FAMILIES in the Northern Territory are facing difficult adjustments after a report revealed a government financial shortfall of almost $1 billion this financial year.
The report, commissioned by the recently elected Country Liberal Party (CLP) government, blamed the former administration for leaving a fiscal imbalance of $981 million in 2012/13.
The imbalance would rise to a cumulative $3.7 billion during the next four years unless things changed, the report said.
Chief Minister Terry Mills said the territory had a problem that must be addressed.
"We know that there will be adjustments that territory families will notice," Mr Mills told reporters on Thursday.
"They may be difficult in the short term, but our aim is to make more secure the future."
Th CLP government has flagged a mini-budget to be held on December 4.
During the next four years net debt in the NT was forecast to rise to $6.2 billion unless something changed, the report said.
"By 2015/16 the current unsustainable fiscal imbalance will have become a real threat to the territory's existence as a self-governing jurisdiction," it said.
Between 2008/09 and 2011/12 the rate of growth of GST revenues declined significantly but this was not matched by slowing operating expenditure, the report said.
Neil Conn, an economist who led the four-man team looking into the NT government's books, said the territory was on the road to going broke.
A former NT administrator, Dr Conn said after looking at the books earlier in the year he was dismayed at the "pit into which the Northern Territory was appearing to sink".
The report said that between 2008/09 and 2011/12 the rate of growth of GST revenues declined significantly but this was not matched by slowing operating expenditure.
The report was critical of some of the costs faced by agencies, including the Department of Families and Children, which it said had a $35 million black hole because of understated staffing and other costs.
Correctional Services needed an additional $25 million, while estimates on building a new prison have jumped from $495 million to $621 million.
The government-owned Power and Water Corporation (PWC) was the largest single contributor to the territory's debt problem, the report said.
Opposition Leader Delia Lawrie, who was treasurer in the former Labor government, said the CLP's "razor gang" had wrongly included debt from government corporations in the overall debt figure.
"What we have right now is the CLP trying to mislead territorians in terms of the state of the territory deficit," Ms Lawrie said.
The PWC was not expected to run at a profit as it had to deliver essential services to small populations across large areas, she said.
Ms Laurie attacked the make-up of the board that was chosen to complete the report and described them as "political hacks".
Dr Conn said that was offensive, that he had worked with both sides of politics in NSW and Canberra, and had never been a member of any political party.
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