In brief
The 2025-26 Northern Territory Budget (the Budget) was delivered on 13 May 2025 by the Northern Territory (NT) (Country Liberal Party) Treasurer, the Hon William (Bill) Yan.
In detail
Budget overview
The Budget centres on new policy commitments with a focus on safety and security, specifically law and order, with $2.26bn largely to address funding shortfalls in frontline government services as a result of ceasing time-limited funding. In addition, the current Government is seeking to strengthen initiatives in health, infrastructure, and cost-of-living measures.
While the general government net operating balance deficit is projected to be $265m in 2025-26, it is forecasted to return to surplus from 2027-28.
The Northern Territory’s net debt is projected to exceed $12bn in the next financial year, with budget forecasts indicating it will rise further to almost $14bn by 2029. However, as new policy commitments have been introduced, the Budget has revised upward its forecasts for GST, taxation, and royalty revenues, which will help to partially offset the fiscal impact of these new initiatives. GST revenue is projected to rise by nearly $600m, while taxation and royalty revenues are expected to increase by approximately $450m over the budget period to 2027–28.
Revenue measures
The Budget introduced some new revenue initiatives, with the Revenue Legislation Amendment Bill 2025 (NT) being introduced into the Legislative Assembly on 13 May 2025 to give effect to some of the below measures.
Payroll tax threshold
From 1 July 2025, the payroll tax tax-free threshold and maximum annual deduction will increase from $1.5m to $2.5m, while the new annual deduction will reduce at a rate of $1 for every $2 of taxable wages above the tax-free threshold (rather than $1 for every $4 of taxable wages). This means the level of taxable wages at which the deduction is exhausted remains at $7.5m.
This will mean that employers with taxable wages of $2.5m or below will be exempt from payroll tax, while those with wages between $2.5m to $7.5m will pay reduced tax. Employers with taxable wages of $7.5m or more will continue to receive no annual deduction and pay tax on their entire NT taxable wages. The measures are expected to result in $12m of forgone revenue per annum from 2025-26, not factoring in the potential economic stimulus arising from these reforms.
Payroll tax apprentice and trainee exemption
From 1 July 2025, wages paid to apprentices and eligible trainees will be exempt from payroll tax. The employee must meet the relevant definition of apprentice or trainee in the Training and Skills Development Act 2016 (NT). The wages will only be exempt if the trainee was employed for less than three months (for full-time employees) or less than 12 months (part-time or casual employees) immediately before commencing the traineeship. This measure is to incentivise the hiring of new apprentices and trainees, although revenue of $5m per annum is expected to be forgone from 2025-26.
Payroll tax and stamp duty exemptions for charities and not-for-profit entities
From 1 July 2025, the payroll tax and stamp duty exemptions available for charities and not-for-profit entities will be simplified and broadened by removing the ‘commercial and competitive’ restrictions on those exemptions.
For the payroll tax exemption, charities and not-for-profit entities are no longer required to substantiate that wages excluded staff engaging in commercial or competitive activities. For the stamp duty exemption, these entities are no longer required to substantiate that acquired property is used solely in a manner that is not commercial or competitive. These measures are expected to result in forgone revenue of $1.3m per annum from 2025-26.
Gambling tax changes
The Gaming Control Act 1993 (NT) is being amended to set a minimum 50% tax rate for activities conducted under an internet gaming licence effective from 1 July 2025. The legislated tax rate will override existing agreement-based tax settings for current internet gaming licences.
This measure is expected to generate additional revenue of $17.7m per annum from 2025-26.
The Racing and Wagering Act 2024 (NT) is also being amended to double the annual tax cap applicable to licensed corporate bookmakers and betting exchanges from 1,000,000 revenue units to 2,000,000 revenue units effective from 1 July 2025. This measure is expected to generate additional revenue from 2025-26 of $13.1m per annum.
Tax and royalty revenue forecasts
Taxation revenue is forecast to decrease from $797m in 2024-25 to $748m in 2025-26, then gradually rise to $804m by 2028-29.
- Payroll tax is expected to total $320m in 2024-25, $31m higher than the forecast in the 2024 Pre-Election Fiscal Outlook (PEFO). It is expected to moderate to $277m in 2025-26, partly reflecting the impact of the increased payroll tax threshold and annual deduction, as well as the apprentice and trainee exemption. It also reflects the Barossa offshore LNG facility transitioning from the construction to operational phase, resulting in reduced employment.
- Conveyance/stamp duty is expected to total $179m in 2024-25, moderating to $139m in 2025-26, and averaging around $128m per annum in the forward estimates.
- Gambling taxes are forecast to total $115m in 2024-25, before averaging to $147m per annum from 2025-26. This reflects policy changes to apply a uniform 50% tax rate for internet gambling licensees and doubling of corporate bookmaker and betting exchange tax cap from 1 July 2025.
- Stamp duty on insurance policies is estimated to total $78m in 2024-25, and is expected to total $84m and grow by around 7% per annum over the forward estimates. When compared to the 2024 PEFO, insurance duty is expected to be lower in all years, however growth is still expected to remain above historical trends due to premium growth and effects of inflation.
- Motor vehicle registration duty is forecast to total $67.7m in 2024-25, and increase to $68.9 in 2025-26, partly offset by the NT government’s light vehicle registration fee freeze, and grow by an average of 3.5% per annum from 2026-27, in line with revenue unit indexation and vehicle registration growth consistent with the economic outlook.
Mining and petroleum royalties are expected to increase from $298m in 2024-25 to $346m in 2025-26, then fluctuate over the forward estimates.
Total taxes and royalties are projected to remain stable at around $1.09bn in 2024-25 and 2025-26, with some variation in later years.
Rachael Cullen
Gareth Mak
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