The Northern Territory has announced a series of dramatic interventions aimed at cutting its budget deficit, including job cuts and pay freezes for executives.
The NT will cut 10% of its public service executives, amounting to 52 full-time jobs, the government announced as part of its plan for budget repair released in full on Tuesday morning.
On Monday, Chief Minister Michael Gunner released the first details of the plan, announcing public sector executives and politicians will have their pay frozen for three years.
“It’s only fair that heavy lifting is also done by freezing politicians’ and executive pay for three years,” said Gunner in a statement.
The territory will also introduce “tough new accountability measures” for senior staff and consequences for poor performance.
The plan will see the implementation of a raft of recommendations by former WA Under-Treasurer John Langoulant, as well as immediate savings identified in the government’s root and branch review of programs. Sixty-eight of 76 recommendations in Langoulant’s final report have been accepted in full by the government, plus six in part or in principle.
The savings will reduce expenditure by $12.6 billion over 10 years and see the budget return to surplus in 2027-28, says the government.
Key recommendations accepted from the Langoulant review also include cutting red tape to attract private investment and create local jobs, and selling the Lands Titles Office, including the Integrated Land Information System.
The territory’s budget is in a parlous state, with the government pointing to two factors: inheriting a $876 million budget deficit when it came to power in 2016, plus a cut of $500 million in annual GST revenue from the federal government.
With increases in expenditure and a stumbling territory economy added in, by the mid-year financial update in late 2018 the government said the deficit was expected to surpass $1.5 billion.
Some argue the Northern Territory has the “most bloated” bureaucracy in the country, with administration staff comprising a disproportionate share of the public sector workforce.
The government says it will “protect front-line workers like teachers, nurses and police and will include important reforms to maximise private investment and create local jobs.”
Treasurer Nicole Manison said the NT government was “making tough decisions in a way that’s fair”.
“It makes politicians and senior executives accountable for their financial decisions,” she said in a statement.
“It ensures much of the heavy lifting is done by cutting the number of executive positions, and freezing politicians and executive pay.
“We’ve made the tough decisions now, so we can continue the investments in education, health and housing that will reduce pressure on the budget in the long term.”