The Northern Territory government has pledged $5 million to prop up the struggling construction industry for repairs and upgrades to aged urban public housing stock.

Treasurer Nicole Manison announced the latest part of a $22 million stimulus package designed to support local jobs and prevent population decline.

The Labor government on Sunday announced $10 million will go towards smaller infrastructure projects across the Territory ahead of bigger fast-tracked items which ramp up in the second half of 2017.

“This will provide an immediate injection into the economy with work to be carried out over the next six months,” Ms Manison said.

“(It will also) have a positive impact on living standards for public housing tenants, funding much-needed upgrades to roofs, fences, bathrooms and kitchens.”

The funding must be spent with local contractors and work can begin from February.

Ms Manison wouldn’t be drawn over whether it was a sign the new Labor government had caved in to pressure to reinstate the previous CLP government’s popular home improvement scheme, which gave home owners $2000 vouchers to employ local tradies.

“We are responding to the feedback. We have a slowing economy and people are very worried about what happens in the next 12 to 18 months,” she said.

Deputy opposition leader Lia Finocchiaro asked the treasurer to explain how the government will afford the plan and still achieve a budget surplus by 2019-20.

“We had the extraordinary situation last week where one of the government’s own ministers described the economy as ‘buggered’,” she said.

“Racking up more government debt is not the way to go about fixing the economy.”

Ms Manison conceded it was a hard decision to make.

“But the alternative – to do nothing – would have been terrible. We would have seen people losing their jobs and leaving,” she said.

“That would have flowed on to GST revenues, stamp duties, and that money that flows through to other sectors of the economy such as retail and hospitality.”