Latest / 360 with Katie Woolf / Political Economist Professor Rolf Gerritson on whether the forecast for the NT to be back in budget surplus by 2026 are realistic

Transcript

Political Economist Professor Rolf Gerritson on whether the forecast for the NT to be back in budget surplus by 2026 are realistic · 360 with Katie Woolf

• 0:00
  Speaker 1: The other story or the other issue that we are
• 0:02
  Speaker 1: talking about this morning is indeed the budget that was
• 0:05
  Speaker 1: handed down yesterday. And joining us on the line right
• 0:07
  Speaker 1: now is CDU political economist Professor Rolf Gerretson. Good morning
• 0:11
  Speaker 1: to you, Rolf.
• 0:14
  Speaker 2: How have you very well?
• 0:15
  Speaker 1: Thank you, Ralph fannot was an interesting day yesterday with
• 0:19
  Speaker 1: that budget handed down. Mate. Have you ever heard of
• 0:22
  Speaker 1: budget handed down and a resignation at the end of it?
• 0:26
  Speaker 2: And I'm very old. I mean I was around when
• 0:29
  Speaker 2: Boosler was a boy, so I would remember it if
• 0:32
  Speaker 2: it had happened before.
• 0:35
  Speaker 1: I agree, it's it's certainly not something that we've experienced
• 0:40
  Speaker 1: before in the territory. And really that resignation has dominated
• 0:44
  Speaker 1: the headlines. But Rolf, what did you make of the
• 0:47
  Speaker 1: budget yesterday?
• 0:49
  Speaker 2: Well, and I was very surprised by the budget. And
• 0:53
  Speaker 2: if you allow me to just get pompous an academic
• 0:56
  Speaker 2: for a seconds. In science, there's a theory called the
• 0:59
  Speaker 2: budget electoral cycle, and that says that the government gets
• 1:03
  Speaker 2: elected and then in the first budget it meets all
• 1:07
  Speaker 2: its promises, that spends a lot of money, and then
• 1:12
  Speaker 2: in a subsequent budget or budgets in the case of
• 1:15
  Speaker 2: a four year electoral cycle like we have, it tries
• 1:20
  Speaker 2: to increase revenue and suppress expenditure, and then in a
• 1:24
  Speaker 2: pre election budget it increases expenditure, you know, promising it's
• 1:30
  Speaker 2: all goodies. And when I read the budget, I thought,
• 1:33
  Speaker 2: this is a pre election budget. How can you have
• 1:35
  Speaker 2: a pre election budget in the middle of the government's term, right,
• 1:40
  Speaker 2: And because you see it had lots of expenditure increases
• 1:45
  Speaker 2: and also the forecast of the deaths that's going to
• 1:48
  Speaker 2: zero by twenty twenty six and I thought this is
• 1:52
  Speaker 2: a very odd budget for this stage of the electoral cycle.
• 1:57
  Speaker 2: And then of course mister Gunner hops up and and
• 2:00
  Speaker 2: I thought, ah, well, know what it is is a
• 2:02
  Speaker 2: legacy budget. In twenty sixteen he became Chief Minister and
• 2:08
  Speaker 2: one of his key election promises was that he would
• 2:10
  Speaker 2: bring the budget back into black. And so what he's
• 2:13
  Speaker 2: done is he's leaving and saying, in effect, well I
• 2:16
  Speaker 2: haven't done it because of COVID, but you know it's
• 2:19
  Speaker 2: going to be done. So I mean, once he announced
• 2:24
  Speaker 2: he resigned, the budget suddenly made sense to me.
• 2:26
  Speaker 1: Yeah, right, that's some good insight rolph, which a lot
• 2:29
  Speaker 1: of people I don't think would have thought too much
• 2:32
  Speaker 1: about but it does make sense then, like you've said,
• 2:35
  Speaker 1: a legacy budget, is it as good as the Chief
• 2:38
  Speaker 1: Minister has tried to make it or the former Chief
• 2:40
  Speaker 1: Minister has tried to make it sound?
• 2:44
  Speaker 2: Well, you know, all of us are citizens, are in
• 2:48
  Speaker 2: favor of increased expenditure, and you know in that sense
• 2:53
  Speaker 2: it is good. I mean they are lucky in the
• 2:55
  Speaker 2: sense that the national budget is national economy is held
• 3:01
  Speaker 2: up better under COVID than expected, and so all those
• 3:04
  Speaker 2: good folks in Sydney and Melbourne who are spending lots
• 3:06
  Speaker 2: of money and giving us our GST or their GSC,
• 3:13
  Speaker 2: you know, it's a good budget in that sense. I mean,
• 3:16
  Speaker 2: our fiscal position is much stronger than we expected it
• 3:18
  Speaker 2: to be at this stage, you know. I mean I
• 3:23
  Speaker 2: still think that the tradition of the removal of the
• 3:26
  Speaker 2: budget deficit by twenty twenty six, it's about cookie land.
• 3:30
  Speaker 1: But anyway, so your recond it's do your recond it's
• 3:33
  Speaker 1: pretty fastical we're not going to get there.
• 3:36
  Speaker 2: Well, no, I mean, you know we're going to have
• 3:38
  Speaker 2: increased inflation. I mean, you know the Reserve Bank has
• 3:42
  Speaker 2: already quiet, it's got across the bowser sort of only
• 3:46
  Speaker 2: a little shot. I mean, you know, they took the
• 3:49
  Speaker 2: rate up to thirty five basis points. They should probably
• 3:53
  Speaker 2: should have taken up to forty, but they're being cautious
• 3:55
  Speaker 2: at this stage. But it's clear that inflation will top
• 3:59
  Speaker 2: five this year. Now people are hoping it will go
• 4:02
  Speaker 2: down next to year. But I just expect we're going
• 4:05
  Speaker 2: to see large waging creases because basically the working people
• 4:09
  Speaker 2: of Australia are sick of having their real living standards
• 4:12
  Speaker 2: of road. So I expect inflation to continue at a
• 4:16
  Speaker 2: fair higher rate for the next few years. That will
• 4:20
  Speaker 2: mean that the GST revenue goes up. So that's good
• 4:26
  Speaker 2: for us, you know, because we get a disproportionate share
• 4:29
  Speaker 2: of it. But the problem is extended to costs will
• 4:33
  Speaker 2: go up. P see. I mean a lot of this
• 4:35
  Speaker 2: forward forecasting is based upon the four years of pay
• 4:39
  Speaker 2: for reasons for the public sector, and I don't think
• 4:42
  Speaker 2: labor parties sustain that. I think they'll crack in some stage.
• 4:47
  Speaker 1: Yep, and Ralph, I guess that is something that you
• 4:50
  Speaker 1: and I had spoken about last week as well. With
• 4:53
  Speaker 1: this public sector pay freeze, how long do you reckon
• 4:57
  Speaker 1: they're going to be able to keep that in place.
• 5:00
  Speaker 2: I don't think it'll see out. The ear right peically
• 5:06
  Speaker 2: is a federal lavy government and they take a case
• 5:08
  Speaker 2: of the their work commission for more than five percent
• 5:12
  Speaker 2: pay increase. Then the workers in the territory you're going
• 5:16
  Speaker 2: to say, well, hang on a second. You know I'm
• 5:19
  Speaker 2: getting nil paying increase. The cost of lok is going up.
• 5:22
  Speaker 2: I mean, despite the Morrison governments dropping half the rebate
• 5:26
  Speaker 2: or half the tax on fuel, diesel prices are rising
• 5:30
  Speaker 2: again as the oil majors profit for the oil majors
• 5:36
  Speaker 2: and petrol station owners decided to take a bit of
• 5:38
  Speaker 2: super profit out of this, as I predicted at the time.
• 5:43
  Speaker 2: So you know, I just think that the pressure will
• 5:47
  Speaker 2: become untenable. You have to remember, because we've got such
• 5:51
  Speaker 2: a huge public service relative to our side. Four percent
• 5:55
  Speaker 2: of the electorate in the northern absolutely, and that's a
• 5:59
  Speaker 2: very crucialgment of the electric do you only need in
• 6:02
  Speaker 2: all those you know, because our seats are so small,
• 6:05
  Speaker 2: you only need a couple hundred votes to shift and
• 6:08
  Speaker 2: suddenly you've lost a seat.
• 6:11
  Speaker 1: Well, it is certainly a very interesting time, there is
• 6:15
  Speaker 1: no doubt about that. I know you're a political observer,
• 6:19
  Speaker 1: a keen political observer, Ralph, who do you reckon is
• 6:22
  Speaker 1: going to be the next Chief Minister.
• 6:24
  Speaker 2: I'm a reluctant critical. I don't like watching the way
• 6:30
  Speaker 2: sausages are made. Well, you know, I hear rumors that
• 6:38
  Speaker 2: the caucus is split, but I think Nicole Madison will
• 6:43
  Speaker 2: end up Chief Minister. But you know I'm usually wrong
• 6:48
  Speaker 2: when I make these.
• 6:50
  Speaker 1: We'll wait and see. Let's see whether we find out
• 6:52
  Speaker 1: on Friday or not, or whether it turns into a
• 6:55
  Speaker 1: bit of a debarcle. Ralph Garretson a c dou political economist,
• 7:00
  Speaker 1: Professor Rolph Garretts, and I should say we really appreciate
• 7:02
  Speaker 1: your time this morning.
• 7:04
  Speaker 2: Delighted Katie. Good to hear from you.
• 7:07
  Speaker 1: Thank you,