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Economic Performance
By any economic measure, the Territory economy has had a great couple of years. In the last financial year real economic growth is estimated to have been 7.2% - the highest rate of growth in Australia for the third straight year in a row. Major resource and infrastructure projects such as the Darwin LNG plant, Alcan alumina refinery expansion, Darwin City Waterfront development and new mineral developments, have been driving population and employment growth.
In June 2007, trend employment in the Territory was 3.1% higher than a year earlier (at 103,000) - the second highest increase in the country. According to the ANZ Job Advertisements series, in the year to June ANZ job ads in the Territory increased by 7.1% in seasonally adjusted terms. Rising employment has been reflected in strong retail results; compared to the corresponding month in 2006, Territory turnover increased by 8.6% in real terms in May 2007, while nationally turnover increased by 5.7%. All this adds up to a very promising economic outlook for the Territory.
The construction sector, in partcular, is currently in overdrive. A swathe of medium to high-rise apartments blocks is springing up in and around the Darwin city centre. In Alice Springs a series of public and private sector projects, including the Red Centre Way, Desert Knowledge Precinct and new land releases are keeping the local builders busy. In annual terms, seasonally adjusted total building work done in the Territory increased by 18.6% in March quarter 2007 to $165 million. Nationally, total building work done increased by 7.5%.
The Outlook
The current financial year looks set to continue these strong
results. The Northern Territory Treasury estimates a
solid growth rate of 3.7 % in 207-08. Longer terms forecasts for
emplyment, investment and economic growth show the Territory is set to outpace
the national economy for the next several years. Access Economics expects the
Territory economy to grow at an average of 4.5% in the five years to 2011-12.
The Territory's rate of employment growth is expected to be the highest in
Australia at 2.8%, compared with the national rate of 1.6%
The story told by these figures is supported by a confidence on the ground.
According to the May 2007 Sensis Business Index, a total
of 74% of Territory SMEs reported being 'fairly' or 'extremely'
confident regarding prospects for the next 12 months.
Property Market
The Territory's real estate market has taken off, coinciding with population growth and consumer demand. Property sales have escalated over the last three years, particularly in Darwin, where house prices rose by 15.4% in the year to March 2007. The median house price in Darwin now exceeds $390,000; Darwin units have done equally well, increasing by 15.7% for the year. Other Territory centres have experienced steady growth - the median house price in Alice Springs has reached $298,000.
Government Support
The Territory Government is business friendly. It is stimulating local business by significantly cutting tax, spending record amounts on infrastructure, improving procurement processes and building a skilled workforce. The reduction in taxes will make the Territory one of the most competitive business environments in Australia. The 2006-07 Northern Territory Budget has resulted in further rises to the stamp duty tax free threshold and its removal on hiring transactions, which privides further support to a thriving construction sector. Business confidence is high and the Territory's economic growth rate continues to outstrip the rest of Australia.
On 1st July 2006 the payroll tax free threshold for business rose to $1.25 million, making the Territory the lowest taxing jurisdiction for small to medium business in Australia. Growth in the first home owner market in the Territory has been supported by increase in the stamp duty tax free threshold from $125,000 to $350,00 in the past two years. As well as increasing the first home owner stamp duty concession threshold, the principle place of residence rebate, introduced in mid-2002, was increased to $2500 in June 2005.
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