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Australia's Northern Territory faces bankruptcy: report

Source: Xinhua| 2018-12-19 13:41:20|Editor: Liangyu
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CANBERRA, Dec. 19 (Xinhua) -- Australia's Northern Territory (NT) is on a trajectory towards bankruptcy, an independent report has found.

The A Plan for Budget Repair report, released by the NT government on Wednesday, warned that the territory was on track for fiscal disaster.

"Over the past 20 years, the Territory has incurred fiscal deficits not only during contractions in the economic cycle but also in times of expansion," Jodie Ryan, head of the NT public service and author of the report, wrote.

"In the absence of immediate and sustained expenditure restraint, the next generation of Territorians will bear a growing burden of current expenditure through interest costs and reduced capacity for service delivery with interest expenses approaching two billion Australian dollars (1.43 billion U.S. dollars) per annum, or around 12 percent of total expenditure.

"This also means that a substantial proportion of borrowing over this period would be used to pay interest costs rather than deliver the services that future Territorians will need."

The report was released a week after it was revealed that the NT government was borrowing money to pay day-to-day expenses such as public servants' salaries and interest payments.

Despite the grim outlook, NT Treasurer Nicole Manison has denied that the situation has reached crisis point.

"I don't think the budget is in crisis because we are very much so going to manage a sustainable path going -forward," Manison told News Corp Australia on Wednesday.

"We are absolutely determined to make the changes so there is a sustainable budget."

Michael Gunner, Chief Minister of the NT, has set a target to cut expenditure growth from 6 percent to 3 percent but has not yet announced any cost-cutting measures.

Gunner defended his government's spending since it won power in 2016, saying he had not made any incorrect decisions.

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