronouncedintheTerritoryandhasalsocontributedtothenarrowingCPIdifferential.



Chapter 5Chapter 5

KeyPointsKeyPoints

Chart 5.1: Consumer Price Index

-1

0

1

2

3

4

5

6

7

97 98 99 00 01 02 03 04 05 06e 07f

Darwin (quarterly) 8 capitals (quarterly)

Darwin (year on year)

8 capitals (year on year)

%

Year ended June

Chart 5.1: Consumer Price Index

-1

0

1

2

3

4

5

6

7

97 98 99 00 01 02 03 04 05 06e 07f

Darwin (quarterly) 8 capitals (quarterly)

Darwin (year on year)

8 capitals (year on year)

%

Year ended June

�� Prices and Wages


ConsumerPriceIndex Annual%Change YearonYear%Change

Darwin 8capitals Darwin 8capitals Darwin 8capitals

December1995 119.20 118.5 4.8 5.1 4.2 4.6

December1996 121.70 120.3 2.1 1.5 3.1 2.6

December1997 120.80 120.0 ‑0.7 ‑0.2 0.2 0.3

December1998 122.70 121.9 1.6 1.6 0.7 0.9

December1999 123.60 124.1 0.7 1.8 0.7 1.5

December2000 130.6 131.3 5.7 5.8 3.9 4.5

December2001 133.5 135.4 2.2 3.1 3.6 4.4

December2002 136.2 139.5 2.0 3.0 2.2 3.0

December2003 138.5 142.8 1.7 2.4 2.1 2.8

December2004 141.1 146.5 1.9 2.6 1.6 2.3

December2005 145.4 150.6 3.0 2.8 2.6 2.7

December2006e 149.8 155.3 3.0 3.1 2.9 3.0

December2007f 153.4 159.2 2.4 2.5 2.6 2.7


1995‑96to2005‑06e 2.1 2.6

2000‑01to2005‑06e 2.3 2.8



Inthelongrun,slowerpricegrowthintheTerritorycomparedtonationallyprobably

reflectsimprovementsintransportinfrastructureandtheimpactofpopulation

growthonimprovingthefeasibilityoflocalsupply.

Reflectingthestrongperformanceofthepropertyandconstructionmarketsinthe

Territoryin2005,thehousing,andhouseholdcontentsandservices,categories

contributedsignificantlymoretoCPIgrowthintheTerritorythannationally

(Chart5.2).Increasingtransportation(includingpetrol)pricesalsocontributedmore,

reflectingthelowerlevelsofcompetitionintheTerritory.AlthoughtheAdelaideto

Darwinraillinkisexpectedtolowertransportationcosts,includingcostsbuiltintothe

pricesofconsumergoods,itisstilltooearlytoassessitsimpact.

Communication,clothingandfootwearmadenegativecontributionstoCPIgrowthin

theTerritoryandnationally.Thisprimarilyreflectsthematuring(andsaturation)ofthe

mobilephonemarketandtheimpactofcompetitionfromChinaandotheremerging

economiesonlowerimportedandlocaltextilemanufacturingprices.

Table 5.1: Consumer Price IndexTable 5.1: Consumer Price Index

ComponentsComponents


#insufficientdataavailable


TheSeptemberquarter2005CPIreleaseincludedanupdateoftheCPIcomponent

weightstobetterreflectcurrenthouseholdexpenditurepatterns.Thechanges,

whicharepartoftheAustralianBureauofStatistics(ABS)15thseriesreview,reflect

theoutcomeofthe2003‑04HouseholdExpenditureSurvey(HES)andtheinclusion

offinancialservices(suchasbankfeesandcreditcardcharges)intheCPIbasket.In

August2005,theABSpublishedasummaryofresultsfromthe2003‑04HES,which

collectsinformationontheexpenditure,income,networthandothercharacteristics

ofAustralianhouseholds(Table5.2).

1998‑99 2003‑04

Darwin$

8capitals$

Difference%

Darwin$

8capitals$

Difference%

Currenthousingcosts(selecteddwellings)

149.63 107.40 39.3 187.76 160.39 17.1

Domesticfuelandpower 22.43 18.57 20.8 29.41 23.96 22.7

Foodandnon‑alcoholicbeverages

157.57 134.58 17.1 172.12 160.37 7.3

Alcoholicbeverages 35.52 20.63 72.2 38.99 23.58 65.4

Tobaccoproducts 17.16 10.04 70.9 14.43 10.99 31.3

Clothingandfootwear 26.66 35.67 ‑25.3 34.58 38.30 ‑9.7

Householdfurnishingsandequipment

54.09 44.45 21.7 56.06 53.59 4.6

Householdservicesandoperation

55.65 43.48 28.0 64.38 56.73 13.5

Medicalcareandhealthexpenses

31.41 35.03 ‑10.3 42.50 49.88 ‑14.8

Transport 141.63 123.33 14.8 149.58 142.40 5.0

Recreation 121.00 95.88 26.2 188.96 121.55 55.5

Personalcare 15.26 15.14 0.8 18.82 18.62 1.1

Miscellaneousgoodsandservices

78.38 62.98 24.5 87.37 87.01 0.4

Totalgoodsandservicesexpenditure

906.40 747.18 21.3 1084.95 947.37 14.5

Meangrosshouseholdincomeperweek

1196.07 957.17 25.0 1415.00 1210.00 16.9

Source:ABSCat.Nos.65350,65350.055.001

Chart 5.2: Annual Percentage Point Contribution to Change in CPI, 2005

-0.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2

Financial andinsurance services#

Education

Recreation

Communication

Transportation

Health

Household contentsand services

Housing

Clothing and footwear

Alcohol and tobacco

Food

Darwin 8 capitals

percentage point contribution

Chart 5.2: Annual Percentage Point Contribution to Change in CPI, 2005

-0.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2

Financial andinsurance services#

Education

Recreation

Communication

Transportation

Health

Household contentsand services

Housing

Clothing and footwear

Alcohol and tobacco

Food

Darwin 8 capitals

percentage point contribution

UpdatedWeightsUpdatedWeights

Table 5.2: Average Weekly Expenditure by Category and

Household Income

Table 5.2: Average Weekly Expenditure by Category and

Household Income

�6 Prices and Wages


In2003‑04,Darwinaverageweeklyhouseholdincomeof$1415remainedabovethe

eightcapitalcitiesaverageof$1210,butthedifferentialdeclinedsignificantlyfrom

25percentin1998‑99to17percentin2003‑04.Thedeclinereflectsstrongeconomic

conditionsintheTerritoryduringthe1998‑99referenceperiod,whichwasfollowed

byaperiodofrelativeweakness.The2003‑04referenceperiodcapturesthebeginning

ofarecoveryphase.

ThedifferentialbetweenaverageweeklyhouseholdexpenditureinDarwinand

theeightcapitalcitiesaveragedeclinedfrom21percentin1998‑99to15percent

in2003‑04,mirroringthedeclineintheaverageincomedifferential.Asignificant

factorinthedeclinewasweakergrowthincurrenthousingcosts,whichincreasedby

25percentinDarwincomparedto49percentfortheeightcapitalcities.Thisreflects

thestronggrowthinthepropertymarketandresidentialconstructionnationally,

whichwasnotobservedintheTerritoryduringthistime.Consistentoverbothsurvey

periods,theadditionalweeklyearningsinDarwinrelativetotheeightcapitalcitiesis

mainlyallocatedtoadditionalexpenditureratherthansavings.

HousingThehighcontributionofhousingandhouseholdcontentsandservicestoCPIgrowth

inDarwincomparedtotheeightcapitalcitiesin2005reflectsstronggrowthin

propertypricesandresidentialconstructionintheTerritory.

HouseandunitpricesincreasedsolidlyacrosstheTerritoryin2005.Themedianhouse

priceinDarwinincreasedby26percentto$328000,whiletheunitandtownhouse

medianpriceincreasedby38percentto$242000.Consistentwiththeseprice

rises,theRealEstateInstituteofAustraliareporteda2.5percentdeclineinhousing

affordabilityinDarwinthroughtheyeartoDecember2005.Housingaffordabilityis

determinedbyaveragemonthlyloanrepaymentsandmedianweeklyfamilyincome.

FuelCrudeoilprices,inAustraliandollarterms,increasedby52percentin2005.Thesharp

increasewasprimarilyassociatedwith:

• strongglobaldemand(notablyfromChina);

• limitedexcesscapacitycoupledwithsupplydisruptions(followingHurricane

Katrina);

• speculativeholdingsbyinvestmentfunds;

• geopoliticalinstability;and

• a6percentdepreciationoftheAustraliandollaragainsttheUnitedStates(US)

dollar.

Continuedsteadygrowthinglobaldemandforoil,combinedwithonlymodest

increasesinproductioncapacityandcontinuinggeopoliticalinstability,areexpected

tokeepcrudeoilpricesaroundUS$60onaveragethrough2006.

OilOil

�7Prices and Wages

Onaverage,retailfuelpricesinDarwintendtobeabout8percenthigherthanthe

nationalaverage.

Higherretailpricesreflectasmallerpopulationandlackofeconomiesofscale

insalesvolumes.HigherfuelpricesintheTerritoryalsoreflecttheabsenceofa

significantindependentdiscountchain,theabsenceofanylarge‑scalepetrolrefinery

(resultinginhigherfreightcosts)andtheabsenceofregularpricediscountingcycles

asobservedinothercapitalcities.TheexpansionofindependentretailerUnited

PetroleumintheTopEndmarketandtheincreasedpresenceofsupermarketfuel

retailingmaypromoteincreasedpricecompetitionintheretailfuelmarketinthe

shortterm,withthelikelihoodofsomeindustryrationalisationinthelongerterm.

In2005,theaverageunleadedpetrolpriceforDarwinincreasedby12.3centsperlitre

to123.1centsperlitre,whiletheaveragepriceineightcapitalcitiesincreasedby

15.9centsperlitreto113.2centsperlitre(Chart5.3).

Source:AustralianAutomobileAssociation,ReserveBankofAustralia,Oilnergy

InFebruary2005,theTerritoryGovernmentcommissionedanindependentinquiry

intopetrolprices.ItconcludedthatalthoughTerritorymotoristspayconsistently

higherpricesforfuelthanmotoristsinothercomparablysizedlocationsinAustralia,

thedifferentialwasnot‘unreasonable’.Theinquirymadeaseriesofrecommendations

focusedonimprovingconsumerawarenesstoencouragemarketefficiency.

TaxationoffuelintheTerritoryisthethirdlowestinthenationbehindQueensland

andTasmania,withtheTerritoryGovernmentprovidingaretailfuelrebateof

1.1centsperlitre.TheAustralianGovernmenthasannouncedthatitwillphaseout

itsFuelSalesGrantSchemefromJuly2006,withthesavingstoberedirectedtothe

nationalRoadstoRecoveryProgram.Theschemeprovidesrebatesofbetween1and

3centsperlitreinruralandremoteareas.

RetailFuelPricesRetailFuelPrices

Chart 5.3: Unleaded Retail Petrol and Crude Oil Prices

0

10

20

30

40

50

60

70

98 99 00 01 02 03 04 05 060

20

40

60

80

100

120

140

Brent crude oil price inAustralian cents per litre (LHS)

Darwin unleadedpetrol (RHS)

8 capitals weighted averageunleaded petrol (RHS)

Australian cents per litre

Year ended June

Australian cents per litreChart 5.3: Unleaded Retail Petrol and Crude Oil Prices

0

10

20

30

40

50

60

70

98 99 00 01 02 03 04 05 060

20

40

60

80

100

120

140

Brent crude oil price inAustralian cents per litre (LHS)

Darwin unleadedpetrol (RHS)

8 capitals weighted averageunleaded petrol (RHS)


Year ended June


ParryFuelPriceInquiryParryFuelPriceInquiry

FuelTaxationFuelTaxation

�� Prices and Wages


GroceryPricesSince2000,NorthernTerritoryTreasuryhasconductedasix‑monthlysurveyofgrocery

pricesinmajorTerritorycentres,plusCairnsandMountIsaforcomparativepurposes.

ThelatestsurveywasconductedinDecember2005(Table5.3).

December2004$

June2005$

December2005$

Annualchange$

Darwin 168 171 174 3.2

AliceSprings 162 164 167 3.0

Katherine 165 172 174 5.0

Yulara 212 203 219 3.2

Nhulunbuy 195 204 202 3.6

Cairns 166 166 168 1.1

MountIsa 167 167 170 1.7

Source:NorthernTerritoryTreasury

InDecember2005,thecostofastandardbasketofgroceriesincreasedby3.0percent

ormoreacrossallTerritorycentressurveyed,whencomparedtoDecember2004.

Higherfreightcostsassociatedwithfuelpricerisesmayhavecontributedtothis

increase.Fuelpricesin2005(asreportedbytheAustralianAutomobileAssociation)

inDarwin,AliceSpringsandKatherineincreasedbymorethan10.0percentoverthis

period.

InDarwinthecostofthebasketincreasedby3.2percentfromtheDecember2004

survey.ThisismarginallyhigherthantheincreaseintheDarwinCPIof3.0percent

overthisperiod,butisequaltotheincreaseinthefoodcategoryoftheCPI.Fruitand

vegetableprices,whichcanbevolatilebetweenquartersandevenbetweenyears,

increasedby8.0percentandwerethemajorcontributortopricesgrowthinthe

basketovertheyear.

OfallTerritorycentressurveyed,AliceSpringsrecordedthelowestaveragepricesin

thelatestsurvey(3.7percentlowerthaninDarwin).Darwinwasthenextcheapest

Territorycentresurveyed,followedbyKatherine.NhulunbuyandYularaweremore

expensivethanDarwinby16percentand26percentrespectively.Highercostsin

thesetwocentresreflectadditionalfreightandstoragecosts,andalackofeconomies

ofscaleandcompetition.Theaveragecostofthebasketofgoodsincomparable

citiesinQueenslandwassimilartotheirTerritorycounterparts,thatis,Cairnswas

3.4percentcheaperthanDarwin,andMountIsawas1.7percentmoreexpensive

thanAliceSprings.FurtherinformationontheGroceryPriceSurveycanbefoundat

www.nt.gov.au/ntt.

ExchangeRatesChangesintheexchangerateaffectthepricesofimportedand,toalesserextent,

domesticallyproducedconsumergoodsandservices.

Onatradeweightedbasis(TWI),theAustraliandollartradedinanarrowrangeover

2005andendedtheyearonlymarginallylowerthanayearearlier.Thisreflectsthe

differingperformanceoftheAustraliandollarrelativetomajorworldcurrencies,

withtheAustraliandollardepreciatingagainsttheUSdollarandanumberofAsian

currencieswhileappreciatingagainsttheEuroandtheYen(Chart5.4).

Table 5.3: Grocery Price Survey, December 2004 to December 2005

Table 5.3: Grocery Price Survey, December 2004 to December 2005

20052005


TherelativestabilityoftheAustraliandollarwasduetotwopowerfuloffsettingforces:

• ThevalueoftheAustraliandollarwassupportedbystronggrowthinexportprices

(particularlycommodities)combinedwithadeclineinimportprices(especially

manufacturedgoodsfromChina)thatresultedinAustraliarecordingitshighest

termsoftrade(theratioofexportpricestoimportprices)in30years.

• Downwardpressureresultedfromanarrowingoftheinterestratedifferential

betweenAustraliaandothercountries(particularlytheUS).Thedifferentialbetween

theUSandAustralianbenchmarkratenarrowedby2percentagepointsin2005,

andwastheprimarydriverbehindthe6percentdepreciationintheAustralian

dollaragainsttheUSdollaroverthisperiod.

Source:ReserveBankofAustralia

WagesSolidwagesgrowthin2005,bothintheTerritoryandnationally,reflecttight

labourmarketconditionsandskilledlabourshortagesprevalentthroughoutthe

year,especiallyintheconstruction,mining,educationandhealthsectors.Thiswas

particularlypronouncedintheTerritory,wherebuoyantpropertyandconstruction

markets,ashortageofmedicalprofessionalsandenterprisebargainingoutcomesfor

publicservantsledtowagesgrowth,asreflectedintheLabourPriceIndex(LPI),of

4.5percentintheyear(Table5.4).

2000%

2001%

2002%

2003%

2004%

2005%

NorthernTerritory

Public 2.6 2.9 3.2 3.7 3.3 4.8

Private 2.6 2.9 3.1 2.6 3.4 4.1

Total 2.6 2.9 3.1 3.1 3.3 4.5

Australia

Public 2.8 3.7 3.3 4.4 4.1 4.6

Private 3.1 3.5 3.3 3.3 3.4 3.9

Total 3.0 3.6 3.2 3.6 3.6 4.1


Chart 5.4: Exchange Rates (moving annual average)

0.4

0.5

0.6

0.7

0.8

0.9

1.0

96 97 98 99 00 01 02 03 04 05 0640

50

60

70

80

90

100

Year ended June

US$ per A$Euro per A$

TWIYen per A$

TWI (RHS)

US$ (LHS)

Euro (LHS)

Yen (RHS)

Chart 5.4: Exchange Rates (moving annual average)

0.4

0.5

0.6

0.7

0.8

0.9

1.0

96 97 98 99 00 01 02 03 04 05 0640

50

60

70

80

90

100

Year ended June

US$ per A$Euro per A$

TWIYen per A$

TWI (RHS)

US$ (LHS)

Euro (LHS)

Yen (RHS)

Table 5.4: Labour Price Index (year on year to December

percentage change)

Table 5.4: Labour Price Index (year on year to December

percentage change)

�0 Prices and Wages


In2005,thepublicsectorLPIrecordedanincreaseof4.8percent,reflectingthe

implementationofanumberofenterprisebargainingagreements(EBAs)that

providedwageincreasessignificantlyaboveCPIintheirfirstyear.TheNorthern

TerritoryPublicSector2004‑2007CertifiedAgreement,coveringabout9500Northern

Territorypublicservants,wascertifiedon21January2005.Itincludeda5percent

increaseinsalariesinthefirstyear,backdatedtoAugust2004,and3percentinboth

August2005andAugust2006.Nurses,teachersandmembersofthepoliceandfire

servicesalsoreceivedsignificantlyaboveCPIwageincreasesin2005.

WagesgrowthintheTerritoryprivatesectorin2005,whilenotasstrongasgrowth

inthepublicsector,increasedatagreaterrateintheTerritorythannationally.The

privatesectorLPIfortheTerritoryincreasedby4.1percentcomparedto3.9percent

nationally.Chronicskillsshortagesingrowthindustriessuchasconstructionand

mining,combinedwithlabourdemandfrommajorconstructionprojectssuchasthe

AlcanG3refineryexpansionatGoveandtheliquefiednaturalgasplantatWickham

Point,wereinstrumentalinraisingthebenchmarkwagerate.

In2005,Territoryaverageweeklyfull‑timeadultearnings(AWFTE)increasedby

6.9percentto$1098,abovethenationalaverageof$1078.GrowthinTerritoryAWFTE

hasexceedednationalgrowthsinceearly2004,largelyasaresultoftheimpactof

majorminingandenergyprojects,whichofferhigherwagestoattractinterstate

workers.AWFTEdatashouldbeviewedwithcautionas,unliketheLPI,whichis

designedtomeasurechangesinthecostofemployingaconstantquantityand

qualityoflabour,theAWFTEmeasureofwagesisheavilyinfluencedbycompositional

changesinthesurveysample.

OutlookAnumberoffactorsareexpectedtocontinuetoputupwardpressureoninflation

nationallyandintheTerritoryin2006‑07.

• InterestratedifferentialsbetweenAustraliaandanumberofcountriesarelikely

tonarrowfurther,mostnotablythedifferentialbetweenAustraliaandtheUnited

States,puttingdownwardpressureontheAustraliandollar.

• CrudeoilpricesareexpectedtoremainhighataboveUS$60throughoutthis

period.

• Ongoingskilledlabourshortageswillcontinuetoputupwardpressureon

aggregatewagesgrowthandencouragepriceinflation.

Themainfactorslikelytooffsetthisupwardpressureoninflationare:

• theincreasedlikelihoodofatleastone0.25percentincreaseinofficialinterestrates

duringthisperiod;and

• thecontinuedglobaldownwardpressureonpricesofmanufacturedproductsfrom

low‑costproducingcountries,especiallyChina.

TheTerritory’sinflationrateisexpectedtocontinuetotrackcloselytothenational

rate,andremainatthehigherendoftheReserveBank’stargetbandof2to3percent

intheshorttomediumterm.

WagesgrowthintheTerritoryisexpectedtomoderatein2006and2007ashigher

EBA‑negotiatedwageincreasesforthemajorityofNorthernTerritorypublicservants

in2005areincludedinthebaseandconstructionworkfortheAlcanG3refinery

expansioniscompleted.Nevertheless,theLPIfortheTerritoryisexpectedtoremain

above4percentasoveralleconomicactivityremainsrobustandskilledlabour

shortagespersist.

PricesPrices

WagesWages

��External Economic Environment

ExternalEconomicEnvironment

• GlobaleconomicconditionsareexpectedtoremainfavourablefortheAustralian

economy.

• CountriesthatarekeydestinationsforTerritoryexportsareexpectedtocontinue

toexperiencerobusteconomicgrowth.

• Riskstothegenerallypositiveoutlookincludethepossibilityofinflationary

pressuresleadingtoanincreaseininterestrates.

DemandforTerritorygoodsbothinternationallyandfromotherAustralianstatesand

territoriesisveryimportantfortheTerritoryeconomy.Overseasdemandconstitutes

almost20percentofTerritoryfinaldemand,whileinterstatedemandaccountsfora

further10percent.

MajorTerritoryexportsincludecrudeoil,mineralores,livecattleandtourism‑related

services.Liquefiednaturalgas(LNG)isanewmajorexportfortheTerritory,withthe

firstshipmenttoJapaninFebruary2006.Themajordestinationmarketsformineral

oresaretheUnitedStates(US),ChinaandJapan.Livecattleareexportedmainly

tothePhilippinesandIndonesia.OilisexportedprimarilytoSingapore,China,the

USandSouthKorea.InternationalvisitorscomeprimarilyfromEurope,Japanand

NorthAmerica.Table6.1providesasummaryoftheeconomicoutlookforthemajor

destinationsofTerritoryexports.

TheAustralia‑USFreeTradeAgreementsignedon1January2005isexpectedto

benefittheAustralianeconomywithincreasedopportunitiesforAustralianexporters

andincreasedinvestmentintheAustralianeconomy.ManyoftheTerritory’s

primaryproductsareexportedtoAsiaforuseinthemanufactureofgoodsthatare

subsequentlyexportedworldwide.ExportstoAsiaareoneofthekeylinksthrough

whichglobaleconomicconditionsaffecttheTerritoryeconomy.Expandedmarket

opportunitiesalsocontinuetobeexploredunderthefreetradeagreementswithboth

Singapore(agreementbeganin2003)andThailand(agreementbeganin2005).

GlobalEconomyGlobaleconomicconditionsremainedfavourablethroughout2005,withstrong

growthintheUS,ChinaandIndia,whilethesituationinJapanappearstobe

improvingfollowingseveralyearsofdeflationandsluggishgrowth.Consensus

Economicsestimatesworldeconomicgrowthof3.3percentin2005.

Thestrengthoftheglobaleconomyhasledtoasignificantandsustainedincrease

incommodityprices,whichislargelyresponsibleforthecurrentstrengthofthe

AustralianandTerritoryeconomies.Theimpactofthesignificantincreaseinoilprices

inrecentyearshasbeenlessthantheincreasesinthe1970s,reflectingmoreefficient

energyuseinmostmajorindustrialnations.

Potentialriskstotheglobaleconomyincludemajorterroristattacks,avianinfluenza

andpoliticalinstabilityintheMiddleEastandothermajoroil‑producingcountries.

ThemagnitudeoftheUScurrentaccountdeficitisamedium‑termriskforthe

USeconomy.

Inthelongerterm,demographicchangesandtheageingofthepopulationare

risksformanyEuropeancountries,particularlyastheyimpactonthedependency

ratio,thatis,thenumberofpeopleagedover65yearscomparedtotheworking

agepopulation.

Chapter 6Chapter 6

KeyPointsKeyPoints

RisksRisks

�2 External Economic Environment


AustralianEconomyIn2005,grossdomesticproduct(GDP)grewby2.5percent.Thiswaslessthanthe

growthindomesticfinaldemandof4.1percentoverthesameperiod.Thedifference

inthesetwomeasuresofgrowthismainlyduetothetradedeficit,andasaresult

annualGDPgrowthhasnotfullyreflectedthestrengthofthedomesticeconomy.

Recordlowunemploymentwasreportedthroughout2005,alongwithsolid

employmentgrowth.InflationremainedwithintheReserveBank’stargetrangeof

2to3percent,helpedbytheappreciationoftheAustraliandollarmakingimports

moreaffordableandoffsettingpricesgrowthindomestically‑producedgoodsand

services.Interestrateshaveremainedunchangedsincethe0.25percentincreasein

March2005.

Althoughstilladragonthedomesticeconomy,thetradedeficitretreatedfrom

thehistorichighrecordedinthefirstquarterof2005,benefitingfromrecordhigh

commoditypricesthatsupportedthevalueofexports.

Thehousingmarketcontinuedtoweaken,particularlyinNewSouthWales,and

increasedoilandfuelpriceskeptconsumerconfidencesubdued.However,businesses

benefitedfromtheglobalresourcesboom,andgrowthinbusinessinvestmentwasa

keycontributortoGDPgrowthin2005.

Theinternationalenvironmenthasbeenextremelyfavourable,particularlyinrelation

toAustralia’stermsoftrade(thatis,theratioofexportpricestoimportprices),which

in2005wereattheirhighestlevelsince1974,inlinewithboomingcommodityprices

andthecontinuedstrengthofthecurrency.ThestrongAustraliandollarhasimpacted

negativelyoncompetitivenessinthemanufacturingsectorandAustralia’sexport

performance,whileatthesametimecontributingtostrongimportdemand.

In2005,thecurrentaccountdeficitreachedanhistorichighdrivenbystronggrowth

inincomedebitsfromdirectinvestmentsintheresourcesector.Exportvolumesare

expectedtoimprovein2006withnewminingprojectscomingonlineandsubstantial

investmentintheresourcessectorandrelatedinfrastructureprojects.Moderationin

thehousingmarketandhighenergycostsareforecasttobringdomesticdemandto

moresustainablelevels.Thesefactorsshouldcombinetonarrowboththetradeand

currentaccountdeficitsfromtherecordlevelsof2005.

Thereareriskstotheoutlookforsustainedgrowth.Oilpricesremainathistorically

highlevelsand,combinedwiththetightlabourmarketandcontinuingcapacity

constraints,thesepriceandwagepressuresareexpectedtoflowthroughtostronger

inflationarypressures.Thereisthepotentialforafurtherinterestraterisein2006

whichmayputdownwardpressureondomesticdemandandgrowth.Theinterest

ratedifferentialbetweenAustraliaanditsmajortradingpartnershasnarrowedand

theAustraliandollarhasweakened.

DomesticEnvironmentDomesticEnvironment

InternationalEnvironmentInternationalEnvironment

Australia’sCurrentAccountAustralia’sCurrentAccount

RisksRisks

��External Economic Environment

Table 6.1: GDP Growth (annual percentage change)

GDPGrowth(%)

Comment2003 2004 2005 2006 2007

North East Asia

China 10.0 10.1 9.9 9.1 8.7 In2005,thegovernmentannounceda‘managed’floatofitscurrency.Productivitygrowthisexpectedtoincreasewithproductionbecominglesslabourintensiveandmorevalueadded.

Korea 3.1 4.6 4.0 5.0 4.7 Growthisexpectedtobesupportedbyincreasedhouseholdconsumptionandindustrialproduction,particularlyintheautomotiveandinformationtechnologyindustries.

Japan 1.8 2.3 2.7 2.9 2.1 Pricedeflationisexpectedtoend.Sustainedeconomicgrowthremainsdependentoneconomicrestructuring.Risksincludetheageingpopulationandshrinkingworkforce.

Taiwan 3.4 6.1 4.1 4.1 4.1 Growthhasbeenledbysolidexpansionintheinformationtechnologysectorandstrongexportperformance.

HongKong 3.2 8.6 7.3 5.3 4.5 HongKonghasbenefitedfromChina’ssolidgrowthwithincreasesinexternaltrade,andthefinanceandtransport/communicationindustries.

South East Asia

Philippines 4.9 6.0 5.1 4.7 4.7 Growthisexpectedtobesupportedbysolidinvestmentandhouseholdconsumption.Risksincludepotentialpoliticalinstability.

Indonesia 4.7 5.1 5.6 5.1 5.5 Infrastructureinvestmentisexpectedtoassiststructuralreform.Theremovalofthesubstantialfuelsubsidyandsubsequentfuelpriceincreasesandinterestraterisesmayundermineconsumption.

Malaysia 5.4 7.1 5.3 5.4 5.2 Tradehasbeendominatedbythemanufacturingsector,inparticular,electricalgoods.Householdconsumptionisexpectedtoincreasepriortotheintroductionofagoodsandservicestaxin2007.

Thailand 7.0 6.2 4.5 4.8 5.0 Alargegovernmentinfrastructuredevelopmentplannedfor2006isexpectedtoboostactivityandinvestment.Currentpoliticaluncertaintyisarisk.

Singapore 2.9 8.7 6.4 6.0 5.2 Projectedgrowthisdrivenbyanexpectedincreaseinmanufacturingproductionwithbothprivateconsumptionandtotalinvestmentexpectedtoincreasestronglyin2006.

North America

UnitedStates 2.7 4.2 3.5 3.3 3.0 Theeconomybegantorecoverin2003supportedbylowinterestratesandtaxcuts.Risksincludegrowthinhouseholdconsumptionrelatedtorisinghousingvalues,shortagesinoilrefiningcapacity,thetradeandcurrentaccountdeficitsandapossiblefallinthedollar.

Canada 2.0 2.9 2.9 3.0 2.7 Businessinvestment,particularlyintheenergysector,hasprovidedmomentumtogrowth.ThestrongCanadiandollarhassupportedconsumerexpenditure,butalsocontributedtoagrowingtradedeficit.Theeconomyisoperatingnearfullcapacity.Proposedtaxcutswillfurthersupportconsumerspending.

European Union 1.0 2.3 1.6 2.2 2.0 Europe’smajoreconomieshavebeenexperiencingrelativelyhighunemploymentandlowgrowthsinceabout2002.Demographicchangesareexpectedtoleadtoadeclineinthelabourforce.MuchofEuropeisexpectedtocontinuetoexperiencerelativelyslowgrowthandhighunemploymentwiththeexceptionoftheUnitedKingdom.

Russia 7.3 7.2 5.5 5.2 na Growthhasbeendrivenbyconsumption,influencedbyrisingincomesandagrowthincredit.Somemoderationinmanufacturingandresourceextractionhasoccurred.

India 8.5 7.5 7.9 7.3 na Growthissupportedbyincreasedindustrialproduction,greateropennesstoforeigninvestmentandtradeliberalisation.Majorexportsincludeinformationtechnologyandtelecommunications.Risksincludehighlevelsofgovernmentdebtandlargetradeandforeignaccountdeficits.

Australia 3.1 3.6 2.5 3.2 3.4

na:notavailable

Source:ConsensusEconomicsForecasts(forIndia,financialyearisreported)(forRussia,dataisfromtheInternationalMonetaryFund)

�� External Economic Environment


OutlookGlobaleconomicconditionsareexpectedtoremainfavourablethroughout2006‑07.

Theoutlookbeyond2006‑07islesscertain,andwilldependheavilyontheextent

towhichtheverystronggrowthseeninChinainrecentyearscanbemaintained.

AnotherimportantinfluencewillbethestrengthoftheUSeconomy,whichhas

recordedsteadygrowthsincemovingintoarecoveryphasein2003,andtheJapanese

economy,whichisemergingfromasustainedperiodoflowgrowthandprice

deflation.

ConsensusEconomicsforecastsworldeconomicgrowthof3.4percentin2006and

3.1percentin2007.

NegotiationsonafreetradeagreementbetweenChinaandAustraliaarecontinuing

and,ifsuccessful,willprovidefurtherimpetustothealreadystrongtradelinks

betweenthetwocountries.

Australianeconomicgrowthin2006‑07isexpectedtobesupportedbycontinuing

strongcommoditydemandandhighprices,strongdemandforexportsfromChina

andsolidhouseholdconsumption.ConsensusEconomicsforecastsgrowthof

3.2percentin2006and3.4percentin2007.

��International Trade

InternationalTrade

• MajorTerritoryexportsaremineralores,mineralfuelsandservicesrelatedtointernationalvisitors(touristsandforeigndefencepersonnel).

• Merchandiseexportsincreasedby18percenttoanestimated$2.6billionin2005‑06,largelyduetoincreasedglobalcommoditydemandandprices.

• Stronggrowth(26percent)inmerchandiseexportsisforecastfor2006‑07,supportedbyafullyearofliquefiednaturalgasproduction,manganesefromthenewBootuCreekmineandincreasedaluminafromAlcan’sGoverefinery.

• MajorTerritoryimportsaremachineryandequipment(mostlyindustrialequipmentforminingandconstructionactivities)andrefinedfuels.

• In2005‑06,importsincreasedbyanestimated17percentto$2.3billion,largelyduetoequipmentimportedfortheBayu‑Undangasandcondensatedevelopmentandhigherpricesforrefinedfuel.TheimportofaircraftviaDarwinfortheJetstarfleetalsocontributedtothisincrease.

• Importsareforecasttodecreaseby23percentin2006‑07,dueinlargeparttocompletionofworkontheAlcanG3refineryexpansionandthecompletionofJetstar’sfleetpurchases.Mineralfuelimportsareforecasttoincreasesignificantly(32percent)withimportoffeedstockgasfortheWickhamPointLNGplant.

AnabundanceofrichmineralandenergyresourcesandalimitedlocalmarketmeanthatinternationaltradeformsanintegralpartoftheTerritoryeconomy.Relianceontheextremelyvolatileminingandenergysectorensuresthatthetimingoflargeprojects,pricevariationsandexchangeratemovementscanhaveadramaticeffectontheTerritory’stradeperformance.ArecentexampleistheeffectofthecommencementofcrudeoilproductionfromtheLaminaria‑Corallinaoilfieldsin1999‑2000(Chart7.1),whichledtoa68percentincreaseinTerritoryexports.Commencementofafullyearofliquefiednaturalgas(LNG)productionislikelytohaveasimilarimpactonTerritoryinternationaltradefrom2006‑07.

CautionisrequiredwheninterpretinginternationaltradestatisticsfortheTerritory.Theimportationofsomehighvaluecapitalgoods,suchastheNorthern Endeavourplatformin1999andlargenumberofpassengeraircraftforJetstarbetween2004and2006,hadasignificantimpactonreportedTerritoryimportsbutisoflittlerelevancetotheonshoreeconomy.Similarly,themajorityofgoldproductionintheTerritoryisexportedviaPerth,andisthereforenotcountedasaTerritoryexport.


Source:NorthernTerritoryTreasury,ABSdataservice5432.0.65.001

Chapter 7Chapter 7

KeyPointsKeyPoints

Chart 7.1: Territory InternationalMerchandise Trade

(moving annual total)

-1

0

1

2

3

4

5

97 98 99 00 01 02 03 04 05 06e 07f

Exports

Imports

Trade balance

Year ended June

$BChart 7.1: Territory InternationalMerchandise Trade


-1

0

1

2

3

4

5

97 98 99 00 01 02 03 04 05 06e 07f

Exports

Imports

Trade balance

Year ended June

$B

�6 International Trade


TradeBalanceTheTerritory’sinternationaltradebalanceasaratiotogrossstateproduct(GSP)was

3.1percentin2004‑05(Table7.1),comparedtoanationalratioof–4.6percent(a

tradedeficit).TheTerritoryhastraditionallybeenanetexporter,largelyduetoits

abundanceofmineralandenergyresources.In2004‑05,theTerritoryrecordedthe

secondhighestlevelofmerchandiseexportspercapitaofAustralianjurisdictionsand

thehighestlevelofimportspercapita.

MerchandiseExports

(percapita)number

ServicesExports

(percapita)number

MerchandiseImports

(percapita)number

RatioofTradeBalancetoGDP/GSP

%

NewSouthWales 3473 2298 9076 ‑13.5

Victoria 3814 1597 8960 ‑12.5

Queensland 5567 1656 5272 1.9

SouthAustralia 5082 662 3643 3.3

WesternAustralia 17587 1374 6726 22.1

Tasmania 4894 367 1222 11.3

Northern Territory 9 606 2 416 9 216 3.1

AustralianCapitalTerritory* 0 2270 92 ‑2.2

Australia 5522 1738 7330 ‑4.6

*MerchandisetradefromtheACTislimitedduetoitssizeandgeographiclocation

Source:ABSCat.Nos.3101.0,5220.0

TheTerritory’sinternationalmerchandisetradesurplusincreasedtoanestimated

$310millionin2005‑06,upfrom$230millionin2004‑05butdownfrom$1billion

in2003‑04.ThisincreaseislargelyduetothecommencementofLNGproduction

whichmorethanoffsetstheimpactoftheimportationofaircraftfornationalairlines

throughDarwin.

TheTerritory’smajormerchandisetradingpartnersareinNorthEastandSouth

EastAsia(mainlyChinaandSingapore).NorthAmerica(mainlyCanada)isanother

importanttraderegion.

MerchandiseExportsMineralandenergyexportscomprisealargeproportionoftheTerritory’sinternational

merchandiseexports.Otherimportantmerchandiseexportsincludelivecattle,animal

andvegetableoils,manufacturedgoods,machineryandtransportequipment,and

chemicalsandrelatedproducts.

Merchandiseexportshavebeenvolatileinrecentyears,dueprimarilytothe

combinedimpactoffallingoilproductionfromLaminaria‑Corallinaandlarge

movementsincrudeoilpricesandtheAustraliandollar.Thenominalvalueof

Territorymerchandiseexportsincreasedby18percenttoanestimated$2.6billionin

2005‑06.Mineraloreexportsincreasedbyabout3percentin2005‑06toanestimated

$1.4billion,reflectingstrongworlddemand,whilethevalueofoilexportsincreased

byabout80percenttoanestimated$0.9billionin2005‑06.Thevalueoflivecattle

exportshasfallenby31percentsince2002‑03,asthestrongerAustraliandollar

affectedcompetitiveness.

Table 7.1: International Trade,2004-05

Table 7.1: International Trade,2004-05

�7International Trade



Throughoutthe1990s,mineralfuels(almostentirelyoil)representedabout

20percentoftotalmerchandiseexports.OilproductionfromtheLaminaria‑Corallina

oilfieldsincreasedthisproportionsignificantly,peakinginmid2001atalmost

70percentoftotalTerritorymerchandiseexports,supportedbyaweakAustralian

dollarandincreasingoilprices.ProductionandexportfromtheLaminaria‑Corallina

oilfieldshasdeclinedsignificantlyinrecentyears.By2004‑05,mineralfuelexports

hadfallentojust23percentofmerchandiseexports.ThecommencementofLNG

productionattheWickhamPointprocessingplantwillonceagainboostmineralfuel

exports.ProductionofLNGisestimatedtobevaluedat$600millionin2005‑06before

increasingtoanestimated$1.36billionin2006‑07.

Territoryrawmineraloreexportsaredominatedbyalumina,manganese,zinc/lead

concentrateanduranium.Despiterelativelysteadyproductionvolumes,strong

commoditypricesandastrongAustraliandollarresultedinthenominalvalueof

Territorymineraloreexportsincreasingby36percentto$1.4billionin2004‑05.

AlthoughthevalueofgoldproductionintheTerritoryistypicallymorethan

$300millionperannum,goldproducedintheTerritoryisgenerallyreportedasan

internationalexportfromWesternAustraliaratherthantheTerritory.

TheMcArthurRivermine,whichcontributedmorethan$150millionayeartothe

mineraloresexportsoverthepastdecade,ceasedundergroundminingoperationsin

September2005andaproposaltomovetoanopencutoperationiscurrentlyunder

considerationbytheTerritoryGovernment.Theimpactofanyreductioninoutput

fromMcArthurRiverwillbesomewhatoffsetbythenewBootuCreekmanganese

minewhichbeganproductioninearly2006.

Territorylivecattleexportsareinfluencedbyeconomicconditionsinimporting

countriesasevidencedbythedramaticdeclinefollowingthe1997Asianeconomic

crisisandsubsequentexchangeratemovements.In2005‑06,thevalueoflivecattle

exportsfromtheTerritoryincreasedbyanestimated5percent.

Inthefiveyearsto2004‑05,about77percentofTerritorymerchandiseexportswent

toAsia.ThemajordestinationmarketsforTerritorymineraloreexportsareChinaand

JapanaswellasNorthAmericaandEurope(Chart7.3).Territoryoilisexportedtoa

broaderrangeofcountriestoberefined,includingSingapore,Korea,Japan,Taiwan

andtheUnitedStates.

Chart 7.2: Territory Merchandise Exports by Major Group


0

1

2

3

4

5

97 98 99 00 01 02 03 04 05 06e 07f

Mineral ores

Live cattle

Mineral fuels

Total

$B

Year ended June

Chart 7.2: Territory Merchandise Exports by Major Group


0

1

2

3

4

5

97 98 99 00 01 02 03 04 05 06e 07f

Mineral ores

Live cattle

Mineral fuels

Total

$B

Year ended June

MineralFuelsMineralFuels

MineralOreMineralOre

LiveCattleLiveCattle

KeyExportMarketsKeyExportMarkets

�� International Trade


*excludingJapan

Source:ABSdataservice5432.0.65.001

MerchandiseImportsMachinery,equipmentandmineralfuelsaretheTerritory’smajorinternational

merchandiseimports.Machineryandtransportequipmentimportshavebeen

particularlyhighinrecentyearsasaresultofequipmentimportedformajorresource

projects(Chart7.4).

In2005‑06,thevalueofimportsincreasedbyanestimated17percentto$2.3billion,

largelyduetotheimportofaircraftforJetstar,equipmentfortheBayu‑Undangas

andcondensatefields,andthehighervalueoffuelimportsassociatedwithasharp

increaseinprices.

In2005‑06,thevalueofmachineryandtransportequipmentimportsincreasedfrom

$1.0billionin2004‑05toanestimated$1.3million,andrepresentabout54percent

ofTerritorymerchandiseimports.Thehighproportionofmachineryandequipment

reflectstheTerritory’shighdemandforindustrialequipmentandmachineryfor

miningandconstruction.Thelargeincreasein2005‑06isduetoDarwinbecoming

thepreferredfirstAustralianportofcallforJetstar’sfleetof20newAirbusA‑320s,

leadingtomorethan$900millioninaircraftimportsfromFrancebeingattributedto

theTerritory.



Chart 7.3: Territory Major Export Destinations,2000-01 to 2004-05

0 200 400 600 800 1000 1200

Middle East

Other

Europe

Japan

North America

North East Asia*

South East Asia

0.9%

6.2%

7.4%

4.9%

37.1%

10.8%

32.9%

$M

Chart 7.3: Territory Major Export Destinations,2000-01 to 2004-05

0 200 400 600 800 1000 1200

Middle East

Other

Europe

Japan

North America

North East Asia*

South East Asia

0.9%

6.2%

7.4%

4.9%

37.1%

10.8%

32.9%

$M

MachineryandTransportMachineryandTransport

Chart 7.4: Territory MerchandiseImports by Major Group


0.0

0.5

1.0

1.5

2.0

2.5

97 98 99 00 01 02 03 04 05 06e 07f

Year ended June

Mineral fuels

Manufactured

Total

Machinery and transport equipment

$BChart 7.4: Territory MerchandiseImports by Major Group


0.0

0.5

1.0

1.5

2.0

2.5

97 98 99 00 01 02 03 04 05 06e 07f

Year ended June

Mineral fuels

Manufactured

Total

Machinery and transport equipment

$B

��International Trade

GasproductionattheWickhamPointLNGplantwillhaveasignificantimpactonthe

Territory.FeedstockgasformanufactureintoLNGispipedviaasub‑seapipelinefrom

theBayu‑UndanfieldsintheJointPetroleumDevelopmentArea(JPDA).Feedstock

gasfromBayu‑UndanwillbereportedasaTerritoryimport,astheJPDAisjointly

managedbyAustraliaandTimorLesteandclassifiedasacountryforinternational

tradepurposes.

Mineralfuelimportsmadeupabout35percentoftheTerritory’sinternational

merchandiseimportsinthefiveyearsto2004‑05.However,thevalueoffuelimports

isheavilyinfluencedbyvolatilityinthepriceofoilandexchangeratemovements.

Thesolidincreaseininternationalfuelimportssince1999reflects,inpart,ashiftin

thesourceofsupply,withlessbeingsourcedfromsoutherndomesticrefineriesand

morebeingsourcedfromSingapore.In2005‑06,theinternationalpriceofcrudeoil

reachedandmaintainedrecordlevelsintheaftermathofHurricaneKatrina,continued

insurgencyinIraqanduncertaintyofsupplyfromVenezuelaandNigeria.Thishas

resultedinthevalueofNorthernTerritoryfuelimportsincreasingbyanestimated

31percentto$710millionin2005‑06.

TheTerritoryhasasmallmanufacturingbaseand,assuch,themajorityof

manufacturedproductsareimported.Manufacturedimportsaccountedforabout

13percentofinternationalmerchandiseimportsinthefiveyearsto2004‑05.

Inthefiveyearsto2004‑05,about29percentofTerritorymerchandiseimportscame

fromSouthEastAsia.SouthEastAsiaandtheMiddleEastarethemajorsuppliersof

theTerritory’sfuelrequirements,withmostfuelbeingsourcedfromSingapore.Europe

isnowtheTerritory’ssecondlargestimportsource,largelyduetoaircraftimportsfrom

France.

*excludingJapan

Source:ABSdataservice5432.0.65.001

ServiceExportsTheTerritoryrecordedthehighestlevelofserviceexportspercapitaofthe

jurisdictionsin2004‑05,primarilyduetoitslargetourismindustryanditsstatusasa

preferredrestandrecreationdestinationforoverseasdefencepersonnel.

Theexpenditurebyforeigngovernmentpersonnelonservicessuchasmeals,

accommodation,entertainmentandsightseeingtoursisclassifiedasgovernment

servicesexports.ThemajorityofTerritorygovernmentservicesexportscomefrom

visitingmilitaryforces,particularlyfromtheUnitedStates.In2004‑05,government

servicesexportswerevaluedat$293millionandcomprisedalmost60percentof

totalTerritoryservicesexports.

FeedstockGasFeedstockGas

OtherImportsOtherImports

KeyImportMarketsKeyImportMarkets

Chart 7.5: Major Territory Import Sources,

2000-01 to 2004-05

0 50 100 150 200 250 300 350

North East Asia*

Other

North America

Japan

Middle East

Europe

South East Asia

$M

4.8%

13.4%

9.0%

12.7%

11.7%

20.0%

28.5%Chart 7.5: Major Territory

Import Sources,2000-01 to 2004-05

0 50 100 150 200 250 300 350

North East Asia*

Other

North America

Japan

Middle East

Europe

South East Asia

$M

4.8%

13.4%

9.0%

12.7%

11.7%

20.0%

28.5%

GovernmentServicesGovernmentServices

60 International Trade


Theexpenditurebyoverseastourists,businesstravellersandstudentson

servicesintheTerritoryisclassifiedastravelservicesexports.Thisincludesmeals,

accommodation,entertainmentandsightseeingtours.In2004‑05,travelservices

werevaluedat$138million,andaccountedfor28percentoftotalTerritoryservices

exports.Since2002,thevalueofTerritorytravelserviceexportshasfallenbymore

than27percent,dueinparttoaseriesofinternationalterroristattacks.

ServiceImportsTerritoryservicesimportsaredominatedbyTerritory‑baseddemandfortravelservices

(consumedbyTerritorianstravellingoverseas)andtransportation(shipmentand

freightservicesprovidedbyforeignoperators),eachofwhichrepresentedaround

45percentofservicesimportsin2004‑05.Thetotalvalueofservicesimportsin

2004‑05was$266million,upfrom$207millionin2003‑04.


OutlookTheTerritory’snominalmerchandisetradesurplusisforecasttobearound$1.5billion

in2006‑07,asubstantialincreasefromanestimated$310millionin2005‑06,dueto

increasedexportsandadeclineinimports.

Thenominalvalueofmerchandiseexportsisforecasttoincreaseby26percentto

$3.3billionin2006‑07,drivenbyafullyearofLNGproduction,manganesefrom

BootuCreekmineandincreasedproductionfromAlcan’sGoverefinery.Thevalue

ofmineralfuelsexports,includingLNG,isforecasttoincreaseby107percentin

2006‑07,largelyduetoincreasedLNGproduction.Commoditypricesareexpected

toretreatfromcurrenthighs,withapredictedslowingoftheChineseeconomyand

asubsequentdeclineinglobaldemandreducingthevalueofTerritorycommodities

exports.

Furtherout,potentialresourcedevelopments,aswellasgas‑basedmanufacturing,

havethecapacitytoboostexportsofoilandgas,althoughthereisstillsome

uncertaintyregardingthelikelihoodandtimingofsuchprojects.

ThenominalvalueofTerritoryinternationalimportstotheTerritoryisforecastto

decreaseby23percentto$1.8billionin2006‑07.ThecompletionofbothJetstar’s

fleetpurchaseandworkontheAlcanG3refineryexpansionarethekeydriversofthis

decline.However,mineralfuelimportsareforecasttoincreaseby32percent,asa

resultoftheimportationoffeedstockgasfortheWickhamPointLNGplant.

TravelServicesTravelServices

Chart 7.6: Territory InternationalServices Trade

(chain volume)

0

100

200

300

400

500

600

700

95 96 97 98 99 00 01 02 03 04 05

Year ended June

$M

Services exports

Services imports

Chart 7.6: Territory InternationalServices Trade

(chain volume)

0

100

200

300

400

500

600

700

95 96 97 98 99 00 01 02 03 04 05

Year ended June

$M

Services exports

Services imports

ExportsExports

ImportsImports

6�Mining and Energy

MiningandEnergy

• Intermsofoutput,miningisthelargestindustryintheTerritory,accounting

for19percentofgrossstateproduct(GSP)in2004‑05,comparedto5percent

nationally.

• Miningoutputisvolatileandproductionlevelscanjumpmarkedlyasnew

projectscomeonline.Globalsupplyanddemandconditionsandtheimpact

ofexchangeratemovementsoncompetitivenessarekeyfactorsaffecting

productionlevelsandprice.

• Inrecentyears,outputhasbeendominatedbyoilproductionfromthe

Laminaria‑CorallinaoilfieldsintheTimorSea,buthasbeendecliningasreserves

aredepleted.

• Intheshorttomediumterm,productionwillbedominatedbygasand

condensateproductionfromBayu‑Undan,halfofwhichisattributedtothe

Territory.Liquefiednaturalgas(LNG)productionatthenewWickhamPointplant

usingfeedstockgasfromBayu‑UndanbeganinDecember2005.

• Stronggrowthinthevalueofmineralsproduction,particularlyalumina,

manganeseandgoldisexpectedin2006‑07,withhigherproductionandprices.

Pricesareexpectedtomoderatebeyond2006‑07asglobalsupplyincreases.

• Inthemediumtolongterm,thelevelofexplorationisexpectedtocontinue

toincrease,consistentwithAustraliantrendsandsupportedbyTerritory

Governmentinitiativesandstrongcommodityprices.

MiningisthemostsignificantindustryintheTerritory,accountingfor19percent

ofGSPin2004‑05,comparedto5percentnationally(Table8.1).However,itshigh

contributiontoGSPisnotreflectedinitsshareofTerritoryemployment.According

toAustralianBureauofStatistics(ABS)estimates,employmentinthemining

industryin2004‑05totalled2100or2.2percentoftotalresidentemployment.

TheDepartmentofPrimaryIndustry,FisheriesandMinesreportsamuchhigher

estimateof4622employeesthatreflectsdefinitionaldifferences,asitincludes

affiliatedemployment,suchasmanufacturingemploymentatAlcanandflyinflyout

employees,whoarenotusuallyresidentintheTerritory.

%

NewSouthWales 1.8

Victoria 1.2

Queensland 7.3

SouthAustralia 2.1

WesternAustralia 19.5

Tasmania 1.6

Northern Territory 19.2

AustralianCapitalTerritory 0.0

Australia 4.8


Chapter 8Chapter 8

KeyPointsKeyPoints

Table 8.1: Mining as a Percentage of Gross State Product and Gross

Domestic Product, 2004-05

Table 8.1: Mining as a Percentage of Gross State Product and Gross

Domestic Product, 2004-05

62 Mining and Energy


MiningisalsoanimportantsourceofTerritoryGovernmentrevenuethroughroyalties

formostonshoreminingoperations.For2005‑06,royaltyrevenueisestimatedat

$48.6million,withafurther$3.1millionpaidbytheAustralianGovernmentasa

grantinlieuofuraniumroyalties.OffshoregasandoilfallsundertheAustralian

Government’staxjurisdiction.

In2005‑06,thevalueofminingandenergyproductionincreasedby33percentto

anestimated$4.1billion,alevelnotseensince2000‑01,whenoilproductionfrom

theLaminaria‑Corallinaoilfieldspeaked.Themajorcontributorstotheincreasewere

increasedproductionofcondensateandliquidpetroleumgas(LPG)atBayu‑Undan,

andthecommencementofLNGproductionatthenewWickhamPointplant

(Chart8.1).


Source:NorthernTerritoryTreasury,DepartmentofBusiness,EconomicandRegionalDevelopment,Departmentof

PrimaryIndustry,FisheriesandMines

MineralsBauxiteproductionatGoveandmanganeseproductionatGrooteEylandtaccounted

forabout46percentofthetotalvalueofproductionin2004‑05,andbothmines

areexpectedtocontinuetodominatemineralproductioninthemediumterm.Zinc,

leadandsilverproductionatMcArthurRiveraccountedforafurther18percentof

productionvaluein2004‑05,butundergroundoperationsceasedinSeptember2005.

Theoperator’sproposaltomovetoanopencutoperationiscurrentlyunder

considerationbytheTerritoryGovernment.

Otherimportantmineralresourcesandoperationsinclude:

• goldmineslocatedintheTanamiDesertandPineCreekareas;

• anewmanganesemineatBootuCreeknearTennantCreek,whichcommenced

productioninApril2006;

• phosphatedepositsnearTennantCreek;

• garnetsandsandvermiculitenearAliceSprings;

• magnesiteandamajorpolymetallicdepositoflead,cobalt,copper,nickelandsilver

intheBatchelorarea;and

• theMerlindiamondfieldsouth‑eastofBorroloola.

0

1

2

3

4

5

6

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Total

Energy

Minerals

Minerals and gas based manufacturing

$B

Year ended June

Chart 8.1: Value of Mining and Energy Production and Processing

(nominal dollars)

0

1

2

3

4

5

6

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Total

Energy

Minerals

Minerals and gas based manufacturing

$B

Year ended June

Chart 8.1: Value of Mining and Energy Production and Processing

(nominal dollars)


KATHERINE

ALICE SPRINGS

DARWIN

Barkly

Railw

ay

Railw

ay

NHULUNBUY

AvonDowns

Kalkarindji

Pine Creek

Dunmarra

Mataranka

Yuendumu

Renner Springs

Elliott

Borroloola

s

Timber Creek

Jabiru

Yulara

BathurstIsland

MelvilleIsland

GOVE

McARTHURRIVER

GROOTE EYLANDT

RANGER/JABILUKA

UNION REEFS

THE GRANITES

MEREENIE

PALM VALLEY

Bauxite/Alumina

Lead/Zinc/Silver

Manganese

Uranium

Gold

Gold

Gas and Oil Field

Gas Field

Stua

rt

100 200

Km

0

Hig

hway

Gas Pipeline

Gas Pipeline

GROUNDRUSHGold

MUD TANKVermiculite

NORTHERN CEMENTLime

MERLINDiamonds

BATCHELORMagnesite

BROWNSCobalt/Nickel

CHARIOTGold

EDNA BERYLGold

HARTS RANGEGarnet Sands

Harts Range

TopSpring

ighwayHTENNANT

CREEK

Ti Tree

Barrow Creek

WONARAHPhosphate

PEKO PROJECTGold

BOOTU CREEKManganese

FRANCES CREEKIron Ore

OnshoreMineralandEnergyResources

6� Mining and Energy


Thenominalvalueofmineralproductionandprocessing,includingmanufacturingof

alumina,decreasedby9percenttoanestimated$1.4billionin2005‑06(Chart8.2).

• Thenominalvalueofgoldproductiondecreasedby34percenttoanestimated

$254million,dueprimarilytotheclosureofTheGranitesmine’sGroundrushore

body.

• Thevalueofbauxiteandaluminaproductiondecreasedby1.9percenttoan

estimated$600milliondueatemporarysuspensiontoproductionattheAlcan

refineryaspartoftheG3expansionproject.

• Thevalueofbasemetalsproductiondecreasedby45percenttoanestimated

$115million.TheconclusionofundergroundminingoperationsattheMcArthur

RivermineinSeptember2005isestimatedtohavehadasignificantimpacton

theproductionoflead‑zincconcentrate.Despitethis,thereremainsasignificant

stockpileoforetobeprocessed.Theimpactofthedeclineinproductionof

lead‑zincconcentratewaspartiallyoffsetbystrongpricesgrowth.

• Thevalueofmanganeseproductionincreasedby14percenttoanestimated

$413million,drivenbyhigherprices,increasedproductionattheGEMCOmineat

GrooteEylandtandthecommencementofproductionatthenewBootuCreekmine.


Source:DepartmentofBusiness,EconomicandRegionalDevelopment,DepartmentofPrimaryIndustry,Fisheries

andMines

MineralexplorationintheTerritoryandnationallyincreasedsignificantlyin2004‑05

inresponsetoincreasingglobaldemandandstrongpriceincreases.IntheTerritory,

privatemineralexplorationexpenditure(includingexplorationforuranium)increased

by31percentto$56millionin2004‑05.Expenditureongoldexploration,at

$27million,accountedforalmosthalfoftotalmineralexplorationexpenditure.Inthe

sixmonthstoDecember2005,expendituretotalled$42million(Chart8.3).

2005‑06Production2005‑06Production

0

100

200

300

400

500

600

700

800

900

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Alumina/bauxite

Manganese

Lead-zinc

$M

Year ended June

Gold

Other minerals

Chart 8.2: Value of Mineral Production and Processing

(nominal dollars)

0

100

200

300

400

500

600

700

800

900

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Alumina/bauxite

Manganese

Lead-zinc

$M

Year ended June

Gold

Other minerals

Chart 8.2: Value of Mineral Production and Processing

(nominal dollars)

ExplorationExploration



Despiteasignificantincreaseoverthelasttwoyears,thelevelofexplorationremains

atarelativelylowlevel.Giventhelongleadtime(typically10to15years)between

thediscoveryofamajororebodyandcommercialproduction,theextendedperiod

oflowlevelexplorationmayhaveimportantconsequencesforproductioncapacityin

themediumtolongterm.

In2003,theTerritoryGovernmentimplementedanewexplorationinitiative,Building

theTerritory’sResourceBase,toattractinvestment.ItfollowsthepreviousNorthern

TerritoryExplorationInitiative,andprovides$15.2millionoverfouryearsforthe

provisionofpre‑competitivegeoscientificdataandthepromotionofprospectivity.

TheinitiativealsosupportsliaisonwithIndigenouslandownersandtheprocessingof

explorationandminingtitles.

EnergyThesignificantenergyresourcesintheTerritoryareoil,uranium,naturalgas,liquid

petroleumgas(LPG)andcondensate(alighthydrocarbonliquidusedtomanufacture

petrolandpetrochemicals,andoftenfoundmixedwithdepositsofnaturalgas).The

majorknownlocationsoftheseenergyresourcesare:

• Ranger,JabilukaandKoongarrainwestArnhemLand(uranium);

• theAmadeusBasinatPalmValleyandMereenie(oilandnaturalgas);

• GreaterSunrise,EvansShoal,Petrel/TernandCrux/ArgusintheTimorSea(natural

gasandcondensate);and

• Laminaria‑Corallina,JabiruandChallis/CassiniintheTimorSea(oil).

Inaddition,50percentofthevalueofoilandgasproductionfromtheJoint

PetroleumDevelopmentArea(JDPA)isalsoattributedtotheTerritory.Currently,the

twoproducingfieldsintheJDPAareBayu‑Undan(gas,LPGandcondensate)and

Elang/Kakatua(oil).

0

20

40

60

80

100

120

96 97 98 99 00 01 02 03 04 05 06

Other minerals

$M

Year ended June

Total

Gold

Chart 8.3: Mineral Exploration (moving annual total)

0

20

40

60

80

100

120

96 97 98 99 00 01 02 03 04 05 06

Other minerals

$M

Year ended June

Total

Gold

Chart 8.3: Mineral Exploration (moving annual total)



TimorSeaOilandGas

Thenominalvalueofenergyproduction,includingLNG,increasedby77percentto

anestimated$2.7billionin2005‑06,reflectingbothincreasedproductionandhigher

prices.

• Thevalueofoilproductionincreasedby42percenttoanestimated$900million,

drivenbya12percentincreaseinproductionandhigherprices.Productionat

Laminaria‑Corallina,whichdominatesoilproductionintheTerritory,hasdeclined

steadilyfromitspeakin2000‑01,butisexpectedtoincreaseby3percentfollowing

atemporaryshutdownin2004‑05forrepairwork.Oilproductionfromthemature

JabiruandChallis/Cassinifieldsrecoveredin2005‑06asregulartankerservices

recommenced.

• Thevalueofuraniumoreproductionincreasedby8percenttoanestimated

$250million,reflectinghigherpricesduetoincreasedglobalenergydemand,

decreasingsuppliesofweapons‑gradeuraniumstocksandagrowinginterestinthe

potentialbenefitsofusinguraniumtominimisegreenhousegasemissions.

• Thevalueofgasproduction,includingLNG,increasedby256percentto

$542million,withthecommencementofLNGproductionatthenewWickham

PointfacilityusingfeedstocksourcedfromBayu‑Undan.

• Thevalueofcondensateproductionincreasedby95percentto$593million,

reflectingincreasedproductionatBayu‑Undan.

INDIAN OCEAN

W.A.

N.T.

NORTHERNTERRITORY

WESTERNAUSTRALIA

TIMOR SEA

Dili

OecusseINDONESIA TIMOR-LESTE

ASHMORE AND CARTIERISLANDS ADJACENT AREA

JOINT PETROLEUMDEVELOPMENT AREA

BuffaloLaminaria-Corallina

Elang/Kakatua

JabiruChallis

Petrel

Tern

Evans Shoal

Chuditch

Kelp

Hingkip

Greater Sunrise

Tahbilk

Maple

CalditaJahal

Cornea

Krill

Sparkle

Blu�

Buller

TenaciousOliver

SwanPuffin

TalbotMontara

Barnett

Discovered undeveloped oil �eldDiscovered undeveloped gas �eld

Producing oil �eld

LEGEND

Darwin

DinichtysGorgonichthys

Crux

Brontosaurus

Padthaway

and BilyaraPrometheus

Titanichthys

Brewster

Audacious

Blacktip

Gas pipeline

Abadi-1

0 100 200

Km

Bayu-Undan

Kupang

Producing gas �eld

INDIAN OCEAN

W.A.

N.T.

NORTHERNTERRITORY

WESTERNAUSTRALIA

TIMOR SEA

Dili

OecusseINDONESIA TIMOR-LESTE

ASHMORE AND CARTIERISLANDS ADJACENT AREA

JOINT PETROLEUMDEVELOPMENT AREA

BuffaloLaminaria-Corallina

Elang/Kakatua

JabiruChallis

Petrel

Tern

Evans Shoal

Chuditch

Kelp

Hingkip

Greater Sunrise

Tahbilk

Maple

CalditaJahal

Cornea

Krill

Sparkle

Blu�

Buller

TenaciousOliver

SwanPuffin

TalbotMontara

Barnett

Discovered undeveloped oil �eldDiscovered undeveloped gas �eld

Producing oil �eld

LEGEND

Darwin

DinichtysGorgonichthys

Crux

Brontosaurus

Padthaway

and BilyaraPrometheus

Titanichthys

Brewster

Audacious

Blacktip

Gas pipeline

Abadi-1

0 100 200

Km

Bayu-Undan

Kupang

Producing gas �eld

2005‑06Production2005‑06Production

67Mining and Energy

*Oil,condensateandliquidpetroleumgas

**IncludingLNGproduction


Source:NorthernTerritoryTreasury,DepartmentofBusiness,EconomicandRegionalDevelopment,Departmentof

PrimaryIndustry,FisheriesandMines

Relativelystrongglobaleconomicgrowthandsignificantincreasesinoilandgas

pricesledtoaresurgenceinexplorationactivityin2004‑05.Privateexpenditureonoil

andgasexplorationincreasedby193percentto$99millionin2004‑05.Expenditure

isexpectedtoincreasesignificantlyin2005‑06,with$131millionrecordedinthesix

monthstoDecember2005.

Likemineralexploration,increasedoilandgasexplorationhasbeensupportedbythe

TerritoryGovernment’sBuildingtheTerritory’sResourceBaseinitiativethroughthe

provisionofgeoscientificinformationtoexplorersandhasledtoamajorincreasein

onshoreexplorationpermits.

Uraniumexplorationexpenditure,concentratedinwestArnhemLand,increasedby

44percentto$6.9millionin2004‑05,triggeredbythelargepriceincreasesince2003.

OutlookTheoutlookformineralsisdeterminedbyglobalsupplyanddemand,withworld

economicgrowthandtheexchangeratebeingmajorinfluencesondemand.Strong

demandisexpectedtocontinueinto2006‑07,withsolidworldeconomicgrowth,

mostnotablyfromChina.ThecompetitivenessofAustralianproducersisexpectedto

beenhancedbyrecentandanticipatedfurtherdepreciationoftheAustraliandollar.

Thevalueofmineralproduction,includingmineralsprocessing,intheTerritoryis

forecasttoincreaseby25percentto$1.8billionin2006‑07,largelyduetoexpected

increasesinalumina/bauxite,goldandmanganeseproduction.

• Aluminaproductionisforecasttoincreaseby37percentto$600million,reflecting

increasedproductionassociatedwiththecompletionoftheAlcanG3refinery

expansionandhigherprices.Expectedpriceincreasesaredrivenbystrongdemand

foraluminafromChinaandaslowerthanexpectedbuildupofglobalproduction.

Pricesareexpectedtoweakenfrom2007andbeyondasnewproductioncapacity

comesonline.

• Manganeseproductionisforecasttoincreaseby29percentto$532million.Prices

areforecasttoincreasebyafurther12percentonthebackofstrongerdemandand

constrainedsupply.Productionvolumeswillbeboostedsignificantlybyafullyear

ofproductionfromthenewBootuCreekmine.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Liquids*

$B

Year ended June

Gas**Uranium

Total

Chart 8.4: Value of Territory Energy Production

(nominal dollars)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Liquids*

$B

Year ended June

Gas**Uranium

Total

Chart 8.4: Value of Territory Energy Production

(nominal dollars)


MineralsMinerals

6� Mining and Energy


• Goldproductionisforecasttoincreaseby32percentto$336million.Productionis

forecasttoincreaseby13percentandpricesbyafurther17percent.Production

fromTheGranitesmineisexpectedtofall,butwillbeoffsetbyanumberofnew

developmentsiftheyproceedasplanned.

Theoutlookforbasemetalsisuncertain.UndergroundoperationsattheMcArthur

Rivermine(lead,zinc,silver)ceasedinSeptember2005andaproposaltomoveto

anopencutoperationiscurrentlyunderconsiderationbytheTerritoryGovernment.

AplannedopencutoperationattheBrown’sDepositnearBatchelor(copper,cobalt,

nickel)concentrateisalsounderconsiderationbytheGovernment.Ifapproved,

productionislikelytobeginin2006‑07.Thesameoperatorisalsoseekingstrategic

partnerstodevelopalargesulphideorebodycontainingcopper,cobalt,nickel,lead

andzincatthesamesite.

Inaddition,thereisaproposaltodevelopanopencutironoremineatFrances

Creek.OrefromtheminewillbetransportedbyrailtoDarwinforexport.Production

isexpectedtocommenceinearly2007andbuilduptoaround1.5milliontonnes

annually.

Oilproductionwillcontinuetodeclinein2006‑07duetolowerproductionfrom

Laminaria‑Corallina,whichaccountsforabout90percentofoilproductioninthe

Territory.ThedeclineinproductionatLaminaria‑Corallinaisanormalfunctionof

decliningreservesandwillcontinue.Anumberofothermarginaloildiscoveriesin

theTimorSeaawaitfurtherappraisaland/ordevelopment.TheseincludeAudacious,

Barnett,Montara,Oliver,Puffin,TalbotandTenacious.Developmentoptionsfor

AudaciousandMontaraarebeingreviewed.

Theimpactofthedeclineinoilproductionlevelswillbeoffsetsomewhatbyexpected

furtherpriceincreasesintheshortterm,supportedbystrengtheningdemand,supply

constraintsandasignificantriskpremium.TheAustralianBureauofAgriculturaland

ResourceEconomics(ABARE)forecaststhe2006oilpricetoaverageaboutUS$60per

barrelbeforeeasingbacktoaboutUS$57in2007.

Thevalueofgasproduction,includingLNG,willincreasesignificantlyin2006‑07,with

thefirstfullyearofLNGproductionatthenewWickhamPointfacilityusingfeedstock

gassourcedfromBayu‑Undan.

Lookingfurtherahead,theTerritoryremainsonthevergeofamajordevelopment

phaseforgasreservesandforgas‑basedmanufacturing.Shouldeffortstobring

moreTimorSeagasonshoreprovesuccessful,itcouldbeusedasfeedstockfor

newmanufacturingindustries.AnareaatGlydePoint,ontheGunnPointPeninsula

totheeastofDarwin,hasbeenidentifiedasapotentialsiteforamajorgas‑based

industrialestateandassociatedportfacilities.Possiblegasmanufacturingprojects

includefurtherproductionofLNGorgas‑basedproducts,suchasmethanol,ethane,

ammonia/ureafertilisersandvariouspetrochemicals.TimorSeagasalsohasthe

potentialtoprovideacheapandefficientenergysourceforthemanufactureof

alumina,magnesiumandotheroreconcentrates,andfortheproductionofelectricity

thatcouldadvancelocalvalue‑addingopportunities.

NegotiationsbetweentheTimor‑LesteandAustraliangovernmentsconcludedin

January2006withthesigningoftheTreatyonCertainMaritimeArrangementsinthe

TimorSea.Atthisstage,however,developmentoftheGreaterSunrisefieldisonhold,

withWoodsideannouncingadeferraloftheprojectforatleasttenyears.

OilOil

GasGas


InDecember2005,theNorthernTerritoryGovernmentannouncedthesigningofa

HeadsofAgreementbetweentheNorthernTerritoryPowerandWaterCorporation,

andENIAustraliaforthesaleofgasfromtheBlacktipfield,aWesternAustralian

administeredfield100kmwestofWadeyeintheBonaparteBasin.Theagreement

bindsthepartiestoworkexclusivelytogethertoconcludethenecessarycommercial

termstodevelopagassaleagreementforthesupplyofgasfromBlacktiptomeetthe

NorthernTerritory’slong‑termgasrequirementsfrom2009.

ABAREhasforecasta22percentincreaseinuraniumpricesin2006‑07,withsome

moderationexpectedin2007‑08asworldsupplyincreases.

IntheTerritory,theRangermineisscheduledtoceaseminingin2008,butithas

extendeditsmillprocessingoftheorethroughto2014.TheJabilukamineremainson

astand‑by,careandenvironmentalmaintenancestatus,andtheoperatorhasgiven

anundertakingtotheAustralianGovernmentthatminingwillnotcommenceuntil

miningatRangerisconcluded.ReservesatJabilukaareestimatedassufficientto

maintainproductionfornearlythreedecades.

InApril2006,AustraliaandChinasignedanuclearsafeguardsagreementthatallows

forAustralianexportsofuraniumtocommenceandmayleadtoincreasedexploration

activity.ThepotentialfornewminesintheTerritorywillcontinuetobeinfluencedby

AustralianGovernmentpolicy,asitretainspoweroveruraniummining.

Aftergraduallydecliningoverthesevenyearsto2003‑04,mineralsexploration

expenditureisimproving,whilepetroleumexplorationhasincreasedsharply.Inthe

mediumtolongterm,thelevelofexplorationisexpectedtocontinuetoincrease,

consistentwithAustraliantrendsandsupportedbyTerritoryGovernmentinitiatives.

Theoutlookisforincreasingexplorationforgold,diamonds,nickel,rareearths,

uraniumandonshorehydrocarbons.Explorationactivityisparticularlybuoyant

inseveralmajorgeologicalprovincesacrossthesouthernandcentralpartsofthe

Territory.

UraniumUranium


7�Tourism

Tourism

• TourismisanimportantpartoftheTerritoryeconomy,creatingdemandand

generatingemploymentinarangeofdifferentindustries,includinghospitality,

retailtrade,transportandconstruction.

• In2004‑05,thetourismindustryaccountedfor7.4percentofgrossstate

product,andisamajoremployerintheTerritory.

• Thetourismindustry,bothnationallyandintheTerritory,experiencedanumber

ofsetbacksinrecentyears,includingtheglobaleconomicslowdownin2001,

terroristattacksinNewYork,London,MadridandBali,thecollapseofAnsettand

theSARSoutbreak.

• In2004‑05,thetourismindustryintheTerritoryshowedsignsofrecovery,with

visitornumbersincreasingby8.4percent.

• Tourism‑relatedinvestmenthasalsobeenincreasing,withanumberofprojects

currentlyunderwayorscheduledtostartin2006.Theseincludeprojects

todevelopadditionaltouristaccommodationandtheDarwinWaterfront

Developmentproject.

• TheoutlookfortourismintheNorthernTerritoryisbroadlypositive.Nationally,

continuedlowunemploymentandsolidwagesgrowthshouldsupportfurther

growthinbothintra‑Territoryandinterstatevisitornumbers.

ThetourismindustryplaysasignificantroleintheTerritoryeconomy,contributing

moretogrossstateproduct(GSP)thaninanyotherjurisdiction.Uniqueflora,fauna

andgeographicalfeatures,aswellasAboriginalartandculture,arekeyattractionsfor

visitors.Cruiseanddefenceforceshipvisitsalsomakeasignificantcontributiontothe

Territory’stourismindustry.

Tourismisdifferenttootherindustriesasitisdefinedbythenatureoftheconsumers,

includingholiday,businessandgovernment‑relatedvisitors,ratherthanthetypesof

goodsandservicesinvolved.Touristscreatedemandinarangeofindustriesincluding

accommodation,cafes,restaurants,culturalandrecreationalservices,retailtradeand

transport.Tourismalsogeneratesactivityintheconstructionindustryforhotelsand

othertourism‑relatedinfrastructure.Assuch,measurementofthetouristindustryis

notasstraightforwardasotherindustries,andtoalargeextentreliesonsurveysof

expenditurebyinternationalanddomesticvisitors.

Tourismaccountedfor7.4percentofTerritoryGSPand6.1percentofstatefinal

demand(SFD)in2004‑05,comparedto3.6percentand3.5percentnationally

(Chart9.1).

Chapter 9Chapter 9

KeyPointsKeyPoints

72 Tourism


Source:NorthernTerritoryTreasury,TourismNT,ABSCat.No.5249.0

Tourismgrowthoveranyperiodcloselyreflectsprevailingeconomicconditions

bothdomesticallyandinternationally.Factorssuchasexchangeratesandgrowth

indisposablehouseholdincomearekeydrivers.Tourismexpenditureislargelya

discretionarycomponentofconsumerexpenditure.Assuch,bothincomegrowthand

consumerconfidencecanhaveasignificanteffectontourismactivity.International

tourismisparticularlysensitivetogeopoliticalconditionsandhealthconcerns,while

theavailabilityandcostofairfaresandfuelpricescanalsoimpactonTerritorytourism

activity.Additionally,visitornumbersareinfluencedbylargeone‑offeventssuchas

theSydneyOlympics,andregulareventssuchastheDarwinCup,ArafuraGames,

MastersGamesanddefenceexercises.

VisitorNumbersNationally,thetourismindustryhasexperiencedanumberofsetbacksinrecentyears.

Theonsetoftheglobaleconomicslowdownin2001,theterroristattacksinNewYork,

London,MadridandBali,thecollapseofAnsettandthesevereacuterespiratory

syndrome(SARS)outbreakallcontributedtoadownturnintourismactivityinthe

followingyears,particularlyinboundinternationaltourism.Overthesameperiod,the

Australiandollarappreciatedsignificantly,compoundingthenegativeimpacton

internationaltouristnumbers(Chart9.2).


0

1

2

3

4

5

6

7

8

9

NT Tas Qld NSW SA WA ACT Vic

%Chart 9.1: Estimate of Tourism as a Percentage of GSP, 2004-05

0

1

2

3

4

5

6

7

8

9

NT Tas Qld NSW SA WA ACT Vic

%Chart 9.1: Estimate of Tourism as a Percentage of GSP, 2004-05

DriversofGrowthDriversofGrowth

Chart 9.2: Overseas Short-term Arrivals, Australia

0

1

2

3

4

5

6

84 86 88 90 92 94 96 98 00 02 04 06

Asian crisis

World economic slowdown and terrorist attacks

World economic slowdown, recession in United States, and Gulf War

Year ended June

number (M)Chart 9.2: Overseas Short-term Arrivals, Australia

0

1

2

3

4

5

6

84 86 88 90 92 94 96 98 00 02 04 06

Asian crisis

World economic slowdown and terrorist attacks

World economic slowdown, recession in United States, and Gulf War

Year ended June

number (M)

7�Tourism

Followingthreeyearsofdecline,thenumberofvisitorstotheTerritoryincreasedby

8.4percentto1.4millionin2004‑05.Visitornightshavealsoincreased,up5.1percent

to9.2millionnights(Table9.1).

Nationally,internationaltouristnumbersbegantorecoverfromtheglobaltourism

downturninmid2003,withgrowthininternationalshort‑termarrivalsof8.6percent

intheyeartoJune2004,and6.9percentintheyeartoJune2005(Chart9.2).The

numberofvisitorstoAustralia,asrecordedbyTourismAustralia,showedincreasesof

9.0percentand6.3percentin2003‑04and2004‑05respectively.Latestdatareports

thattherecoveryininternationalnumbersnationallyisbeginningtoflowthroughto

theTerritory.Followingafallof13.7percentin2002‑03,internationalvisitornumbers

totheTerritorywereflatin2003‑04and2004‑05(Chart9.3,Table9.1).However,in

theyeartoDecember2005,internationalnumbersincreasedby8.2percent,dueto

strongerresultsintheSeptemberandDecemberquarters.

Interstatevisitornumbersrecoveredin2004‑05,upby28percentto608000,with

interstatevisitornightsincreasingby10percentto5.2millionnights(Chart9.3,

Table9.1).Althoughthenumberofinterstatevisitorshastendedtoberelatively

volatile,2004‑05wasabovetheaverageofthepastfiveyears.Visitornightsin

2004‑05,however,remainbelowtheaverageoverthesameperiod,indicatinga

reductionintheaveragelengthofstay.

Source:TourismNT

Intra‑Territory Interstate International Total

(000) %Change (000) %Change (000) %Change (000) %Change

1999‑00 1351 5533 3391 10275

2000‑01 1567 15.9 6262 13.2 4019 18.5 11847 15.3

2001‑02 1663 6.2 5091 ‑18.7 3196 ‑20.5 9950 ‑16.0

2002‑03 1532 ‑7.9 5887 15.6 2792 ‑12.6 10211 2.6

2003‑04 1441 ‑5.9 4715 ‑19.9 2620 ‑6.1 8776 ‑14.1

2004‑05 1327 ‑7.9 5193 10.1 2705 3.2 9225 5.1

Fiveyearannualaverage ‑0.4 ‑1.3 ‑4.4 ‑2.1

Source:TourismNT

InternationalVisitorsInternationalVisitors

InterstateVisitorsInterstateVisitors

Table 9.1: Visitor Nights in the Northern Territory

Table 9.1: Visitor Nights in the Northern Territory

300

400

500

600

700

00 01 02 03 04 05

International

Intra-Territory

Interstate

Year ended June

number (000)Chart 9.3: Territory Visitors

7� Tourism


Intra‑Territoryvisitornumbersdecreasedby4.7percentto467000visitorsin2004‑05,

whilevisitornightsfellby7.9percentto1.3millionnights(Chart9.3,Table9.1).

Intra‑Territoryvisitorsaccountforoverone‑thirdoftotalvisitornumbersinthe

Territory,however,intra‑Territoryvisitornightsrepresentamuchsmallerpercentage

ofthetotal(about14.7percentoverthepastsixyears)astheaveragelengthofstay

byTerritoriansismuchlowerthanbothinternationalorinterstatevisitors.

MarketSegmentsInterstatevisitorscontinuetoremainthelargestsourceofdemandfortourisminthe

Territory,representingabout40percentofallvisitorsoverthepastfiveyears.Strong

growthininterstatevisitornumbersin2004‑05resultedinan8percentincrease

intotalvisitornumbers,whiletheinternationalandintra‑Territoryvisitornumbers

remainedflat.Intra‑Territoryvisitorsaccountedforanaverageof35percentoftotal

visitorsoverthepastfiveyears,whileinternationalnumbersmadeuptheremaining

26percent.

DomesticvisitorstotheTerritorytendtostaylongerthanvisitorstootherjurisdictions

reflectingtheremotenessandnatureoftheTerritory’sattractions.Bycontrast,

internationalvisitorstotheTerritoryhaveamuchshorteraveragelengthofstaythan

inotherjurisdictions,stayinganaverageof8nightsin2004‑05,comparedto17nights

onaverageinotherjurisdictions.

TourismAustraliaestimatesthat334000internationalvisitorscametotheTerritory

in2004‑05.Ofthese,about57percentwerefromEurope,withvisitorsfromthe

UnitedKingdom(22percent),Germany(13percent)andfromotherpartsof

Europe(22percent).Japan(17percent)andNorthAmerica(13percent)wereother

significantsourcemarkets(Chart9.4).

Source:TourismNT

AhighproportionofGermansandotherEuropeansvisitingAustraliacontinueto

beattractedtotheTerritory,andin2004‑05morethan20percentofthesevisitors

toAustraliavisitedtheTerritory.Historically,onlyasmallproportionofvisitorsto

AustraliafromAsia(notincludingJapan)andNewZealandvisitedtheTerritory

(Chart9.5).

Intra‑TerritoryVisitorsIntra‑TerritoryVisitors

VisitorCompositionVisitorComposition

InternationalVisitorsInternationalVisitors

Chart 9.4: International Visitors to the Territory, 2004-05

Other Europe 22%

United Kingdom22%

Japan 17%

North America13%

Germany 13%

Other Asia 6%

New Zealand

4%

Other 3%

Chart 9.4: International Visitors to the Territory, 2004-05

Other Europe 22%

United Kingdom22%

Japan 17%

North America13%

Germany 13%

Other Asia 6%

New Zealand

4%

Other 3%

7�Tourism

Source:TourismNT,ABSCat.No.3401.0

InternationalbackpackersaremuchmoresignificanttotheTerritorythanforother

jurisdictions,accountingfor32percentofinternationalvisitornumbersin2004‑05,

comparedto19percentonaverageacrossotherjurisdictions.However,like

internationalvisitorsingeneral,internationalbackpackerstendtostayfewernightsin

theTerritorycomparedtootherjurisdictions.

ThenumberofinternationalbackpackerstotheTerritorydeclinedinrecentyears.

Overthepastfouryears,internationalbackpackernumbershavedecreasedbyan

averageof8.1percentperyear,to108500backpackersin2004‑05.Duringthesame

period,internationalbackpackerstoAustraliaincreasedmarginallyby0.6percent,

suggestingadeclineinbackpackerinterestintheTerritory.

BackpackersfromtheUnitedKingdomrepresented29percentofthetotalnumberof

internationalbackpackerstotheTerritory.GermanyandotherEuropeancountriesare

alsokeysourcemarkets.

Self‑drivevisitors,consistingprimarilyofdomestic(interstateandintra‑Territory)

visitors,areanimportantpartoftheTerritory’stourismmarket.Self‑drivevisitors

totheTerritoryincreasedby10percentto169000visitorsin2004‑05,following

adecreaseof28percentin2003‑04.Theincreasecamefromdomesticself‑drive

visitors,whoincreasedby16percentto134000visitorsin2004‑05.

Thereweremorethan11000cruiseshippassengersin2005,anincreaseof6percent

from2004.Afterremainingfairlystablebetween2001and2004,cruiseshipvisits

increasedby50percentin2005,withatotalof33visits.However,theaverage

numberofpassengerspershipdeclinedsubstantially.

Cruiseshipnumbersareexpectedtoincreaseagainin2006withatotalof45visits,

representinga36percentincreaseon2005.Overone‑thirdofthesevisitswill

bemadebytheluxurycruiseshipOrion,whichhasbeenbasedinAustraliasince

April2005,offering17cruisestoEastTimorandtheKimberleysin2006.Typically,

cruiseshipvisitsarescheduledbetweenDecemberandApril,tocoincidewithwinter

inthenorthernhemisphere.

Darwinisanimportantportofcallfornavypersonnel,withalargenumberof

Australianandinternationalnavyshipsdockingeachyear.In2005,77navalships

visitedDarwinforatotalof267visitdays,downfrom94shipsand320visitdaysin

2004.AlthoughnavalshipvisitsstillrepresentasignificantinjectionintotheTerritory

economy,theirnumbershavebeensteadilydecliningfromtheirpeakof375ships

in1999,whenvisitswereunusuallyhighduetoincreasedmilitaryactivityrelatedto

Timor‑Leste.

Chart 9.5: Proportion of International Arrivals to Australia who visit the

Territory, 2000-01 to 2004-05

0

5

10

15

20

25

30

35

Germany OtherEurope

UnitedKingdom

NorthAmerica

Japan Other Asia NewZealand

Other

%Chart 9.5: Proportion of International Arrivals to Australia who visit the

Territory, 2000-01 to 2004-05

0

5

10

15

20

25

30

35

Germany OtherEurope

UnitedKingdom

NorthAmerica

Japan Other Asia NewZealand

Other

%

BackpackersBackpackers

Self‑DriveMarketSelf‑DriveMarket

CruiseandDefenceShipsCruiseandDefenceShips

76 Tourism


Onaverage,cruiseshippassengersandcrewspendabout$180and$150perperson

perdayrespectivelywhileonlandintheTerritory.Spendingbynavypersonnelis

estimatedtobebetween$150and$200perpersonperday.

DestinationsTheTerritory’suniqueflora,faunaandgeographicalfeaturesarekeyattractionsfor

visitors,withAboriginalartandcultureanothermajordrawcardfortheTerritory’s

nationalparks.EachyeartheTerritory’snationalparksattractmorethanamillion

visitors.

TheTerritory’smajortouristregionsaretheTopEnd,whichincludesDarwin,Kakadu,

ArnhemandDaly,andtheCentre,whichincludesAliceSprings,MacDonnell,Tanami

andPetermann(Uluru‑KataTjuta).

VisitorstotheCentreincreasedby11percentto629000visitorsin2004‑05,after

threeyearsofdeclinefromapeakof745000in2000‑01.TheTopEndhaslikewise

beenrecoveringfromtherecentdownturn,withincreasesinvisitornumbersof

0.5percentin2003‑04,and9.7percentto794000in2004‑05.Annualvisitorstothe

Katherineregionhavebeenvolatileoverthefiveyearsto2004‑05,peakingat366000

visitorsin2001‑02,followedbyafallof24percentin2002‑03,beforerisingto302000

visitorsin2004‑05.

Uluru‑KataTjuta(AyersRockandtheOlgas)continuestobethemostvisitednational

parkintheTerritory,havingsteadilygrowninpopularityoverthepasttwodecades.

Theparkattracted357000visitorsin2004‑05,upfrom349000visitorsin2003‑04.

VisitorstoWatarrkaNationalPark(KingsCanyon)increasedby19000to270000

visitorsin2003‑04(datafor2004‑05isunavailable).Inthedecadeto2003‑04,visitors

toWatarrkahaveincreasedatanannualaveragerateof8.7percent,reflecting

improvedaccessandfacilities.Aftertwoyearsofdecline,visitornumberstoLitchfield

NationalParkhaverecoveredsomewhat,increasingby29000(to258000visitors)

in2004‑05.VisitorstoNitmilukNationalPark(KatherineGorge)decreasedby37000

to232000visitorsoverthesameperiod.VisitornumberstoKakaduNationalPark

continuetheirsteadydeclinefromthe1995‑96peak,fallingatanaverageannualrate

of3.2percentoverthepastdecade.With165000visitorsin2004‑05,Kakaduwasby

fartheleastvisitedoftheTerritory’smajornationalparks,attractingfewerthanhalf

thenumbersvisitingUluru‑KataTjuta.

TheoveralldeclineinvisitorstotheTerritory’smajornationalparksinrecentyears

reflectsinparttheweaknessofthetourismindustry,butmayalsoreflectmorereliable

andconsistentcountingmethodssince2000.

*VisitornumberstoWatarrkaNationalParkarenotavailablefor2004‑05

Source:TourismNT

NationalParksNationalParks

0

100

200

300

400

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05

Uluru-Kata Tjuta

Watarrka*

KakaduNitmiluk

Litch�eld

Year ended June

number (000)Chart 9.6: Visitors to Northern Territory National Parks

0

100

200

300

400

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05

Uluru-Kata Tjuta

Watarrka*

KakaduNitmiluk

Litch�eld

Year ended June

number (000)Chart 9.6: Visitors to Northern Territory National Parks

77Tourism

CapacityAboutthree‑quartersofinterstateandinternationalvisitorsentertheTerritorybyair.

Assuch,airaccessremainsakeyfactorfortheTerritory’stourismindustryandthe

importanceofcompetitive,reliableandaccessibleservicescannotbeoverstated.

In2005,averageweeklyinternationalseatcapacityintotheTerritoryincreasedby

9.8percentto1926seats,thehighestlevelsince2001.InDecember2005,thelow

costcarrierTigerAirwaysbeganafourtimesweeklyservicebetweenSingaporeand

Darwin,resultinginanadditional720seatsperweekonthisroute.InJanuary2006,

QantasintroducedafourtimesweeklyservicefromSydneytoMumbaiviaDarwin,

resultinginDarwingainingthreeadditionalweeklyservicesfromSydney.

RoyalBruneiannouncedinApril2006thattheywouldtemporarilyreduceservicesto

Darwinfromthreetotwoperweek.Adateforthereinstatementofthethirdserviceis

notknown.

Domesticseatcapacityincreasedby8.1percentincalendaryear2005,reachinga

recordyearlyaverageofalmost12000seatsperweek.Thisreflectsincreasedcapacity

onQantasservices,whichmorethanoffsetthewithdrawalofVirginBlue’sAlice

Springs‑AdelaideandDarwin‑MelbourneservicesinSeptember2005.Furtherincreases

areexpectedfor2006,withQantassubsidiaryJetstarenteringtheTerritorymarket,

providinganadditional700seatsfromMay2006,increasingto900seatsinJune2006.

Anemergingfeatureoftheinternationalcarriermarketisthecurrentlysmallbut

significantcharterflightsegment.AliceSpringsairportaccommodateditsfirst

directinternationalcharterservicefromJapanin2003.Theretheresincebeenseven

chartersintotal,bringingmorethan2000JapanesetravellersintoAliceSprings.Inlate

2005,afurthertwoflightsfromTokyoandOsakawereannounced,with700Japanese

visitorsarrivinginAliceSpringsinDecember2005andJanuary2006.Thisbringsthe

totalnumberofchartersfromJapantonine.

FormoredetailonTerritoryaircapacity,seeChapter14Transportand

Communication.

Note:Cairns‑GoveandCairns‑GrooteEylandtservicesarenotincluded.TheCairns‑Goveservicehasacapacityof805

seatsperweek;theCairns‑GrooteEylandtserviceceasedin2003.

Source:DepartmentofPlanningandInfrastructure

AirTransportAirTransport

Chart 9.7: Territory Airline Capacity (moving annual average)

0

2

4

6

8

10

12

14

98 99 00 01 02 03 04 05 06e

International (Darwin)

Interstate (Darwin)

Interstate (Alice Springs)

Interstate (Uluru)

seats per week (000)

Year ended June


0

2

4

6

8

10

12

14

98 99 00 01 02 03 04 05 06e


Interstate (Darwin)


Interstate (Uluru)


Year ended June

7� Tourism


FromitsbeginninginFebruary2004throughtoDecember2005,theAdelaideto

Darwinrailwayhascarriedalmost140000passengers,exceedinginitialexpectations

ofaround40000passengersperyear.In2005,theserviceranonceaweek,witha

secondservicerunningtwiceaweekforthepeakseasonofMaytoJuly.Thesecond

weeklyservicewasextendedtothefullyearfromMarch2006.

NorthernTerritoryhotelandmoteloccupancyratesincreasedby4percentagepoints

to60percentin2004‑05,whileoccupancyratesforbackpackerhostelscontinued

theirsteadydecline,falling3percentagepointsto43percent.Thenumberofbeds

inTerritoryhotels,motelsandhostelshasremainedfairlysteady,increasingby

2percentoverthepastfiveyears.

Investmentrelatedtotourisminfrastructure,aswithmuchnon‑residentialbuilding

activity,tendstobevolatile,especiallyinsmallerjurisdictionsliketheTerritory.

Developmentoverthepastfewyearshasbeenrelativelysubdued,however

tourism‑relatedinvestmenthasrecentlybeenincreasing.ConstructionoftheDarwin

AirportResortwascompletedinMay2005,atavalueof$10million,andanumber

ofotherprojectsareunderway,orarescheduledtostartin2006,includingfurther

touristaccommodationdevelopmentandtheDarwinWaterfrontDevelopment

project(see‘TourismInvestment’belowformoredetails).

OutlookTheoutlookfortourismintheNorthernTerritoryisbroadlypositive.Continuedlow

unemploymentandsolidwagesgrowthshouldsupportfurthergrowthinboth

intra‑Territoryandinterstatevisitornumbers.

Globaleconomicgrowth,ledbytheUnitedStatesandChina,isbecomingmore

broadlybased,withimprovingconditionsinJapanandEurope(bothkeymarketsfor

tourismintheNorthernTerritory),aswellasEastAsiaandotheremergingeconomic

regions.Growthintheworldeconomyisestimatedtohavebeenwellaboveaverage

in2005,andthisislikelytocontinuein2006.

Intheabsenceofmajorinternationalshocks,suchasterroristattacksorhealth

epidemics,growthininternationalarrivalstoAustraliashouldcontinuein2006and

2007.TheshorttomediumtermpotentialforfurtherdepreciationoftheAustralian

dollarcouldalsodrivegrowthininternationalvisitornumbers,whileencouragingmore

Australianstotakedomesticholidays.AkeychallengefortheNorthernTerritorywillbe

torecaptureandexpanditsshareoftheinternationaltourismmarketinAustralia.

In2003‑04,theNorthernTerritoryTouristCommission(nowTourismNT)receiveda

fundingincreaseof$27.5millionoverthreeyearsaimedathelpingrebuildtourism

demandfollowingthe2001downturn.Afundingincreaseof$10millionperyearfrom

2006‑07willenableacontinuationofmarketingandtourismdevelopmentactivities

atcurrentlevels,followingamajorupdateoftheNorthernTerritory’stourismbrandin

March2005.

Bothgovernmentandprivatesectorinvestmentinthetourismindustrywillcontinue

in2006and2007,withanumberofmajorprojectsbeingplannedorcurrentlyunder

way.

Thefirststageofthe$1.1billionDarwinWaterfrontDevelopmentiswellunderway.

Stage1isscheduledforcompletionin2008,andincludestheconstructionofthe

ConventionandExhibitionCentre,retailandrecreationfacilitiesandahotelconsisting

of141servicedholidayapartments.Anew$4.5millioncruiseshipterminalwillalso

bebuiltatFortHillWharfandisscheduledtobecompletedbyDecember2006.

RailTransportRailTransport

AccommodationAccommodation

VisitorNumbersVisitorNumbers

TourismInvestmentTourismInvestment

7�Tourism

Othercurrentandupcomingprojectsinclude:

• the$100millionOutriggerPandanasdevelopmentinDarwin,consistingmainlyof

servicedholidayapartments,tobecompletedin2007;

• anew$20millionredevelopmentoftheMirambeenaResorttocreateanextra

126rooms;

• the$27millionDesertRestSolarHolidayVillageinAliceSprings;

• the$60millionDarwinChinatowndevelopmenttobecompletedin2009;and

• theTerritoryGovernmentiscurrentlyseekingexpressionsofinterestforthe

developmentofalow‑risetropicalresortattheLittleMindilsiteinDarwin.

TheMelaleucaonMitchellbackpackerhostelinDarwinwascompletedin2004and

isthefirststageofalargerdevelopmentproposedtoincluderetailandrecreational

facilities.

ThesealingoftheMereenielooproad(linkingAliceSpringsandYularaviaKings

Canyon)andtheLitchfieldlooproadprovidingbetteraccesstoLitchfieldNational

Parkoverthenextfewyearswillimprovebasicinfrastructure.Thesearesignificant

longerterminvestmentsinthetourismindustryintheseregions.

Themajorriskstocontinuedrecoveryinthetourismindustryincludeunlikelyevents

suchasterroristattacksoraninternationalhealthcrisisduetoaninfluenzapandemic,

eitherofwhichcouldhaveasuddenandsignificantimpactoninternationaltravel

intentions.Nonetheless,astheglobaleconomicexpansioncontinues,notablyinthe

Territory’skeysourcemarkets,andthedriversofdemandfortourismservicesremain

positive,growthinvisitornumberstotheTerritoryareexpectedtostrengtheninthe

shorttomediumterm.

RisksRisks

�0 Tourism


��Rural Industries and Fisheries

RuralIndustriesandFisheries

• Ruralindustriesandfisheriesaccountedfor2.8percentofTerritorygrossstate

product(GSP)in2004‑05and2.6percentofresidentemployment.

• TheTerritoryenjoyscertaincomparativeadvantagesduetoitscapacitytosupply

marketswitharangeofearlyseasonandoutofseasonproduce,andbenefits

duetoanenvironmentallycleanimage.

• Outputgrowthintheindustrytendstobevolatileduetovariableweather

conditions,whiletheexchangeratecanhaveasignificanteffectoninternational

demand.IntheTerritory,averageannualoutputgrowthhasbeenbelowbroader

economicgrowthoverthepast10years.

• Thevalueofruralindustriesproductionwasestimatedat$496millionin

2005‑06,anincreaseof1.6percentfrom2004‑05.

• Thevalueofproductionisforecasttoincreaseby5.5percentto$524millionin

2006‑07.

RuralindustriesintheTerritorycomprisecattleandotherlivestock(buffalo,crocodiles,

poultry,pigsandcamels),horticulture(fruit,vegetables,nurseryandcutflowers)

andmixedfarming(fieldcrops,hayandseeds,andforestry).Thefisheriesindustry

comprisestheharvestofwildcatchandaquaculture.

Ruralindustriesandfisheriesaccountedfor2.8percentofTerritorygrossstate

product(GSP)in2004‑05and2.6percentofresidentemployment.

Ruralindustriesandfisheriesarevitalinregionalandremoteareas,providing

directemploymentforabout2400peopleandrepresentinganimportantsource

ofeconomicdevelopment.Theseindustriesalsoaccountforasignificantshareof

Territoryexportrevenue,withthetotalvalueestimatedat$139millionfor2004‑05,or

6.3percentoftotalexports.


Source:DepartmentofBusiness,EconomicandRegionalDevelopment

Chapter 10Chapter 10

KeyPointsKeyPoints

Chart 10.1: Rural Industries and Fisheries Value of Production

(nominal dollars)

Chart 10.1: Rural Industries and Fisheries Value of Production

(nominal dollars)

0

100

200

300

400

500

600

93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Total

Cattle

Fisheries

HorticultureOther

$M

Year ended June

�2 Rural Industries and Fisheries


YearendedJune

Cattle Horticulture Fisheries Other Total

$M %Change $M %Change $M %Change $M %Change $M %Change

1994 153 62.8 31 6.9 106 15.2 17 ‑10.6 308 31.6

1995 124 ‑19.0 39 25.8 122 15.1 17 0.0 302 ‑1.8

1996 134 8.1 45 15.4 99 ‑18.9 17 0.0 295 ‑2.4

1997 155 15.7 46 2.2 118 19.2 21 23.5 340 15.4

1998 136 ‑12.3 61 32.6 134 13.6 23 9.5 354 4.1

1999 153 12.5 60 ‑1.6 152 13.4 26 13.0 391 10.4

2000 141 ‑7.8 85 41.7 144 ‑5.3 24 ‑7.7 394 0.8

2001 170 20.6 91 7.1 142 ‑1.4 25 4.2 428 8.6

2002 210 23.3 92 1.3 117 ‑17.7 21 ‑18.0 439 2.6

2003 184 ‑12.3 86 ‑7.1 104 ‑11.0 25 23.8 399 ‑9.2

2004 229 24.4 88 2.3 130 25.3 23 ‑10.4 470 17.9

2005 241 5.1 99 12.4 119 ‑8.4 30 31.6 489 3.9

2006e 254 5.7 80 ‑18.9 122 2.3 40 33.8 496 1.6

2007f 260 2.3 96 20.4 126 3.0 41 3.2 524 5.6


1995‑96to2005‑06 6.6 5.9 2.1 9.0 5.3

2000‑01to2005‑06 8.4 ‑2.6 ‑3.0 9.9 3.0

e:estimate;f:forecastSource:DepartmentofBusiness,EconomicandRegionalDevelopment

CattleThevalueofNorthernTerritorycattleproductionfor2005‑06isestimatedat

$254million,up5.7percentfrom2004‑05.Thepastoralindustryisamajor

contributortoincomesinruralareasandprovidesconsiderableflow‑onbenefitsto

otherindustries,particularlytransportandretailtrade.In2005‑06,cattleproduction

isestimatedtohaveaccountedformorethan50percentofthetotalvalueofrural

industriesandfisheriesproduction.

In2004‑05,themostrecentyearfordisaggregateddata,almost501396cattlewere

turnedofffromTerritorypastoralproperties,anincreaseof0.5percentfrom2003‑04.

Increasesinlivecattleexportsandinterstatecattlemovementsoffseta75percent

decreaseincattleslaughteredinTerritoryabattoirs.OfTerritorycattleturnedoffin

2004‑05,53percentweredestinedforinterstatemarkets,47percentwereexported

liveoverseasandlessthan1percentwereslaughteredatTerritoryabattoirs.Interstate

movementofcattleincreasedby83percentin2003‑04,overtakingoverseasexports

asthedominantdestinationforTerritorycattle.

About265000headofcattleweresentinterstatein2004‑05,up1.5percentfrom

2003‑04.QueenslandwasthemaindestinationforTerritorycattle,takingabout

62percentofthetotalinterstatemovementofcattle.SouthAustraliatookabout

24percentand14percentwenttootherjurisdictions.Thevalueofinterstatetradeof

Territorycattlewas$117millionin2004‑05.

Themajorityofcattledestinedforinterstatemarketsarefeedercattleforfurther

growingbeforeslaughterandsaleinthedomesticandinternationalmarkets.About

65percentofbeefproducedinAustraliaisexported,mainlytotheUnitedStates

(theUS)andJapan.In2004‑05,Australianbeefexportsbenefitedfromtheabsence

ofUSbeeffromNorthAsianmarkets,duetobansassociatedwiththediscoveryof

bovinespongiformencephalopathy(BSE)intheUSin2003.Thisboosteddemandfor

AustralianbeefinJapan,KoreaandTaiwanandliftedbeefandcattleprices.

Table 10.1: Rural Industries and Fisheries Value of Production

(nominal dollars)

Table 10.1: Rural Industries and Fisheries Value of Production

(nominal dollars)

LinkstoRegionalEconomiesLinkstoRegionalEconomies

InterstateTradeInterstateTrade


Territorycattlerepresentedabout43percentoftotalAustralianlivecattleexports

toallmarketsin2004‑05andabout51percentofAustralianexportstoAsia.Atotal

of235501headofTerritorycattlewereexportedtoSouthEastAsiain2004‑05,a

marginalincreaseover2003‑04.ThehighvalueoftheAustraliandollarin2003‑04,

higherAustraliancattleprices,competitionfromAustralianbeefexportmarket,and

strongcompetitionfromlowerpricedmeatinSouthEastAsianmarketsfromSouth

AmericaandIndiawerethemajorfactorsinhibitingexpansioninthelivecattleexport

market.In2004‑05,totalTerritorylivecattleexportswerevaluedat$123million.

IndonesiawasthelargestmarketforTerritorylivecattleexports,takingabout

78percentoftotallivecattleexports.ExportstoIndonesiaincreasedbyalmost

16percentto184174headin2004‑05.ThePhilippinesimported29224headof

Territorycattlein2004‑05,adecreaseof45percentcomparedto2003‑04.Thedecline

reflectscontinuedeconomicandpoliticalproblems,therelativelylowvalueofthe

PhilippinepesoandcompetitionfromcheapSouthAmericanbeefandIndianbuffalo

meat.

ThefinancialperformanceofbeefproducersintheTerritoryfellin2004‑05,largely

duetopoorerseasonalconditionsinthesouthernhalfoftheTerritory.TheAustralian

BureauofAgricultureandResourceEconomics(ABARE)estimatesthattheaverage

farmcashincomesofTerritorybeefproducersin2004‑05wasaround$208000per

farm.However,therewereconsiderablevariationsinfarmfinancialperformance

betweenthepastoralregionsandbetweenlargeandsmallcattleenterprises.

CattleOutlookTheinterstatemovementofNorthernTerritorycattleisexpectedtoremainsteadyin

2006‑07.InterstatemovementsofTerritorycattlearedrivenbydemandformeatboth

domesticallyandinAustralia’sbeefexportmarkets,inparticular,Japan,theUSand

SouthKorea.

Afterreachingrecordlevelsin2004and2005,AustralianbeefexportstoJapanare

forecasttoeasein2005‑06and2006‑07,withtheanticipatedliftingofthebanonUS

beefintoJapan.AsimilarweakeningofdemandforAustralianbeefinSouthKoreais

alsolikelyin2006‑07,asthebanonUSbeefisremovedthere.

AustralianbeefexportstotheUSareforecasttoincreaseby8percentin2006‑07,

followinga13percentdeclinein2005‑06.Furtherout,therecoveryisexpectedto

continue,howeverexportstotheUSwillremainbelowthequotaallocationfora

numberofyears,withstrongcompetitionfromCanadianandUruguayanbeef.

ABAREandMeatandLivestockAustralia(MLA)projectionsshowamodestrecovery

intheAustralianlivecattleexporttradein2006‑07,withexportsincreasingbyabout

5percent.Therecoverywillbedrivenbysomeeasingincompetitionfromthe

meattradeandanimprovementinSouthEastAsiandemandaseconomicgrowth

reboundsinthesecountries.However,competitionfromSouthAmericaandIndiais

stillexpectedtobestrongenoughtopreventamajorrecoveryincattleshipmentsto

SouthEastAsianmarkets.

TerritorylivecattleexportstoSouthEastAsiaareexpectedtoincreaseslightlybutwill

dependcriticallyonexchangeratemovementsandpricecompetitionfromcheaper

substitutes(beefandbuffalomeat)fromtheAsiansubcontinentandlocallysupplied

meatssuchasporkandchicken.

OverseasTradeOverseasTrade

FinancialPerformanceFinancialPerformance

InterstateForecastInterstateForecast

LiveCattleTradeLiveCattleTrade

�� Rural Industries and Fisheries


ALICE SPRINGS

TENNANT CREEK

AvonDowns

Barrow Creek

Kalkarindji

Pine Creek

Dunmarra

Mataranka

Yuendumu

Harts Range

Renner Springs

Elliott

Borroloola

TopSprings

Timber Creek

Jabiru

Nhulunbuy

Yulara

BathurstIsland

MelvilleIsland

RANGELANDCATTLE

RANGELAND CATTLE

RANGELAND CATTLE

PRAWNTRAWLING

HORTICULTURE,PIGS, POULTRY,

CROCODILES

Hig

hway

Barkly

Highway

Rai

lway

Railw

aySt

uart

100 200

Km

0

AQUACULTURE

KATHERINEMIXED FARMING

Ti Tree

DARWIN

HORTICULTURE

HORTICULTURE,MIXED FARMING

ORDIRRIGATION

AREA

KATHERINEDALY BASIN

Ngukurr

BUFFALO

HorticulturePotential

COMMERCIAL ANDRECREATIONAL

FISHING

HorticulturePotential

AQUACULTURE

AQUACULTURE

COMMERCIAL ANDRECREATIONAL

FISHING

NorthernTerritoryRuralIndustriesandFisheries


OtherLivestockIndustriesIn2005‑06,theproductionvalueofotherlivestockindustriesintheNorthernTerritory

wasestimatedat$10million,contributing2percenttothetotalvalueofTerritory

ruralindustriesandfisheries.Otherlivestockindustriessupplyeggs,poultry,pork

andbuffalotolocalmarkets.Buffaloes,horses,camels,deer,pigsandgoatsare

alsoexportedliveoverseas,whilehorses,camelsandcrocodilesareexportedlive

interstate.Crocodileskinsandfleshareproducedforlocalandexportmarkets.Other

livestockproductionisexpectedtobesteadyin2006‑07.

Horticulture

0

20

40

60

80

100

120

94 95 96 97 98 99 00 01 02 03 04 05 06 07

Mangoes Table grapes Bananas

MelonsOther fruits VegetablesNursery and cut �owers

$M

Year ended June


TheTerritoryhorticultureindustryincludesfruit,vegetables,nurseriesandcutflowers,

andcontributed16percenttothetotalvalueofTerritoryruralindustriesandfisheries

productionin2005‑06.Thevalueofhorticulturalproductionfor2005‑06isestimated

tobearound$80million,adecreaseof19percentfrom2004‑05.Themainreason

forthedeclinewasalargedropinmangoproductionduetothebiennialproduction

cycleofmangotrees.

ThemajorityofNorthernTerritoryhorticulturalproductionisdestinedforinterstate

markets.ThemainfruitsproducedintheTerritoryincludemangoes,tablegrapes,

bananasandrockmelons.Fruitproductionwas34percentlowerin2005‑06

largelyduetoadeclineinmangoproduction.Mangoproductiondeclinedfrom

19226tonnesin2004‑05to8400tonnesin2005‑06,howeverthevalueofproduction

fellbyonly29percentto$30millionduetopriceincreases.

Theproductionoftablegrapesdeclinedagainin2005‑06,primarilyduetoahigh

incidenceofnematodeinfestationwhichdepressedyields.Only1300tonnesof

grapeswereproducedin2005‑06comparedtoapeakof4000tonnesin2001‑02.

Thevalueoftablegrapesin2005‑06was$5.8million.Establishedgrapegrowersare

implementingafiveyearvinereplacementprogramwithstocktolerantofnematode

infestation.

Chart 10.2: Value of Territory Horticultural Production

Chart 10.2: Value of Territory Horticultural Production

�6 Rural Industries and Fisheries


In2005‑06,bananaproductionwasatthesamelevelas2004‑05butbananaprices

declined,reducingthevalueofproductionto$4.2million.Thedecreaseinvalueofthe

cropinrecentyearshasbeenduetoPanamadisease,whichcausedtheclosureofa

numberofcommercialbananafarms.Althoughthediseasehasnotaffectedinterstate

marketaccess,ithashadanegativeimpactonproduction,andthepotentialspreadof

thediseaseremainsamajorconcern.Inresponsetoindustryconcerns,theNorthern

TerritoryGovernmenthasestablishednewresearchfacilitiestoproducebanana

varietiesresistantto,ormoretolerantof,Panamadisease.Itishopedthatsomenew

varietieswillbeavailableforusebytheindustrywithinthenextfewyears.

Melonproductionin2005‑06wassimilartothatin2004‑05.However,rockmelon

pricesdeclinedandthevalueofproductionwas$4.5million,a30percentdecline

from2004‑05.

Theproductionofexoticfruitssuchasrambutan,jackfruit,dragonfruit,guavas,

carambolas,Fijiapples/hogplumsandstarapplesremainedsteadyin2005‑06,but

pricesandthereforeproductionvaluesweregenerallylower.Territoryvegetable

productionin2005‑06was6027tonnes,amarginalincreaseover2004.Pricesof

mostvegetablesincreasedleadingtoa10percentjumpinthevalueofvegetable

productionto$16million.

HorticulturalOutlookIntheshortterm,theoutlookforTerritoryhorticulturalproductionisexpectedto

improve,drivenmainlybyincreasesinmangoandgrapeproduction.Inthelonger

term,favourableclimaticconditions,arelativelydisease‑freestatus,improvedproduct

quality,expandedmarketingeffortsandtherelativelyunrestrictedaccesstodomestic

andinternationalmarketswillunderpinfutureindustrygrowth.

Asjuveniletreescontinuetomature,furtherincreasesinthesupplyofmangoes

areexpected,ensuringthatmangoesremainthemajorhorticulturaloutputinthe

Territoryfortheforeseeablefuture.However,asmangoproductionincreases,a

numberofissueswillemergeintermsoflaboursupply,pricepressureandtheneed

todevelopnewmarketsaswellasforthelogistics/supplychainandqualityassurance

andcontrol.

UntilbananasresistanttoPanamadiseasebecomecommerciallyavailable,further

industrydevelopmentwillbeconstrained.Inthemeantime,somebananagrowers

arediversifyingintoothercrops,suchasrockmelonsorwatermelons,asatemporary

measure.Bananapriceshaveincreasedmarkedlyfollowingextensivedamageto

thenorthQueenslandbananaindustryfromCycloneLarryinMarch2006.Pricesare

expectedtoremainhighduringthe2005‑06and2006‑07seasonsastheQueensland

bananaindustryrecovers.

ProductionofrockmelonsandothermelonsintheTerritoryhasriseninrecentyears,

withlargeareasplantedintheDarwinandKatherineregions,includingproduction

fromanumberoftraditionallymixedcroppingfarms.TheTerritoryhastheadvantage

ofsupplyingoffseasonmelonstosouthernstatesduringthewintermonths.Territory

melonshavebeensuccessfullyexportedtoSingapore,MalaysiaandHongKonginthe

pastand,ifproductioncontinuestoincrease,theywillprobablyagainbeexportedto

overseasmarkets.

�7Rural Industries and Fisheries

Commercialgrowersofthenewerexoticfruits,especiallydragonfruit,areestablishing

furtherareasofthesecropsinrecognitionoftheirpotential.Abreakthroughin

exportingrambutanstothelucrativeJapanesemarketsshouldcontinuetoencourage

furtherinvestmentandgrowthinthissector.

Thenurseryandcutflowersectorsalsohavegoodprospectsforexpansion,especially

intheTopEnd,whereclimaticconditionsprovidedistinctproductionadvantagesfora

widerangeoftropicalvarieties.Inadditiontocurrentheliconiaandorchidproduction

forsouthernmarkets,continuingresearchanddevelopmentofadditionalnursery

varietiesshouldresultinproductionlevelsincreasing.

MixedFarmingMixedfarmingincludeshayandpastureseedproduction,cerealcropssuchas

sorghumandmaize,othercropssuchaspeanuts,sesameandsoybeans,andfarm

forestry.Thevalueoffieldcropproductionin2005‑06isestimatedat$15million,

anincreaseof2.5percentfrom2004‑05.Fieldcropproductionisdominatedbyhay

andfoddergrownintheKatherine,Douglas/DalyandDarwinareasforthelivecattle

exportindustry.

Farmforestryisestimatedtohaveincreasedby149percentto$15millionin2005‑06,

followinggrowthof123percentin2004‑05.OnMelvilleIsland,amulti‑milliondollar

privateforestrydevelopmentprojectisunderway,followingthetrialexportof

14000cubicmetresoflogsin2003‑04.

FishingTheNorthernTerritoryfishingindustrycomprisescommercial,recreationaland

traditionalIndigenoussectors.Thecommercialsectorincludestheharvestingof

wildcatchfisheriesandaquacultureaswellastheprocessing,tradeandretailingof

seafood.

In2005‑06,thevalueofTerritoryfisheriesproductionisestimatedtohaveincreased

by2.3percentto$122million.Thevalueofproductionoverrecentyearshas

fluctuatedwidelyduetoclimaticanddemandconditions,increasingby25percentin

2003‑04,andfallingby8.4percentin2004‑05.


*Aquacultureispredominantlypearls,butalsoincludesprawnsandbarramundiaquaculture;Otherincludesspecies

offinfish,crustaceans,molluscsandechinoderms.


Chart 10.3: Value of Territory Fishing Production (nominal dollars)

Chart 10.3: Value of Territory Fishing Production (nominal dollars)

0

20

40

60

80

100

120

140

160

93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Year ended June

$M

Total

Prawns

Aquaculture*OtherCrabs Barramundi

0

20

40

60

80

100

120

140

160

93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Year ended June

$M

Total

Prawns

Aquaculture*OtherCrabs Barramundi

�� Rural Industries and Fisheries


Prawnandaquacultureproduction(primarilypearlsandbarramundi)arethemajor

componentsoffishingoutput.Combined,thesetwosectorsaccountedforalmost

75percentofthevalueofTerritoryfisheriesproductionin2005‑06.Asharpfallinthe

valueofaquacultureproductionin2000‑01wasassociatedwithadramaticdeclinein

internationalpearlpricesandmajorproducersdelayingharvest.

Effectivemanagementoffisheriescontinuestobeanintegralcomponentofthe

Territory’slong‑termresourcestrategy.Overthepastdecade,importantchangeshave

occurredinfisheriesadjacenttotheTerritory.TheNorthernPrawnFisheryhasseen

thegreatestadjustment,withvoluntaryandcompulsoryreductionsresultinginboat

numbersfallingfromabout350intheearly1980sto95boatsin2004.

Otheradjustmentmeasureshaveincludedalicencebuyback,gearrestrictions,

seasonalclosures,riverclosureandminimumsizelimits.Theclosuretocommercial

barramundifishingoftheMcArthurRiverin2002andtheAdelaideRiverin2004were

majorinitiatives,withtheresourcesbeingreallocatedtotherecreationalsector.

RecreationalfishingisoneofthemostpopularleisureactivitiesintheTerritory.

LatestestimatesplacespendingonrecreationalfishingintheTerritoryatmorethan

$27millionperannum.Recreationalfishingisalsoanimportanttourismsegment,

especiallyintheTopEndandaroundBorroloola.

FishingOutlookSteadygrowthinthegrossvalueofproductionisforecastfor2006‑07and2007‑08,

drivenmainlybygrowthintheaquaculturesector.

Aquacultureisforecasttoexpandby10percentto$29millionin2006‑07,and

8percentin2007‑08.Thepositiveoutlookisinfluencedbyanumberofpotential

developments,includingamajorexpansioninthefarmedbarramundiindustryanda

largescaletrepanghatchery,currentlyinitspilotphaseonChannelIsland.

Pearlproductionisexpectedtoshowsteadygrowthoverthenextfewyears,

increasingfrom$17millionin2004‑05toanestimated$22millionin2010‑11.

ResourceManagementResourceManagement

RecreationRecreation

AquacultureAquaculture

��Construction

Construction

• Overthepastfiveyears,theconstructionindustryhasonaverageaccountedfor

6.5percentofTerritorygrossstateproductandemployed7.3percentofthe

workforce.

• Theperiodimmediatelyfollowingthemajordefenceforcerelocationtothe

TopEndcoincidedwithamarkedreductioninconstructionactivity,aseconomic

andpopulationgrowthweakened.

• MajorinfrastructureprojectssuchastheBayu‑Undanoilandgasdevelopmentand

theliquefiednaturalgasplantatWickhamPoint,aswellastheAlcanG3refinery

expansion,havekeptengineeringconstructionatrecordlevelsinrecentyears.

• Propertymarketshavestrengthenedsignificantlysince2004.Afterincreasing

by3.9percentto$2.1billionin2004‑05,thevalueofconstructionworkdoneis

estimatedtodecreaseby7.3percentto$1.9billionin2005‑06.

• In2006‑07,thevalueofconstructionworkdoneisforecasttodecreaseby

52percentto$916million.ThecompletionofworkontheWickhamPointLNG

plantisthemajorfactorcontributingtothedecline.

• In2006‑07,constructionactivitywillagainbeunderpinnedbyengineering

workformajorprojects,particularlytheAlcanG3refineryexpansion,andwill

befurthersupportedbysolidresidentialactivityassociatedwithrecovering

populationgrowthintheDarwinregion.

ConstructionisamajorTerritoryindustry,butishighlyvolatile,accountingfor7percent

ofgrossstateproduct(GSP)in2004‑05comparedto6percentnationally.

Constructionactivityslowedmarkedlyfollowingthestronggrowthofthemidtolate

1990sassociatedwiththedefencebuildup(Chart11.1).In2000‑01,construction

workdonetotalledlessthan$0.6billion,increasingto$1.7billionin2001‑02and

2002‑03,primarilydrivenbyconstructionworkfortheAliceSpringstoDarwinrailway

andBayu‑Undanstage1.Activityreachedrecordlevelsin2003‑04and2004‑05,

withconstructionforBayu‑Undanstage2,theLNGplantatWickhamPointandthe

$2billionAlcanG3refineryexpansionatGove.


Source:NorthernTerritoryTreasury,ABSCat.Nos.8752.0,8762.0,8782.0.65.001


KeyPointsKeyPoints

Engineering

Total

0.0

0.5

1.0

1.5

2.0

2.5

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Residential

Non-residential

Year ended June

$BChart 11.1: Territory Construction Work Done (moving annual total,

2003-04 dollars)

Engineering

Total

0.0

0.5

1.0

1.5

2.0

2.5

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Residential

Non-residential

Year ended June

$BChart 11.1: Territory Construction Work Done (moving annual total,

2003-04 dollars)

�0 Construction


TheconstructionindustryisasignificantemployerintheTerritory,accountingfor

7.3percentofresidentemploymentinthepastfiveyears.Althoughmajorprojects

suchastheAlcanG3refineryexpansionatGovecreateasignificantnumberofjobs

intheTerritory,thisisnotnecessarilyreflectedinresidentemploymentfiguresas

reportedbytheAustralianBureauofStatistics(ABS).Theprimaryreasonisthatthe

verylargescaleoftheseprojectscombinedwithalimitedpoolofskilledlocalworkers

resultsinastrongrelianceonflyinflyout(FIFO)employees.

ProjectssuchastheAlcanG3refineryexpansionhaveahugeimpactonthevalueof

constructionworkdoneintheTerritory.TheyaresignificantbothonaTerritoryanda

nationalscaleandcanleadtosubstantialvolatilityinthevalueofconstructionwork

done.However,theimpactoftheseprojectsonunderlyingeconomicactivitymaybe

lesssubstantialduetotheirlocation,ofteninremoteareasoroffshore,useofFIFO

workersandtheimportationofequipmentandconstructionmaterialsfromoutside

theTerritory.

ResidentialConstructionResidentialconstructionincludesthebuildingofnewhousesandotherresidential

buildings,residentialconversions,alterationsandadditionstoresidentialbuildings.

Demographic,socialandeconomicfactorshavestronginfluencesonthedemand

forresidentialdwellingsand,inturn,onconstruction.Factorsaffectingthedemand

forhousingincludetherateofnewhouseholdformation,thedistributionofincome

andwealth,theavailabilityandcostofhousing,thepriceofnewdwellingsrelativeto

existingdwellingsandgovernmenthousingpolicies.Intheshortterm,interestrates

andbusinessandconsumerconfidencearealsomajorinfluencesonthebuilding

cycle.

Territoryhousingconstructionsustainedstronglevelsofactivitythroughoutthelate

1990s(Chart11.2).Growthreflectedtheimpactoftheincreaseddefencepresence,

whichinconjunctionwithactivityintourismandothersectors,boostedeconomic

andpopulationgrowthanddemandfordwellings.Combinedwithrelativelylow

interestratesandtaxincentives,thisgrowthgeneratedstronginvestoranddeveloper

confidenceintheresidentialmarket,particularlyintheDarwinareaandnotablyfor

unitsandhigh‑riseapartmentcomplexes.



0

100

200

300

400

500

97 98 99 00 01 02 03 04 05 06e 07f

Year ended June

Total

Private

Public

$MChart 11.2: Territory Residential Building Work Done (moving annual

total, 2003-04 dollars)

0

100

200

300

400

500

97 98 99 00 01 02 03 04 05 06e 07f

Year ended June

Total

Private

Public

$MChart 11.2: Territory Residential Building Work Done (moving annual


��Construction

LandThecompletionofthedefencebuildupandageneraldownturnintheonshore

economyfrom2000sawlandsalesdeclineovertheperiodto2003,toabouthalf

the1998peak.In2004,landsalesbeganasteadyimprovementinlinewithstronger

housingdemand.Thepaceoflandsalescontinuedtogrowin2005,increasing

by19percentintheyear,albeitfromarelativelylowlevel.In2005,Palmerston

accountedfor78percentofallresidentiallandsales,upfrom65percentayear

earlier,whileDarwinaccountedfor19percentofsales,downfrom31percent,and

AliceSpringsaccountedfor3percentofsales(Chart11.3).

InAliceSprings,ashortageofresidentiallandfordevelopmentoverthepastdecade

wasassociatedwithnativetitlerestrictionsonthereleaseofcrownland.Alandmark

IndigenousLandUseAgreement(ILUA)betweentheTerritoryGovernmentandthe

LhereArtepenativetitleholderswasfinalisedinApril2004.Theagreementledtothe

releaseof40residentialblocksinthenewsubdivisionofStirlingHeights.Inrecent

years,twolargeruralresidentdevelopmentshavebeenproposedfortheAliceSprings

region,whichmayprovideupto400newblocks.

SubdivisionofDarwin’snewestsuburb,Lyons,willbeginin2006.Lyonsisajoint

public‑privatesectordevelopmentandwillcreateapproximately700residentiallots

on77hectaresofsurplusdefencelandnearLeePoint.Thesuburbwillbedeveloped

concurrentlyfordefenceandprivatesectorhousing.

AlthoughDarwiniscurrentlyseeingsubstantialconstructionofmediumandhigh

densitydwellings(notablyinthecentralbusinessarea),anumberofnewhousing

estatesclosetothecentralbusinessdistricthavealsobeendevelopedinrecentyears

includingBayview,Woolner,ParapGrove,TheNarrows,TipperaryWatersandCity

Valley.

Strongpopulationgrowthfrom1995to1998associatedwiththedefencebuild

up,combinedwiththelimitedsupplyoflandforhousingdevelopmentinDarwin,

wastheprimarystimulusfortherapidgrowthofPalmerston.Palmerston’sready

supplyoflandhasseenthesuburbsofDurack(FairwayWaters),Gunn(TheChase),

Bakewell,FarrarandRoseberydevelopandgrowsubstantiallyinarelativelyshort

time.Demandhasrecoveredrapidlyfromthelowlevelsexperiencedin2002‑03,

bolsteredbyowner‑occupierandinvestmentdemand,andsupportedbyincreased

homeownershipincentivesofferedthroughtheNorthernTerritoryGovernment’s

HomeNorthScheme.

AccesstolandforresidentialdevelopmentisnotanimmediateissueinPalmerston;

availablelandinGunn,Farrar,DurackandRoseberyisconsideredsufficientforatleast

thenextfiveyears.

AliceSpringsAliceSprings

DarwinDarwin

PalmerstonPalmerston

�2 Construction


Source:AustralianValuationOffice

Residentialbuildingapprovalsarealeadindicatorofshort‑termdwellingconstruction

activity.Followingstronggrowthinthemidtolate1990s,approvalspeakedin

1998‑99.Approvalsdeclinedby30percentinboth1999‑2000and2000‑01,followed

bytwoyearsofstagnation(Chart11.4).

Severalfactorscontributedtothedownturn.Theprimaryreasonwasoverbuilding

resultingfromthedefence‑relatedconstructionboomofthe1990s.Weaker

populationgrowthandrisinginterestratesalsoactedtodampenowner‑occupierand

investordemand.TheintroductionoftheTerritoryGovernment’sQuickStartscheme

andthedoublingoftheFirstHomeOwnerGranthelpedtohalttherateofdecline,

withprivatesectorapprovalsincreasingby2percentin2001‑02.

Approvalswereunchangedin2002‑03astheintroductionofGovernmentincentives

inthepreviousyearactedtopullforwardactivity.Stronggrowthinotherresidential

buildingapprovalswasmorethanoffsetbyadeclineinhouseapprovals,whichfellto

theirlowestlevelsince1989.

0

400

800

1200

1600

2000

96 97 98 99 00 01 02 03 04 05 06

Year ended June

Private

Public

number


0

200

400

600

800

96 97 98 99 00 01 02 03 04 05 06

Total

Palmerston

Darwin

number

Alice Springs

Rural Darwin

Year ended June

Chart 11.3: Territory Residential Land Sales (moving annual total)

0

200

400

600

800

96 97 98 99 00 01 02 03 04 05 06

Total

Palmerston

Darwin

number

Alice Springs

Rural Darwin

Year ended June

Chart 11.3: Territory Residential Land Sales (moving annual total)

ResidentialBuildingApprovalsResidentialBuildingApprovals

Chart 11.4: Territory Building Approvals for Residential Dwellings


Chart 11.4: Territory Building Approvals for Residential Dwellings


��Construction

In2004‑05,approvalsincreasedby18percentto1388,withsolidgrowthinbothnew

houses(up24percent),andapprovalsforseverallargeapartmentcomplexeswhich

increased‘other’dwellingsapprovalsby18percent.

PropertyMarketsMovementsinpropertymarketscontinuetobethelargestinfluenceontheresidential

constructionsectorintheTerritory.Thebuildingindustryandpropertymarketsare

subjecttostrongfluctuationsinactivity,realestatepricesandsalesvolumes.

TheTerritorydidnotexperiencethehousingpriceboomseeninmostsouthernstates

intheperiodleadingupto2004.TheRealEstateInstituteofAustralia(REIA)reports

thatestablishedhousepricesinDarwinincreasedby58percentinthefiveyearsto

2005,thesecondlowestgrowthoftheeightcapitalcities(behindMelbourne).

In2005,Darwinhousepricesincreasedby15percent,thestrongestgrowthsince

themid1990s(Chart11.5).Nevertheless,theTerritorycontinuestohavethemost

affordablehousingofalljurisdictions,accordingtotheREIA.

Theotherdwellingsmarket(townhousesandunits)tendstobesignificantlymore

volatilethanthemarketforhouses(Chart11.5),withpricesfluctuatingwiththe

releaseofmajornewdevelopments,changesininvestorsentimentanddistinctcycles

ofunderandoversupply.


TheREIAestimatesthatotherdwellingspricesinDarwinincreasedby13percentto

$176300in2004,asinvestorsandowneroccupiersreturnedtothemarket.Theother

dwellingsmarketstrengthenedfurtherin2005,withmedianpricesincreasingby

24percentto$216100.Overthefiveyearsto2005,otherdwellingspricesincreased

by44percent,comparedto58percentforhouses.

Residentialpropertysalespeakedin1999,boostedbypublicsectordisposalsrelated

totheTerritoryHousingdivestmentprogram.Propertysalesfellsignificantlyin

2000and2001,notablyforhouses,whichfellmorethan30percentoverthetwoyear

period.

Salesnumbersforbothhousesandotherdwellingshaveimprovedmarkedlysince

thetroughinmid2001(Chart11.6).Growthhasbeendrivenequallybysalesofother

dwellingsandhousesoverthisperiod,althoughtheproportionofunitsaleshas

increasedsignificantly.Salesgrowthhasslowedmarkedlysincemid2004;nonetheless

housesalesareatrecordlevelsandotherdwellingssalesareclosetorecordlevels.

HousingPricesHousingPrices

Chart 11.5: Territory House and Other Dwellings Prices (year on year

percentage change)

-15

-10

-5

0

5

10

15

20

96 97 98 99 00 01 02 03 04 05 06

%

Year ended June

Other dwellings

Houses

Chart 11.5: Territory House and Other Dwellings Prices (year on year

percentage change)

-15

-10

-5

0

5

10

15

20

96 97 98 99 00 01 02 03 04 05 06

%

Year ended June

Other dwellings

Houses

PropertySalesPropertySales

�� Construction



Territoryrentalvacancyrateswereatrelativelyhighlevelsforseveralyearsuntilearly

2002,reflectingageneraloversupply.Overthepastthreeyears,vacancyrateshave

fallentolevelsthatsuggestdemandwilloutpacesupplyintheshorttomediumterm.

TheRealEstateInstituteoftheNorthernTerritory(REINT)reportstheaverage

residentialvacancyratesfor2005as:

• Darwin–2.0percentforhousesand2.6percentforunits;

• Palmerston–2.8percentforhousesand2.2percentforunits;

• AliceSprings–3.3percentforhousesand4.2percentforunits;and

• Katherine–3.1percentforhousesand2.1percentforunits.

AccordingtotheREIA,rentalincomeforathree‑bedroomhouseinDarwinaveraged

$300perweekin2005,thehighestaverageweeklyrentalincomeonrecord.

Atwo‑bedroomunitgeneratedaverageweeklyrentalincomeof$220forthe

sameperiod,upfrom$210in2004.

PublicHousingIntheTerritory,themainprovidersofhousingassistanceareTerritoryHousing,which

managestheTerritoryGovernment’spublicandgovernmentemployeehousingstock,

theIndigenousHousingAuthorityoftheNorthernTerritory(IHANT)andtheDefence

HousingAuthority(DHA).Theseorganisationsprovidepartiallyorfullysubsidised

accommodationtoeligiblelow‑incomeearners,publicsectoremployees,Indigenous

Territoriansanddefencepersonnel.

IntheTerritory,thenumberofhouseholdsinpublicsectordwellingsisrelativelyhigh,

with2001Censusdatareportingthat15percentofhouseholdswererentingfroma

statehousingauthoritycomparedto5percentnationally.Thisproportionhasfallen

sincethe1996Census,when29percentofhouseholdswererentingfromastate

housingauthorityintheNorthernTerritory.

TerritoryHousingownsandmanagesmorethan7200dwellingsthroughoutthe

Territory.

Constructionworksince2003‑04hasconcentratedonincreasingthemaintenance

andupgradeprogramtoaddressthedeteriorationinconditionandamenityof

TerritoryHousingstock.Inaddition,anumberofpublichousingcomplexeswere

redevelopedtoreducedensityandminimiseassociatedantisocialbehaviour.There

hasalsobeenanincreasedemphasisontheprovisionofgovernmentemployee

housinginremoteareas.

Chart 11.6: Territory House and Other Dwelling Sales


0

500

1000

1500

2000

2500

3000

96 97 98 99 00 01 02 03 04 05 06

Year ended June

number

Other dwellings

Houses

Chart 11.6: Territory House and Other Dwelling Sales


0

500

1000

1500

2000

2500

3000

96 97 98 99 00 01 02 03 04 05 06

Year ended June

number

Other dwellings

Houses

RentalMarketRentalMarket

TerritoryHousingTerritoryHousing

��Construction

SignificantTerritoryHousingprojectsin2004‑05includethecompletionof40ground

leveltwo‑bedroomunitsattheFannieBaySeniorsVillage,theconstructionof

34governmentemployeedwellingsinremotecommunitiesatacostof$10.6million,

thereplacementof40governmentemployeedwellingsatacostof$14.6millionand

theupgradeof53dwellingsatacostof$5.3million.

Since1991,TerritoryHousinghassupportedhomeownershipthroughaprogramto

providehomeloansundertheHomeNorthscheme.HomeNorthprovidesassistance

tolowandmiddleincomehouseholdswhichareunabletoobtainfinancethrough

privatesectorfinancialinstitutions.

Theschemewaspopularinthelate1990s,butthelevelofuptakedeclinedin2000.

In2001thenumberofnewloansdecreasedby21percentto251.Thisdecline

continuedbeforereachingalowof178approvalsin2003.Therewasan88percent

increasein2004to335approvals,albeitfromarelativelylowbasereflectingincreased

confidenceintheDarwinhousingmarketandimprovementstothescheme.Major

changestotheschemeinJuly2005resultedina44percentincrease(to483)inthe

numberofnewloansin2005.

IHANTwasformedin1995andisresponsibleforthedevelopmentofimproved

housingforIndigenousTerritorians.During2004‑05,94newdwellingswere

constructedand22dwellingswereupgradedandrenovatedatacostof$20million.

IHANTalsogeneratesconsiderablebuildingactivitythroughitsmaintenance

program.

InDecember2005,theAustralianGovernmentandtheNorthernTerritory

GovernmentsignedtheAgreementfortheProvisionofHousingandHousing

RelatedInfrastructureforIndigenousPeopleintheNorthernTerritory2005‑2008.

TheagreementeffectivelymovestheexpenditurefromtheAustralianGovernment’s

NationalAboriginalHealthStrategytoexistingIndigenoushousingprograms

administeredbytheTerritoryGovernment.

Defencerelocationsinthemidtolate1990sresultedinsignificantresidential

constructionthroughDHA.DHAprovideshousingfordefencepersonnelthroughits

ownershipofdwellings,developmentactivity,andthroughtheleasingofproperties

fromtheprivatesector.DHA‑managedstockintheTerritoryhasincreasedfromabout

1250dwellingsin1992to2215dwellingssinceJune2005.DHAisalsoapartnerin

thedevelopmentofthenewDarwinsuburbofLyonsnearLeePoint,andwillretainat

least300residentiallots.Constructionisexpectedtotakeplaceoverafiveyearperiod

frommid2006.

Non‑ResidentialBuildingNon‑residentialbuildingincludeshotels,shoppingcentres,factories,offices,schools,

hospitalsandcinemas.Thelevelofprivatesectorinvestmentinnon‑residential

buildingisdeterminedbyseveralfactors,includingtheadequacyofexistingcapital

stock,interestrates,anticipatedfuturedemandandgeneralbusinessconfidence.

Publicsectorexpenditureonnon‑residentialbuildingistargetedtomeetmedium

tolong‑termneedsandprovidesocialandeconomicinfrastructuresuchasschools,

hospitalsandroads.

Populationgrowthfuelledtheneedforexpandedsocialandcommercial

infrastructurerequiredtosupportgrowingdemand,notablyforshoppingand

educationalfacilities.Strongtourismgrowthinthe1990salsoresultedinmajorhotel

investment.

IndigenousHousingAuthorityoftheNorthernTerritory

IndigenousHousingAuthorityoftheNorthernTerritory

DefenceHousingAuthorityDefenceHousingAuthority

�6 Construction


Inlinewiththecompletionofmajordefenceworksandmoderatingpopulation

growth,non‑residentialbuildingeasedin1999‑2000and2000‑01.Stronggrowthof

25percentin2001‑02wasprimarilyassociatedwithupgradesattheDarwinandAlice

SpringshospitalsandthesignificantexpansionoftheAyersRockResortatYulara.

Non‑residentialbuildingactivityfellin2002‑03asthecompletionofthehospital

upgradesreducedpublicinvestment.


Source:NorthernTerritoryTreasury,ABSCat.Nos.8752.0,8755.0,8782.0.65.001

Non‑residentialactivityincreasedby15percentin2003‑04andby3percent

in2004‑05primarilyduetopublicinvestmentexpenditurewhichincreased

by68percent.Themostnotableofthepublicsectorinvestmentprojectswas

defence‑relatedinfrastructure,includingtheco‑locationofthe1stAviationRegiment

toDarwinandtheBradshawFieldTrainingArea.Totalnon‑residentialbuildingactivity

isestimatedtohaveincreasedby6.9percentin2005‑06(Chart11.7).

Privatesectornon‑residentialconstructionfellby25percentin2004‑05,withprojects

strugglinginanenvironmentofrisinglabourcostsandskillsshortagesastheywere

unabletomatchwagesandconditionsofferedbymega‑projectssuchastheWickham

PointLNGplantandtheAlcanG3refineryexpansion.

TerritoryGovernmentinvestmentfornon‑residentialbuildingin2004‑05included

thecommencementoftheconstructionofabulkloadingfacilityatEastArm,a

lowsecuritycorrectionalcentreinDarwinandclassroomsatDarwinHighSchool.

Health‑relatedprojectsincludedtheconstructionofhospiceandpalliativecare

facilitiesatRoyalDarwinHospital,arenalhealthclinicinTennantCreekand

remediationworksatAliceSpringsHospital.Additionally,aspartoftheNational

AboriginalHealthStrategy,anumberofhealthclinicswerebuiltorupgradedin

remotecommunities.

Publicsectornon‑residentialconstructionactivityeasedin2005‑06asthework

relatedtotheupgradeofRobertsonBarracksconcluded.Althoughthiswas

somewhatoffsetbyNorthernTerritoryGovernmentandcooperativeprojects,public

non‑residentialactivityisestimatedtohavefallenbyaround16percentin2005‑06.

Atthelocalgovernmentlevel,theAliceSpringsTownCouncilbegana$9million

redevelopmentoftheCivicCentreinlate2004.Stage1ofthedevelopmentwas

completedinlate2005,withstage2scheduledtobecompletedinearly2006.

0

50

100

150

200

250

300

97 98 99 00 01 02 03 04 05 06 07f

Public

Private

Total

$M

Year ended June

e

Chart 11.7: Territory Non-Residential Building Work Done (moving annual


0

50

100

150

200

250

300

97 98 99 00 01 02 03 04 05 06 07f

Public

Private

Total

$M

Year ended June

e

Chart 11.7: Territory Non-Residential Building Work Done (moving annual


PrivateSectorPrivateSector

PublicSectorPublicSector

�7Construction

The$1.1billionDarwinWaterfrontDevelopment,ajointprivateandpublic

sectorproject,commencedin2005andwillcontinuetoprovideastimulustothe

non‑residentialconstructionsectorovercomingyears.Inparticular,the$100million

DarwinConventionandExhibitionCentre,aswellascommercialspace,serviced

apartmentsandahotel,hasaminimum85percentlocalcontentrequirementfor

contractorsandsuppliers.

In2005‑06,theDarwinWaterfrontDevelopment,alongwithotherlargenon‑

residentialprojects,suchasstage1oftheDarwinChinatowndevelopment(consisting

ofanofficetowerandcarpark)andthe$100millionOutriggerPandanasserviced

apartments,willleadtoanestimated29percentincreaseinprivatenon‑residential

constructionactivity.

EngineeringConstructionTraditionally,engineeringconstructionactivityintheTerritoryhasbeen

predominantlyfundedbythepublicsectorandlargelyfocusedoninfrastructure

development.

However,asaproportionofworkdone,privatesectorengineeringconstruction

hasgrownoverthepastdecade.WorkontheAliceSpringstoDarwinrailwayand

Bayu‑Undanstages1and2haveresultedinprivatesectorworkexceedingthatof

thepublicsector.Basedoncurrentprojects,privatesectorengineeringwillremainat

highlevelsuntil2007,asinvestmentforBayu‑Undanstage2andtheAlcanG3refinery

expansionatGove(themaindriversofengineeringworkdone)reachtheirpeakin

2005‑06.

ExcludingtheimpactoftheTimorSeaoilandgasmega‑projectssuchasthe

Laminaria‑Corallinaoilfieldsin1998‑99,theBayu‑Undanoilandgasproject

(2002to2005)andtheAlcanG3refineryexpansion(2004to2006),privatesector

engineeringactivityhasaveragedaroundone‑thirdofthetotalengineering

constructionworkdonesince1990.

Territoryengineeringconstructionincreasedseven‑foldfrom$179millionin2000‑01

tomorethan$1.3billionin2001‑02.Thesharpspikewasprimarilyattributableto

workforBayu‑Undanstage1andtherailway(Chart11.8).Asexpenditureforthese

projectscontinuedin2002‑03,engineeringconstructionactivityincreasedbya

further6percentto$1.4billion.

e:estimatef:forecast

Source:NorthernTerritoryTreasury,ABSCat.Nos8762.0,8782.0.0.65.001

DarwinWaterfrontDevelopment

DarwinWaterfrontDevelopment

MajorProjectsMajorProjects

Chart 11.8: Territory Engineering Construction Work Done (moving

annual total, 2003-04 dollars)

0.0

0.4

0.8

1.2

1.6

2.0

97 98 99 00 01 02 03 04 05 06e 07f

Private

Public

Total

$B

Year ended June

Chart 11.8: Territory Engineering Construction Work Done (moving

annual total, 2003-04 dollars)

0.0

0.4

0.8

1.2

1.6

2.0

97 98 99 00 01 02 03 04 05 06e 07f

Private

Public

Total

$B

Year ended June

�� Construction


Therailwayprojectandassociatedbridgeworkaccountedforanestimated

15percentoftotalengineeringworkdonein2001‑02,increasingtomorethan

20percentin2002‑03asconstructionreachedpeaklevels.Theconstructionofstage

2oftheEastArmPortalsocontributedsignificantlytototalengineeringconstruction

workdoneduring2002‑03and,toalesserextent,into2003‑04.

Engineeringconstructionworkincreasedby19percenttomorethan$1.6billionin

2003‑04andby0.6percentin2004‑05.Thesignificantincreasewaspredominantly

duetoworkforBayu‑Undanstage2commencinginmid2003,includingthe

constructionoftheUS$1billionLNGplantatWickhamPointandaUS$500million

sub‑seapipeline.TheWickhamPointLNGplantwascompletedinDecember2005,

markingtheconclusionoftheconstructionphaseoftheBayu‑Undanproject,

whichisthemajorcontributortotheestimated14percentdeclineinengineering

constructionworkin2005‑06.

Inlate2004,workcommencedonthe$2billionexpansionoftheAlcanG3refinery

atGove.ThisprojectisthefirstmajorprojectintheTerritorytomakeuseof

pre‑assembledmodules(PAMs).The600modulesareassembledoffsite(primarily

inMalaysiaandThailand)andshippedtoGoveforinstallation.Thisprocessenables

themajorityoffabricationworktobecarriedoutinlocationswhereskillsaremore

availableandcostsarelower.TheAlcanexpansionwillsubstantiallyincreasethe

capacityoftheexistingrefineryandisduetobecompetedinOctober2006.

Othermajorengineeringprojectscommencedorcontinuingin2005‑06includethe

$70millionDarwinbiodieselplant,the$65millionBradshawFieldTrainingAreaat

TimberCreek,and$37millionrelatedtoinfrastructurefortheDarwinWaterfront

Development.

ConstructionOutlookGiventheuncertaintysurroundingmanyofthefactorsinfluencingthedecisionto

proceedwithconstructionactivity,timingcanbeunpredictable.Thesefactorsinclude

theinvestmentclimate,accesstocapital,theoutlookforglobaleconomicgrowth,

commodityprices,thevalueoftheAustraliandollarandperceptionsaboutthe

Territory’scomparativeadvantages.

ConstructionactivityintheTerritoryisforecasttodecreaseby52percentto

$916millionin2006‑07.Thevalueofresidentialbuildingisforecasttodecreaseby

6percentto$314millionandnon‑residentialconstructionisforecasttodecreaseby

4percentto$195million.Thedominantinfluencewillbeengineeringconstruction,

whichisforecasttofallby71percent($1billion)to$406million.

Theoutlookisforweakeningresidentialconstructionactivityin2006‑07,withwork

doneforecasttodecreaseby6percent,butwillremainathistoricallyhighlevelsafter

increasingbyanestimated20percentin2005‑06.

Witharelativelystrongpropertymarket,strengtheningpopulationgrowthand

buoyantemploymentprospects,consumerandinvestorconfidenceisexpectedto

continueintheshortterm,althoughthethreatofrisinginterestratescouldactto

dampenactivity.Anumberoflargemulti‑storeyapartmentcomplexesarecurrently

underconstruction,withmoreplannedin2006‑07,almostexclusivelyintheDarwin

centralbusinessdistrict.

AlcanG3RefineryExpansionAlcanG3RefineryExpansion

ResidentialBuildingResidentialBuilding

��Construction

Thegrowthinresidentialactivityisexpectedtopeakin2005‑06,althoughitwill

remainstrongin2006‑07.Majordevelopmentsproceedinginclude:

• theEvolutiononGardinerresidentialandcommercialdevelopment($50million);

• theresidentialcomponentoftheDarwinWaterfrontDevelopment($70million);

• theresidentialcomponentofthe26‑storeyPandanasOutriggerdevelopment

($100million);and

• thejointventuredevelopmentoftheDarwinsuburbofLyons($280million).

Lookingfurtherahead,landavailabilityissufficientforseveralyearsofdevelopment

atcurrenttake‑upratesinbothDarwinandPalmerston.Thecompletionofrelocation

oftheStuartParkfueltankfarmtoEastArmwillcreateasignificantparcelofprime

realestateavailableforresidentialdevelopmentin2007.

Non‑residentialbuildingworkisforecasttodecreaseby4percentin2006‑07,

followingarelativelystrongperiodofactivityinrecentyearsprimarilyduetothe

completionofdefenceprojectssuchastheredevelopmentofRobertsonBarracks

andtheBradshawFieldTrainingArea.Thiswillbesomewhatoffsetbyanincreasein

privatesectornon‑residentialconstructionassociatedwiththeDarwinWaterfront

Development,includingthe$100millionDarwinConventionandExhibitionCentre,

andtheDarwinChinatowndevelopment.

Engineeringconstructionin2006‑07isforecasttofallby71percentto$406million,

asmajorengineeringprojectsdrawtoaclose.Publicsectorinvestmentoverthenext

decadewillbefocusedontheDarwinWaterfrontDevelopment.

WithmajorengineeringworkforBayu‑Undanstage2complete,andastheAlcan

G3refineryexpansiondrawstoaclosein2006,engineeringconstructionactivity

intheTerritorywillcontractsubstantiallyin2006‑07.However,newprojectssuch

asthe$750milliondevelopmentoftheBlacktipgasfieldintheJosephBonaparte

Gulfandthe$450millioncondensateprocessingfacilityatEastArmwillensurethat

engineeringactivityintheTerritoryremainsatlevelswellabovehistoricalaverages

beyond2007.

AstheTerritorycontinuestodevelopasaserviceandmanufacturinghubforthe

northernAustralianminingandenergysectors,furtheropportunitiesarelikelytobe

createdfortheTerritoryconstructionindustry.

Non‑residentialBuildingNon‑residentialBuilding

EngineeringConstructionEngineeringConstruction

LongerTermOutlookLongerTermOutlook

�00 Construction


�0�Manufacturing

Manufacturing

• TheTerritoryhasasmallandnarrowlybasedmanufacturingsector,dominated

byaluminaproductionatAlcan’sGoverefinery.In2004‑05manufacturing

accountedfor7percentofgrossstateproductandabout3percentoftotal

employment.

• Manufacturingproductionwillbeincreasedsignificantlyin2006‑07with

increasedaluminaproductionfromtheexpandedAlcanrefineryandliquefied

naturalgasproductionfromthenewWickhamPointfacility.

• Afurtherincreaseisexpectedin2007‑08withcompletionofthecondensate

processingfacilityatEastArm,theheliumplantatWickhamPoint,andafullyear

ofproductionfromthenewrenewablefuels(biodiesel)facility.

• Inthemediumtolongterm,naturalgasfromtheTimorSeacouldbeusedasan

inputforgas‑relatedmanufacturingindustriesandasacheaperenergysource

formining‑relatedvalueadding.

ThemanufacturingsectorintheTerritoryissmallcomparedtootherjurisdictions,

accountingfor7percentofgrossstateproduct(GSP)in2004‑05,comparedto

11percentnationally.About3000peopleareemployedinthesector,accountingfor

3percentoftotalemployment.ThemanufacturingbaseintheTerritoryisalsonarrow,

reflectingthesmalllocalmarketanddistancefromothermajormarkets.Exceptfor

export‑focusedaluminaandliquefiednaturalgas(LNG)production,themajorityof

Territorymanufacturingisforlocalconsumption.

In2005‑06,manufacturingvalueaddedincreasedby32percenttoanestimated

$931million.

CompositionChart12.1showstheproportionsofvalueadded,employmentandturnover

attributabletoeachsubdivisionofmanufacturing.

Note:Basedonlatestavailabledata:2000‑01‘Employment’and2002‑03for‘ValueAdded’and‘Turnover’.



KeyPointsKeyPoints

0 20 40 60 80

Textile, clothing, footwear and leather

Other manufacturing

Petroleum, coal, chemical andassociated product

Wood and paper product

Non-metallic mineral product

Food, beverage and tobacco

Printing, publishing and recorded media

Machinery and equipment

Metal product

Employment Turnover Value Added

% of manufacturing

Chart 12.1: Territory Manufacturing Subdivisions Selected Indicators

0 20 40 60 80

Textile, clothing, footwear and leather

Other manufacturing

Petroleum, coal, chemical andassociated product

Wood and paper product

Non-metallic mineral product

Food, beverage and tobacco

Printing, publishing and recorded media

Machinery and equipment

Metal product

Employment Turnover Value Added

% of manufacturing

Chart 12.1: Territory Manufacturing Subdivisions Selected Indicators

�02 Manufacturing


ManufacturingintheTerritoryisdominatedbymetalproducts,whichtypically

accountforabout70percentoftotalmanufacturingvalueadded,comparedtoabout

18percentnationally(Chart12.1).Althoughitismuchlesslabourintensivethan

mostothermanufacturingsubdivisions,itaccountsforabout38percentofTerritory

manufacturingemploymentduetoitssheersize.

Metalproductsmanufacturingisdominatedbytheconversionofbauxiteto

aluminaatAlcan’sGoverefinery,producingabout2milliontonnesofaluminaand

directlyemployingabout1100peoplein2004‑05.Themetalproductssubdivision

alsoincludessheetmetalfabricationandtheproductionofmaterialsusedinthe

constructionindustry.

FuelsandchemicalsmanufacturingintheTerritoryhasbeenrelativelysmall

accountingforabout6percentoftotalmanufacturingvalueadded,comparedto

13percentnationally.Ithaspreviouslyaccountedforjust4percentofTerritory

manufacturingemployment.However,theimportanceofthissubdivisionisgrowing,

astheTerritory’sgas‑basedprocessinginfrastructurecontinuestodevelop.

ProductionofLNGatWickhamPoint,whichbeganinDecember2005,willadd

significantlytothevalueofTerritorymanufacturing.Theplantisexpectedtoproduce

3.2milliontonnesperannumforexporttoJapan,anddirectlyemploy80to100

permanentstaff.

Machineryandequipmentmanufacturingaccountsforabout6percentof

manufacturingvalueaddedintheNorthernTerritory,comparedto19percent

nationally.Itaccountsforabout19percentofTerritorymanufacturingemployment.

Themaintenancerequirementsofthelarge,andstillincreasing,defencepresencehas

thepotentialtosignificantlyimpactmachineryandequipmentmanufacturinginthe

Territory.ThearrivalofnewTigerArmedReconnaissancehelicopterslaterin2006and

newAbramstanksin2007willprovidefurtheropportunitiesforlocalmanufacturing.

OutlookAluminaproductionissettoincreasefrom2007,withtheexpansionofAlcan’sGove

refineryincreasingproductioncapacityfrom2millionto3.8milliontonnesper

annum.Theincreasedcapacityisexpectedtocreateupto120additionalonsitejobs.

Constructionofa$450millioncondensateprocessingfacilityatEastArmisexpected

tocommenceinearly2007,withproductionplannedtostartinthesecondhalfof

2008.Thefacilitywillsourcecondensate,whichisalighthydrocarbonliquidoften

foundmixedwithdepositsofnaturalgas,fromtheTimorSeaandNorthWestShelffor

theproductionofpetroleum,diesel,liquidpetroleumgas(LPG)andjetfuel.

ApprovalhasalsobeengrantedfortheconstructionofaheliumplantatWickham

Point,whichisexpectedtocommenceproductioninearly2007.Theplantwilluse

wastefromtheLNGplanttoproducealmost900tonnesofliquidheliumperyear,

valuedatabout$20million,fordomesticandexportmarkets.

Inthemediumtolongterm,thepossibilityofbringingmoreTimorSeagasonshore

offerssignificantmanufacturingopportunities.NegotiationsbetweenTimorLesteand

AustraliangovernmentsconcludedinJanuary2006withthesigningoftheTreatyon

CertainMaritimeArrangementsintheTimorSea.Atthisstage,however,development

oftheGreaterSunrisefieldisonholdwithWoodsidePetroleumannouncingadeferral

oftheprojectforatleasttenyears.Thelikelihoodofbringinggasonshorefromthe

GreaterSunrisefieldremainsuncertain.

MetalProductsMetalProducts

Petroleum,Coal,ChemicalandAssociatedProducts

Petroleum,Coal,ChemicalandAssociatedProducts

MachineryandEquipmentMachineryandEquipment

AluminaProductionAluminaProduction

Gas‑relatedProjectsGas‑relatedProjects

�0�Manufacturing

ShouldeffortstobringTimorSeagasonshoreprovesuccessful,itcouldbeused

asfeedstockfornewmanufacturingindustries.AnareaatGlydePoint(onthe

GunnPointPeninsula)hasbeenidentifiedasapotentialsiteforamajorgas‑based

industrialestateandassociatedportfacilities.Possiblegasmanufacturingprojects

includefurtherproductionofLNG,orgas‑basedproductssuchasmethanol,ethane,

ammonia/ureafertilisersandvariouspetrochemicals.TimorSeagasalsohasthe

potentialtoprovideacheapandefficientenergysourceforthemanufactureof

alumina,magnesiumandotheroreconcentrates,andfortheproductionofelectricity

thatcouldadvancelocalvalue‑addingopportunities.

Constructionhascommencedonanew$77millionrenewablefuelsfacility

attheDarwinBusinessParkatEastArm,andisscheduledforcompletionby

September2006.Itwillhavethecapacitytoproduce130000tonnesofzerosulphur

biodieselandpharmaceuticalgradeglycerineperyearforsaletodomesticandexport

markets.

ThemediumtolongertermimpactoftheAustralAsiarailwayontheTerritory’s

manufacturingsectorisstilluncertain.Lowertransportcostsmayhaveanegative

impactonthelocalmanufactureofhigh‑volume,low‑valueconsumergoodssuch

asfoodsandbeverages,whichhavetraditionallybeensupportedbyhighinterstate

transportcosts.Atthesametime,lowertransportcostsmayalsoprovidenew

opportunitiesforlocalmanufacturingbyreducinginputcostsandprovidingmore

competitiveaccesstosouthernmarkets.

BiodieselBiodiesel

Railway‑relatedEffectsRailway‑relatedEffects

�0� Manufacturing


�0�Retail and Wholesale

RetailandWholesale

• Retailandwholesaletradeaccountedfor6.6percentofNorthernTerritorygross

stateproduct(GSP)and16percentofresidentemploymentin2004‑05.

• Followingsolidgrowthof5.3percentin2004‑05,Territoryrealretailturnover

growthisexpectedtomoderateto2.5percentin2005‑06.Majorcontributorsto

growthin2005‑06werehouseholdgoods,hospitalityandservices.

• Territoryretailturnoverisforecasttoincreaseby4.5percentin2006‑07,

supportedbystrongemployment,apositiveoutlookforthehousingmarketand

stableinterestrates.

TheretailindustryisanimportantsourceofemploymentforTerritorians,accounting

for13percentofresidentemploymentin2004‑05comparedto15percentnationally.

Itaccountedfor4.7percentofTerritoryGSP,comparedto5.8percentofgross

domesticproduct(GDP)nationally(Table13.1).

Comparedtoretailtradeandwholesaletradeinotherjurisdictions,wholesaletrade

intheTerritoryisamuchsmallercontributortotheTerritoryeconomy,accountingfor

1.9percentofGSPand3.0percentofresidentemploymentin2004‑05.Therelatively

smallcontributionofwholesaletradereflectstheTerritory’ssmallsize,whichmeans

thatretailersoftensourceproductsdirectlyfrominterstatewholesalers.

PercentageofTotalEmployment PercentageofTotalGSP/GDP

Retail%

Wholesale%

Retail%

Wholesale%

NewSouthWales 15.0 4.7 5.5 4.7

Victoria 15.0 4.7 5.6 5.0

Queensland 16.4 4.3 7.2 4.4

SouthAustralia 14.8 4.6 5.6 3.7

WesternAustralia 15.1 4.6 5.1 3.6

Tasmania 15.0 3.5 6.9 3.1

Northern Territory 13.0 3.0 4.7 1.9

AustralianCapitalTerritory 12.4 1.8 4.9 1.7

Australia 15.2 4.5 5.8 4.4


DemandDriversGrowthinpopulation,employmentandhouseholddisposableincomearemajor

determinantsofgrowthinretailturnover.Householddisposableincomeisaffectedby

interestrates,employmentandwagesgrowth.Innominalterms,Territoryhousehold

disposableincomepercapitaincreasedby7.7percentin2004‑05,comparedwith

4.0percentnationally.ThesignificanceofthetourismsectorintheTerritoryimpacts

retailturnoverduetothesignificantinfluenceofinterstateandoverseasvisitors.

Followingastronggrowthphaseinthemid1990sassociatedwiththedefenceforce

buildup,Territorypopulationgrowthslowedbetween1997and2003.Population

growthhassincerecovered,reporting1.1percentgrowthin2004andestimated

growthof1.7percentfor2005.Growthisforecasttocontinueatrecentlevelsin2006

and2007.


KeyPointsKeyPoints

Table 13.1: Retail and Wholesale Trade, 2004-05

Table 13.1: Retail and Wholesale Trade, 2004-05


�06 Retail and Wholesale


Nationally,householddebtandcreditgrowthcontinuedatasolidpaceover2005,

withannualcreditgrowthof13percent.Atthesametime,householdassetshave

grownby11percentandhouseholdnetworthisimproving.Nonetheless,therateof

creditgrowthismoderating,downfromabout20percentinthesecondhalfof2003.

Inrecentyears,stableinflation,financialderegulationandstrongerpropertymarkets

haveinfluencedthecapacityandconfidenceofhouseholdstotakeongreaterdebt,

withcreditgrowthincreasingatanannualrateofabout12percentoverthe10years

toDecember2005.Althoughincreaseddebthasbeenassociatedwithincreased

wealth,itislikelythathouseholdswillbemoresensitivetointerestrateincreasesin

thefuture.

Inresponsetostrongdomesticdemandandimportgrowth,coupledwithapositive

outlookforglobaleconomicgrowth,theReserveBankofAustralia(RBA)raised

interestratesby0.25percentinMarch2005.Theincreasewasthefirstsincelate2003,

whenrateswereraisedby0.5percentagepoints.SinceMarch2005,rateshave

remainedunchanged.

Householdexpectationsoftheinflationoutlookand,importantly,theirexpectations

oftheRBA’sresponsetoanyemerginginflationarypressures,willinfluencehow

sensitivehouseholdexpenditureistointerestratechanges.

Nationally,consumersentimentasreportedbytheWestpac/MelbourneInstitute,rose

tohistoricallyhighlevelsinJanuary2005,buoyedbystrongemploymentconditions,

arisingstockmarketandstrengtheningpropertymarkets.Asharpdeterioration

insentimentwasreportedinMarch2005,followingtheinterestrateincrease.It

alsocoincidedwithaslowdownineconomicgrowth,increasingfuelpricesanda

downturninglobalmarkets.Inlate2005,sentimentdecreasedtothelowestlevel

sinceMarch2003.Consumersentimenthassincerebounded,althoughnottothe

levelsreportedinearly2005.

AccordingtotheDecemberquarter2005SensisConsumerReport,Territory

consumersaremoreconfidentthanconsumersinallotherjurisdictions(Chart13.1).

Territoriansarealsothemostlikelytofeel‘betteroff’thantheyhadayearearlier,with

‘earningmoremoney’fromworkandinvestmentsidentifiedasthekeyreasonfor

improvedconfidence.

Source:SensisConsumerReport

HouseholdDebtHouseholdDebt

InterestRateMovementsInterestRateMovements

ConsumerSentimentConsumerSentiment

Chart 13.1: Consumer Sentiment, December Quarter 2005

0

10

20

30

40

50

60

NT WA Qld ACT SA Tas NSW Vic

%Chart 13.1: Consumer Sentiment, December Quarter 2005

0

10

20

30

40

50

60

NT WA Qld ACT SA Tas NSW Vic

%

�07Retail and Wholesale

RetailTradeActivityTerritoryrealretailturnoverstrengthenedover2004‑05withstronggrowthof

5.3percent,higherthanthe3.4percentaverageoverthefiveyearstoJune2005.

Stronggrowthwasboostedbyhigherlevelsofconsumerconfidence,lowinterest

rates,wagesgrowth,steadypopulationgrowthandtheimpactofAustraliandollar

appreciationonthepriceofimportedgoods.

In2005‑06,retailturnovergrowthintheTerritoryisexpectedtomoderateto

2.5percent,althoughitcomesafteraperiodofstronggrowth.Althoughhigher

fuelpricesmayhaveanegativeimpact,thestrengthofthelocalconstructionand

propertymarkets,historicallylowinterestratesandthestrongexchangerateare

supportingconsumption.

TheweakeningAustraliandollarisdampeningconsumption.Nationalgrowth

easedto3.5percentin2004‑05followingrecordgrowthof7.6percentin2003‑04.

In2005‑06,nationalgrowthisestimatedtomoderatefurtherto2.0percent.This

moderationreflectsthecombinedeffectsofamorecautiousapproachtohousehold

consumptioninfluencedbyincreasingdebtservicingrequirements,thedownturnin

propertymarketsinseveraljurisdictionsandthevolatilityofconsumerconfidence

relatedtorisingfuelprices.

Thedevelopmentofnewretailspacetendstoproceedwhencapacityconstraints

becomeevident.Followingalargeincreaseinthesupplyofretailspaceinthe

mid1990sassociatedwithstrongpopulationgrowth,therehasbeenaperiodof

consolidation.

Ahighgrowthphaseiscurrentlyunderway,withanumberofmajorretail

constructionprojectsdueforcompletioninmidandlate2006.Bunningsis

undertakingamajorexpansionofretailspacewiththeconstructionoftwonew

warehousesinPalmerstonandDarwinthathaveacombinedfloorspaceofabout

22267squaremetres.Further,anexpansionofanew3000squaremetreshowroomat

theJapeHomemakerVillageisdueforcompletionin2006‑07.

Lookingahead,completionofseveralmajorresidentialprojectsintheDarwincentral

businessdistrictisexpectedtodecreasethehighlevelofvacantretailspace.Thereare

alsoplansforthefurtherdevelopmentofDarwinInternationalAirport’snewbusiness

parkoverthenext20years.Thebusinessparkmasterplanistodevelopthe33

hectaresitethatisboundedbyMcMillansandBagotroadsintoamajorcommercial

andretailprecinct.

Retailturnoverisamajorcomponentofhouseholdconsumptionexpenditure,

whichinturnisasignificantcomponentoffinaldemandandeconomicgrowth.The

AustralianBureauofStatistics(ABS)releaseditsHouseholdExpenditureSurvey(HES)

inAugust2005.HESresultsindicatethatTerritoryconsumersspendrelativelymore

thanthenationalaverageon:

• recreation,alcoholicbeveragesandtobaccoproducts;

• housing;and

• householdservices(particularlypestcontrol).

Territoryconsumersspendrelativelylessonclothingandfootwear,whichisindicative

ofclimateandlifestylefactors.Territoryconsumersalsospendrelativelylesson

medicalcareandhealthexpensestoreflecttheyoungandtransientpopulationand

limitedavailabilityofprivatehealthcare.

RetailSpaceRetailSpace

ConsumptionProfileConsumptionProfile

�0� Retail and Wholesale


e:estimate

Source:NorthernTerritoryTreasury,unpublishedABSdata

Foodconsistsofsupermarketandgroceryitems,meat,fishandpoultry,fruitand

vegetables,liquorandbreadretailing.Foodconsistentlyaccountsforasignificant

proportionofnationalretailturnoverandaccountsforabouthalftheTerritory’s

retailturnover.Expenditureonfoodfellby1.5percentin2005‑06,subtracting

0.7percentagepointsfromtotalretailgrowth.Thedeclineinreportedfood

turnoverhasoccurredinspiteofstrengtheningpopulationgrowthandmoderate

householdconsumptiongrowthover2005‑06.Thedeclineinfoodturnovermaybe

counter‑balancedsomewhatbyanincreaseinexpenditureontakeaway,restaurant

andcafemeals,whichiscapturedinthehospitalityandservicescategory.

Householdgoodsturnoverisestimatedtohaveincreasedby7.0percentin2005‑06,

adding0.9percentagepointstoretailgrowth.Householdgoodsincludefurniture

andfloorcoverings,domestichouseware,appliancesandhardware.Demandfor

householdgoodsiscloselylinkedtodwellinginvestment.

Theotherretailingcategoryincludesdepartmentstoreturnoverandspending

onpharmaceuticals,jewellery,nurseryitems,toiletries,antiquesandusedgoods.

Followingstronggrowthof9.2percentin2004‑05,otherretailingisestimatedto

recordmodestgrowthof0.5percentin2005‑06,reducingtotalretailgrowthby

0.1percentagepoints.

Hospitalityandservicesconsistsofhotels,pubs,taverns,bars,clubs,cafesand

restaurants,videohireoutlets,hairdressingandbeautysalons.Afterdecliningin

thethreeyearsto2003‑04,hospitalityandservicesretailingexperiencedavery

strongrecovery,increasingby16percentin2004‑05withestimatedgrowthof

13percentin2005‑06contributing2.2percentagepointstoretailgrowth.Afterbeing

affectedbythedeclineininternationalvisitornumbersintheperiodsince2000,

thestrengtheningoutlookfortourism,strongerpopulationanddisposableincome

growtharehavingapositiveimpactonthislargelydiscretionaryretailingcategory.

0

200

400

600

800

1 000

90 92 94 96 98 00 02 04 06e

Food

Clothing and soft goods

Recreational goods

Household goodsOther

Hospitality and services

Year ended June

Chart 13.2: Territory Real Retail Turnover (moving annual total)

0

200

400

600

800

1 000

90 92 94 96 98 00 02 04 06e

Food

Clothing and soft goods

Recreational goods

Household goodsOther

Hospitality and services

Year ended June

Chart 13.2: Territory Real Retail Turnover (moving annual total)

FoodFood

HouseholdGoodsHouseholdGoods

OtherRetailingOtherRetailing

HospitalityandServicesHospitalityandServices

�0�Retail and Wholesale

OutlookNationally,thestrengthoftheeconomycanbelargelyattributedtothestronggrowth

indomesticspendinginrecentyears,withretailturnovertypicallyrepresentingabout

40percentofhouseholdconsumption.Atthenationallevel,retailtradegrowthis

forecasttostrengthenin2006‑07,underpinnedbystrongemployment,apositive

outlookforthehousingmarketandstableinterestrates.

TheoutlookfortheTerritoryisbroadlyconsistentwiththenationaloutlook.Territory

retailturnoverisexpectedtostrengthenover2006‑07,withforecastgrowthof

4.5percent.Itisexpectedthatsolidretailgrowthwillbesupportedbystrong

employment,steadypopulationgrowthandcontinuedpositiveoutlookforthe

housingmarket.

Overtheshorttomediumterm,interestratesandpetrolpriceswillcontinueto

playanimportantroleininfluencingdiscretionarydisposablehouseholdincome,

consumerconfidence,consumptionexpenditureandthepatternofretailactivity.

Majorriskstoforecastactivityareinterestrateincreases,adepreciationofthe

Australiandollarandtheflowthroughtohouseholdbudgetsandconsumption.

��0 Retail and Wholesale


��Transport and Communication

TransportandCommunication

• GoodtransportandcommunicationlinksarecriticaltotheTerritory’sdevelopment,

giventhesmallsizeofthelocalmarket,relativeisolationfrommajormarketsin

southernAustraliaandthesmallandwidelydispersedTerritorypopulation.

• In2004‑05,thetransportandcommunicationsectoraccountedfor6.3percent

ofgrossstateproductandrepresentsabout6.9percentoftotalTerritory

employment.

• ThecompletionoftheAdelaidetoDarwinraillinkinlate2003representsamajor

milestoneinthedevelopmentoftheTerritory’stransportinfrastructure.Railis

nowthedominantmodeoftransportforthenorth‑southfreightroute.Italso

providesopportunitiesforregionaldevelopment,particularlyasacost‑effective

methodforthetransportofbulkcommodities.

• ThevolumeoffreightthroughthePortofDarwincontinuestoincrease,andis

expectedtogrowfurtherwithrecentimprovementstofacilitiesatEastArm,

includingabulkliquidsterminalandequipmenttofacilitatethetransferofoil.

• Bothinternationalanddomesticaircapacityhasgrownstronglyoverthelast

12months,withTigerAirwayscommencingoperationsontheDarwin‑Singapore

routeandthearrivalofQantassubsidiaryJetstar.

• AnewcontractwithTelstratoprovideTerritoryGovernmentinformationand

communicationtechnology(ICT)servicesincludesanindustrydevelopment

programthatisexpectedtogenerate170newjobs.

Transportandcommunicationindustriesarecriticaldriversofeconomicgrowth.Of

particularimportancetotheTerritoryeconomyaretherolesoflong‑distanceand

interstatefreighttransportationandremotetelecommunicationsinfrastructure,

giventheTerritory’ssize,remotenessandwidelydispersedpopulation.Transport

andcommunicationrepresented6.3percentoftheNorthernTerritory’sgrossstate

product(GSP)in2004‑05.

ThefourmajorsegmentsoftheTerritory’stransportsectorareroad,rail,seaandair.Until

recently,roadhasbeenthekeymodeoffreighttransportationintheTerritory,however

thecompletionoftherailwayin2004hasseenrailemergeasthedominantfreightlink

betweenAdelaideandDarwin.Theraillinkalsohasimplicationsforfuturedevelopment

inDarwin’sportinfrastructure,withthepotentialforDarwintodevelopasaregional

transportandlogisticshub,morecloselylinkingAustraliawithmarketsinAsia.

Transport%

Communication%

Total%

NewSouthWales 3.7 2.6 6.3

Victoria 3.5 3.3 6.8

Queensland 4.4 2.5 6.9

SouthAustralia 4.0 2.3 6.3

WesternAustralia 4.2 2.3 6.5

Tasmania 4.0 2.5 6.5

Northern Territory 3.8 2.5 6.3

AustralianCapitalTerritory 2.1 2.7 4.9

Australia 3.8 2.7 6.5



KeyPointsKeyPoints

Table 14.1: Transport and Communications Production as a Proportion of GSP/GDP, 2004-05

Table 14.1: Transport and Communications Production as a Proportion of GSP/GDP, 2004-05

��2 Transport and Communication


TransportTransport‑relatedactivityaccountedforabout$395millionor3.8percentofTerritory

GSPin2004‑05andrepresentsabout5.0percentoftotalTerritoryemployment.

In2005,railtransported592800tonnesoffreight,comparedto557400tonnesin

2004,representinggrowthof6.4percent.

Currently,railfreightisdominatedbydomesticproduct,althoughimportandexport

volumesaregrowingsteadily.About85percentoffreightbetweenDarwinand

Adelaideisnowcarriedbyrail.Railtransporthasincreasedthedominanceofthe

centralcorridorinfreightmovementsintoandoutoftheTerritory.Althoughroad

transportmaystillholdthecomparativeadvantageforshorthaulandtime‑sensitive

perishableandchilledproducts,indicationsarethatthiscouldbedecreasing,

asdemonstratedbytheuseofrailtransportduringthepeakmangoseasonin

October2005.

Fortheinternationalmarket,therailwayhasacomparativeadvantageovershipping

duetoitsspeedanditscapacitytomovebulkcommoditiestoDarwinforexport.

ThefrequencyofshippingservicestoandfromDarwinisnotcurrentlysufficient

tocapitaliseonrecentimprovementsinportinfrastructureandtomaximisethe

railway’spotential.CommencementofaregularmonthlyShanghai‑Darwinservicein

January2006,andinterestinIndonesiaandsouthernChinaservices,areimportant

recentdevelopments.

AdirectDarwin‑Melbourne(viaAdelaide)freightproductwasintroducedinJuly2005,

helpingtostreamlinemovementsbetweenthetwocities.

In2005,theKatherineFreightTerminalexperienceda65percentincreaseincontainer

movements,whichincludedasignificantincreaseinhorticulturalproduceduringthe

peakmangoseason.Aproposaltodevelopaclusterfacilityforfreightforwardersat

KatherineFreightTerminal,incorporatingcoldstoresandacommonusertransport

depot,isnowunderconsideration.

Thecosteffectivenessofrailforlargevolumesofmineraloreisapotentiallysignificant

stimulusformininginregionalareas.Forexample,from2006about650000tonnes

ofmanganeseoreperyearwillbetransportedfromthenewBootuCreekmine(near

TennantCreek)toDarwinforexport.FrancesCreekmine(nearPineCreek)isalsoin

theprocessofreopeningoperationsandplanstoexportabout1.5milliontonnesof

ironoretoChinaviaDarwinfromearly2007.

PassengernumbersontheGhanincreasedby12percenttoabout74000

passengersin2005.Followingasuccessfulthreemonthtrialin2005,thenumberof

Adelaide‑Darwinserviceshasbeenincreasedfromonetotwoperweek.

AstheTerritory’smainport,thePortofDarwinhandlesfreightfordomestic

consumption,cruiseships,andisahubforoffshoreoilexplorationsupplyandthe

railway.Inaddition,anumberofprivateportsservicecoastalminingcommunities

directlyforsuppliesandmineralexports,includingBingBongnearBorroloola,

AlyangulaonGrooteEylandtandNhulunbuyinEastArnhemLand.

In2004‑05,totalcargotonnagethroughthePortofDarwinincreasedby73percent

toarecord1.9milliontonnes.Theincreaseincludesabout600000tonnesofarmour

rockshippedfromDarwinfortheconstructionoftheBayu‑Undansub‑seagas

pipelineanda33percentincreaseintradingvesselcalls(registeredvisits).

Alsoin2004‑05,petroleumproductsaccountedfor60percentoftotalimport

tonnagethroughDarwin.Othersignificantimportsincludecementclinkerand

metalproducts.Keyexportsincludedarmourrock,livestockandmetalproducts.

RailRail

SeaTransportSeaTransport


Further,ashiftinthesourceofpetroleumproductsresultedinasignificantincreasein

overseasimportsandacorrespondingdecreaseininterstateimports(Chart14.1).The

continuedrecoveryoflivestockexports(a51percentincreasein2004‑05)wasthe

majorcontributortoincreasingoverseasexportsin2004‑05.

In2005,cruiseshipvisitsincreasedby50percenttoatotalof33visits,andpassenger

numbersincreasedby6percenttoabout11000passengers.Visitsareexpectedto

increaseto45cruiseshipsin2006.

Note:Thelargeincreasein‘IntrastateOut’in2004‑05isarmourrockusedfortheconstructionoftheBayu‑Undan

sub‑seagaspipeline


SwireShippinghascommittedtoacontinuationofitsfortnightlyDarwin‑Singapore

shuttleservicethatbeganin2003.InJanuary2006,HaiWinShippingannounced

aregularmonthlyShanghai‑Darwinservicefollowingsuccessfultrialsduring2005,

wherebytwo‑thirdsofthecontainerisedfreightfromthetrialwasdistributedacross

Australiabyrailandtheremainderbyroad.

RecentlycompletedportfacilitiesatEastArmincludeawharfextension,abulkliquids

terminal,internodalfacilities,acontainerwharfandtheinstallationofpipelinesand

equipmentforoiltransfer.Thecompletionofthebulkhandlingfacility,shiploaderand

supportinginfrastructureintheDarwinBusinessParkwillfurtherpromoteDarwinasa

transporthub.

TheNorthernTerritoryisservedbythreenationalhighwayswhichprovidelinksto

Queensland(BarklyHighway),SouthAustralia(StuartHighway)andWesternAustralia

(VictoriaHighway).TheNationalHighwaynetworkisthebackboneoftheroad

networksystemacrosstheTerritoryandprovidestheonlysealedroadlinkbetween

theTerritoryandtherestofAustralia.

TheTerritoryroadnetworkconsistsofmorethan35000kilometresofroad.

About12percentareclassifiedasnationalhighways,19percentasarterialroads,

45percentassecondaryroads(todistributetrafficwithinregions)and24percent

aslocalroads.Afurther13200kilometresofroads,primarilyfordistributingtraffic

withinlocalareas,areadministeredbylocalgovernment.

Chart 14.1: Trade through Port of Darwin

0

200

400

600

800

1 000

95 96 97 98 99 00 01 02 03 04 05

Overseas in

Overseas outIntrastate out

Interstate out

Interstate in

Year ended June

tonnes (000)Chart 14.1: Trade through Port of Darwin

0

200

400

600

800

1 000

95 96 97 98 99 00 01 02 03 04 05

Overseas in

Overseas outIntrastate out

Interstate out

Interstate in

Year ended June

tonnes (000)

RoadTransportRoadTransport

�� Transport and Communication


Allthreelevelsofgovernmentareresponsiblefordevelopingandmaintainingthe

roadnetworksintheNorthernTerritory.AusLinkistheAustralianGovernmentfunding

programdesignedtoallocatefundingtothelandtransportnetwork.In2005‑06,

AusLinkexpenditureonroadsintheTerritoryisestimatedat$39million.Thisincludes

majorworksontheVictoriaandStuarthighways,bridgeworksontheStuartHighway

aswellasupgradesto‘blackspot’locations,roadsservicingthepastoral,tourismand

miningindustriesandimprovedaccessforremotecommunities.

NorthernTerritoryGovernmentexpenditureonTerritoryroadsin2005‑06isestimated

at$27millionforcapitalworksand$32millionforrepairsandmaintenance.

Improvingroadstotouristdestinationssuchasthecontinuationofsealingboththe

MereenieandLitchfieldlooproadsisapriorityin2006‑07.

SevenairlinesoperateregularinternationalservicesfromDarwin:

• Qantas(Denpasar,Singapore,Mumbai);

• Garuda(Denpasar);

• TigerAirways(Singapore);

• Merpati(Kupang);

• AirNorth(Dili);

• RoyalBrunei(Brunei);and

• AustralianAirlines(Singapore).

InternationalairlinecapacitydecreasedsignificantlybetweenJune2001and

June2003(Chart14.2).SinceMay2004,capacityhasincreasedsteadilyfrom1761

to2576seatsperweekinMarch2006,withthehighestweeklyseatcapacitylevel

sinceApril2001reachedinJanuary2006(2558seatsperweek).Furthergrowthis

expectedwiththeintroductionofseveralnewservices.

InDecember2005,lowcostcarrierTigerAirwaysbeganoperatingthe

Darwin‑Singaporeroute,increasingcapacitybyabout40percentor720seats

perweek.InJanuary2006,Qantascommenceditsnewthreetimesaweekservice

fromSydneytoMumbaiviaDarwin.RoyalBruneiannouncedinApril2006that

servicestoDarwinwouldtemporarilybereducedfromthreetotwoflightsperweek.

In2005,internationalarrivalsintoDarwinincreasedby2.4percentto80700.

OccasionalcharterserviceflightsalsobringtouristsdirectlyfromJapanto

AliceSpringstovisitUluru.Since2003,therehavebeennineflights,bringingmore

than2700touriststotheTerritory.

Air‑InternationalAir‑International


e:estimate

Note:Cairns‑GoveandCairns‑GrooteEylandtservicesarenotincluded.TheCairns‑Goveservicehasacapacityof

805seatsperweek;theCairns‑GrooteEylandtserviceceasedin2003.


Qantas,VirginBlue,Airnorth,SkywestandJetstaroperateabout170inbound

interstateflights(about23000seats)perweek.Theseservicesprovidedaily

connectionsbetweentheNorthernTerritoryandallAustraliancapitalcitiesandmajor

regionalcentres.

Interstateweeklyseatcapacityhasincreaseddramaticallyinrecentyears,from17407

in2001‑02to22301in2004‑05,duelargelytothearrivalofVirginBlue.Capacity

increasedtoanestimated22738seatsin2005‑06,dueinparttotheoperationof

largeraircraftbyQantasduringthewetseason.

InSeptember2005,VirginBluewithdrewitsDarwin‑SydneyandAlice

Springs‑Adelaideservices(1680seatsperweek).InMay2006,Qantassubsidiary

JetstarbeganoperatingontheDarwin‑Brisbane,Darwin‑Melbourneand

Darwin‑Adelaideroutes,whileQantashaswithdrawnitsDarwin‑Melbourneservice,

representinganetincreaseof900seatsperweekfromJuly2006.

In2005domesticarrivalsintotheTerritoryincreasedby2.3percentto535600.

FourairlinesoperateregularserviceswithintheTerritory:

• Qantas(Darwin,Nhulunbuy,AliceSpringsandUluru);

• AboriginalAirServices(AAS)(Darwin,ArnhemLand,TiwiIslands,Katherine,

TennantCreek,AliceSpringsandUluru,andGoveandNgukkurfromJuly2006);

• Airnorth(Darwin,Gove,GrooteEylandtandManingrida);and

• VincentAir(DarwinandGrooteEylandt).

Airfreighttoremotecommunitiesisalsoimportantforthedeliveryofperishables,

householditemsandmail.


0

2

4

6

8

10

12

14

98 99 00 01 02 03 04 05 06e


Interstate (Darwin)


Interstate (Uluru)


Year ended June


0

2

4

6

8

10

12

14

98 99 00 01 02 03 04 05 06e


Interstate (Darwin)


Interstate (Uluru)


Year ended June

Air‑InterstateAir‑Interstate

Air‑IntrastateAir‑Intrastate

��6 Transport and Communication


CommunicationsThecommunicationsindustryaccountedforabout$265millionor2.5percent

ofTerritoryGSPin2004‑05andrepresentsabout1percentoftotalTerritory

employment.

TechnologicaldevelopmentshavereducedtheisolationfacedbymanyTerritorians,

particularlythoselivinginremotelocalities.Increasedaccesstoinformation

technologyinfrastructurehasenabledthedeliveryofawiderrangeofmainstream

servicestoremoteareasandinnovationsinservicedelivery.Despitesignificant

investmentandongoingimprovement,thegapbetweentheTerritoryandother

jurisdictionsintheiraccessandcapabilitytodeliverinformationandcommunication

technology(ICT)basedservicesremainslarge,particularlyinremoteareas.

RemoteareasintheTerritoryhavebenefitedfromincreasedaccessto

telecommunicationsservices,howeverthelowvolumeofnetworktrafficandlackof

competitionmeansthatunitcostsforelectronicservicesremainhigh.

ConnectAustralia,theAustralianGovernment’snewtelecommunicationsprogram

forremoteAustralia,wasannouncedinSeptember2005.The$1.1billionpackage

aimstoimproveremoteandregionaltelecommunications.TheTerritoryGovernment

isliaisingwiththeAustralianGovernmenttoensurethatspecificneedsofthe

Territoryareaddressed.Inparticular,broadbandandmobileaccessinremoteareas

andasecondfibre‑opticcablefromAdelaidetoDarwintoimprovewholesale

telecommunicationscompetition.

ThereareseveralotherAustralianGovernmentfundedprogramsaimedatimproving

accesstoICTinremoteareasoftheTerritory:

• TheRegionalMobilePhoneProgramhasestablishedCDMAmobileservicesto

DalyRiver,Gapuwiyak,Milikapiti,Pirlangimpi,AliCurungandWarawi.Coverage

willbeextendedtoBarunga,Beswick,Cooinda,Daguragu/Kalkaringi,Galiwinku,

ManingridaandMilingimbiin2006.

• TheCommonwealthCoordinatedCommunicationsInfrastructureFund(CCIF)

andTelstraprovideda$2milliongrantfortelecommunicationsandbroadband

fibre‑opticinfrastructuretoPeppimenarti,PalumpaandWadeyethatistobe

completedinlate2006.

• TheAustralianGovernmentandTelstra,throughtheCommunityPhonesProgram,

begantoinstallfixedpublictelephonesinabout80remotecommunitiesinthe

NorthernTerritoryin2006toprovidecheapercallrates.

• TheITTrainingandTechnicalSupportProgramprovided$1.22milliontotrain

1500IndigenouspeopleinremotecommunitiesnorthofTennantCreekduring2006.

SinceJune2005,TelstrahasprovidedTerritoryGovernmentvoice,dataandinternet

servicesthatwerepreviouslyprovidedbySingTelOptus.Thenewcontractincludesan

expansionofbandwidthandcoverage,aswellasa$65millionindustrydevelopment

programaimedatexpandingtheTerritory’sICTSector.Theprogramincludesa

customercontactcentreandanIndigenouscallcentre,andisexpectedtogenerate

170newjobs.TheGovernment’sLocalAreaNetwork(LAN)willalsobemovedfrom

thecurrentserviceprovidertoTelstrain2006,whichisexpectedtodeliveracost

savingtoGovernmentofabout$4millionoverfouryears.

RemoteAccessRemoteAccess

NorthernTerritoryGovernment

NorthernTerritoryGovernment

��7Transport and Communication

TherearetwoDepartmentofEmployment,EducationandTraining(DEET)programs

aimedatimprovingICTservicedeliveryaccessanduseinschools:

• LearningandTechnologyinSchools(LATIS)aimstoprovideICTtoeveryschoolin

theTerritory.Todate,theprogramhasdeliveredbroadbandto155schools,54of

theseviasatellite.

• InteractiveDistanceLearning(IDL),whichhasreplacedthetwo‑wayradiofrom

theSchooloftheAir,isusingsatellitetechnologytodeliverinteractivespecialist

tuitionto200remotehomesteads,schoolsandtrainingcentresintheTerritory.The

technologyisnowusedforsecondarytuition,butinthefuturemaybeappliedto

trainingneeds,includingvocationaleducationandtraining.

Bothprogramswillprogressivelymovetoterrestrialservices,whereappropriate,

undertheTelstracontract.

DarwinisservedbytheABC(includingtheABC2digitalservice),SBS,ChannelNine

andSouthernCrossTelevision(SCTV–formerlyChannel7)networks.Additionally,

InfoTelevisionbroadcaststourist‑orientedinformationinDarwinviathefree‑to‑air

andcablenetworks.OthermajorcentresreceiveacombinationofImparja,SCTV,

CentralQueenslandSatelliteTelevision(Channel10),theABCandSBS.Austarpay

televisionisavailableviadirectcableinDarwinandviasatelliteinAliceSpringsand

otherpartsofTerritory.

InDecember2005,athirdcommercialdigital‑onlychannelwasapprovedforDarwin

andisexpectedtobeginbroadcastingbytheendof2007.Channel9andSCTVhave

firstoptiontopurchasethelicence.

Darwin,AliceSpringsandsmallercentresintheTerritoryareservicedbyanumberof

radiostations,includingtheABC,commercialandcommunitystations.TheAustralian

Governmentpolicyframeworkfortransitiontodigitalradiowasannouncedin

September2005,althoughnofirmdatefortheTerritoryhasbeenset.

OutlookImprovedportfacilities,morefrequentshippingservicesandprivatesector

infrastructureinvestmentindicatesthatrailandcomplementaryinfrastructurewill

continuetohavethegreatestimpactonthetransportsectorintheshorttomedium

term.Into2006‑07andbeyond,transportationofbulkmineralexportsandsupplies

fortheminingsectorwillemergeasasignificantmarketforrailtransport.Inaddition

tothis,futureexpansionoftrialsandthedevelopmentofinfrastructurenetworksin

Darwin,KatherineandTennantCreekwillcontinuetoimprovethegrowthpotentialof

railtransport.Overtime,railisexpectedtobeincreasinglyusedbyadjacenteconomic

regionsintheKimberleyandnorth‑westQueensland,viathedepotsatKatherineand

TennantCreek,providingadditionalbusinessopportunitiesinthesecentres.Inthe

longerterm,itisexpectedthatDarwinwillbecomeincreasinglyutilisedasaregional

transporthub.

Continuedeconomicgrowth,amorestableglobalenvironmentandcommencement

ofTigerAirwaysandJetstarservicestoDarwinareexpectedtoseeinternational

airlinecapacityincreasethrough2006‑07,leadingtoincreasedtourismopportunities.

TelstrahaveannouncedathreeyearplantorolloutThirdGeneration(3G)mobile

coveragetotheNorthernTerritory,includingremotetownsandcommunities.

The3GservicewillreplaceCDMAcoverage,givingusersbroadbandspeedmobile

connection,includingvideocalling.

TelevisionTelevision

RadioRadio

TransportTransport

CommunicationsCommunications

�� Transport and Communication


��The Public Sector

ThePublicSector

• ThepublicsectorconsistsofAustralian,Territoryandlocalgovernmentactivity

includingdefence.ItisamajorcontributortotheNorthernTerritoryeconomy,

providingawiderangeofeconomicandsocialservices.

• In2004‑05,governmentadministration,defenceandtheotherpredominantly

publicsectorindustries(healthandeducation)accountedforabout19percent

ofgrossstateproductandabout34percentofstatefinaldemand–muchhigher

thanmostotherjurisdictions.

• Thenon‑defencepublicsectoristhelargestemployerintheTerritory,accounting

forabout28percentoftotalemployment(33percentwhendefenceis

included).

• Therelativeimportanceofthenon‑defencepublicsectorhasdeclinedsteadily

overthepasttwodecades,reflectingthematuringTerritoryeconomy.

ThepublicsectorincludesAustralian,NorthernTerritoryandlocalgovernment

activity.Thefocusofthischapteristhenon‑defencepublicsectorintheTerritory;

defenceactivityisdiscussedinmoredetailinChapter16.

ThepublicsectorintheTerritoryisasignificantlylargercomponentoftheeconomy

thaninmostotherjurisdictions,accountingforabout19percentofgrossstate

product(GSP)and33.7percentofstatefinaldemand(SFD)in2004‑05.Nationally,the

publicsectoraccountedforjust21percentofSFD(Chart15.1).TheAustralianCapital

Territory(ACT)istheonlyjurisdictionwithalargerpublicsector,duetoitslarge

AustralianGovernmentpresence.

Thenon‑defencepublicsectorisalsothelargestemployerintheTerritoryand

accountedfor28percentoftotalemploymentin2004‑05(33percentwhendefence

isincluded).



KeyPointsKeyPoints

Chart 15.1: Total Public Sector Expenditure as a Percentage

of SFD, 2004-05

0

10

20

30

40

50

60

NSW Vic Qld SA WA Tas NT ACT Aust

Non-defence Defence

%Chart 15.1: Total Public Sector Expenditure as a Percentage

of SFD, 2004-05

0

10

20

30

40

50

60

NSW Vic Qld SA WA Tas NT ACT Aust

Non-defence Defence

%

�20 The Public Sector


ExpenditureIn2005‑06,non‑defencepublicsectorexpendituretotalledanestimated

$3218million,a5percentincreaseon2004‑05.Inrelativeterms,expenditureismuch

higherintheTerritorythaninmostotherjurisdictions.In2004‑05,non‑defencepublic

sectorexpenditurewas$1511percapita,comparedto$845percapitanationally.

TheACThadthehighestexpenditureat$4514percapitaandQueenslandthe

lowestat$759percapita.AsaproportionofSFD,Territorynon‑defencepublicsector

expenditureisalsothesecondhighest(25percent),behindtheACT(52percent).

ThehighlevelofpublicsectorexpenditureintheTerritoryreflects,amongother

factors,thatthecostofprovidingcoregovernmentfunctionsissharedbyasmaller

populationbasethaninotherjurisdictions.

Since1989‑90,theTerritorypublicsectorexpenditureasaproportionofSFDhas

declinedsignificantly,reflectingboththegrowthintheTerritorypopulationandthe

ongoingdevelopmentoftheTerritoryeconomy(Chart15.2).Overthisperiod,SFD

hasincreasedbyanannualaverageof5.1percent,withprivatesectorgrowthof

6.1percent,comparedtopublicsectorgrowthofjust3.4percent.

AlthoughthedeclineinthepublicsectorasaproportionofSFDismirrorednationally,

therateofdeclineintheTerritoryhasbeenmuchfaster.Theproportionforthe

Territoryhasdeclinedfromabout43percentin1989‑90toabout34percent

($4.1billion)in2004‑05.Excludingdefence(andthereforethesignificantimpactof

thedefencebuild‑upinthe1990s),thedeclineisevenmoredramatic,fallingbyabout

12percentagepointsfromabout37percenttoabout25percent.Overthesame

period,thenationalproportiondeclinedbyjust3percentagepoints,fromabout

24percentto21percent.


In2004‑05,consumptionaccountedfor86.5percentoftotalnon‑defencepublic

sectorexpenditureintheTerritory,andaroundone‑thirdoftotalconsumption(public

andprivate).Territoryandlocalgovernmentsaccountedfor57percentoftotalpublic

sectorconsumption,defenceaccountedfor25percent,andAustralianGovernment

non‑defencefortheremaining18percent(Chart15.3).

Between1990‑91and2004‑05,non‑defencepublicsectorconsumptionhasincreased

byabout50percent(Chart15.3),butneverthelessdeclinedasaproportionof

totalconsumptionfromabout39percentto31percent.Thisreflectsthegrowing

significanceofprivatesector(household)consumptionexpenditureintheTerritory.

Chart 15.2: Public Sector Expenditure as a Proportion of SFD (moving annual total)

15

20

25

30

35

40

95 96 97 98 99 00 01 02 03 04 05

Year ended June

Northern Territoryincluding defence

Northern Territoryexcluding defence

Australia including defence

Australia excluding defence

%Chart 15.2: Public Sector Expenditure as a Proportion of SFD (moving annual total)

15

20

25

30

35

40

95 96 97 98 99 00 01 02 03 04 05

Year ended June

Northern Territoryincluding defence

Northern Territoryexcluding defence

Australia including defence

Australia excluding defence

%


�2�The Public Sector


Publicsectorinvestmentisvolatileandcanexperiencelargefluctuationsfromyearto

yearduetothesmallsizeoftheTerritoryeconomyandtheimpactoffundingforlarge

one‑offprojectssuchastheAdelaidetoDarwinraillink(2001‑03;Chart15.4).

In2004‑05,non‑defencepublicsectorinvestmentaccountedfor14percentof

totalnon‑defencepublicsectorexpenditureand12percentoftotalinvestment.

Territoryandlocalgovernmentsaccountedfor39percentofthetotalpublicsector

investment,publiccorporationsaccountedfor32percent,defenceaccountedfor

23percent,andAustralianGovernmentnon‑defencefortheremaining5.6percent.


EmploymentThepublicsectoristhelargestemployerintheTerritory.In2004‑05,thenon‑defence

publicsectoraccountedforabout28percentoftotalemploymentanddefence

accountedforanadditional5percent.TheNorthernTerritoryGovernmentaccounts

for74percentofnon‑defencepublicsectoremployment,theAustralianGovernment

(excludingdefence)accountsfor13percentandlocalgovernmentfortheremaining

13percent.

Chart 15.3: Components of Public Sector Consumption Expenditure


0

1

2

3

4

95 96 97 98 99 00 01 02 03 04 05

Year ended June

$B

Territory and Local Government

Total including defence

Australian Government excluding defence

Total excluding defence

Chart 15.3: Components of Public Sector Consumption Expenditure


0

1

2

3

4

95 96 97 98 99 00 01 02 03 04 05

Year ended June

$B

Territory and Local Government

Total including defence

Australian Government excluding defence

Total excluding defence


Chart 15.4: Components of Public Sector Investment Expenditure


0

200

400

600

800

95 96 97 98 99 00 01 02 03 04 05

Year ended June

$M

Australian Government (including defence)

State and local government

Total public sector investment

Australian Government (excluding defence)

Chart 15.4: Components of Public Sector Investment Expenditure


0

200

400

600

800

95 96 97 98 99 00 01 02 03 04 05

Year ended June

$M

Australian Government (including defence)

State and local government

Total public sector investment

Australian Government (excluding defence)

�22 The Public Sector


Since1990‑91,non‑defencepublicsectoremploymenthasincreasedatanannual

averagerateof1.2percent(Table15.1),slightlylessthanpopulationgrowthoverthe

sameperiod.Localgovernmentemploymentincreasedbyanannualaveragerate

of6.8percentovertheperiod,dueinparttogrowthinCommunityDevelopment

EmploymentProjectsandthegrowingnumberoflocalgoverningbodies(largely

communitygovernmentsinremoteareas).TerritoryGovernmentemployment

increasedatanannualaveragerateof1.2percent,whileAustralianGovernment

employment(excludingdefence)decreasedbyanannualaveragerateof1.7percent

overtheperiod.

Thedefencecontributiontoemploymentgrowthsince1990‑91hasbeensubstantial,

withaverageannualgrowthof6.3percentovertheperiod.Furtherdetailsofthe

defencebuild‑upareprovidedinChapter16.

YearendedJuneAustralian

Gov’tTerritory

Gov’tLocalGov’t

Total(excludingDefence) Defence* Total

1991 4400 16500 1200 22100 2086 24186

1992 4350 15725 1150 21225 2281 23506

1993 3900 14950 1200 20050 2561 22611

1994 3775 15475 1200 20450 2543 22993

1995 3975 15775 1300 21050 2524 23574

1996 4050 16125 1975 22150 3312 25462

1997 4175 16050 2150 22375 3384 25759

1998 3500 16200 2625 22325 3756 26081

1999 3550 16000 2600 22150 4111 26261

2000 3450 15975 2600 22025 4662 26687

2001 3550 16675 2600 22825 4641 27466

2002 3850 17050 2950 23850 5119 28969

2003 3450 17925 2900 24275 5191 29466

2004 3400 18625 3325 25350 5041 30391

2005 3475 19475 3425 26375 5009 31384

2006e 3 400 19 700 3 225 26 325 5 180 31 505

CompoundAnnualGrowth(%)

1990‑91to2005‑06e ‑1.7 1.2 6.8 1.2 6.3 1.8

2000‑01to2005‑06e ‑0.9 3.4 4.4 2.9 2.2 2.8

e:estimate

*DefencenumbersasatJuneforeachyear,notyearaverage

Source:NorthernTerritoryTreasury,ABSCat.No.6248.0.55.001,DepartmentofDefence

EmploymentdatareferencedinTable15.1arebasedontheAustralianBureauof

StatisticsWageandSalaryEarners,PublicSectordataseries(WSE),whichreports

onthenumberofpublicsectorpaidpositionsintheNorthernTerritory.Itisnota

full‑timeequivalentnumber,norisitameasureofthenumberofemployees.Growth,

therefore,partlyreflectsanincreasingnumberofcasualandpart‑timepositions.

Table 15.1: Public Sector Employee Numbers (year average)

Table 15.1: Public Sector Employee Numbers (year average)

�2�The Public Sector

TheNorthernTerritoryOfficeoftheCommissionerforPublicEmployment(OCPE)

providesanalternative,full‑timeequivalentmeasureofemployeesunderthe

Public Sector Employment and Management ActforTourismNTandAboriginalAreas

ProtectionAuthorityemployeesandpolice.TheOCPEmeasureexcludesCharles

DarwinUniversity,CentralianCollege,BatchelorInstituteofIndigenousTertiary

Education,NorthernTerritoryRuralCollege,MenziesSchoolofHealthResearch,

TerritoryInsuranceOfficeandLegalAidCommissionbecausetheyarenotrelevant

totheNTPS.IntheDecemberquarter2005,OCPEreportedtheaveragenumber

offull‑timeequivalentNTPSemployeesat15837,a3.6percentincreasefromthe

Decemberquarter2004averageof15285.

OCPEdatareportsthatthenumberofself‑identifiedIndigenousemployeesinthe

TerritoryGovernmentatDecember2005was1154,anincreaseof14.6percent

overtheyear.Indigenousemploymentrepresents6.8percentoftheTerritory

Governmentemploymentcomparedto6.1percentoneyearago.Thesefigures

relyonself‑identification,andarethereforelikelytounderstatethetruelevelof

Indigenousemployment.IncreasedIndigenousemploymentreflectsinitiativesto

promoteIndigenouscareerdevelopmentaswellasapossibleincreaseinthenumber

ofemployeeswhoself‑identifyasIndigenouspersons.

OutlookModestgrowthinthenon‑defencepublicsectorexpenditureandemploymentis

expectedin2006‑07,consistentwiththeTerritoryGovernment’scommitmentto

recruitmorepolice,nursesandteachers.

IndigenousEmploymentIndigenousEmployment

�2� The Public Sector


�2�Defence

Defence

• TheAustralianDefenceForcecontributessignificantlytotheNorthernTerritory

economy.ThedefencepresenceintheTerritoryhasmorethandoubledsincethe

early1990s,withthenumberofdefencepersonnelandtheirfamiliesincreasing

fromabout6200inJune1992toanestimated12900inJune2006.

• About10percentofAustralianpermanentdefenceforcepersonnelarenow

basedintheTerritory.RecurrentdefenceexpenditureintheTerritorytotalled

$839millionin2004‑05.

• MajordefenceactivitiesunderwayintheTerritoryincludetheconstruction

ofthe$65millionBradshawFieldTrainingAreanearTimberCreekandthe

developmentofthe$170millionnewsuburbofLyons(atLeePoint).

• SupplyandsupportcontractsforthenewArmidaleClasspatrolboats,Abrams

tanksandTigerhelicopterswillprovidesignificantandongoingbenefitstothe

Territoryeconomy.

The1987DefenceWhitePaperoutlinedastrategicdecisiontoadoptanorthern

defenceposition,recognisingthatanypotentialthreattoAustralia’ssecurityislikelyto

comefromthenorth.TheTerritory,byvirtueofitslocation,becameakeycomponent

ofdefenceplanningandsubsequentlyafocusforoperations,whichincludedthe

relocationofasignificantproportionofdefencecapabilitytotheTopEnd.

Defencestrategicprioritieshavecontinuedtodevelopand,sincethe2000Defence

WhitePaper,thereisnowagreateremphasisoncontributingtothesecurityofthe

immediateregion,buildingcapacitytorespondtoemergenciesandterrorismand

increasedcoastalsurveillance.Withtheexpansionofthenortherndefencerole,

Darwin’simportanceasastrategicdefencebase,whichishometoHeadquarters

NorthernCommand,willremainanintegralelementoftheTerritoryeconomyintothe

foreseeablefuture.

About10percentofallAustralianpermanentdefenceforcepersonnelarebasedin

theTerritory,whichissignificantcomparedtotheTerritory’s1percentshareofthe

totalAustralianpopulation.About6percentoftotalnationaldefenceexpenditure

occursintheTerritory(Table16.1).

DefencePersonnel*

%

DefenceExpenditure

%

TotalPopulation

%

NewSouthWales 31.9 31.2 33.3

Victoria 11.8 16.1 24.7

Queensland 24.2 23.0 19.5

SouthAustralia 4.9 6.2 7.6

WesternAustralia 7.7 8.7 9.9

Tasmania 0.3 1.6 2.4

Northern Territory 9.9 6.2 1.0

AustralianCapitalTerritory 9.3 7.0 1.6

Australia 100.0 100.0 100.0

*Excludescivilians,reserveforcesandpersonnelservingoverseas

Source:DepartmentofDefence,ABSCat.No.3101.0,unpublishedABSdata


KeyPointsKeyPoints

Table 16.1: Population, Permanent Defence Force Members and

Defence Expenditure Proportions, 2004-05

Table 16.1: Population, Permanent Defence Force Members and

Defence Expenditure Proportions, 2004-05

�26 Defence


DefencePopulationTheArmyPresenceintheNorth(APIN)programcommencedin1992andinvolved

therelocationoftheArmy’s1stBrigadetoDarwinovertheperiod1992‑2001.The

APINprogramwastheprimaryforcebehindthedefencebuildupintheTopEnd.The

relocationinvolvedabout23001stBrigadedefencepersonnelfromHolsworthyin

NewSouthWalesandPuckapunyalinVictoria(alongwithalargenumberofarmoured

vehicles,supportvehiclesandsupportingequipment).

Sincetheearly1990s,AustralianDefenceForcepersonnelbasedintheTerritory

(includingDepartmentofDefencecivilians)havemorethandoubled,increasing

fromabout2600inJune1992toanestimated5600inJune2006.IntheTerritory,

armypersonnel,estimatedat3500inJune2006,accountforabout63percentof

totaldefencepersonnel.ThenumberofnavypersonnelbasedintheTerritoryhas

changedlittleoverthepastdecade,averagingaround550personnel,butisexpected

toincreasetoabout580inJune2006,whilethenumberofairforcepersonnelis

estimatedtohavefallenfrom1385inJune1992toabout1100inJune2006.In

June2006,therewillbeanestimated400civiliandefencepersonnelandabout

780reservistsbasedintheTerritory(Chart16.1).


Source:NorthernTerritoryTreasury,DepartmentofDefence

ThedefencepresenceintheTerritorycontributestotheeconomynotonlythrough

consumptionandinvestment,butalsothroughthepartnersofdefencepersonnel,

oftenskilled,enteringthelabourforce.The2003DefenceCensusfoundthataround

56percentofpartnerswhowerenotalsopermanentdefenceforcemembersworked

fulltime.Ofallpartners,48percenthadformalqualifications(bachelordegreeor

higher,certificateordiploma,tradeorvocationalqualification)and22percentwere

undertakingsomeformofstudy.

ThetotalNorthernTerritorydefencecommunity–personnelandtheirfamilies–is

estimatedtohaveincreasedfromabout6200inJune1992toanestimated12900in

June2006.Thedefencecommunitycurrentlyrepresents6.3percentoftheTerritory’s

population,upfrom3.7percentinJune1992.Since1992,thenumberofdefence

membersandfamiliesbasedintheTerritoryhascontributed0.3percentagepointsto

theTerritory’saverageannualpopulationgrowthrateof1.5percent.

AnothersignificantincreasetotheTerritorydefencecommunitywasassociated

withtherelocationoftheArmy’s1stAviationRegimenttoRobertsonBarracksnear

Palmerston,andthe17newTigerArmedReconnaissancehelicoptersthatwillarrive

laterin2006.Therelocationincludedabout300personnelandtheirfamilies.

Chart 16.1: Defence Personnel Stationed in the Northern Territory

0

1

2

3

4

5

6

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Total defence personnel

Army

Airforce

Civilians

Navy

Year ended June

number (000)Chart 16.1: Defence Personnel Stationed in the Northern Territory

0

1

2

3

4

5

6

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Total defence personnel

Army

Airforce

Civilians

Navy

Year ended June

number (000)

�27Defence

DefenceExpenditureTheAustralianBureauofStatistics(ABS)estimatesthatdefencerecurrentexpenditure

(weaponsandplatforms,salariesandotheroperationalexpenses)intheTerritorywas

$839millionin2004‑05,upfrom$812millionin2003‑04.Salariespaidtodefence

personnel($363millionin2004‑05)representcloseto50percentoftotalrecurrent

defenceexpenditureoverthepastdecade(Chart16.2).Defencesalariesarean

importantdriverofconsumerdemandintheTerritory,equivalentto4.2percentof

totalconsumptionexpenditureintheTerritoryeconomyin2004‑05.

Source:ABSunpublisheddata

Darwinisanimportantnavalport,withalargenumberofRoyalAustralianNavy(RAN)

andinternationalnavyshipsvisitingtheTerritoryeachyearforregularexercises,rest

andrecreationalvisits,andmissionssuchasreliefoperationsfollowingthe2004Asian

tsunami.Thesevisitsprovideasignificanteconomicboost,particularlyexpenditureby

sailorsonshoreleaveandre‑supplyandservicestopoversinDarwin.Shipsremainin

portforanaverageoffourdays,withcrewsizesbetween100and1000.Itisestimated

thateachUnitedStatesNavysailorspends$150‑$200aday.In2005,77navyships

visitedthePortofDarwinforatotalof267visitdays,comparedto94navyshipsand

320visitdaysin2004.

ThedefencepresenceintheTerritoryprovidessignificantopportunitiesforlocal

industry.In2003,theTerritoryGovernmentestablishedtheDefenceSupportDivision

(DSD)tohelpacceleratethegrowthofTerritoryindustrycapabilitytocapture

defence‑relatedopportunities.InconjunctionwiththeAustralianIndustryand

DefenceNetwork‑NT,theDSDaimstomaximiselocalindustrybenefitsbyidentifying

opportunitiesandencouragingTerritorybusinessestodevelopskillsandpartnerships

tosupplydefencerequirements.Further,theDSDaimstodeveloplocaldefence

industrycapabilitybasedonanunderstandingofchangingdefencerequirements.

Morerecently,theDSDhastakenontheadditionalroleofDefenceCommunity

LiaisontohelpsupportdefenceorganisationssuchastheDefenceCommunity

Organisation,DefenceHousingAuthority(DHA)andDefenceFamiliesAssociation

assistdefencepersonnelandtheirfamiliespostedtotheTerritory.

Overthepasttenyears,thevalueandnumberofdefencecontractswithTerritory

businesseshavegrownsteadily.Otherdevelopmentsincludethegreaterlevelsof

outsourcingofdefenceservicesandtheincreasedcapacityofTerritorybusinesses

tomeetspecialiseddefencerequirements.Theserelationshipshaveprovided

opportunitiesfornewcapacityandcapabilitytobedeveloped,broadeningand

enhancingthelocaleconomy.

Chart 16.2: Defence Recurrent Consumption Expenditure in the

Northern Territory

0

200

400

600

800

1000

92 93 94 95 96 97 98 99 00 01 02 03 04 05

Total

Operational

Salaries

Year ended June

$MChart 16.2: Defence Recurrent Consumption Expenditure in the

Northern Territory

0

200

400

600

800

1000

92 93 94 95 96 97 98 99 00 01 02 03 04 05

Total

Operational

Salaries

Year ended June

$M

NavyShipsNavyShips

DefenceSupportDivisionDefenceSupportDivision

�2� Defence


ExamplesoflocallyawardedcontractsincludemaintenanceandrepairoftheexistingLeopardtanksandFremantleClasspatrolboats.Morethan100localcontractorsarealreadyengagedwithsupplyandsupportcontractsassociatedwiththenewArmidaleClasspatrolboatsandtheprovisionofmedicalandsecurityservices.Inaddition,90percentofthe$82millionbuildingworksassociatedwiththerelocationofthe1stAviationRegimentwasawardedtolocalconstructioncompaniesandisscheduledforcompletionbymid2006.ThisincludestheconstructionofnewfacilitiesandworkingareaswithinRobertsonBarrackstohousethenewTigerhelicoptersanddefencepersonnel.The$65milliondevelopmentoftheBradshawFieldTrainingArea(dueforcompletionbytheendof2006)forthearmy,whichwillformpartoftheAustralian‑UnitedStatesJointCombinedTrainingCapability,providedemploymentopportunitiesforIndigenousenterprisesandotherTerritorybusinesses.

TheTerritoryresidentialconstructionboomofthelate1990swaslargelytheresultofincreaseddefencedemandforhousing.TherelocationoflargenumbersofdefencepersonnelandtheirfamiliestotheTopEndhasresultedinasignificantandpermanentincreaseintheTerritory’spopulation,withanassociatedincreaseindemandforhousingandothergoodsandservices.Anothermajorroundofconstructionisexpectedtocommenceinmidtolate2006associatedwiththedevelopmentofthenewsuburbofLyonslocatedatLeePointinDarwin.

In2003,theDHAopenedtheVantagePointApartmentcomplex(athreetower,95unitdevelopmentonthefringeoftheDarwincentralbusinessdistrict)tocaterfordefencepersonnelwhopreferadifferentstyleofaccommodation.

DHAcurrentlymanagesaround2200dwellingsintheNorthernTerritory,withthemajoritylocatedinDarwinandPalmerston(Chart16.3).Defencehousinggrewstronglybetween1992and1999,withaveragegrowthindwellingstockof9.4percentperannum.However,since1999therehasbeenamarginaldeclineinthestockofdwellingsasDHAhasdivesteditselfofolderstock.

Duetothecombinationofexpiredleases,stockdisposalsandanincreasingdemandforhousing,DHAplanstoinvestaround$170millioninthedevelopmentofthenewsuburbofLyonsoverthenextfiveyears.Thisprojectwillcomprise300newDHAhomesandafurther350allotmentsavailableforsaletothepublic.Whencompleted,thisprojectwillincreaseDHA‑manageddwellingstockbyabout14percenttoabout2500dwellings.ThelandclearingstageoftheLyonsdevelopmenthascommenced.Stage1oftheconstructionphase,whichincludesaround75DHAhomes,isexpectedtobegininmidtolate2006andisdueforcompletionin2007.In2005‑06,DHAplanstocompleteanadditional21homesinthesuburbofRoseberyinPalmerston.


Source:NorthernTerritoryTreasury,DefenceHousingAuthority

DefenceHousingDefenceHousing

Chart 16.3: Defence Housing Authority Dwelling Stock

0

500

1 000

1 500

2 000

2 500

3 000

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Total

Darwin and Palmerston

Katherine

Alice Springs

Year ended June

number Chart 16.3: Defence Housing Authority Dwelling Stock

0

500

1 000

1 500

2 000

2 500

3 000

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06e 07f

Total

Darwin and Palmerston

Katherine

Alice Springs

Year ended June

number

DefenceContracts

�2�Defence

DefenceForceIndustryTheAustralianDefenceForce(ADF)ismadeupofthethreeprimaryservices–Army,

NavyandAirForce–alongwithothergroupsinvolvedinsupportandcoordination

functions.MajordefencesitesintheNorthernTerritoryinclude:

• LarrakeyahBarracksinDarwin;

• RobertsonBarracksnearPalmerston;

• HMASCoonawarrainDarwin;

• RAAFBaseDarwin;

• RAAFBaseTindalnearKatherine;and

• theJoint(UnitedStatesandAustralia)DefenceFacilityPineGapnearAliceSprings.

OtherdefencesitesincludetheDefenceEstablishmentBerrimah,BradshawField

TrainingArea(nearTimberCreek),MountBundyFieldTrainingArea(neartheMary

River)andDelamereBombingRange(nearKatherine).

InJune2006,thereareexpectedtobeanestimated3500full‑timearmypersonnel

stationedintheTerritory.

RobertsonBarracks,locatednearPalmerston,isthelargestoperationalbaseinthe

TerritoryandishometotheArmy’s1stBrigade.Therelocationofthe1stBrigadein

the1990sandconstructionoftheRobertsonBarrackscomplexprovidedasignificant

boosttotheTerritoryeconomyandtothedevelopmentofthePalmerstontown

centreandsuburbs.Therelocationofthe1stAviationRegimentfromQueenslandto

theNorthernTerritorywillcontinuetoprovideafurtherboosttothelocaleconomy.

TheArmyalsooperatestheNorforcesurveillanceunit(NORFORCE)comprisingaround

600personnelwhenatfulloperationallevel.About65‑70percentofpersonnelare

Indigenous,withasignificantproportionfromremotecommunities.

InJune2006,thereareexpectedtobeanestimated580full‑timeRoyalAustralian

Navy(RAN)personnelstationedintheTerritory.

BorderprotectionistheprimaryfocusofRANoperationsintheTerritory,with

Darwin‑basedpatrolboatsundertakingsurveillancepatrolsofAustralia’snorthern

approaches.ThepatrolboatsplayanimportantroleinOperationCranberrytotarget

illegalfishingandsmugglinginnorthernwaters,andarealsoinvolvedinsearchand

rescueoperations.

HMASCoonawarraishometothemajorityoftheRAN’sFremantleClasspatrolboats.

Thesepatrolboatswillbereplacedbyafleetof14newArmidaleClasspatrolboats

byearly2008,witheightbasedinDarwin,andanadditionaltwooperatingoutof

DampierinWesternAustralia,withcrewandservicesprovidedfromDarwin.Civil

worksatHMASCoonawarrahavecommencedtoextendthesynchro‑liftandwharf

toaccommodatethelargerArmidaleClasspatrolboatsandtoprovideanewport

servicesbuildingandcrewchangefacility.Constructionisdueforcompletionbythe

endof2006atanestimatedcostofabout$19million.

ArmyArmy

NavyNavy

��0 Defence


InJune2006,thereisexpectedtobeanestimated1200RoyalAustralianAirForce

(RAAF)personnelstationedintheTerritory.

RAAFBaseTindalisthemainoperationalbaseinthenorthandishometoanF/A‑18

fightersquadron.Itisalsoastrategicbaseforlogisticssupporttodeployedforces.

RAAFBaseDarwin,Australia’smostnorthernairfield,isaforwardoperatingbase

forRAAFoperationsandexercisesandregularlyhostsforeignaircraftduringthese

exercises.RAAFBaseDarwinisalsohometoNo.396CombatSupportWing,which

commandssquadronsbasedinDarwin,TownsvilleandButterworth(Malaysia),andis

usedasabaseforsurveillanceaircraft.

TheTerritoryisalsohometotheDelamereAirWeaponsRangefacility(south‑westof

Katherine)andoneofAustralia’sthreeJindaleeOvertheHorizonradarsurveillance

units(nearAliceSprings).

HeadquartersNorthernCommand(HQNORCOM),thejointforceheadquarters

responsibleforthedefenceofnorthernAustralia,isbasedatLarrakeyahBarracksin

Darwin.ItsjurisdictionincludestheTerritory,northQueenslandandthenorthernhalf

ofWesternAustralia.

HQNORCOMisalsoengagedwiththeJointOffshoreProtectionCommandthatis

responsiblefortheimplementation,coordinationandmanagementofoffshore

maritimesecurity,includingtheprotectionofoffshoreoilandgasassets.

TheJointDefenceFacilityatPineGapnearAliceSpringsisacriticalcomponentofthe

UnitedStates’globalmissiledefenceandearlywarningsystem.Thefacilityisjointly

administeredbytheAustralianandUnitedStatesdefencedepartments.Itemploysan

estimated900personnel,ofwhomabouthalfareAustralian.Facilitypersonneland

theirdependants,estimatedatabout3000,represent12percentoftheAliceSprings

population.

AtpresenttherearetwoongoingprimarydefenceoperationsintheTopEnd:

• OperationCranberryprovidesassistancetothecivilCoastWatchsurveillance

programtoprotectAustralia’snorthernwaters;and

• OperationReflexIIcontributestothedetection,interceptionanddeterrenceof

vesselscarryingunauthorisedarrivalsinAustralia’snorth‑westwaters.

Territory‑baseddefencepersonnelhaveplayedasignificantroleinAustralia’s

militaryinvolvementinIraq,particularlyintheareasoftransport,security,air

trafficcontrolandmedicalsupport.Inaddition,mostofthe450troopsthatmake

uptheAlMuthannaTaskGroupthatprovidesupportandsecurityforJapanese

reconstructionandsupporttroopsinsouthernIraq,aredrawnfrom1stBrigade

personnelbasedintheTerritory.

Territory‑baseddefencepersonnelhavealsobeeninvolvedinreliefoperationsas

partofAustralia’sresponsetothe2004AsiantsunamiandthePakistanearthquakein

November2005.

AirForceAirForce

HeadquartersNorthernCommand

HeadquartersNorthernCommand

JointDefenceFacilityPineGapJointDefenceFacilityPineGap

OperationsandDeploymentsOperationsandDeployments

��Defence

DefenceexercisesareregularlystagedintheTerritoryandprovideamajorboostto

theeconomythroughsupplyandsupportcontractsandincreasedvisitornumbers.In

2005‑06,theTerritoryhostedthreemajorexercises:

• ExerciseKakaduVIIwasthelatestinaseriesofmultinationalmaritimeexercises

intheseasadjoiningDarwin.Itinvolvedmorethan1700defencepersonnelfrom

Australia,NewZealand,Singapore,Malaysia,PapuaNewGuineaandIndonesiawith

observersfromIndia,France,ThailandandKorea.

• ExerciseAlbatrossAusindo,conductedinApril2005,wasthefirstcombined

defenceexercisewithIndonesiasince1999.Themaritimeairexercise,whichaims

toenhancemaritimesecurityandfostercloserrelationsbetweenIndonesiaand

Australia,willbeconductedagaininMay2006.

• ExercisePacificProtector06,amajorProliferationSecurityInitiative,was

conductedintheDarwinareaduringApril2006andattractedrepresentativesfrom

32countries.

OutlookAlthoughtheinitialimpactoftheAPINprogramontheTerritoryeconomyhaspassed,Darwin’spositionatAustralia’snorthernapproachwillseeitremainofstrategicrelevancetoAustralia’sdefence.Therelocationofthe1stAviationRegimentwillcontinuetoincreasealreadysignificantlevelsofdefenceinvestmentandconsumptionexpenditureintheTerritory.

The$170millionLyonsdevelopmentprojectwillboosttheNorthernTerritoryeconomy

overthenextthreetofouryearswiththeconstructionof300houses.Whencompleted,

itwillbringDHAhousingstockintheNorthernTerritorytoaround2500dwellings.

Thereplacementofpatrolboats,helicoptersandtanksbasedintheTerritorywill

provideopportunitiesforlocalbusinesstocompeteformaintenanceandother

contracts,aswellasattractingnationalandinternationalbusinesstotheTerritory.

TofurtherdeveloptheArmy’slandoperationscapabilityinthenorth,the1stBrigade’scurrentdefencetankfleet(Leopardtanks)willgraduallybereplacedfrom2007with41re‑conditionedUSM1A1Abramstanks(plusavarietyofsupportvehicles).InsupportofthearrivalofnewAbramstanks,theGovernmenthasannouncedthereleaseof60hectaresoflandclosetoRobertsonBarracksforthedevelopmentofanindustryparkthatwillincludeaDefenceSupportHubtoprovidealocationformaintenanceandsupportcontractstobecarriedoutintheTerritory.

ToaccommodatethenewArmidaleClasspatrolboats,additionalconstructionworkat

HMASCoonawarrahascommencedatanestimatedcostof$19million.Thisisduefor

completionbytheendof2006.

Lookingfurtherahead,aredevelopmentofRobertsonBarracksisplannedand

includestheprovisionofnewandupgradedfacilitiesfortraining,emergency

response,workingaccommodationandequipmentsupport.Anothermajorpotential

upgradeisRAAFDarwinRedevelopmentStageTwo,whichinvolvesupgradesto

existingfacilitiesincludingfuelfarms,workshops,afitnesscentre,airfieldlightingand

anewlogisticsheadquarters.FurtherredevelopmentworkatRAAFTindalisalso

planned.NewfuelstoragefacilitiesfortheRANandongoingmaintenanceoffield

trainingareasarealsopotentialareasforfuturedevelopment.

ExercisesExercises

DefenceSupportHubDefenceSupportHub

DarwinNavalBaseUpgradeDarwinNavalBaseUpgrade

PlannedCapitalExpenditurePlannedCapitalExpenditure

��2 Defence


ExercisePitchBlackisabiennialexerciseinvolvingtheRAAFandairforcesfrom

variousothercountries.In2004,theexerciseinvolvedmorethan1500personnelfrom

Australia,Singapore,ThailandandFrance,andinjectedabout$7millionintothe

NorthernTerritoryeconomy.ThenextPitchBlackExerciseisplannedfor

July/August2006andislikelytohaveasimilarimpactontheTerritoryeconomy.

OtherfutureexerciseactivitythatwillinvolveTerritorybasedADFunitsmayinclude:

• ExerciseAlbatrossAusindo,tobeconductedagaininMay2006;

• ExerciseAcesNorth,acombinedAustralianandUSairstrikeexerciseplannedfor

May/June2006;

• ExerciseSouthernFrontier,involvingUnitedStatesMarineCorpsoperatingfrom

RAAFBaseTindalandplannedforSeptember/October2006;

• ExercisePredator’sGallop,developingthe1stBrigade’skeywar‑fightingcapabilities

andconductedatmajorfieldtrainingareaslocatedineitherQueenslandorthe

NorthernTerritory;and

• ExerciseTalismanSabre07,abiennialjointexercisethatmayincludesome

activityatBradshawFieldTrainingAreawestofDarwin.In2005itwasconducted

innorthernQueensland,andinvolvedmorethan6000Australianand11000

USpersonnelfromnavy,army,airforce,marineandspecialforcesunits.

DefenceExercisesin2006‑07DefenceExercisesin2006‑07

��Abbreviations

Abbreviations

ABARE AustralianBureauofAgricultureandResourceEconomics

ABC AustralianBroadcastingCorporation

ABS AustralianBureauofStatistics

ACCC AustralianCompetitionandConsumerCommission

ADF AustralianDefenceForce

ADSL AsymmetricDigitalSubscriberLine

AFANT AmateurFishermansAssociationoftheNorthernTerritory

APEC Asia‑PacificEconomicCooperation

APIN ArmyPresenceintheNorth

APTC AsiaPacificTransportConsortium

ARC AustralianResearchCouncil

ASLAV AustralianLightArmouredVehicle

AVO AustralianValuationOffice

AWE averageweeklyearnings

AWFTE averageweeklyfull‑timeearnings

A$ Australiandollar

B billion

BIITE BatchelorInstituteofIndigenousTertiaryEducation

BOOT build‑own‑operate‑transfer

BSE bovinespongiformencephalopathy(madcowdisease)

CAS CommercialAccommodationSurvey

Cat.No. cataloguenumber

CBD centralbusinessdistrict

CCIF CoordinatedCommunicationsInfrastructureFund

CCP CensusCoordinationPlan

CDEP CommunityDevelopmentEmploymentProjects

CDMA CodeDivisionMultipleAccess

CDU CharlesDarwinUniversity

CIC CanberraInvestmentCorporation

CPI ConsumerPriceIndex

cpl centsperlitre

CSC ComputerSciencesCorporation

CSIRO CommonwealthScientificandIndustrialResearchOrganisation

DBERD DepartmentofBusiness,EconomicandRegionalDevelopment

DCA DevelopmentConsentAuthority

DEET DepartmentofEmployment,EducationandTraining

DEWR DepartmentofEmploymentandWorkplaceRelations

DHA DefenceHousingAuthority

DIDS DefenceIntegratedDistributionSystem

DSD DefenceSupportDivision

e estimate

EBA enterprisebargainingagreement

EOP ElectronicOutbackProject

ERP estimatedresidentpopulation

ESO essentialservicesoperator

EU EuropeanUnion

f forecast

FIFO flyinflyout

FMD footandmouthdisease


�� Abbreviations

FSGS FuelSalesGrantScheme

FTE full‑timeequivalent

GDP grossdomesticproduct

GEMCO GrooteEylandtMiningCompany

GOC governmentownedcorporation

GSP grossstateproduct

GST goodsandservicestax

HCS HealthandCommunityServices

HMAS HerMajesty’sAustralianShip

HQNORCOM HeadquartersNorthernCommand

ICHO IndigenousCommunityHousingOrganisation

ICT informationandcommunicationstechnology

IDL interactivedistancelearning

IEDTF IndigenousEconomicDevelopmentTaskForce

IHANT IndigenousHousingAuthorityoftheNorthernTerritory

ILUA IndigenousLandUseAgreement

IMF InternationalMonetaryFund

INTERFET InternationalForceEastTimor

ISDN IntegratedServicesDigitalNetwork

IT informationtechnology

JPDA JointPetroleumDevelopmentArea

JLUN JointLogisticsUnit‑North

LATIS LearningandTechnologyinSchools

LFS LabourForceSurvey

LGANT LocalGovernmentAssociationoftheNorthernTerritory

LHS lefthandside

LNG liquefiednaturalgas

LPI LabourPriceIndex

LPG liquidpetroleumgas

M million

MLA MeatandLivestockAustralia

NCP NationalCompetitionPolicy

NT NorthernTerritory

NTHA NorthernTerritoryHorticulturalAssociation

NTN NetworkingtheNation

NTPS NorthernTerritoryPublicService

OCPE OfficeoftheCommissionerforPublicEmployment

OECD OrganisationforEconomicCooperationandDevelopment

OPEC OrganisationofPetroleumExportingCountries

PAMs preassembledmodules

PES PostEnumerationSurvey

RAAF RoyalAustralianAirForce

RAN RoyalAustralianNavy

RBA ReserveBankofAustralia

REIA RealEstateInstituteofAustralia

REINT RealEstateInstituteoftheNorthernTerritory

RHS righthandside

RSE relativestandarderror

SARS SevereAcuteRespiratorySyndrome

SBS SpecialBroadcastingService

SCTV SouthernCrossTelevision

SE standarderror

��Abbreviations

SFD statefinaldemand

TIO TerritoryInsuranceOffice

TWI trade‑weightedindex

UK UnitedKingdom

ULCEZ UntimedLocalCallsinExtendedZones

US,USA UnitedStatesofAmerica

USD,US$ UnitedStatesdollar

USO universalserviceobligation

VET vocationaleducationtraining

WSE WageandSalaryEarners,publicsectorseries


��6

Glossary

BroadbandAn‘alwayson’internetconnectionwithanaccessspeedequalto,orgreaterthan256kilobitspersecond(kbps).

Broadbandhasthecapacitytoaccommodateaudio,videoanddatachannelssimultaneously.

ChainVolumeMeasureChainvolumemeasuresprovideestimatesofrealchangebyfactoringinchangingpricerelativitiesfromyeartoyear.

ConfidenceIntervalConfidenceintervalsrepresentthelikelihoodinwhichavaluelieswithinanidentifiedrangeofestimates.Confidence

intervalsareconstructedusinganestimateanditsassociatedstandarderror.

ConsumerPriceIndexAgeneralindicatorofthepricespaidbyhouseholdconsumersforaspecificbasketofgoodsandservicesinoneperiod

relativetothecostofthesamebasketinabaseperiod.

ConstantDollarsUsedtoremovetheimpactofpricechanges(inflation)intimeseriesdata.Inthebaseyear,currentpricesequalconstant

prices.Toconvertcurrentdollarvaluestoconstantdollarvalues,itisnecessarytodeflateorinflatebytheappropriate

inflationindexnumber.

CurrentDollarsAmeasurethatisnotadjustedforinflationorchangesinthepurchasingpowerofmoney.Currentdollarsspecifythevalue

atacertainpointintimeandarenotusedtocomparevaluesoveraseriesoftimeperiods.

DwellingUnitAself‑containedsuiteofrooms,includingcookingandbathingfacilities,intendedforlong‑termresidentialuse.

EmployedPersons15yearsandolderwhoworkedforonehourormoreintheweekthattheresidentemploymentsurveywas

conducted.

FinalConsumptionExpenditureThevalueofpurchasesofgoodsandservicesforconsumptionbyhouseholdsandgovernment.Excludespurchasesof

fixedassets,intermediategoodsoradditionstoinventories.Intermediategoodsarethoseusedasinputsformakingother

goods.

GoodsandServicesTaxFrom1July2000,theAustralianGovernmentintroduceda10percenttaxongoodsandservices(GST),replacingthe

previouswholesalesalestaxregime.Someitemslikebasicfood,health,educationandexportsareGSTfree.

GrossDomesticProductThetotalvalueofgoodsandservicesproducedinAustraliaovertheperiodforfinalconsumption.Intermediategoods,or

thoseusedintheproductionofothergoods,areexcluded.Grossdomesticproductcanbecalculatedbyeithersumming

totaloutput,totalincomeortotalexpenditure.

GrossFixedCapitalFormationAdditionstothestockofrealcapitalbyprivateandpublicsectors.Realcapitalrepresentsassets,exceptlandandnatural

resources,whicharecapableofproducingincome,forexample,newandsecond‑handbuildings,plantandequipment,

androads.

GrossStateProductSimilartogrossdomesticproduct,exceptthatitmeasuresthetotalvalueofgoodsandservicesproducedinajurisdiction.

Itisthesumofallincome,namelywages,salariesandprofits,plusindirecttaxeslesssubsidies.Itcanalsobecalculatedby

measuringexpenditure,whereitisthesumofstatefinaldemandandinternationalandinterstatetrade,changesinthe

levelofstocks,andabalancingitem.

Glossary

��7

LandbridgeIntermodaltransportsystemofshippinginternationalcargoacrossacontinent,typicallybytrain,fromonecoastto

another.

LabourForceAllpersons15yearsandoverwhoareavailableforwork,thatis,employedplusunemployedpersonsactivelyseeking

work.Excludesdefenceforcepersonnelandnon‑residents.

MiscellaneousGoodsandServicesIncludesitemssuchaspersonalcare,jewellery,watchesandclocks,andhealthinsurance(sourcedfromABSinternal

documents).

MovingAnnualTotalAmethodusedtosmoothdata.Thesesmoothingmethodsironouttheshort‑termfluctuationsinthedatabyaveraging

observationscollectedovera12‑monthperiod.

NominalTermsWheredataisnotadjustedforinflationorchangesinthepurchasingpowerofmoney.

NORFORCENorforcesurveillanceunit

OriginalTermsDatainoriginaltermsisbasic,rawdataascollectedinasurveyoracensus.Itisnotadjustedforseasonality,orsmoothed

toremoveirregularitiestoformatrendseries.

ParticipationRateTheproportionofthepopulationover15yearsofagewhoareworkingorlookingforwork.

PrivateBusinessInvestmentPrivatefixedcapitalformationfornon‑residentialbuildingsandstructures,machineryandequipment,livestock,

intangiblefixedassetsandownershiptransfercostsbeforedepreciation.

RelativeStandardErrorTherelativestandarderroristhestandarderrorexpressedasaproportionoftheestimate.Thismeasureprovidesan

immediateindicationofthepercentageerrorlikelytohaveoccurredduetosampling.

SampleErrorSampleerroristhedifferencebetweenestimateobtainedfromaparticularsampleandthevaluethatwouldbeobtained

ifthewholepopulationwasenumeratedunderthesameprocedures.

SeasonallyAdjustedTermsTheseasonallyadjustedseriesisatimeseriesofestimateswiththeeffectsofnormalseasonalvariationremoved,thatis,

thosefluctuationsthatexhibitaregularpatternataparticulartimeofyear.Seasonallyadjustedtermsallowtheeffectsof

othernon‑seasonalinfluencesontheseriestobemoreclearlyrecognised.

StandardErrorThestandarderrorofanestimateisameasureofthevariationintheestimatefromallpossiblesamples,andthereforeis

ameasureoftheprecisionwithwhichanestimatefromaparticularsampleapproximatestheaverageoverallpossible

samples.

StateAccountsAnAustralianBureauofStatisticsframeworkandmethodologyformeasuringeconomicgrowth(seegrossdomestic

product,grossstateproductandstatefinaldemand).

StateFinalDemandFinalconsumptionexpenditureplusgrossfixedcapitalformationineachjurisdiction.Itrepresentsthetotalexpenditure

onconsumptionandinvestmentinajurisdiction.

Glossary


�� Glossary

TermsofTradeTheratioofexportpricestoimportprices.Animprovementinthetermsoftradeoccurswhenexportpricesriserelativeto

importprices.Ithasasignificantinfluenceonthevalueofacountry’scurrency.

Trade‑WeightedIndexIndexofweightedaverageexchangevalueofonecurrencyagainstcurrenciesofothercountries.Australia’sTWIisan

indicatorofhowtheAustraliandollarisperformingcomparedtoitsmajortradingpartners.Thecompositionofthe

indexisdeterminedbyAustralia’stwo‑waytradewithitsmajortradingpartners,andaccountsforatleast90percentof

aggregatetrade.

TrendTermsThetrendseriesisusedtoanalysetheunderlyingbehaviourofaseriesovertime.Trendtermsarederivedbysmoothing

theseasonallyadjustedseriessoastoreducetheimpactofanyirregularcomponentsofthatseries.

UnemployedPersons15yearsandolderwhowerenotemployedduringtheweekofthelabourforcesurveyandwereactivelylooking

forworkinthelastfourweeks.

UnemploymentRateThenumberofunemployedpersonsexpressedasapercentageofthelabourforce.

VisitorTourismResearchAustraliadefinesavisitorassomeonewhohasstayedinaplaceatleast40kilometresfromtheirusual

placeofresidenceforatleastonenight,butwhoisawayfromhomeforlessthan12months.Aninternationalvisitoris

definedasanoverseasarrivalwhostayedinAustraliaforlessthan12months.

Glossary

��Charts

Charts

Chart1.1: IndustryProportionsofGSP/GDP,2000‑01to2004‑05 5

Chart1.2: TerritoryEmploymentandGSPProportions,2000‑01to2004‑05 7

Chart1.3: ProportionofSFD,2000‑01to2004‑05 8

Chart1.4: HouseholdFinalConsumptionExpenditure,2004‑05 8

Chart1.5: TerritoryBusinessInvestment(movingannualtotal) 9

Chart2.1: TerritoryConsumption(chainvolumemeasure,movingannualtotal) 16

Chart2.2: TerritoryDwellingandBusinessInvestment(chainvolumemeasure,movingannualtotal) 17

Chart2.3: TerritoryStateFinalDemandandGrossStateProduct(chainvolume,annualpercentagechange) 18

Chart3.1: AnnualPopulationGrowth 19

Chart3.2: StateandTerritoryPopulationGrowthRatestoJune2005(averageannualgrowth) 21

Chart3.3: TerritoryPopulationGrowthbyMainCentre 21

Chart3.4: AgeDistributionofPopulation 23

Chart3.5: AgeDistributionofTerritoryPopulation 24

Chart3.6: TerritoryPopulationGrowthbyComponent 26

Chart3.7: TerritoryInterstateMigrationFlows 28

Chart3.8: TerritoryInterstateMigrationFlows,byJurisdiction,2000‑01to2004‑05(annualaverage) 29

Chart4.1: EmploymentEstimatesRelativeStandardErrors,July2005 36

Chart4.2: TerritoryStateFinalDemandandEmploymentGrowth(yearonyear) 39

Chart5.1: ConsumerPriceIndex 43

Chart5.2: AnnualPercentagePointContributiontoChangeinCPI,2005 45

Chart5.3: UnleadedRetailPetrolandCrudeOilPrices 47

Chart5.4: ExchangeRates(movingannualaverage) 49

Chart7.1: TerritoryInternationalMerchandiseTrade(movingannualtotal) 55

Chart7.2: TerritoryMerchandiseExportsbyMajorGroup(movingannualtotal) 57

Chart7.3: TerritoryMajorExportDestinations,2000‑01to2004‑05 58

Chart7.4: TerritoryMerchandiseImportsbyMajorGroup(movingannualtotal) 58

Chart7.5: MajorTerritoryImportSources,2000‑01to2004‑05 59

Chart7.6: TerritoryInternationalServicesTrade(chainvolume) 60

Chart8.1: ValueofMiningandEnergyProductionandProcessing(nominaldollars) 62

Chart8.2: ValueofMineralProductionandProcessing(nominaldollars) 64

Chart8.3: MineralExploration(movingannualtotal) 65

Chart8.4: ValueofTerritoryEnergyProduction(nominaldollars) 67

Chart9.1: EstimateofTourismasaPercentageofGSP,2004‑05 72

Chart9.2: OverseasShort‑termArrivals,Australia 72

Chart9.3: TerritoryVisitors 73


��0

Chart9.4: InternationalVisitorstotheTerritory,2004‑05 74

Chart9.5: ProportionofInternationalArrivalstoAustraliawhovisittheTerritory,2000‑01to2004‑05 75

Chart9.6: VisitorstoNorthernTerritoryNationalParks 76

Chart9.7: TerritoryAirlineCapacity(movingannualaverage) 77

Chart10.1: RuralIndustriesandFisheriesValueofProduction(nominaldollars) 81

Chart10.2: ValueofTerritoryHorticulturalProduction 85

Chart10.3: ValueofTerritoryFishingProduction(nominaldollars) 87

Chart11.1: TerritoryConstructionWorkDone(movingannualtotal,2003‑04dollars) 89

Chart11.2: TerritoryResidentialBuildingWorkDone(movingannualtotal,2003‑04dollars) 90

Chart11.3: TerritoryResidentialLandSales(movingannualtotal) 92

Chart11.4: TerritoryBuildingApprovalsforResidentialDwellings(movingannualtotal) 92

Chart11.5: TerritoryHouseandOtherDwellingsPrices(yearonyearpercentagechange) 93

Chart11.6: TerritoryHouseandOtherDwellingSales(movingannualtotal) 94

Chart11.7: TerritoryNon‑ResidentialBuildingWorkDone(movingannualtotal,2003‑04dollars) 96

Chart11.8: TerritoryEngineeringConstructionWorkDone(movingannualtotal,2003‑04dollars) 97

Chart12.1: TerritoryManufacturingSubdivisionsSelectedIndicators 101

Chart13.1: ConsumerSentiment,DecemberQuarter2005 106

Chart13.2: TerritoryRealRetailTurnover(movingannualtotal) 108

Chart14.1: TradethroughPortofDarwin 113

Chart14.2: TerritoryAirlineCapacity(movingannualaverage) 115

Chart15.1: TotalPublicSectorExpenditureasaPercentageofSFD,2004‑05 119

Chart15.2: PublicSectorExpenditureasaProportionofSFD(movingannualtotal) 120

Chart15.3: ComponentsofPublicSectorConsumptionExpenditure(movingannualtotal) 121

Chart15.4: ComponentsofPublicSectorInvestmentExpenditure(movingannualtotal) 121

Chart16.1: DefencePersonnelStationedintheNorthernTerritory 126

Chart16.2: DefenceRecurrentConsumptionExpenditureintheNorthernTerritory 127

Chart16.3: DefenceHousingAuthorityDwellingStock 128

Charts

��Tables

Tables

Table1.1: IndustryProportionsofGSP/GDP,2004‑05 6

Table2.1: TerritoryEconomicGrowthProfile 11

Table2.2: TerritoryStateFinalDemand(SFD)andGrossStateProduct(GSP) 12

Table2.3: NorthernTerritoryEconomicIndicators 15

Table3.1: AnnualPopulation 20

Table3.2: TerritoryPopulationEstimatesbyMainCentre,asat30June 22

Table3.3: PopulationComponents,asat30June 26

Table3.4: EstimatedProportionof2001PopulationPreviouslynotResidentintheStateorTerritory 28

Table4.1: TerritoryABSreportedLabourForceandEmployment(annualaverage) 37

Table4.2: EmploymentbyIndustry 41

Table5.1: ConsumerPriceIndex 44

Table5.2: AverageWeeklyExpenditurebyCategoryandHouseholdIncome 45

Table5.3: GroceryPriceSurvey,December2004toDecember2005 48

Table5.4: LabourPriceIndex(yearonyeartoDecemberpercentagechange) 49

Table6.1: GDPGrowth(annualpercentagechange) 53

Table7.1: InternationalTrade,2004‑05 56

Table8.1: MiningasaPercentageofGrossStateProductandGrossDomesticProduct,2004‑05 61

Table9.1: VisitorNightsintheNorthernTerritory 73

Table10.1: RuralIndustriesandFisheriesValueofProduction(nominaldollars) 82

Table13.1: RetailandWholesaleTrade,2004‑05 105

Table14.1: TransportandCommunicationsProductionasaProportionofGSP/GDP,2004‑05 111

Table15.1: PublicSectorEmployeeNumbers(yearaverage) 122

Table16.1: Population,PermanentDefenceForceMembersandDefenceExpenditureProportions,2004‑05 125


��2

Maps

OnshoreMineralandEnergyResources 63

TimorSeaOilandGas 66

NorthernTerritoryRuralIndustriesandFisheries 84

Maps

2006-07 budget · 2006-07 budget the economy a relatively high proportion of gsp is attributed to...

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