Darwin CPI Rises

The Territory's Consumer Price Index (CPI) has shown a growth of 4.9%, a full percentage point more than the very high national average of 3.9%.

"This means if you're earning fifty grand per year you've lost two and a half thousand dollars in spending power.” Shadow Treasurer Terry Mills said today.

"Predictably there will be two effects on people's budgets. As I have already said the value of people's income will be diminished but secondly in an effort to contain the dragon of inflation the Reserve Bank will probably move to increase interest rates to take the heat out of the economy.

"If that occurs people with less spending power will be servicing higher mortgage repayments.

"Just as rising inflation and interest rates rises bear heavily on the household budget these factors will also put pressure on the Territory Budget.

"Households will be forced to respond but the question begs, will the Territory Government be able to deal with its spending problems?

"The Territory should have been spending its extra GST money more on Infrastructure Development and less on recurrent spending or even engaged in an effective savings program.

"Year in and year out the Territory Government has not remained within its budgets. The only reason that it has returned surpluses is because they have received much more in tax income, both GST and state taxes, than they ever expected. The moment the money comes in they've spend it.

"If the national figures continue to trend in their current direction then the Territory Economy will cool and the Territory Government will not be well positioned to respond to it.”

2006-10-26