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
GrossStateProductGrossStateProduct
StateFinalDemandStateFinalDemand
PopulationPopulation
EmploymentEmployment
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
2006-07 budget The Economy
�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
2006-07 budget 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
Source:ABSCat.No.5220.0
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
2006-07 budget The Economy
Source:ABSCat.No.5220.0
PatternsofhouseholdconsumptionarequitedifferentintheTerritory(Chart1.4).
Territoryconsumersspendrelativelymore(asaproportionofconsumption
expenditure)onfood,recreationandculturethanAustralianconsumersingeneral.
Inrelationtofood,thisreflectshigherpricesassociatedwithhigherfreightcosts
formostgoods,combinedwithweakercompetitivepressuresrelatingtothesmall
marketsize.
Source:ABSCat.No.5220.0
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
Northern Territory Australia
%
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
Northern Territory Australia
%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
Northern Territory Australia
%
�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
2006-07 budget 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.
e:estimate;f:forecast
Source:NorthernTerritoryTreasury,ABSCat.No.5220.0
Chapter 2Chapter 2
KeyPointsKeyPoints
Table 2.1: Territory Economic Growth Profile
Table 2.1: Territory Economic Growth Profile
�2 Economic Growth
2006-07 budget The Economy
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
��Economic Growth
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.
GrossStateProductGrossStateProduct
VolatilityofGSPVolatilityofGSP
StateFinalDemandStateFinalDemand
OnshoreandOffshoreActivityOnshoreandOffshoreActivity
MajorProjectsMajorProjects
�� Economic Growth
2006-07 budget The Economy
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
��Economic Growth
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).
ConsumptionConsumption
�6 Economic Growth
2006-07 budget The Economy
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
e:estimate;f:forecast
Source:NorthernTerritoryTreasury,ABSCat.No.5206.0
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
Source:NorthernTerritoryTreasury,ABSCat.No.5206.0
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)
ConsumptionConsumption
�� Economic Growth
2006-07 budget The Economy
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
e:estimate;f:forecast
Source:NorthernTerritoryTreasury,ABSCat.No.5206.0,5220.0
InvestmentInvestment
StateFinalDemandStateFinalDemand
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
Source:NorthernTerritoryTreasury,ABSCat.No.3101.0
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
2006-07 budget The Economy
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
e:estimate;f:forecast
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
Source:ABSCat.No.3101.0
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
2006-07 budget The Economy
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.
Source:ABSCat.No.3201.0
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
2006-07 budget The Economy
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
Indigenous June 2005
Non-Indigenous June 1996
Non-Indigenous June 2005
% 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
Indigenous June 1996
Indigenous June 2005
Non-Indigenous June 1996
Non-Indigenous June 2005
% 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
2006-07 budget The Economy
Forsometimeintothefuture,theTerritoryislikelytofaceanexpanding,ratherthana
contracting,workingagepopulationasaproportionofthetotalpopulation.Thisis
uniqueamongthejurisdictionsinAustralia.TheexpectedgrowthintheIndigenous
populationhasthepotentialtoexpandtheTerritoryworkforceifopportunitiesto
participatefullyineconomicdevelopmentareprovidedandaccepted.Thiswill
providetheTerritorywithacompetitiveadvantagecomparedwiththerestof
Australia.
ComponentsofPopulationGrowthPopulationgrowthconsistsofnaturalincrease(birthsminusdeaths),netoverseas
migrationandnetinterstatemigration.
Source:ABSCat.No.3101.0
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.
Source:ABSCat.No.3101.0
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
2006-07 budget The Economy
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
Source:ABSCat.No.2004.0
TheTerritory’spopulationshowsgreaterinterstatemobilitythananyother
jurisdiction,withanestimated21percentoftheTerritory’spopulationin2001not
livingintheTerritoryfiveyearspreviously(Table3.4).OverthefiveyearstoJune2005,
around9percentofthepopulationmovedinterstateeachyear.Nationally,around
2percentofthepopulationmoveinterstateeachyear.TheTerritorytendstoattract
youngmobileinterstatemigrants;in2003‑04themedianageofinterstatemigrants
wasthelowestofthejurisdictions,at27yearsofage.Thetendencyofpeopletoleave
theTerritoryonretirement,however,reducesthemagnitudeofnetmigrationtothe
Territory.
Source:ABSCat.No.3101.0
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.
Source:ABSCat.No.3101.0
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
2006-07 budget The Economy
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
2006-07 budget The Economy
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
2006-07 budget The Economy
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
2006-07 budget The Economy
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).
Source:ABSCat.No.6202.0
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
Source:NorthernTerritoryTreasury,ABSCat.No.6202.0
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)
EmploymentEmployment
�� Labour Market
2006-07 budget The Economy
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
2006-07 budget The Economy
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
2006-07 budget The Economy
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.
e:estimate;f:forecast
Source:NorthernTerritoryTreasury,ABSCat.No.6401.0
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
2006-07 budget The Economy
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
CompoundAnnualGrowth%
1995‑96to2005‑06e 2.1 2.6
2000‑01to2005‑06e 2.3 2.8
e:estimate;f:forecast
Source:NorthernTerritoryTreasury,ABSCat.No.6401.0
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
��Prices and Wages
#insufficientdataavailable
Source:ABSCat.No.6401.0
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
2006-07 budget The Economy
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)
Australian cents per litre
Year ended June
Australian cents per litre
ParryFuelPriceInquiryParryFuelPriceInquiry
FuelTaxationFuelTaxation
�� Prices and Wages
2006-07 budget The Economy
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
��Prices and Wages
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
Source:ABSCat.No.6345.0
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
2006-07 budget The Economy
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
2006-07 budget The Economy
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
2006-07 budget The Economy
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.
e:estimate;f:forecast
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
(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
$B
�6 International Trade
2006-07 budget The Economy
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
e:estimate;f:forecast
Source:NorthernTerritoryTreasury,ABSdataservice5432.0.65.001
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
(moving annual total)
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
(moving annual total)
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
2006-07 budget The Economy
*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.
e:estimate;f:forecast
Source:NorthernTerritoryTreasury,ABSdataservice5432.0.65.001
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
(moving annual total)
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
(moving annual total)
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
2006-07 budget The Economy
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.
Source:ABSCat.No.5220.0
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
Source:ABSCat.No.5220.0
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
2006-07 budget The Economy
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).
e:estimate;f:forecast
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)
6�Mining and Energy
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
2006-07 budget The Economy
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.
e:estimate;f:forecast
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
6�Mining and Energy
Source:ABSCat.No.8412.0
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)
66 Mining and Energy
2006-07 budget The Economy
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
e:estimate;f:forecast
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)
ExplorationExploration
MineralsMinerals
6� Mining and Energy
2006-07 budget The Economy
• 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
6�Mining and Energy
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
ExplorationExploration
70 Mining and Energy
2006-07 budget The Economy
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
2006-07 budget The Economy
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).
Source:ABSCat.No.3401.0
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
2006-07 budget The Economy
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
2006-07 budget The Economy
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
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
7� Tourism
2006-07 budget The Economy
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
2006-07 budget The Economy
��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.
e:estimate;f:forecast
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
2006-07 budget The Economy
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
CompoundAnnualGrowth%
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
��Rural Industries and Fisheries
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
2006-07 budget The Economy
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
��Rural Industries and Fisheries
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
Source:DepartmentofBusiness,EconomicandRegionalDevelopment
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
2006-07 budget The Economy
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.
e:estimate;f:forecast
*Aquacultureispredominantlypearls,butalsoincludesprawnsandbarramundiaquaculture;Otherincludesspecies
offinfish,crustaceans,molluscsandechinoderms.
Source:DepartmentofBusiness,EconomicandRegionalDevelopment
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
2006-07 budget The Economy
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.
e:estimate;f:forecast
Source:NorthernTerritoryTreasury,ABSCat.Nos.8752.0,8762.0,8782.0.65.001
Chapter 11Chapter 11
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
2006-07 budget The Economy
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.
e:estimate;f:forecast
Source:NorthernTerritoryTreasury,ABSCat.No.8752.0
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
total, 2003-04 dollars)
��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
2006-07 budget The Economy
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
Source:ABSCat.No.8731.0
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
(moving annual total)
Chart 11.4: Territory Building Approvals for Residential Dwellings
(moving annual total)
��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.
Source:AustralianValuationOffice
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
2006-07 budget The Economy
Source:AustralianValuationOffice
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
(moving annual total)
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
(moving annual total)
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
2006-07 budget The Economy
Inlinewiththecompletionofmajordefenceworksandmoderatingpopulation
growth,non‑residentialbuildingeasedin1999‑2000and2000‑01.Stronggrowthof
25percentin2001‑02wasprimarilyassociatedwithupgradesattheDarwinandAlice
SpringshospitalsandthesignificantexpansionoftheAyersRockResortatYulara.
Non‑residentialbuildingactivityfellin2002‑03asthecompletionofthehospital
upgradesreducedpublicinvestment.
e:estimate;f:forecast
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
total, 2003-04 dollars)
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
total, 2003-04 dollars)
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
2006-07 budget The Economy
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
2006-07 budget The Economy
�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’.
Source:NorthernTerritoryTreasury,ABSCat.No.8221.0
Chapter 12Chapter 12
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
2006-07 budget The Economy
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
2006-07 budget The Economy
�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
Source:ABSCat.No.5220.0
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.
Chapter 13Chapter 13
KeyPointsKeyPoints
Table 13.1: Retail and Wholesale Trade, 2004-05
Table 13.1: Retail and Wholesale Trade, 2004-05
PopulationPopulation
�06 Retail and Wholesale
2006-07 budget The Economy
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
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60
NT WA Qld ACT SA Tas NSW Vic
%Chart 13.1: Consumer Sentiment, December Quarter 2005
0
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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
2006-07 budget The Economy
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
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800
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90 92 94 96 98 00 02 04 06e
Food
Clothing and soft goods
Recreational goods
Household goodsOther
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Year ended June
Chart 13.2: Territory Real Retail Turnover (moving annual total)
0
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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
2006-07 budget The Economy
���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
Source:ABSCat.No.5220.0
Chapter 14Chapter 14
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
2006-07 budget The Economy
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
���Transport and Communication
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
Source:DepartmentofPlanningandInfrastructure
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
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Year ended June
tonnes (000)Chart 14.1: Trade through Port of Darwin
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Overseas in
Overseas outIntrastate out
Interstate out
Interstate in
Year ended June
tonnes (000)
RoadTransportRoadTransport
��� Transport and Communication
2006-07 budget The Economy
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
���Transport and Communication
e:estimate
Note:Cairns‑GoveandCairns‑GrooteEylandtservicesarenotincluded.TheCairns‑Goveservicehasacapacityof
805seatsperweek;theCairns‑GrooteEylandtserviceceasedin2003.
Source:DepartmentofPlanningandInfrastructure
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.
Chart 14.2: Territory Airline Capacity (moving annual average)
0
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International (Darwin)
Interstate (Darwin)
Interstate (Alice Springs)
Interstate (Uluru)
seats per week (000)
Year ended June
Chart 14.2: Territory Airline Capacity (moving annual average)
0
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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
Air‑InterstateAir‑Interstate
Air‑IntrastateAir‑Intrastate
��6 Transport and Communication
2006-07 budget The Economy
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
2006-07 budget The Economy
���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).
Source:ABSCat.No.5206.0
Chapter 15Chapter 15
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
2006-07 budget The Economy
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.
Source:ABSCat.No.5206.0
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
%
ConsumptionConsumption
�2�The Public Sector
Source:ABSCat.No.5206.0
Publicsectorinvestmentisvolatileandcanexperiencelargefluctuationsfromyearto
yearduetothesmallsizeoftheTerritoryeconomyandtheimpactoffundingforlarge
one‑offprojectssuchastheAdelaidetoDarwinraillink(2001‑03;Chart15.4).
In2004‑05,non‑defencepublicsectorinvestmentaccountedfor14percentof
totalnon‑defencepublicsectorexpenditureand12percentoftotalinvestment.
Territoryandlocalgovernmentsaccountedfor39percentofthetotalpublicsector
investment,publiccorporationsaccountedfor32percent,defenceaccountedfor
23percent,andAustralianGovernmentnon‑defencefortheremaining5.6percent.
Source:ABSCat.No.5206.0
EmploymentThepublicsectoristhelargestemployerintheTerritory.In2004‑05,thenon‑defence
publicsectoraccountedforabout28percentoftotalemploymentanddefence
accountedforanadditional5percent.TheNorthernTerritoryGovernmentaccounts
for74percentofnon‑defencepublicsectoremployment,theAustralianGovernment
(excludingdefence)accountsfor13percentandlocalgovernmentfortheremaining
13percent.
Chart 15.3: Components of Public Sector Consumption Expenditure
(moving annual total)
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
(moving annual total)
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
InvestmentInvestment
Chart 15.4: Components of Public Sector Investment Expenditure
(moving annual total)
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
(moving annual total)
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
2006-07 budget The Economy
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
2006-07 budget The Economy
�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
Chapter 16Chapter 16
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
2006-07 budget The Economy
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).
e:estimate;f:forecast
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
2006-07 budget The Economy
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.
e:estimate;f:forecast
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
2006-07 budget The Economy
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
2006-07 budget The Economy
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
2006-07 budget The Economy
��� 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
2006-07 budget The Economy
��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
2006-07 budget The Economy
��� 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
2006-07 budget The Economy
��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
2006-07 budget The Economy
��2
Maps
OnshoreMineralandEnergyResources 63
TimorSeaOilandGas 66
NorthernTerritoryRuralIndustriesandFisheries 84
Maps