Wednesday 20th Sep, 2017

SPECIAL REPORT: Northern Territory

Photo: Charles Darwin University
Photo: Charles Darwin University

ROLF Gerritsen might come across as the quintessential Northern Territorian.

Straight talking, no BS, calls it as he sees it.

So asked about the state of the NT economy, the research leader (Central Australia) at Charles Darwin University pulls no punches.

“Within six months it will be in recession unless the government says ‘go ahead with fracking’. It would be in recession now but INPEX has taken six months longer to build the plant than they originally hoped to,” he says.

“The extent of the downturn has been masked for the time being.”

Professor Gerritsen says the economy of the Northern Territory is small – it doesn’t really make anything.

“What manufacturing there was in the past has gradually been eroded as the roads and transport networks improved and the costs of trucking drops – which it has in real terms by about 60% in the last 20 years,” he says.

“Now you see trucks even bringing water tanks up to Darwin. Twenty years ago they would have brought the sheet but the water tanks would have been manufactured in Darwin.”

But he argues Darwin will persist because of government expenditure.

“It is primarily a service economy and has a very large public sector. You can be optimistic in the sense that public sector expenditure will continue.

“There will be periodic pulses like with INPEX because the scale of the economy is such that it doesn’t need a very big project to suddenly boot the whole economy along.”

He notes cattle farmers have fared reasonably due to high beef prices.

Some other farming operations are also keeping their heads above water.

“There is a minor horticulture-come-farming sector that is doing reasonably well, partially because they are efficient, partly because they can come onto the market at times when competitors can’t,” he says.

“The fishing industry has been flat for the last 10 years and governments haven’t helped by closing river mouths to allow for recreational fishing. So the production of barramundi has actually gone down.”

The northern prawn fishery varies, with last year being a good season but the one before being terrible.

“That is very largely an environmental and biological determinant season. They need plenty of rain in the Gulf areas.”

Construction has had its setbacks, a large builder in Alice Springs having recently closed.

But some increased Defence expenditure is also on the cards, particularly with the USA and China at loggerheads over the South China Sea.

“We could expect increased Defence expenditure on the Robertson base. If the government doesn’t go ahead with fracking, the next pulse will be large Defence expenditure.”

He notes vehement opposition to fracking amid concerns it would affect the water supply.

“It is not coal seam gas fracking, it is fracking in deep shale which is thousands of feet below the water table,” he states.

Professor Gerritsen is dismissive of one Territorian piece of infrastructure, the Alice Springs to Darwin rail link.

“It barely pays the interest on its debt and is not very profitable for some of its customers either,” he says bluntly. “The Ghan has cut its services down to one a week. The railway was built for political reasons not economic reasons,” he says.

“The problem is all the mineral prospects in the Territory are not large-scale with mile-long trains. All the mineral prospects in the NT are fairly small and we don’t have anything like the Pilbara that would make the railway profitable.”

He notes most of the goods in Alice Springs come from Adelaide rather than Darwin.

“Alice Springs and Central Australia are more part of the South Australian economy than they are of the NT economy,” he says.

“We don’t import anything from Darwin except hopeless public servants.”

Darwin has long been something of an enigma. Dreamers have long talked of it as some sort of gateway to Asia.

Opponents of the Victorian Channel Deepening project, for example, spruiked the woolly idea of increased shipping to Darwin and then overland rail to the populous parts of the continent.

“Most of the ships that come to Australia come to either Melbourne or Fremantle. “The problem with those sorts of bulk cargoes coming to Darwin is that they would then have to be trans-shipped twice. Taking things on and off ships is more expensive than sailing the ships,” Professor Gerritsen says

“So going to Melbourne for a shipping agent from Singapore is no more expensive than sailing to Darwin except that in Darwin you have to offload and offload again somewhere else.”

Elsewhere the gap between indigenous and non-indigenous Territorians remains significant, albeit with some improvement in the reduction by way of near-natal deaths.

“Life expectancy has gone up a bit but there has been no progress in education or law and order. In virtually everything else there’s no progress.”

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