Australian state, territory announce record debts in COVID-19 budgets

Source: Xinhua| 2020-11-11 14:32:28|Editor: huaxia

CANBERRA, Nov. 11 (Xinhua) -- The governments of the state of South Australia (SA) and the Northern Territory (NT) have announced record levels of debt as a result of the coronavirus crisis.

Their treasurers on Tuesday handed down their respective budgets for the financial year 2020-21.

SA state Treasurer Rob Lucas announced that net government debt will almost double to 33.2 billion Australian dollars (24.1 billion U.S. dollars) by 2023-24 as the state follows the federal government in prioritizing job creation over budget repair by borrowing more at a time of record-low interest rates to support the economy.

He confirmed that SA recorded a budget deficit of 1.49 billion AUD in 2019-20, its largest in history, and that it would rise further to 2.6 billion AUD in 2020-21 before returning to surplus in 2023-24.

"We want to provide a jolt, a two-year stimulus to the economy, while at the same time putting in place the basis for long-term sustainable jobs growth in our state," Lucas said.

The budget included 8.9 billion AUD for a major roads project to be completed by 2030, and 45 million AUD to upgrade Hindmarsh Stadium, the state's main soccer stadium, to an "elite facility" in time for the Women's World Cup in Australia in 2023.

NT Chief Minister Michael Gunner, who appointed himself Treasurer after winning re-election in August, announced a record deficit of 2.45 billion AUD.

He revealed that deficits would continue for at least the next decade with debt expected to double to 16 billion AUD by 2029-30.

The NT has had the fewest confirmed cases of COVID-19 of any state or territory, but has been hit hard by the shutdown of the tourism industry.

"The Northern Territory's 2020 Budget is being delivered in a world very different to the one we were in last year," Gunner said. "We went headfirst into a once-in-a-century crisis that has impacted a lot more than the Budget papers."

The NT government planed to spend 9.3 billion AUD in 2020-21, far exceeding its projected revenue of 6.3 billion AUD.

Gunner said the economic recovery from the pandemic would be "long and bumpy" with employment projected to decline 0.7 percent in the region and private investment by 13.5 percent.

However, he noted that the NT's economy grew by 4.8 percent in 2019-20 off the back of liquefied natural gas (LNG) exports.

In order to rein in spending, Gunner announced that the wages of public servants will be frozen for four years, saving 424 million AUD.

The treasurer anticipated union resistance to the announcement but said he was confident they would accept it.

"I am extremely confident the longer (unions) look at these numbers, the more they will realize that we are being legitimate, that we're going in to save jobs," he said.

"I am convinced the unions will also want to save jobs and that will be the conversation we have at the table." (1 U.S. dollar equals 1.37 Australian dollars) Enditem