The Northern Territory's credit rating has been downgraded with the Territory government blaming the federal government cuts to GST returns.
Rating agency Moody's has downgraded the NT from Aa2 to Aa3 but has lifted its outlook from negative to stable.
Treasurer Nicole Manison said the downgrading was no surprise considering the challenging economic times the Territory was facing.
"When we came to government we inherited an $876 million deficit and a declining economy," Ms Manison said.
"Then the federal government cut $500 million per annum from our GST.
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"Moody's has again highlighted the devastating impact the federal government cuts have had on the Territory budget."
In its decision, Moody's cited the NT's deteriorating credit profile due to weakening revenue in the wake of slower economic growth and lower GST receipts.
"The main cause of the weakening fiscal position is the cumulative effect of the lower GST grants," the agency said.
Ms Manison said the Labor government had already embarked on a major program to fix the budget that would return Territory finances to surplus in 2027/28.
The plan includes cuts to government spending, a pay freeze for MPs and public service executives and cuts to red tape to attract private investment and create local jobs.
"The plan provides a sensible way forward for the Territory finances," the treasurer said.
"That will continue to support Territorians by creating local jobs and growing the economy, and we will continue to invest in education, health, housing and community safety."
