Northern Territory Economic Renewal
An economy in transition
The Northern Territory economy is undergoing a period of significant transition with population and economic growth slowing following the boom in investment in the Ichthys LNG Project and resource sector which resulted in economic growth peaking to more than 12 per cent in 2013.
The economy is thinly based and has been heavily reliant on government spending and the resource sector. Economic growth has declined significantly in recent years and is now lagging behind the national average. Current economic growth in the NT is 1.7 per cent, well below the 10-year average of 3.5 per cent, as well as the current nationwide growth rate of 2.8 per cent.
The slowing in the resource sector has seen an outflow of workers and a decline in population. The Northern Territory’s population growth has now fallen to -0.1 per cent at June 2018, well below its ten-year average of 1.2 per cent. Likewise, Darwin’s population is only growing at 0.5 per cent, well below the 10-year average of 2.5 per cent.
The decline in the resources sector has been compounded by a slowdown in tourism growth and international student numbers - two sectors which are important for the growth and diversification of the economy.
The recent City Deal between the Northern Territory Government, the Commonwealth Government and City of Darwin will provide a much needed boost in investment including the establishment of a new education precinct in the City to attract an increasing number of international students. This will be supported by the Northern Territory International Education and Training Strategy 2019-25 which aims for a four-fold increase in international student numbers to 10,000 by 2025.
It will be important to build on initiatives in the City Deal with even further investment in critical infrastructure that supports the growth and diversification of the economy. This should include setting ambitious growth targets for key sectors of the economy supported by clear and well-resourced strategies with a focus on redoubling efforts to:
- boost both domestic and international tourism with the aim of achieving at least 5 per cent growth per annum in international tourism numbers through increased investment in critical tourism infrastructure, and a concerted and targeted campaign by Tourism NT including in key European and US markets
- increase the level of overseas migrants to reach the proposed population growth target of 1.4 per cent, through increased investment in critical infrastructure and a focus on attracting and retaining skilled migrants to meet employment opportunities in health-care, social services, hospitality and other growth sectors of the economy.