The Northern Territory government's outlook is for soaring annual deficits, with spending cuts and a possible new gas boom among the few solutions.
The deficit is tipped to hit more than $1.5 billion this fiscal year.
That is $299 million higher than the last forecast six months ago.
Escalating demand for core government services and a $3.4 billion cumulative loss in GST revenue since August 2016 were blamed for projected significant deficits and increasing net debt in the NT's 2018/19 Mid-Year Report.
Net debt of $4.5 billion in 2018/19 was forecast to increase to $7.1 billion in with interest payments of more than $382 million, which is lower than the last forecast of $7.5 billion.
Demand for core government services was growing, with government increasingly using debt to spend with revenue through tax, mining royalties and Commonwealth assistance not enough to improve the budget position.
The economy is growing overall thanks to net exports such as mining and the lifting of a ban on the controversial practice of fracking means onshore gas is a possible new future industry.
However state final demand, which measure economic demand within the NT, is tipped to fall 4.6 per cent this fiscal year reflecting a decline in private investment such as the completed $55 billion Inpex natural gas project.
"It is a delicate balance at the moment, we have to be responsible with where we do spend our money," Treasurer Nicole Manison said.
A $100 million economic stimulus package involving public housing repairs and maintenance, which will employ local tradies was announced this week but at the same time the government has committed to reaching $800 million in savings in the public service, including job losses.
"At a time when the worst thing that could happen in the Territory would be seeing a lot more people leaving the Northern Territory you need to make sure you are supporting jobs, we have prioritised infrastructure and programs around supporting jobs and building the population here," she told reporters.
"When you have 245,000 people it is an incredibly small population, when you have the highest proportion of disadvantaged people living in remote areas and a lot of them in extreme poverty and you have very limited ways to raise your own revenue, federal funding is very important."
CLP Opposition Leader Gary Higgins said the government was not cutting spending by enough and leading the Territory towards insolvency.
