2012-13 mini budget - treasury.nt.gov.au€¦ · web viewforward estimates. uniform presentation...

Northern Territory Government

2012-13

Mini Budget

2012-13

Mini Budget

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Table of ContentsPart 1: Ministerial Statement 3

Part 2: Agency Output Statements 13Overview 15

Auditor-General’s Office 16

Northern Territory Electoral Commission 17

Ombudsman’s Office 18

Department of the Chief Minister 19

Department of the Legislative Assembly 21

Northern Territory Police, Fire and Emergency Services 22

Office of the Commissioner for Public Employment 24

Department of Lands, Planning and the Environment 25

Land Development Corporation 27

Department of Land Resource Management 28

Department of Treasury and Finance 30

Northern Territory Treasury Corporation 32

NT Fleet 33

Government Printing Office 34

Data Centre Services 35

Department of Education and Children’s Services 36

Office of Children and Families 38

Department of the Attorney-General and Justice 40

Department of Correctional Services 42

Department of Health 44

Department of Transport 47

Darwin Bus Service 50

Darwin Port Corporation 51

Department of Infrastructure 53

Construction Division 55

Department of Local Government 56

Department of Primary Industry and Fisheries 57

Department of Mines and Energy 58

Tourism NT 59

Territory Discoveries 60

Department of Arts and Museums 61

Department of Sport and Recreation 62

Parks and Wildlife Commission of the Northern Territory 64

Territory Wildlife Parks 65

Table of Contents

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Department of Business 66

Department of Housing 70

NT Home Ownership 72

Department of Regional Development and Indigenous Advancement 73

Aboriginal Areas Protection Authority 75

Part 3: 2012-13 Mid-Year Fiscal Outlook Report 77Under Treasurer’s Certification 79

Chapter 1 – Overview 81

Chapter 2 – Fiscal Strategy Statement 85

Chapter 3 – Updated Fiscal and Economic Outlook 95

Chapter 4 – Additional FITA Requirements 113

Chapter 5 – Uniform Presentation Framework Statements 121

Note: The printed version of this Mini Budget states on page 10, paragraph 11 andpage 106, last paragraph, the increase in registration will be “...$37 for a small vehicle”. The correct amount is “...$67 for a small vehicle” and has been corrected in this digital

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version.

Ministerial Statement

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Table of Contents

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Part 1


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IntroductionMadam Speaker, I present the 2012-13 Mini Budget.

It is now a well-established fact that my Government inherited an appalling fiscal position from the previous Labor Government.

The Territory’s net debt had been allowed to grow, or had been pushed, to $2.7 billion at the start of this financial year.

Even worse, the forward estimates issued by my predecessor at budget time showed a prospective increase in net debt to over $5.5 billion in less than four years’ time.

Whether that prospective increase was due to political opportunism, incompetence, indifference or simply lack of understanding is now beside the point.

The stark reality is that such a debt burden is not sustainable, and something must now be done about it.

This Mini Budget therefore has several purposes:

1. To establish precisely the extent of the deterioration in the Territory’s Budget for 2012-13 between its presentation to this House in May and the election of the Mills’ Country Liberals Government on 25 August.

2. To incorporate the effect of the measures I recently announced to start the Power and Water Corporation back on its long road towards financial sustainability.

3. To identify unfunded spending commitments left behind by the outgoing Government and, where those commitments are consistent with our Government’s policies, to fund them.

4. To honour a number of election commitments made to Territorians by my Government.

5. From the new expenditure and revenue bases established after that process, to start the long and painful way back to living within our means, to ensure our total expenditures do not exceed our total revenue or to use the technical Treasury term, to reduce our fiscal imbalance to zero over a reasonable period of time.

6. To start that process now with expenditure reductions offered up by agencies after an intensive review of program priorities and involves the efficient use of public sector resources while keeping frontline services in place.

7. To address one of the major pressures on the Territory’s cost of living, and that is housing.

8. To then continue with the identification of additional revenue that will be raised from the limited sources open to the Territory Government and its agencies.

9. Finally, to make some adjustment to the amount of cash that will be made available to the capital works program, deferring some projects and shifting some of the cash towards urgently needed repairs and maintenance of the Territory’s public assets.

1. Deterioration in the Budget since MayIn the Pre-Election Fiscal Outlook, the fiscal imbalance was forecast to be $867 million in 2012-13, increasing to $1197 million in 2013-14, before declining to $561 million in 2014-15 and $475 million in 2015-16.

Subsequently, there were further adjustments to the overall position facing the Territory which, despite higher estimates of goods and services tax (GST) receipts, added well over$100 million each year to the projected imbalance.


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To put this in perspective, interest payable on borrowings to meet the pre-Mini Budget fiscal imbalance of $981 million in 2012-13 would have cost taxpayers close on $60 million per year.

That is more than the tourism budget, an area that is vital to the long-term sustainability of the Territory.

By way of further example, $60 million per year spent on interest would employ another 600 nurses, not just for one year but every year indefinitely.

And that is just one year’s fiscal imbalance.

We were facing fiscal imbalances, accumulating by a further $3.7 billion over the next four years, a clearly untenable situation.

2. Power and Water Corporation DecisionsBy far the biggest single issue facing the Territory was the parlous financial state of the Power and Water Corporation.

Power and Water requires an ongoing improvement of at least $200 million per annum to operate as a sustainable government owned corporation.

There are three broad choices:

• bigger subsidies from the taxpayer;

• reduced costs of generation and transmission; or

• increased tariffs charged to consumers of electricity, water and sewerage services.

When faced with the fact that Power and Water Corporation had for years been denied the ability to cover its costs through its charges, the Government was faced with the prospect of paying even bigger taxpayer subsidies to that struggling enterprise.

A $200 million subsidy is equivalent to the cost of employing 2000 public servants.

It is a sum equal to the combined budgets of Tourism, Primary Industry and Fisheries, Mines and Energy, Arts and Museums, and Sport and Recreation.

There is no alternative or Labor “magic pudding” to call upon.

The burden of keeping Power and Water Corporation viable has to be borne by either the Territory taxpayer or by the users of power and water products in the Territory.

One way or the other, the money comes out of the pockets of Territorians.

There is no doubt in my mind that the fairer way is that, barring substantial cost cutting, the users of the product meet the cost.

It should not be overlooked that even after the tariff increases, Territorians will only pay prices close to the average of those paid by other Australians.

3. Unfunded LegaciesWe have uncovered substantial unfunded commitments made by the previous Government, many of which we had no choice other than to fund.

None stand out more than in the then Department of Children and Families where the Chief Executive has advised she was instructed by the then Minister to hire over 90 staff in the last month of the 2011-12 financial year, despite the fact that there was no budget provision in 2012-13.

Sadly, this was the tip of the iceberg.


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We have been left with a legacy of expenditure commitments with a cost estimated by agencies of over $600 million over the forward estimates period.

We have now considered them in the context of our Government’s priorities, and have funded over half including the following provisions in this Mini Budget and over the forward estimates:

• over $50 million for police, fire and emergency services covering items such as overtime, police housing and technology;

• $6 million for land resource management, mainly for wildfire suppression activities;

• funding of $115 million for the Children and Families function;

• an additional $21 million for correctional services; and

• $59 million for health, including funding to operate the Medi-Hotel, Alice Springs Hospital Emergency Department, remote mobile breast screening and secure care facilities.

4. Election CommitmentsMadam Speaker, the Government has incorporated the Country Liberals’ commitments made in the lead up to the election into the Mini Budget. Key commitments include:

• in the area of policing, 100 more frontline police officers will be recruited in the Top End and 20 more in Alice Springs. The recruitment campaign commenced within the first few days of the new Government’s term in office and the annual cost will be $27.5 millionper annum when fully implemented by July 2014;

• Nightcliff Police Station will be upgraded at a cost of $2 million, and the Alice Springs Youth Centre will receive a $2.5 million capital grant to upgrade and transform to a Police and Citizens Youth Club;

• as promised in the election campaign, the “back to school bonus” vouchers will double in value next school year from $75 to $150 per student, assisting families with the cost of a range of school supplies and services;

• an additional $6.5 million a year will enhance cardiac outreach services and cardiac rehabilitation services to make them more accessible to regional and remote Territorians, and commence low-risk angioplasty services at Royal Darwin Hospital;

• waiting lists will be reduced with an annual boost of $4.46 million to provide 400 additional elective surgeries every year across the Territory;

• the increased funding to peak sport and recreational bodies is included in the Mini Budget, at $1.75 million a year, increasing grants by 50 per cent;

• an additional $4 million a year is provided for the Sport Voucher Scheme, providing a$75 sports registration voucher for every child involved in a sport where fees are paid, to commence at the start of the 2013 school year; and

• homeland housing and municipal and essential services will be boosted with additional funding of $14 million over the next four years, in addition to the current funding committed in the Budget for these services. This funding will improve housing standards for remote Indigenous families and will be conditional on observing compulsory school attendance and residents participating in the homelands economy.


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5. Fiscal Strategy to 2015-16The Mini Budget sets out this Government’s strategy for starting to return the Territory Budget to a sustainable position.

I hope every Territorian understands the extent and nature of the task that confronted this Government and why we have taken the hard decisions we have.

Notwithstanding those decisions to rein in expenditure and pursue additional revenue, our net debt will continue to grow, albeit more slowly, because it will take time for expenditure to come down to match available revenue.

Madam Speaker, the fiscal target is simple to state: we will remove the fiscal imbalance by 2015-16.

In that year we will live within our means.

Total expenditures will not exceed total revenues.

We have made a big start in this Mini Budget and we are within striking distance of the target.

6. Expenditure SavingsTurning to expenditure savings, a key item contributing to our high expenditure growth has been the rapid build up in public service staff numbers.

I should make it clear that this Government is committed to providing and supporting the delivery of effective outcomes for frontline services.

This means we will continue to search for better and more efficient ways to achieve the results required.

Madam Speaker, we have paid close attention to setting the funding bases for the major spending agencies with a high frontline output emphasis, such as health, education, police and other agencies providing critical services to Territorians.

It has been important to get these major expenditure areas settled.

Madam Speaker, I turn now to outline some of the specific savings measures in this Mini Budget:

• the Chief Minister’s offices in Palmerston and Katherine have been closed, and the Alice Springs office will move to more modest accommodation;

• the no-longer-required Council of Territory Cooperation – a creature of the special agreement with the Independent Member for Nelson that kept the Henderson team so tenuously in government – will realise $600 000 a year in savings;

• civilianising positions currently occupied by police officers, and returning them to the frontline, achieving savings reaching $10.9 million a year by 2015-16;

• higher paid positions are being reviewed across the board to make agency management structures leaner and more strategically focused;

• we will focus on capitalising on benefits and efficiencies available from the centralised shared services model that provides cross-government services;

• resource allocations in the arrangements with non-government organisations and other bodies providing services on behalf of government will be directed to meeting greater demand pressures and adopting more cost-effective options for providing services;


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• the Smart Court and the Alcohol and Other Drugs Tribunal are to be abolished, saving more than $9 million over the next four years;

• special arrangements funded by the previous Government in the Gerry Wood agreement will not proceed further, including the Litchfield swimming pool and later stages of grants for sporting facilities at Fred’s Pass;

• a late decision by the former Government to add an additional $500 000 per year to existing funding for the Buildskills Program will not proceed; and

• agencies are rationalising their use of travel, consultancies, vehicle fleets and other discretionary expenditures, instead making better use of video conferencing and other technologies in their day-to-day operations.

7. HousingMadam Speaker, the high cost of housing in the Territory is one of the unforgivable legacies left to this Government to sort out, with Territorians bearing the burden of excessively high rents and purchase prices, and weighing heavily on the cost of living.

Unlike the previous Government, we do have a plan.

We have already outlined the Real Housing for Growth strategy that will produce 2000 homes for working Territorians over this term of Government, through private sector investment.

We have already outlined the two HomeBuild Access products to facilitate home ownership at the lower end of the market by assisting low to middle-income earners with subsidised interest loans and other new home owners with low deposit loans.

It is worth noting that, although the Territory has the most generous housing assistance schemes in Australia, they have been poorly targeted.

Also as part of the Mini Budget, we will change the approach to first home owner assistance schemes to encourage construction of new housing.

We will discontinue the current stamp duty first home owner concession while increasing the first home owner grant.

For homes in the Darwin, Palmerston and Darwin rural areas, assistance to eligible first home owners will be $25 000 for new homes and $12 000 for existing homes.

Assistance of $25 000 will be offered in regional parts of the Territory for both new and existing homes, recognising the current constrained supply of new housing development compared with the Top End.

We will reduce eligibility for the first home owner grant from $750 000 to homes valued up to$600 000.

The stamp duty principal place of residence rebate will be targeted to new homes only, and will be increased to $7000 from the current $3500.

These measures will come into effect today.


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8. Revenue IncreasesThere are various revenue sources available to the Government including taxes, and fees and charges for services.The Territory’s revenue effort is assessed by the Commonwealth Grants Commission, which recommends the level of GST payments to the states and territories.In the most recent assessment, the Grants Commission assessed that the Northern Territory was raising only 78 per cent of the revenue it would raise if taxes and charges were at state-average levels.This means Territory taxes and charges are 22 per cent lower than the average of the states.This is unreasonable.If the Territory is to provide the same standard of services as elsewhere in the country, then Territorians should pay similar charges as in other states.Make no mistake, when assessing our need for GST funds, the Grants Commission assumes that we are making a reasonable revenue effort, given that we receive several times moreper capita GST allocation than the states.I will now outline the major revenue changes.Madam Speaker, total motor vehicle registration costs are among the lowest in the country.Aside from recent consumer price index (CPI) increases, fees have not increased for 16 years and are significantly lower than the states’ average.Motor vehicle registration fees will rise from 1 January 2013.When considered as part of total registration costs, the increases will vary between 4 and18 per cent, or $11 for a motorcycle or small box trailer, $67 for a small vehicle and $105 for alarge four-wheel drive.Bus fares in the Territory are overall much lower than in other jurisdictions.From 1 January 2013, bus fares will rise by around a dollar per ticket, raising approximately$2.5 million per annum.Students under 18, vision impaired passengers and veterans will continue to travel for free.With effect from the middle of next year, the number of taxis will be increased, providing another 35 taxis in Darwin and Alice Springs and $620 000 in revenue per annum.Public housing rents will increase by 1 per cent, raising around $300 000 per annum.Madam Speaker, revenue increases have been contained to measures where the Territory sits towards the lowest end of the scale among the states and where there have been few increases in recent times.

9. Capital Works CashWe have been able to reprioritise infrastructure spending to better balance expenditure over the forward estimates.An additional $100 million cash will be re-allocated over four years towards the backlog in repairs and maintenance.This is good news for small businesses across the Territory.


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ConclusionIn conclusion, Madam Speaker, we should be under no illusion that today marks the end of the trail, that everything will be fine with the Territory’s finances once this Mini Budget is in place.

Today is the beginning of a long process of restoring our finances to a sustainable condition, where we can then set about doing the things we know need to be done to assist in realising the Territory’s great future.

We need cash in the bank and credibility in the eyes of investors and other governments to make that happen.

I am confident that this Mini Budget will be a significant step along the way.

Although our initial goal is to stop the deterioration in the Territory’s fiscal position, it will not remove the huge debt mountain.

We will be working on strategies to address this matter in the 2013-14 Budget.

In the next phase, moving towards the 2013-14 Budget we will focus on areas that drive the economy, such as mines and energy, tourism and primary industry.

Once the path is set in the 2013-14 Budget towards eliminating the last of the fiscal imbalance by 2015-16, we will be in a better position to ramp up the activities in those wealth-creating areas.

This Mini Budget will take the fiscal imbalance in 2015-16 to $53 million or very close to living within our means.

There will be a modest adjustment in 2012-13, but significant reduction in 2013-14, 2014-15 and 2015-16.

These measures will also effect a reduction of almost $1.2 billion in the projected $5.5 billion in net debt at 2015-16.

Madam Speaker, I table the 2012-13 Mini Budget and note that, aside from outlining adjustments to the Budget, it satisfies the Territory’s obligations to publish a mid-year report.

I move that the statement be noted.

Agency

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Part 2

Agency Output Statements

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OverviewPart two of the Mini Budget book provides high level summary information for each budget sector agency and business division, including the new agencies formed following the Administrative Arrangements Order of 4 September 2012.

A profile for each agency and business division is provided, along with its key strategic issues. For agencies, output tables are presented setting out the original 2012-13 Budget and the revised 2012-13 Mini Budget. Where an agency has been restructured since the 2012-13 Budget, the Budget column has been back cast for comparative purposes and therefore presents the original budget position as though the new agency structure had been in place in May 2012.

Detailed information such as output and business line descriptions and performance measures have not been provided, however these details will be included in Budget Paper No. 3, when the 2013-14 Budget is released in May 2013.

The output tables include each agency’s current output groups and outputs, total expenses, total income and appropriation by purpose.

Following the output table, where relevant, key Government initiatives and major budget changes are also provided. The variations described are in regard to 2012-13, full descriptions relevant to 2013-14 will be incorporated in the 2013-14 Budget Papers.

For business divisions, business line information is presented for the 2012-13 Budget and the 2012-13 Mini Budget for income, expenses and the net surplus/deficit before income tax. An update on the business division’s performance for 2012-13 is also provided.

Where agencies and business divisions have capital works projects in 2012-13, an updated capital works table is also presented.

Auditor-General’s Office

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The Northern Territory Auditor-General’s Office provides support to the Auditor-General in the discharge of statutory obligations under various Acts of Parliament, such as the Audit Act and the Public Information Act, including:• the conduct of field work as part of examining financial information prepared

by the Treasurer, agencies, statutory bodies and other public sector entities that are controlled by the Northern Territory Government;

• the conduct of performance management and information system audits;• the conduct of reviews of public information issued by public authorities; and• operational support in areas such as financial, information technology

and records management.

Strategic Issues• Extension of the audit program for 2012-13, following recent Commonwealth

legislative changes, in order to assess the adequacy of Northern Territory agencies’ performance management systems in connection with national funding agreements.

• Reviewing and refining the performance management system methodology to ensure consistency with contemporary developments in this area.

Output Group/Output2012-13Budget

2012-13Mini

Budget$000 $000Audits and Reviews 3 772 3 772

Audits and Reviews 3 772 3 772

TOTAL EXPENSES 3 772 3 772

TOTAL INCOME 3 772 3 772

NET SURPLUS (+)/DEFICIT (-)

AppropriationOutput 3 090 3 090CapitalCommonwealth

Government Initiatives and Budget VariationsThe Auditor-General’s Office budget is not expected to change from that published in the 2012-13 Budget.

Northern Territory Electoral Commission

Agency Profile

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The Northern Territory Electoral Commission provides an independent electoral service to the people of the Northern Territory, the Northern Territory Legislative Assembly, municipal and shire councils and other organisations.

Strategic Issues• Analysing the operational experience and performance of the 2012 Legislative Assembly

and council general elections for the purpose of reporting to the Legislative Assembly and recommending legislative and operational improvements.

• Assessing and responding to the roll out of recent Commonwealth legislation related to enrolment, affecting the Territory and local government electoral rolls.

• Maintaining a state of preparedness to respond to local government and Legislative Assembly by-elections or any major, Territory-wide electoral events that may emerge.

• Continuing to enhance and increase the electoral education and public awareness program.


2012-13Mini Budget

$000 $000Electoral Services 3 149 3 149

Electoral Services 3 149 3 149



NET SURPLUS (+)/DEFICIT (-) - 23 - 23

Appropriation

Output 2 261 2 041Capital

Commonwealth

Government Initiatives and Budget VariationsThe Northern Territory Electoral Commission budget is not expected to change significantly from that published in the 2012-13 Budget.

Ombudsman’s Office

Agency Profile

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The Ombudsman’s role is to receive, investigate and resolve complaints made by members of the public about any administrative action to which the Ombudsman Act applies and to foster excellence in public sector services.

In addition to these responsibilities, the Ombudsman is required to inspect, audit and report on compliance by Northern Territory Police with the Telecommunications (Interception) Northern Territory Act, Commonwealth Telecommunications (Interception and Access) Act and the Surveillance Devices Act 2007.

Strategic Issues• Contributing to a strong and vibrant democracy by investigating and reporting on

complaints of inappropriate administrative actions.

• Establishing a service to remote communities commensurate with that provided by the Commonwealth Ombudsman and in other states.

• Developing processes to monitor National Heavy Vehicle Haulage regulation.

• Training public officials to investigate skilfully, thoroughly and with fairness.

• Closing the gap in service to people outside cities from the Territory Ombudsman and the Commonwealth Ombudsman.

• Monitoring administrative practices and decision making of public authorities to ensure appropriate service delivery is maintained under new savings measures.


2012-13Mini Budget

$000 $000Ombudsman’s Office 2 178 2 217

Ombudsman for the Northern Territory 2 178 2 217




Appropriation


Commonwealth

Government Initiatives and Budget VariationsThe Ombudsman’s Office budget is not expected to change significantly from that published in the 2012-13 Budget.

Department of the Chief Minister

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The Department of the Chief Minister is responsible for ensuring that Government priorities are reflected in policy and implemented effectively by the public sector. It provideswhole of government policy advice and leadership in coordinating approaches to priority issues throughout the Northern Territory public sector. The agency’s primary contribution to the strategic direction of the Government is through the coordination of coherent, rigorous and evidence-based advice to the Chief Minister and Cabinet.

Strategic Issues• Maximising opportunities for the Northern Territory arising out of national and Territory

policy initiatives by proactively engaging in emerging issues through the Council of Australian Governments and other forums.

• Enhancing social development and participation by facilitating social inclusion and responsibility initiatives, advancing the interests of Territory women, youth and seniors, and coordinating multicultural programs and services.

• Building a safe, secure and resilient Northern Territory by aligning Northern Territory security arrangements with national frameworks, and facilitating whole of government emergency planning and response frameworks.

• Supporting the work of the Administrator of the Northern Territory and the conservation and maintenance of Government House.

• Supporting regional development including job creation initiatives by providing strong leadership and coordination through regional coordination committees.

• Supporting robust executive government frameworks by providing effective advice and support to Cabinet and Ministers, and legislative services.

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Department of the Chief Minister

Output Groups/Outputs2012-13Budget

2012-13Mini Budget

$000 $000Policy Advice and Public Sector Coordination 16 144 32 499

Policy Advice and Coordination 4 252 13 455

Multicultural, Women, Youth and Seniors Advancement 7 178 7 010

Alice Springs Transformation Plan 4 714 12 034

Government Business Support 31 460 32 177

Support to Ministers and Leader of the Opposition 24 515 25 249

Legislation Production 2 517 2 511

Support to Administrator and Government House 3 391 3 380

Community Support 1 037 1 037



NET SURPLUS(+)/DEFICIT(-)) - 5 118 - 21 654

Appropriation


Commonwealth

395 395

Government Initiatives and Budget VariationsThe Policy Advice and Public Sector Coordination output group increase is due to the revised timing of commitments related to Commonwealth Government-funded programs, including the Alice Springs Transformation Plan and Remote Indigenous Housing.

Department of the Legislative Assembly

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The Department of the Legislative Assembly provides operational support, services and professional advice to Northern Territory Legislative Assembly Members and other clients, and promotes community understanding of the work of the Legislative Assembly and its committees.

Strategic Issues• Promoting awareness and understanding in the community of representative parliamentary

democracy through the delivery of educational programs and promotional activities.

• Ongoing review of parliamentary practice and procedures to ensure effective operation of the Legislative Assembly and a timely and efficient legislative process.

• Ongoing asset management planning for the maintenance and upgrading of the Parliament House facility to ensure a consistently high standard of amenity and service.

• Ongoing improvements to the delivery of services to Members of Parliament to ensure prompt and responsive services that meet their needs.

• Ongoing procedural, research and administrative support to ensure that committees are able to operate effectively and fulfil their role in examining and reporting on a range of issues.

• Continuing development of a capable and engaged workforce to ensure a sustainable organisation.


2012-13Mini Budget

$000 $000Parliamentary Services 28 616 27 980

Assembly Services 4 827 4 156

Members and Client Services 14 242 14 242

Building Management Services 9 547 9 582



NET SURPLUS (+)/DEFICIT (-) - 4 020 - 4 020

Appropriation


Commonwealth

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Government Initiatives and Budget VariationsThe department’s budget is largely unchanged from that published in the 2012-13 Budget.

Northern Territory Police, Fire and Emergency Services

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The Northern Territory Police, Fire and Emergency Services is a tri-service agency comprising the Northern Territory Police Force, the Northern Territory Fire and Rescue Service and the Northern Territory Emergency Service. The Commissioner of Police exercises chief executive officer authority over all three entities.

Strategic Issues• Keeping the community safe through:

– delivering highly visible frontline police services;

– tackling alcohol-related crime;

– targeting anti-social behaviour and public order issues;

– providing crime reduction initiatives focused on achieving a reduction in crime across assaults, theft, unlawful entry and property damage; and

– working with key stakeholders, including other government agencies, non-government organisations, the private sector and the public, to enhance community safety.

• Improving safety on Territory roads through education and enforcement.

• Providing responsive and professional customer service that enhances community safety perceptions.

• Continuing to enhance the all-hazards emergency response capability.

• Focusing on developing proactive community safety.

• Providing fire education programs, building community resilience, to better cope with emergencies.

• Improving the delivery of services through ensuring the effective use and allocation of resources.

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Northern Territory Police, Fire and Emergency Services


2012-13Mini Budget

$000 $000Community Safety and Crime Prevention 97 410 104 690

Community Safety and Crime Prevention 97 410 104 690General Policing, Crime Detection, Investigation and Prosecution 179 792 188 615

Response and Recovery Services 57 741 60 574Investigations 78 633 82 492Services to Judicial Process 43 418 45 549

Road Safety Services 25 390 26 636Community Safety and Crime Prevention 25 390 26 636

Fire Prevention and Response Management 35 319 36 187

Fire Prevention and Response Management 35 319 36 187Emergency Services 4 750 5 123

Emergency Services 4 750 5 123


TOTAL INCOME 313 180 328 988


AppropriationOutput 268 422 283 491

Capital 11 404 13 272

Commonwealth 6 131 7 604

Government Initiatives and Budget Variations• $2.5 million in 2012-13 to commence recruitment to meet the Government’s commitment to

provide 120 additional police officers, including 20 for Alice Springs.

• $0.3 million in 2012-13 to conduct a Safe Streets Audit.

• $0.5 million for closed-circuit television cameras in Katherine.

• $1.79 million in 2012-13 for additional resources in Katherine and Alice Springs to be utilised as communications staff.

• $5.7 million ongoing from 2012-13 for police housing expenses.

• $2 million capital works project to upgrade Nightcliff Police Station.

• $2.5 million in 2012-13 for a grant to the Alice Springs Youth Centre to transition to a Police and Citizen Youth Club.

• $3.88 million in 2012-13 for key Information, Communication and Technology Systems.

$M2012-13 New Capital Works

Katherine Police and Fire Station air-conditioning replacement 2.0

Milikapiti police facilities and overnight accommodation 0.9

Nightcliff Police Station 2.0

Peter McAulay Centre TRG equipment and storage shed 0.6

Police overnight facilities – Mt Liebig, Areyonga and Robinson River 1.8

Office of the Commissioner for Public Employment

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The Office of the Commissioner for Public Employment has principal responsibility to Government in the areas of public sector management and industrial relations.

The Office supports the Commissioner for Public Employment’s statutory employer role as defined in the Public Sector Employment and Management Act (PSEMA). The Commissioner is also required to provide strategic and policy advice to support the Minister in undertaking his duties under PSEMA.

Strategic Issues• Providing guidance and support across the Northern Territory Public Sector (NTPS) on all

employment matters.

• Negotiating new NTPS workplace agreements in line with the NTPS Wages Policy.

• Developing a whole-of-NTPS training framework.

• Developing an executive mobility program to further develop NTPS leadership and management capacity.


2012-13Mini Budget

$000 $000Employment Services 7 642 6 637

Employee and Industrial Relations 3 059 3 059

Workforce Planning and Development 3 909 2 904

Promotion, Disciplinary and Inability Appeals and Grievance Reviews 674 674



NET SURPLUS (+)/DEFICIT (-) - 10 22

Appropriation


Commonwealth

Government Initiatives and Budget VariationsThe Office of the Commissioner for Public Employment’s budget is expected to reduce in line with operational efficiencies.

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Department of Lands, Planning and the Environment

Agency ProfileThe Department of Lands, Planning and the Environment leads land development forthe Northern Territory by providing Government with strategic plans and policies to meet current and emerging needs for land and infrastructure, while ensuring developmental and regulatory control.

The agency plays a central role in managing the Crown Estate, natural and cultural heritage assets and develops and maintains spatial information used to support long-term planning and land release. The agency balances decision making in relation to environmental sustainable development assessment, while facilitating the continued economic development of the Territory.

The Planning Commission is a statutory body supported by the agency that provides a strategic role to planning for the future development of the Territory, to facilitate long-term economic development by responding to forecasted demand and providing strategicand long-term integrated land use planning and infrastructure plans, including transport corridors, to achieve the best use of land.

The agency also provides support to other statutory bodies including the Darwin Waterfront Corporation, Northern Territory Environment Protection Authority (NTEPA) and NT Build.

Strategic Issues• Continuing strategic land release to meet market demands and drive economic

development.

• Reducing the cost of serviced land to the community.

• Supporting sustainable development by private enterprise.

• Assisting Indigenous custodians to have Indigenous place names and associated stories recognised as valuable cultural property.

• Developing, implementing and reviewing policy relating to building regulation including the certification process.

• Supporting the Planning Commission to:

– undertake strategic planning and investigation of future residential, commercial and industrial developments across the Territory; and

– develop town plans (Northern Territory Planning Scheme Area Plan and Zoning Maps) and town centre urban design plans for Growth Centre Aboriginal Communities.

• Developing and designing headworks and trunk infrastructure services to support future land and economic development.

• Managing infrastructure demand growth and facilitating opportunities associated with major private sector infrastructure projects.

• Designing and pursuing initiatives relating to spatially enabling government information.

• Progressing the implementation of a new model for delivering valuation services to the Territory Government.

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Department of Lands, Planning and the Environment


2012-13Mini Budget

$000 $000Economic Development 20 532 20 256

Land Administration 13 276 12 963

Land Development 7 256 7 293

Land Services 29 332 29 941

Building Advisory Services 4 322 4 057

Development Assessment Services 4 864 4 644

Heritage 3 037 2 951

Land Information 14 032 15 347Lands Planning 3 077 2 942

Statutory Bodies 27 221 28 437

NT Environment Protection Authority 8 095 8 511

NT Planning Commission 800

Darwin Waterfront Corporation 18 436 18 436

NT Build 690 690



NET SURPLUS (+)/DEFICIT (-) -1 536 -3 141

Appropriation


Commonwealth

582 582

Government Initiatives and Budget Variations• $0.8 million for the establishment of the Northern Territory Planning Commission to develop

strategic plans and planning policy, and provide advice on significant developments and other activities determined by the Planning Amendment Act.

• $0.5 million for the establishment of the NTEPA to provide advice on environmental issues, undertake environmental assessments and functions associated with the management of waste and pollution, including compliance and enforcement activities, and other functions conferred on the NTEPA by any other Act.

• $0.75 million to investigate flood mitigation options for Rapid Creek.

• $0.19 million for the secondment of a Charles Darwin University demographer/economist and additional research work.


Middle Arm Industrial Precinct – water 15.5

Palmerston East – headworks 12.8

27

Land Development Corporation

Business Division ProfileThe Land Development Corporation underpins economic development in the greater Darwin region through the provision of strategic industrial land and projects at East Arm, the Darwin Business Park and Middle Arm.The corporation also facilitates the delivery of a range of innovative residential and mixed-use developments, with an emphasis on affordability, through a variety of partnership arrangements.

Strategic Issues• Investing in long-term growth through the ongoing development of the East

Arm Logistics Precinct incorporating the Darwin Business Park and the common user area, the Defence Support Hub, Middle Arm and Marine Industry Park.

• Supporting investment and infrastructure by investigating different land delivery models and facilitating new initiatives at the East Arm Logistics Precinct, Middle Arm Industrial Precinct and other locations to meet industry needs.

• Partnering with the private sector to deliver a range of residential projects including suburban subdivisions, medium density and mixed-use developments and integrated projects.

• Growing local industry through partnership opportunities and strategic alliances within Government, the private sector and other stakeholders.

Business Line2012-13Budget

2012-13Mini

Budget$000 $000Income 54 898 54 898

Residential Development 32 439 32 439Industrial Development 22 459 22 459

Expenses 45 005 44 895


NET SURPLUS (+)/DEFICIT (-) BEFORE INCOME TAX 9 893 10 003


PerformanceThe Land Development Corporation’s financial performance is not expected to change significantly from that published in the 2012-13 Budget.


Common user area – stage 3 3.2Defence Support Hub – RGM development 2.2Residential development including NRAS housing at Johnston, Maluka Drive and Zuccoli

47.6Wishart Road development 14.4

Department of Land Resource Management

Agency Profile

28

The Department of Land Resource Management provides natural resource management services to landholders across the Northern Territory including the scientific assessment of vegetation, fauna, land and water assets and the allocation, management and monitoring of these resources to ensure their sustainable use.

Strategic Issues• Identifying opportunities for agricultural expansion through the strategic assessment and

identification of land with suitable soils and sufficient water.

• Monitoring key rivers to ensure early warning and notification of flood risk to communities and government assets and ensuring new developments on floodplains mitigate flood risk.

• Ensuring contemporary natural resource management legislation is applied to the allocation and use of the Territory’s land, water, fauna and flora resources.

• Developing an appropriate, sustainable and transparent process for rental of the Northern Territory’s estate for pastoral purposes.

• Assisting the Pastoral Land Board to meet its statutory obligations under thePastoral Land Act.

• Providing developers and users of the Northern Territory’s natural resources with consistent scientific advice that promotes economic development without compromising the overall health of resources.

• Building community capacity and resilience to bushfire through increasing community involvement in fire awareness and mitigation programs, and shared responsibility and improved compliance with fire prevention and mitigation legislation by landholders.

• Progressing a strategic approach to managing increased risk of bushfire and bushfire intensity in the rural urban interface as a result of closer subdivision and weed infestation.

• Delivering policy, strategy and management advice relating to the conservation of the Northern Territory’s unique wildlife and ecosystems, for the ongoing sustainable development of the Northern Territory.

• Working with Indigenous elders and communities to preserve and utilise Indigenous biocultural knowledge for the conservation of the Northern Territory’s flora and fauna.

• Implementing robust monitoring systems to track the health of the Territory’s biodiversity and inform adaptive management.

• Increasing our understanding of the Territory’s biodiversity assets and assisting landholders and the community to protect threatened species.

• Promoting economic opportunities through the sustainable use of wildlife.

Department of Land Resource Management

2012-13Budget

$000

2012-13Mini Budget

$000

Output Group/Output

29

Land Resource Management 51 948 54 044

Flora and Fauna 9 622 9 622

Rangelands 13 175 14 069

Water Resources 14 490 14 510

Bushfires 7 625 8 825

Multi Agency Services 7 036 7 018



NET SURPLUS (+)/DEFICIT(-) - 2 186 - 2 186

Appropriation

Output 34 817 36 317Capital 345 345


Government Initiatives and Budget Variations• $1 million ongoing from 2012-13 for wildfire activities.

• $0.5 million ongoing from 2012-13 to support the Pastoral Land Board and rangeland monitoring program.

Department of Treasury and Finance

30

The Department of Treasury and Finance contributes to the achievement of the Northern Territory Government’s economic, fiscal and social policies by providing analysis and advice on sustainable Government finances, strategic positioning and effective risk management of the Government’s economic, commercial and revenue activities.

The department also provides shared corporate services for government agencies, including financial and human resource administration, procurement services, information and communication technology (ICT) services and office leasing.

Strategic IssuesIssues that will influence the Territory’s economic and fiscal circumstances include:

• the outcome of the review into the distribution of goods and services tax (GST) revenue between states;

• assisting government agencies to maximise key fiscal strategies to improve the Government’s financial position;

• the increased complexity of Commonwealth/state intergovernmental financial arrangements, particularly the requirements of National Partnership Agreements and associated performance targets and achievements in a range of areas including health reform and Stronger Futures;

• the continued constraints on commercial finance following the impacts of the European debt crises on investment markets; and

• national economic conditions leading to lower Territory revenues and a more constrained fiscal outlook.

The Department of Treasury and Finance continues to enhance the provision of shared corporate services by:

• providing support to the Northern Territory public sector through cost-effective shared financial and human resource administration, procurement, information technology management and office leasing services to Government.

Department of Treasury and Finance

2012-13Budget

$000

2012-13Mini Budget

$000

Output Group/Output

31

Financial Management

Financial Management

Economic

6 382 6 059

6 382 6 059

77 216 76 844

Economic Services 6 859 6 487

Payments on Behalf of Government 70 357 70 357

Territory Revenue 17 066 22 161

Territory Revenue 7 006 6 822

Tax-related Subsidies 10 060 15 339

Superannuation 3 699 3 509

Superannuation 3 699 3 509Economic Regulation 1 303 1 273

Utilities Commission 1 303 1 273

Shared Services 143 975 144 716

Finance Services 18 590 18 574

Human Resource Services 30 619 30 619

Procurement Policy and Services 2 701 2 880

Information and Communication Technology Services 21 633 21 677

Office Leasing Management 70 432 70 966


TOTAL INCOME 247 547 252 088


Appropriation


Commonwealth

2 029 2 029

Government Initiatives and Budget Variations• An increase of $4 million in first home owner grants due to the grant increasing from

$7000 to:

– $25 000 for new homes in the greater Darwin/Palmerston and Darwin rural area and new and existing homes in other areas of the Northern Territory; and

– $12 000 for existing homes in the greater Darwin/Palmerston and Darwin rural area.

• $1.3 million for the BuildBonus Scheme.

Northern Territory Treasury Corporation

Business Division Profile

32

The Northern Territory Treasury Corporation is the central financing authority for the Northern Territory Government. The Corporation undertakes borrowing and investment activities on behalf of Government and provides cost-efficient loans to its public sector clients.

Strategic Issues• Managing the Territory Government’s investments efficiently.

• Securing cost-effective refinancing of maturing debt and financing of additional borrowings.

• Continuous development of the Corporation’s business continuity planning and corporate governance framework.

2012-13 2012-13Business Line Budget Mini Budget

$000 $000Income 261 232 267 048

Government Loans and Investments 261 232 267 048

Expenses 223 806 222 394

Government Loans and Investments 223 806 222 394

SURPLUS (+)/DEFICIT (-) BEFORE INCOME TAX 37 426 44 654

PerformanceInterest revenue for 2012-13 is forecast to increase due to higher levels of cash balances, which are expected to be maintained through the 2012-13 financial year. This resulted from the prefunding of borrowings of $492 million undertaken in 2011-12.

NT Fleet


33

NT Fleet is responsible for the management of the Northern Territory Government vehicle fleet, except police, fire and emergency services vehicles.

Strategic Issues• Working with agencies to improve the cost-effective utilisation of government-owned

vehicles including four-wheel-drives across the fleet.

• Working with agencies to achieve more cost-effective options for vehicle requirements based on business or functional needs of agencies.

• Continuing implementation of the Vehicle Booking system across government to facilitate improved vehicle utilisation, greater transparency and reporting of vehicle usage.


2012-13Mini Budget

$000 $000Income 53 922 53 922

Fleet Services 53 922 53 922

Expenses 38 544 38 544

Fleet Services 38 544 38 544

NET SURPLUS (+)/DEFICIT(-) BEFORE INCOME TAX 15 378 15 378

PerformanceNT Fleet’s financial performance is not expected to change from that published in the 2012-13 Budget.

Government Printing Office

34

The Government Printing Office provides printing and publication services to Northern Territory Government agencies.

Strategic Issues• Deliver cost-effective printing services and identify innovative delivery methods that meet

customer expectations in an industry where technology is evolving rapidly.


2012-13Mini Budget

$000 $000Income 5 979 5 959

Printing Services 5 979 5 959

Expenses 5 824 5 804

Printing Services 5 824 5 804

NET SURPLUS (+)/DEFICIT (-) BEFORE INCOME TAX 155 155

PerformanceThe Government Printing Office’s financial performance is not expected to change from that published in the 2012-13 Budget.

Data Centre Services


35

Data Centre Services delivers a range of information and communications technology services to Northern Territory Government agencies.

Strategic Issues• Limiting growth in the number of physical servers through extension of the virtual server

environment and reducing the unit cost of data centre hosting.

• Continue investigating options to improve the disaster recovery capability for critical business systems.

• Modernising information technology systems in the mainframe environment and delivering improved value for money from this technology platform.

• Implementing a utility computing service allowing agencies to access capacity on demand to meet their business needs without the need to acquire their own ICT infrastructure.


2012-13Mini Budget

$000 $000Income 24 462 24 462

Data Centre Management 24 462 24 462

Expenses 20 185 20 185

Data Centre Management 20 185 20 185


PerformanceData Centre Services’ financial performance is not expected to change from that published in the 2012-13 Budget.

Department of Education and Children’s Services

36

The role of the Department of Education and Children’s Services is to improve the educational outcomes, safety and wellbeing of Territory children from their early years through to senior years.

Strategic Issues• Providing quality, evidence-based early years education and care programs for the best

possible start in life.

• Improving services through an integrated approach to support better outcomes for children and families.

• Improving student attendance at school.

• Further improving levels of achievement in national testing for years 3, 5, 7 and 9, with particular attention to closing the gap between Indigenous and non-Indigenous students.

• Implementing a cohesive and rigorous school improvement program.

• Providing quality learning experiences at all stages of schooling through implementation of the Australian Curriculum.

• Providing robust, innovative and flexible options, including virtual delivery models, for senior years students to ensure students are maximising access to, and participation in, future education, training and employment pathways.

• Embedding and sustaining recruitment, retention and development of quality teachers and school leaders with a particular emphasis on our Indigenous workforce.

• Using existing government infrastructure and resources, particularly in remote communities, to maximise outcomes for Territory children.

• Enhancing cohesion of innovative, integrated place-based service delivery, particularly in remote towns.

Department of Education and Children’s Services

2012-13Budget

$000

2012-13Mini Budget

$000

Output Group/Output

37

Government Education 667 431 681 539

Preschool Education 47 806 47 482

Primary Education 349 839 363 151

Middle Years Education 124 482 128 021

Senior Years Education 127 370 129 073

International Education 759 524

Tertiary Education 17 175 13 288

Non-Government Education 163 890 161 750

Primary Education 76 902 76 790

Middle Years Education 52 546 51 656

Senior Years Education 34 442 33 304


TOTAL INCOME 786 688 792 556


Appropriation



Government Initiatives and Budget Variations• An additional $3.3 million ongoing from 2012-13 to increase the Back to School Voucher

from $75 to $150 for students in Territory schools from January 2013.

• An additional $2.3 million in 2012-13 to assist schools with rising utility rates.

• An additional $5.8 million in 2012-13 for repairs and maintenance for government schools.

• An additional $1.0 million for Commonwealth programs in government schools, including Empowering Local Schools, Investing in Focus Schools and Reward for Great Teachers.

• An additional $0.7 million for the Edmund Rice Foundation program.

$M

2012-13 New Capital Works

Child and family centres – Gunbalanya, Maningrida, Ngukurr and Yuendumu 16.1

Child care centres – Ntaria and Umbakumba 1.9

Kalkarindji School – new classroom block and ablutions 1.8

Kintore Street School – new double classroom early learning centre 1.8

National Solar Schools Program 1.0

Palmerston Senior College – special education upgrade, stage 2 0.8

Taminmin College – canteen facility 1.0

Walungurru School – replace administration block 0.9

Office of Children and Families

Agency Profile

38

The Office of Children and Families, part of the Education and Children’s Services portfolio, provides assistance to children and young people, families and communities to ensure the wellbeing, care and protection of children and young people and their families.

Strategic Issues• Working with families and carers to build parenting capacity and increase engagement

with early years learning programs.

• Integration of early years learning, family support and preventative child protection functions.

• Developing and maintaining a quality out-of-home care system to meet the safety and stability needs of children in care.

• Expanding and supporting an enhanced child and family service system, particularly in remote communities.

• Reforming the child protection and out-of-home care system to better respond to the needs of Aboriginal and Torres Strait Islander children, families and communities.

• Strengthening the child protection and family support systems through improved compliance with legislation and policy, streamlined reporting and changes to court practices.

• Working in partnership across agencies and with the non-government sector to build a better connected and coordinated child protection and family support system.

• Supporting specialist and generalist services to provide integrated responses in meeting the needs of adults and children affected by family violence, and break the cycle of violence.

• Investing in the training, development and supervision of staff, and introducing new quality and accountability mechanisms, to improve skills and provide high quality practice.

Office of Children and Families

2012-13Budget

$000

2012-13Mini Budget

$000

Output Group/Output

39

Children and Families 176 269 188 505

Family and Parent Support Services 53 259 40 894

Child Protection Services 52 217 57 972

Out-of-Home Care Services 52 507 70 263

Early Years 18 286 19 376


TOTAL INCOME 164 624 173 993


Appropriation



Government Initiatives and Budget Variations• An additional $10 million in 2012-13 to meet demand pressures in child protection

and out-of-home care.

• An additional $2 million in 2012-13 to provide a grant to support Somerville Community Services in Palmerston.

• The remaining variations in the outputs represent a refocusing of the office’s budget to frontline child protection and out-of-home care services.

Department of the Attorney-General and Justice

40

The role of the Department of the Attorney-General and Justice is to provide strategic legal and justice policy advice to the Northern Territory Government and independent court, prosecution, registration and advocacy services for Territorians in an effective, efficient and ethical manner.

The department’s role is delivered by:

• providing civil litigation, commercial, native title and policy services to government;

• oversighting the provision of financial assistance and support to victims of crime;

• providing support services to enable courts and tribunals to administer justice for the community;

• enabling statutory independent office holders to protect the community’s legal rights and property; and

• coordinating research and statistical data to assist the implementation of justice-related government policies.

Strategic Issues• Implementing Government’s legislative reform agenda relating to sentencing and bail,

victims of crime, court orders for persons taken into protective custody and assault-related offences including ‘one punch’ legislation.

• Developing the Safe Homes policy to provide assistance to those impacted by violent property crime.

• Ensuring equitable access to financial assistance and support for victims of crime.

• Coordinating quality criminal justice research and statistical information and analysis to support the government’s legislative reform program.

• Enhancing services and support for all courts, tribunals and coronials across the Territory.

• Providing advocacy, awareness, training and advice to stakeholders on issues that affect the rights of the vulnerable and disadvantaged across the range of justice services.

• Ensuring criminal matters are dealt with efficiently throughout the criminal justice process.

• Providing an independent, professional and effective criminal prosecution service.

• Maintaining Government’s focus on native title and other Aboriginal land issues.

• Assisting with strategies and policies to reduce Indigenous over-representation in the justice system.

Department of the Attorney-General and Justice

2012-13Budget

$000

2012-13Mini Budget

$000

Output Group/Output

41

Legal Services 28 976 29 550

Solicitor for the Northern Territory 15 131 15 131

Policy Coordination 13 845 14 419

Court Support 47 703 49 013

Higher Courts 12 440 13 312

Lower Courts 25 476 25 785

Fines Recovery Unit 1 793 1 922

Integrated Justice Information System 7 994 7 994

Independent Offices 19 661 20 326

Office of the Director of Public Prosecutions 9 609 10 259

Consumer Affairs 2 151 2 151

Anti-Discrimination Commission 1 163 1 178

Information Commissioner 478 478

Public Interest Disclosures 341 341

Registrar-General 2 249 2 249

Public Trustee 1 107 1 107

Health and Community Services Complaints Commission 1 151 1 151

Children’s Commissioner 1 412 1 412




Appropriation


Commonwealth

Government Initiatives and Budget Variations• $0.17 million ongoing from 2012-13 to support Domestic Violence Legal Services to

provide advice and assistance for people in need of protection and people accused of crimes relating to domestic violence.

• $1.29 million ongoing from 2012-13 to provide increased administrative and other support services to enable Northern Territory courts and tribunals to function efficiently and effectively.

• $0.65 million ongoing from 2012-13 to provide increased support to the Office of the Director of Public Prosecutions to undertake independent criminal prosecution services on behalf of Government.

Department of Correctional Services

Agency Profile

42

The Department of Correctional Services provides a safe, secure and humane correctional system. It provides a custodial service to adult prisoners and juvenile detainees including access to therapeutic interventions, reintegration services, counselling and other programs. It provides assessment, monitoring and supervision services to community-based adult and juvenile clients in line with orders issued by the courts and the Parole Board.

Strategic Issues• Developing work-ready skills and increasing employment opportunities for offenders in

custody through education and industrial training programs.

• Providing programs, therapeutic interventions and services to assist offenders to break the cycle of re-offending and actively promoting pre-release employment opportunities.

• Implementing the smoke-free initiative as part of the Healthy Lifestyles Strategy for all staff and prisoners working or residing in adult and juvenile facilities, with a focus on addressing some risk factors associated with endemic chronic diseases, particularly suffered by Indigenous prisoners.

• Provide a coordinated, seamless delivery of services for youth justice through amalgamating the focus on youth detention, family support centres and the youth justice strategy.


2012-13Mini Budget

$000 $000Correctional Services 139 319 144 130

Custodial Services 100 030 103 247

Community Corrections 24 881 25 117

Juvenile Detention 8 333 8 939

Youth Justice 6 075 6 827


TOTAL INCOME 129 985 133 489


Appropriation

Output 121 992 125 460Capital 626 656

Commonwealth 280 280

Department of Correctional Services

43

Government Initiatives and Budget Variations• $0.45 million in 2012-13 to allow for two additional work crews, with one each in

Alice Springs Correctional Centre and Darwin Correctional Centre to operate in the regional areas.

• $1 million in 2012-13 for early intervention programs and residential boot camps for juvenile offenders.

• $0.67 million ongoing from 2012-13 to meet operational expenses of the Alice Springs Juvenile Detention Centre.

• $0.46 million in 2012-13 for employment of key personnel crucial to the commissioning of the Darwin Correctional Precinct.

• $1.8 million in 2012-13 to manage increased prisoner numbers at the Darwin Correctional Centre.

• $0.12 million in 2012-13 to restructure Darwin Correctional Centre kitchen facilities to accommodate increased prisoner capacity.

• $0.41 million in 2012-13 to meet costs associated with increased sitting days of the Parole Board.


Additional beds to support alcohol and drugs services 1.6

Alice Springs Correctional Centre – new and upgraded infrastructure to support an 4.6 additional 50 prisoners

Department of Health

44

The role of the Department of Health is to improve the health and wellbeing of all Territorians and their families by:

• providing individual, family and community health and public health services;

• working with communities in the planning, development, delivery and evaluation of health and family services;

• promoting changes in attitudes and behaviours that are harmful to health; and

• promoting independence and self management.

Strategic Issues• Implementing the ‘New Service Framework for Health and Hospital Services in the

Northern Territory’.

• Responding to growing demand and cost of services, consistent with the position of other health systems nationwide.

• Implementing a System Performance Framework providing for robust and transparent information against financial, activity, and safety and quality performance indicators.This is a requirement under the National Health Reform Agreement, and the main tool for supporting devolved accountability and responsibility.

• Developing financially and clinically sustainable services that respond to expected demand.

• Ensuring timely access to emergency and acute hospital care.

• Implementing key initiatives to provide a financially sustainable service system that meets best practice clinical and other performance indicators, in response to system pressures from the increasing cost of health services, the ageing Northern Territory population and improvements to life expectancy, including:

– clinical redesign, with a focus on attaining national emergency department and elective surgery performance targets; and

– activity-based funding across hospital services as required under the National Health Reform Agreement.

• Closing the gap in life expectancy for Indigenous and non Indigenous Territorians.

• Reducing alcohol attributable hospitalisation rates.

• Reducing health risk factors for Territorians by focussing on chronic disease prevention, early identification and management.

• Actively engaging and advocating for Northern Territory design and funding requirements to be considered as part of the national response to the National Disability Insurance Scheme.


45


2012-13Mini Budget

$000 $000Hospitals 775 035 799 067

Admitted Patient Services 613 295 621 143Non-admitted Patient Services 161 740 177 924

Health and Well Being Services 374 839 379 106

Community Health Services 199 810 198 176

Mental Health Services 52 983 53 849

Community Support Services for Frail and Aged and People with 98 017 100 086Disabilities

Support for Senior Territorians 24 029 26 995Public Health Services 78 795 80 434

Environmental Health 6 661 6 459

Disease Control Services 22 396 24 064

Alcohol and Other Drug Services 41 937 41 771

Health Research 7 801 8 140

TOTAL EXPENSES 1 228 669 1 258 607

TOTAL INCOME 1 187 369 1 208 270


Appropriation

Output 827 709 841 912Capital 4 445 4 445


Government Initiatives and Budget Variations• $6.5 million ongoing from 2012-13 to enhance the Cardiac Outreach Service and

Cardiac Rehabilitation Service, and the commencement of low-risk angioplasty services.

• $2 million in 2012-13 for a review of the Patient Assistance Travel Scheme.

• $4.46 million ongoing from 2012-13 to provide 400 additional elective surgeries per year.

• $2.36 million in 2012-13 to meet the operational expenses of the Alice Springs Hospital Emergency Department.

• $0.57 million in 2012-13 to provide a grant to the BushMob Youth Residential Rehabilitation Service.

• $0.5 million ongoing from 2012-13 to meet operational costs associated with supported accommodation for clients under court orders.

• $2 million in 2012-13 to meet the operational expenses of the 100-bed Medi-Hotel at Royal Darwin Hospital.

• $1.6 million in 2012-13 to meet operational costs of Secure Care facilities.

• $0.33 million ongoing from 2012-13 to implement Youth Suicide Report recommendations.

• An additional $2.6 million in 2012-13 for repairs and maintenance for health facilities.

• An additional $3.9 million in 2012-13 for the Pensioner Concession Scheme to assist with rising utility rates.


46


Alice Springs Hospital – fire protection, air-conditioning and remediation works 5.0

Borroloola Health Clinic upgrade 0.8

Gove District Hospital – fire upgrades 0.7

Milingimbi Health Centre – construct new health centre 4.5

Palmerston Hospital 10.0

Rehabilitation Centres 35.0

Remote Health Clinic – Elliott 6.2

Remote Health Clinic – Galiwinku 6.4

Remote Health Clinic – Ngukurr 5.9

Remote Health Clinic – Ntaria 6.4

Remote Health Clinic upgrade – Papunya 1.8

Royal Darwin Hospital – smoke detection system upgrade 1.6

Tennant Creek Hospital – emergency department redevelopment 3.7

47

Department of Transport

Agency ProfileThe Department of Transport provides safe and effective transport systems and services to meet current and emerging community and Government needs.

The agency plays a central role in the sustainable development of the Territory by forecasting demand and providing:

• roads, transport and infrastructure planning to develop and connect communities across the Territory;

• safe, accessible and effective public transport services; and

• regulatory services covering road transport, marine and rail safety.

Darwin Bus Service is a government business division of the department and is reported separately to the agency for Budget purposes.

Strategic Issues• Implementing initiatives of the three key planning strategies for the Territory:

– 10-year Transport Strategy;

– 10-year Infrastructure Strategy; and

– 10-year Road Strategy.

• Undertaking strategic planning and program development of road and transport infrastructure works programs for future Commonwealth-funded infrastructure.

• Improving regional air and land transport services to support access to services, including continuing the remote bus trials and facilitating reporting officer functions for registered airstrips.

• Continuing to partner with the Commonwealth to respond to challenges presented by access to remote areas, in particular identifying transport infrastructure submissions for works to improve access to remote and regional areas.

• Contributing to the reform agenda for single national regulators for heavy vehicles, rail and marine transport.

• Assessing the impact of the Council of Australian Governments National Road Pricing Arrangements.

• Finalising a Darwin Region Transport Study and associated Darwin Transport Plan and Public Transport Strategy.

• Implementing the NT Road Safety Action Plan’s key actions, initiatives and programs including DriveSafe NT Urban and Remote programs.

• Managing transport infrastructure demand growth and opportunities and contributing to the development of transport management plans associated with major private sector infrastructure projects.

• Developing and delivering sustainable and active transport initiatives.


48


2012-13Mini Budget

$000 $000Transport 211 056 214 215

Public Transport 45 265 44 924

Road Transport 22 185 23 269

Transport Safety 4 038 4 360

Road Network Management 123 293 123 293

Transport Assets 12 404 13 814

Transport Policy (including NT Railway) 3 871 4 555


TOTAL INCOME 174 917 177 482


Appropriation

Output 142 126 143 149Capital 25 950 49 950Commonwealth 78 769 78 769

Government Initiatives and Budget Variations• $33 million to deliver duplication works to Tiger Brennan Drive in Darwin.

• $0.35 million to extend Parap Motor Vehicle Registry hours of trading to include Saturday.

• $0.44 million to meet growth in Motor Vehicle Registry frontline service demand.

• $1.5 million for third party management, adjudication and processing of infringement notices from red light and speed cameras.

• $0.32 million to meet increased frontline service demand associated with the introduction of the National Maritime Safety Regulator.

• $0.32 million to meet increased demand for on-road heavy vehicle enforcement.

49



Arnhem Highway – upgrade 4.0

Black Spot Program 1.0

Central Arnhem Road – passing opportunities 1.5

Howard Springs Road 12.0

National Network flood immunity improvements 6.0

National Network infrastructure road safety initiatives 11.0

National Network strengthening and widening 10.0

Red Centre Way (Mereenie) 5.0

Roads to Recovery Program 4.6

Secondary and local roads – pavement strengthening 1.0

Stuart Highway – Darwin to Katherine overtaking opportunities 1.0

Tanami Road – upgrade and seal 2.0

Tiger Brennan Drive duplication – Dinah Beach Road to Woolner Road 9.0

Upgrade barge landing at Wurrumiyanga (Nguiu) 2.0

Urban arterials – strengthen deficient pavement sections 2.0

Urban arterials – traffic management improvements 3.0

Utopia airstrip – upgrade and seal 2.5

Yarralin airstrip – upgrade and seal 2.5

50

Darwin Bus Service

Business Division ProfileThe primary function of Darwin Bus Service is to provide an efficient, safe and reliable urban bus service to meet the needs of the Darwin and Palmerston communities.Darwin Bus Service operates under a service level agreement with the Public Transport Division of the Department of Transport. Bus services are also provided for special events and school travel in Darwin and Palmerston.

Strategic Issues• Enhancing urban public transport by providing a safe, comfortable,

reliable and cost-effective bus service.• Improving safety for drivers and passengers.• Reducing the impact on the environment from the use of private motor

vehicles by providing bus services as an alternative means of transportation.

• Continuing refinement of Darwin Bus Service’s commercial business operations as a government business division.


2012-13Mini

Budget$000 $000Income 8 904 8 934

Urban Public Bus Service 8 904 8 934Expenses 8 436 8 436

Urban Public Bus Service 8 436 8 436

NET SURPLUS (+)/DEFICIT (-) BEFORE INCOME TAX 468 498

PerformanceDarwin Bus Service’s financial performance is not expected to change significantly from that published in the 2012-13 Budget.

51

Darwin Port Corporation

Business Division ProfileThe Darwin Port Corporation provides port infrastructure and has a key role in the facilitation of trade through the Port of Darwin.

The Darwin Port Corporation’s East Arm and City wharves facilities principally serve the following shipping and cargo markets:

• petroleum and other bulk liquids imports and exports;

• dry bulk imports and exports including mining consumables;

• offshore oil and gas rig services;

• livestock exports;

• container and general cargo including vehicles;

• commercial fishing industry; and

• cruise and naval vessels.

Strategic Issues• Identifying key economic opportunities through industry awareness and participation with

an improved focus on understanding cost drivers and a more commercially driven pricing strategy.

• Managing the projected increased service demands relating to the INPEX project with staged increases in pilotage capability and modern maritime management information systems.

• Increasing commercial focus on existing community service obligation activities and costs, with staged implementation of commercial strategies to improve financial performance.

• Managing the development and maintenance of assets to meet customer needs, with a focus on improving operational efficiencies.

• Continuing to deliver the East Arm facility as an export gateway for new and existing mining projects by improving service delivery for bulk product and container export markets.

• Continuing to improve environmental practices and exploration of alternate bulk loading options with stakeholders to stimulate growth and develop Darwin as the port of choice for bulk minerals exports.

• Continuing development work on the management of stormwater drainage at East Arm Wharf.

• Reviewing safety management systems to ensure new requirements are met under occupational health and safety legislation.

• Ensuring appropriate resourcing to deliver safety initiatives and best practice approaches.

Darwin Port Corporation

2012-13 2012-13

52

Business Line Budget Mini Budget

$000 $000Income 43 059 43 463

East Arm Wharf 29 385 29 789

Navigation and Pilotage 8 452 8 452

City Wharves 5 222 5 222

Expenses 38 738 36 249


Navigation and Pilotage 8 120 7 626

City Wharves 8 280 7 768



Navigation and Pilotage 332 826

City Wharves - 3 058 - 2 546

PerformanceDarwin Port Corporation’s financial performance is expected to improve in line with operational efficiencies.

53

Department of Infrastructure

Agency ProfileThe Department of Infrastructure provides professional project management services for the design, procurement and construction supervision of the Northern Territory Government’s infrastructure program.

The agency provides strategic advice and policy interpretation on a whole of government basis for infrastructure planning and capital works project definition to ensure that built assets are fit for purpose and that life cycle costs are minimised.

The agency is also responsible for the Construction Division, a government business division that is responsible for the procurement and delivery of the Government’s capital works,minor new works and repairs and maintenance programs.

Strategic Issues• Managing and delivering the Territory infrastructure program, including procurement

methodologies that best ensure value for money, transparency and local industry engagement.

• Ensuring best practice in project delivery and a commitment to the ongoing training of agency personnel.

• Developing initiatives for sustainable growth through fostering strong relationships with client agencies and facilitating industry engagement.

• Working with contractors to promote employment, apprenticeships and other training opportunities in the infrastructure sector.

• Ensuring the construction industry has the capacity to respond effectively to Government’s needs across the Territory.

• Working with industry to ensure government contracts deliver quality, occupational health and safety and environmental outcomes that meet client expectations, comply with industry standards and satisfy legislative requirements.

Department of Infrastructure

2012-13 2012-13

54

Output Group/Output Budget Mini Budget

$000 $000Infrastructure Services 24 671 29 987

Asset Management Services 8 415 12 880

Infrastructure Development 3 341 3 307

Technical Specifications 3 426 3 441

Program Management 9 489 10 359




Appropriation

Output 13 105 17 170Capital 207 208 226 964


Government Initiatives and Budget Variations$6.2 million in 2012-13 for the recovery of the new Asset Management System.

55

Construction Division

Business Division ProfileThe Construction Division works collaboratively with client agencies across the Northern Territory Government to identify infrastructure requirements and design. The divisionalso procures and manages construction projects across the Territory and oversees the maintenance of government assets.

Strategic Issues• Ensuring that appropriate resource requirements and models are in place to enable

effective delivery of the Territory Government’s infrastructure program.

• Continuing to support industry engagement through sharing information and training opportunities, and working collaboratively to attract employees to the construction industry.

• Working with clients and core agencies to ensure the appropriateness and effectiveness of procurement methodologies for the delivery of government infrastructure.


2012-13Mini Budget

$000 $000Income 56 001 57 782

Project Management and Delivery 56 001 57 782

Expenses 55 611 55 517

Project Management and Delivery 55 611 55 517

NET SURPLUS (+)/DEFICIT (-) BEFORE INCOME TAX 390 2 265

PerformanceConstruction Division’s performance is expected to improve as a result of operating efficiencies.

Department of Local Government

Agency Profile

56

The primary role of the Department of Local Government is to build stronger regions and communities through sustainable economic development and effective local governments and animal welfare programs.

Strategic Issues• Supporting the local government sector to strengthen governance, management capability

and sustainable delivery of services and build capable workforces.• Improving animal welfare awareness and ensuring legislative compliance.


2012-13Mini Budget

$000 $000Local Government 73 440 60 015

Local Government 72 515 59 090

Animal Welfare 925 925




Appropriation


Commonwealth 200

Government Initiatives and Budget Variations• $0.25 million ongoing from 2012-13, to establish the Family Safe Environment Fund to

assist councils improve the safety of public parks.

• $1 million in 2012-13 to support local government reform.

• The reduction in the Local Government output from the 2012-13 Budget is primarily due to the revised timing of Commonwealth receipts and payments of financial assistance grants that occurred in 2011-12.

Department of Primary Industry and Fisheries

57

The Department of Primary Industry and Fisheries is responsible for the development and management of primary industry and fisheries according to Government priorities and works closely with resource-based industry partners to deliver programs focused onsustainable and productive farming and fishing. The agency supports Government priorities around regional and Indigenous economic development and developing food-based market opportunities for the industry.

Strategic Issues• Sustainably increasing the production and value of Northern Territory pastoral,

horticultural, fishing and aquaculture industries.

• Supporting economic development in regional areas, specifically Indigenous development opportunities and capacity building.

• Facilitating strategic and innovative utilisation of land and water resources.

• Targeting scientific research and extension services to support industry development, productivity and profitability.

• Protecting Northern Territory primary industries from exotic pests and diseases and maintaining or enhancing these industries’ interstate market access.

• Providing modern and credible regulator services, including compliance, to Government and the public across all relevant areas of business.

• Developing frameworks to support strategic resource planning.


2012-13Mini Budget

$000 $000Resource Industry Development 49 780 50 864

Primary Industry 38 627 39 541

Fisheries 11 153 11 323




Appropriation


Commonwealth

251 151

Government Initiatives and Budget Variations• $0.4 million ongoing from 2012-13 for the Ord Development Project.

• Carry forward of $0.85 million of unspent funds from 2011-12 relating to externally funded projects.

Department of Mines and Energy

58

The Department of Mines and Energy is responsible for implementing the Northern Territory Government’s priorities for the development and management of the Territory’s mineral and petroleum resources.

In working with its resource-based industry partners, the agency aims to stimulate and sustain economic development across the Territory.

Strategic Issues• Capturing and disseminating geological information to encourage the responsible

development of the Northern Territory’s minerals and petroleum resources.

• Attracting local and international business investment partnerships.

• Administration and granting of tenure and facilitating land access for mining, petroleum and geothermal exploration and development.

• Supporting economic development and participation for Indigenous people.

• Regulating the exploration, mining and production of minerals and petroleum.• Managing the residual risks associated with legacy mine sites.


2012-13Mini Budget

$000 $000Resource Industry Development 21 802 24 512

Minerals and Energy 21 802 24 512



NET SURPLUS (+)/DEFICIT (-) - 679 - 1 679

Appropriation



Government Initiatives and Budget Variations• $0.68 million ongoing from 2012-13 for the regulation of onshore energy activity.

• $0.45 million ongoing from 2012-13 for the environmental regulation of mining activity.

• $0.28 million ongoing from 2012-13 for mining titles management.

• $0.15 million ongoing from 2012-13 to the International Investment Attraction Program to assist investment from key Asian markets into the Territory’s mining industry.

• $0.15 million ongoing from 2012-13 to the Pre-Competitive Geoscience initiative under the Bringing Forward Discoveries initiative to stimulate mineral and petroleum exploration.

• Carry forward of $1 million of unspent Commonwealth funds from 2011-12 for site maintenance activities at Rum Jungle mine site.

Tourism NT

Agency Profile

59

Tourism NT is a statutory authority established under the Tourism NT Act that markets the Northern Territory as a desirable visitor destination and encourages and facilitates the sustainable growth of the tourism industry in the Territory.

Strategic Issues• Refining investment mix and in-market activities to target the best prospects for travel to

the Territory in response to economic factors, particularly the high Australian dollar, and Tourism Australia’s marketing refocus on eastern markets.

• Working with airlines in a highly competitive and dynamic operating environment to build sustainable services to the Northern Territory through cooperative marketing campaigns and engaging with Asian markets that have strong air linkages to Darwin.

• Assisting local tourism operators address supply-side constraints on tourism growth such as access to a skilled labour force, investment attraction and product development in accordance with the national Tourism 2020 strategy.

• Working with professional conference organisers and other nontraditional partners to broaden the Territory’s tourism appeal beyond leisure markets through additional focus on business events, incentive travel, education and youth markets.

• Refining marketing activities due to the proliferation of consumer touch-points including social media platforms and other digital channels.


2012-13Mini Budget

$000 $000Tourism 41 462 41 712

Marketing 30 888 31 074

Destination Development 10 574 10 638

Northern Territory Major Events 6 347 6 347

Northern Territory Major Events 6 347 6 347




Appropriation


Commonwealth

Government Initiatives and Budget Variations$0.25 million in 2012-13 for the establishment of the Northern Territory Tourism Commission Board.

Territory Discoveries

60

Business Division ProfileTerritory Discoveries contributes to the Territory’s economic growth by developing tourism products for sale to customers in the domestic and selected international marketplaces. The core performance objective of Territory Discoveries is to increase the distribution and sale of the Territory’s tourism product, particularly that of small to medium-sized businesses.

Strategic Issues• Adjusting marketing initiatives in response to the effect of current economic conditions on

consumers’ travel purchases.

• Responding to changes in the way that consumers are engaging with the travel distribution network including increased consumer-direct purchasing and new market entrants such as online travel agents and online tourism aggregators.

• Engaging in social media networks and other digital distribution channels in response to the rapid uptake of technology by consumers in planning and booking travel.


2012-13Mini Budget

$000 $000Income 5 326 5 326

Holiday Sales 5 326 5 326Expenses 5 458 5 458

Holiday Sales 5 458 5 458

NET SURPLUS (+)/DEFICIT (-) BEFORE INCOME TAX - 132 - 132

PerformanceTerritory Discoveries’ financial performance is not expected to change from that published in the 2012-13 Budget.

Department of Arts and Museums

Agency Profile

61

The Department of Arts and Museums is responsible for assisting and facilitating Territorians to tell their stories and understand their history through arts and culture. The department supports, develops and promotes the creative arts and screen sector and is responsible for protecting and providing access to the Territory’s major cultural and scientific assets and collections. It also assists the community to care for and make best use of these assets for tourism, research, educational, recreational and commercial opportunities.

Strategic Issues• Fostering community capacity and participation in developing sustainable cultural

activities, centres and services at the regional level.

• Supporting and promoting the development of cultural activities, centres and services to meet 21st century audience expectations and needs with regard to tourism, research, educational, recreational and commercial opportunities and activities.

• Supporting professional development, training and employment pathways in the creative industries, especially in the not-for-profit arts and culture sector.

• Developing and enhancing strategic partnerships with the community, Commonwealth, business and philanthropic sectors to diversify the funding mix and improve access to and engagement with the Territory’s cultural assets and collections.


2012-13Mini Budget

$000 $000Arts and Culture 41 681 43 441

Scientific and Cultural Collections 31 615 32 807

Arts and Screen Sector 10 066 10 634




Appropriation

Output 33 632 34 332Capital 38 38

Commonwealth 696

Government Initiatives and Budget Variations• $0.2 million ongoing from 2012-13 for the operation of the Defence of Darwin Experience.

• $1.25 million over three years from 2012-13 to support the Katherine Regional Cultural Precinct.

Department of Sport and Recreation

Agency Profile

62

The Department of Sport and Recreation’s primary responsibility is to facilitate and promote involvement by all Territorians in sport and active recreation, promote water safety and facilitate a strong and vibrant racing industry.

Strategic Issues• Increasing the participation of Territorians in sport and active recreation through

community engagement, sports events, pathway development and access to key sporting facilities.

• Developing and implementing the Sport Voucher scheme.

• Addressing water safety by providing a pool safety compliance program and educational campaigns through the Northern Territory Water Safety Plan.

• Providing policy advice and administration of racing industry funding and supporting development of the thoroughbred racing industry and Darwin Greyhound Association.

• Progressing the commitment to partnering in the development of the Michael Long Centre.


2012-13Mini Budget

$000 $000Sport and Recreation 44 973 50 878

Sports Biz 10 719 15 805

Northern Territory Institute of Sport 3 472 3 496

Facilities 11 158 14 953

Events 5 434 2 434

Water Safety 1 613 1 613

Racing 12 577 12 577




Appropriation


Commonwealth

63

Department of Sport and Recreation

Government Initiatives and Budget Variations• Additional grant funding of $1.74 million ongoing from 2012-13 to peak sporting bodies

and active recreation organisations.

• $4 million ongoing from 2012-13 to implement the Sport Voucher scheme.

• $2 million in 2012-13 to upgrade the Anzac Oval in Alice Springs.

• $0.3 million in 2012-13 for Satellite City BMX to upgrade its Palmerston facility.

• $0.3 million in 2012-13 for the Northern Territory BMX Association to upgrade the Jingili facility.

• $45 000 in 2012-13 to Alice Springs Karting Club to upgrade its facilities to host the 2013 Australian Karting Titles.

• Additional funding of $1.2 million ongoing from 2012-13 for operation of Lake Leanyer Recreation Park.

• $0.25 million in 2012-13 for capital improvements to the Alice Springs Golf Club.

• One-off reduction in 2012-13 of $3 million associated with the cancellation of the 2013 Arafura Games.

Parks and Wildlife Commission of the Northern Territory

64

The primary responsibility of the Parks and Wildlife Commission of the Northern Territory (PWCNT) is to manage and develop the Territory’s parks and reserves for the benefit ofthe community. It does this by providing high quality nature-based tourism and recreational experiences and opportunities in a manner that also protects the intrinsic natural and cultural values of the parks.

Strategic Issues• Reviewing the joint management of parks in conjunction with land councils to

improve outcomes for both traditional owners and the wider community.

• Increasing tourism and business investment opportunities in parks and reserves, and streamlining the process for the issue and regulation of permits.

• Protecting the public from dangerous and nuisance wildlife, particularly saltwater crocodiles.


2012-13Mini Budget

$000 $000Protected Areas and Conservation 51 099 53 705

Parks Visitor Management Programs 25 391 27 201

Parks Conservation Management Programs 25 708 26 504




Appropriation


Commonwealth

382 382

Government Initiatives and Budget Variations• $0.2 million ongoing from 2012-13 for the removal of asbestos in public areas under

PWCNT management.

• $2.6 million in 2012-13 and $1.85 million ongoing from 2013-14 for staff requirements.

65

Territory Wildlife Parks

Business Division ProfileTerritory Wildlife Parks is responsible for managing the Territory Wildlife Park at Berry Springs and the Alice Springs Desert Park.

A key responsibility of both parks is to showcase the Northern Territory’s unique flora and fauna in a natural environment that is educational, interactive and interesting for the visiting public. The park experience enables people to understand, respect and enjoy the Territory’s natural environments.

Strategic Issues• Continuing to build the education, conservation and interactive capacity of the parks and

measuring the effectiveness of the education and experiential programs.

• Increasing the number of visitors to the parks and enhancing visitor satisfaction.

• Continuing to implement captive breeding of endangered, rare and threatened species of native fauna, and seed banking of native flora.


2012-13Mini Budget

$000 $000Income 10 253 10 253

Territory Wildlife Park 5 088 5 088

Alice Springs Desert Park 5 165 5 165

Expenses 12 057 12 057

Territory Wildlife Park 6 202 6 202

Alice Springs Desert Park 5 855 5 855

NET SURPLUS (+)/DEFICIT (-) BEFORE INCOME TAX - 1 804 - 1 804

Territory Wildlife Park - 1 114 - 1 114

Alice Springs Desert Park - 690 - 690

PerformanceTerritory Wildlife Parks’ financial performance is not expected to change from that published in the 2012-13 Budget.

Department of Business

66

The Department of Business provides:

• strategic programs to develop and broaden the Territory’s economy, in particular, support to industry and individual businesses to grow industry capability and business competitiveness, and investment attraction, promotion and facilitation services;

• research and innovation facilitation through grants and advisory services;

• advice and information to the public and private sectors on government procurement policy issues, tendering and contract processes and practices;

• funds and administers the provision of an Australian standard adult vocational education and training (VET) system in the Territory;

• coordination of training, employment and workforce growth initiatives to respond to occupational skill shortages in the emerging economic conditions;

• facilitation of skilled migration programs that meet industry and employer needs, and support for Territorians to gain and retain employment;

• facilitation of major economic, resource development and other projects of strategic interest to the Territory, including onshore gas industry developments, major mineral developments and marine supply base facilities;

• promotion of international trade and investment opportunities in the Territory and relationships with countries of strategic interest in the wider Asian region;

• regulation of liquor and gaming licensing and regulation to build a fairer and safer community; and

• Territory-wide regulation of work health and safety, dangerous goods, electrical safety and rehabilitation and workers compensation.

Strategic Issues• Investment attraction and project facilitation to drive economic growth and business

development across the Territory.

• Broadening the Territory’s industry base with a particular focus on oil and gas-based activities.

• Reforming government procurement policy and practices to improve transparency and user-friendliness while delivering cost-efficient, effective, value for money procurement outcomes.

• Implementing a Territory-wide employment strategy to maximise employment opportunities for Territorians and assist in meeting business and employer workforce needs.

• Continuing partnerships with industry and other stakeholders to attract a skilled workforce to the Territory to meet the needs of employers and major projects.

• Working with the Commonwealth to implement a Regional Migration Agreement to assist businesses impacted by major projects with their workforce needs.

• Improving Indigenous employment outcomes through strategic policy initiatives and leveraging Government’s position as the Territory’s largest employer.

• Identifying key economic opportunities for the Territory by coordinating a whole of government approach to major projects including implementation of the Ichthys LNG project and strategies to cater for growth.


67

• Attracting investment and new trade opportunities through developing Darwin as an onshore gas-based processing hub, establishing the Marine Supply Base, leveraging opportunities from the Ichthys LNG project, promoting local industry capacity to national and international markets and developing and maintaining strong international relationships with priority countries and markets.

• Providing effective alcohol management and regulation for all Territorians with the intent of minimising incidents of harm, alcohol-related crime and anti-social behaviour associated with alcohol misuse.

• Setting workplace safety standards and ensuring that organisations are meeting their obligations in providing safe workplaces.

• Ensuring community engagement and buy-in is obtained in relation to community safety throughout the Territory.

• Targeting compliance frameworks and tools for industry, business and community organisations to facilitate regulatory compliance, supported through education and inspections.

• Supporting apprentices and trainees, commencing and in training, in occupations experiencing skill shortages in the Territory.

• Continuing targeted skill development programs and initiatives to respond to occupational skill shortages and emerging industry needs.

• Assisting businesses to improve their energy efficiency through the delivery of the ecoBiz NT program.

• Assisting Territory industry and business to respond to growth opportunities and challenges by taking up new knowledge and technologies to improve competitiveness and productivity.

68



2012-13Mini Budget

$000 $000Business Development 13 196 13 866

Business and Industry Development Support 13 196 13 866

Procurement, Economic Policy and Commercial Services 8 150 7 835

Procurement and Economic Policy 5 499 5 234Commercial Services 2 651 2 601

Territory Development 4 512 6 461

Project Implementation and Coordination 869 2 001

Project, Trade and Investment Attraction 3 643 4 460

Employment and Training 99 242 102 520

Workforce Growth 6 210 8 147

Training 93 032 94 373

Gambling and Licensing Services 16 142 15 727

Licensing, Regulation and Alcohol Strategy 16 142 15 727

WorkSafe 8 487 8 123

Regulation of Work Health and Safety 8 487 8 123


TOTAL INCOME 142 788 147 215


Appropriation

Output 115 204 116 008Capital 220 220


Government Initiatives and Budget Variations• $1 million increase in grant funding to support business and industry development

including the Trade Support Scheme, industry development and support grants and industry sponsorships.

• $1.13 million increase for Marine Supply Base environmental consultancies and contractual commitments, including Marine Ranger Program, Migratory Bird management plan, legal services and engineering advice.

• $0.50 million increase to establish the AusIndo Forum to build and strengthen relationships between Australia and Indonesia.

• $0.23 million increase for the establishment of the new Office of Asian Engagement.

• $3 million increase in Commonwealth funding for Stronger Futures in the Northern Territory Jobs Package to develop and deliver up to 100 employment-based traineeships in the Northern Territory.

• $0.70 million reduction to the Commonwealth funding for the National Partnership Agreement on Skills Reform.

• $1.42 million additional funding for the Australian Apprenticeships Support Services Contract to allow engagement of additional trainees and apprentices and to cater for increased apprentice travel and accommodation allowances.


69

• $50 000 increase for the Alice Springs Golf Club to support business planning activities.


Marine Supply Base – headworks 6.0

Marine Supply Base – stage 1 59.5

Department of Housing

70

The primary role of the Department of Housing is to deliver social and affordable housing programs across the Territory.

Strategic Issues• Continuing to implement key social housing initiatives, in partnership with the

Commonwealth, under the National Affordable Housing Agreement and national partnership agreements on Homelessness, Social Housing and Remote Indigenous Housing.

• Addressing homelessness by increasing social housing supply, improving transitionaland supported accommodation options, and building capacity within the non-government sector.

• Supporting Venture Housing to provide additional affordable rental housing options for eligible Territorians.

• Developing and implementing affordable housing strategies to attract and retain key workers in the Territory, including delivery of the Real Housing for Growth plan.

• Improving safety and security for public housing tenants and their neighbours through public housing safety officers in Darwin and Alice Springs to address antisocial behaviour of tenants, visitors and itinerants in and around public housing.

• Developing an integrated public housing framework that is consistent across urban and remote communities.

• Providing and improving access to public housing assistance and support to Indigenous people in remote communities and town camps.

• Supporting the transition of town camps and urban living areas to normalised living and service arrangements.

• Implementing a strategic and coordinated approach to the construction, maintenance and management of housing and housing-related infrastructure in Indigenous communities.


2012-13Mini Budget

$000 $000Territory Housing Services 264 092 263 763

Urban Public and Affordable Housing 133 750 132 689

Remote Public Housing 106 985 106 039

Government Employee Housing 23 357 25 035


TOTAL INCOME 207 937 214 789


Appropriation

Output 60 231 57 960Capital 55 517 55 517


Department of Housing

71

Government Initiatives and Budget VariationsThe decrease in expenses is primarily due to a reduction in the community service obligation payment and operational efficiencies.


Government Employee Housing

Construct additional housing in remote locations 3.0

Land servicing in remote locations 1.0

Remote teacher housing 6.9

Upgrade priority housing in remote locations 3.0

Public Housing

Homelessness NP – A Place to Call Home – Bellamack 4.6

Homelessness NP – A Place to Call Home – Zuccoli 6.0

Redevelop unit complexes across all regions 4.0

Rosebery – construct 7 x 2 bedroom units 2.4

Indigenous Housing and Infrastructure

National Partnership Agreement on Remote Indigenous Housing 111.5

NT Home Ownership

Agency Profile

72

NT Home Ownership provides housing assistance products to Territorians, including loans, grants and subsidies, to increase home ownership opportunities for low to middle-income earners.

Strategic Issues• Increasing home ownership among low to middle-income earners in the Territory through

appropriately targeted affordable NT Home Ownership products.

• Developing home loan assistance initiatives aimed at increasing the supply of affordable new housing in the Territory.

• Growing the number of Indigenous clients who access home ownership opportunities through NT Home Ownership.


2012-13Mini Budget

$000 $000Income 14 565 18 036

NT Home Ownership 14 565 18 036

Expenses 12 458 16 414

NT Home Ownership 12 458 16 414


Government Initiatives and Budget VariationsThe new HomeBuild Access assistance package will commence on 1 January 2013 to increase new housing supply at the affordable end of the housing market. HomeBuild Access replaces the former Government’s My New Home and HOMESTART EXTRA schemes.

PerformanceNT Home Ownership operating performance in the 2012-13 Mini Budget is expected to be lower than the 2012-13 Budget due to the reduction in interest margins between borrowing and lending profiles.

73

Department of Regional Development and Indigenous Advancement

Agency ProfileThe primary role of the Department of Regional Development and Indigenous Advancement is to build stronger regions and communities through coordination of remote infrastructure across the Territory, sustainable economic development, interpreter and translator services, and improved social wellbeing and living conditions for Indigenous Territorians, especially those living in remote communities.

Strategic Issues• Continuing to improve access to an appropriate range and standard of government

services for remote residents.

• Working in partnership with the Commonwealth, local governments and local people to deliver commitments under the Remote Service Delivery National Partnership Agreement and under the Stronger Futures partnership with the Commonwealth.

• Strengthening the capacity and capability of the Aboriginal Interpreter Services to improve access for Territorians to government services.

• Coordinating, reporting and monitoring outcomes of the nationally agreed Closing the Gap targets specified in the National Indigenous Reform Agreement.

• Leading and coordinating whole of government Indigenous policies.

• Contributing to economic development and job creation in regional areas by facilitating investment and developing business and job opportunities.

• Securing land tenure to establish and maintain government infrastructure and support private sector development on Aboriginal land.

74

Department of Regional Development and Indigenous Advancement


2012-13Mini Budget

$000 $000Regional Services 104 198 140 710

Indigenous Essential Services 102 337 131 481

Remote Infrastructure Coordination 1 861 9 229

Regional Development 7 309 7 931

Regional Development 7 309 7 931

Indigenous Advancement 11 200 11 770

Indigenous Policy 1 430 1 280

Interpreter and Translator Services 7 074 8 381

Remote Service Delivery Coordination 2 696 2 109


TOTAL INCOME 119 859 142 633


Appropriation



Government Initiatives and Budget Variations• $14 million across four years, including an additional $2 million in 2012-13, for the

Homelands initiative to improve existing housing in homelands and outstations.

• The increase in the Indigenous Essential Services output of $29.1 million relates to$14 million in Commonwealth funding for the Critical Infrastructure Project in Remote Service Delivery communities, $5.5 million for the final years’ funding of the NT Jobs Package, $0.3 million for a water and energy efficiency program and $9.3 million in Territory and Commonwealth government funding for property and tenancy management within homelands.

• The Remote Infrastructure Coordination output increase of $7.4 million includescarried-forward funds for fencing within remote communities and for a Cadastral Survey commenced in 2011-12.

• The Interpreter and Translator Service output increase of $1.3 million represents additional Commonwealth funding.

75

Aboriginal Areas Protection Authority

Agency ProfileThe Aboriginal Areas Protection Authority’s purpose and objectives, contained in the Northern Territory Aboriginal Sacred Sites Act, are to protect sacred sites and the traditional interests in sacred sites of Indigenous custodians.

The Authority’s documents hold a secure record of the traditional information on whichlegal recognition of these interests depends and provides authoritative advice so that these interests are incorporated in decisions about land use.

Strategic Issues• Protecting Aboriginal sacred sites in the Northern Territory in accordance with Aboriginal

tradition and in the context of development.

• Identifying and protecting sites at risk due to increased development activity.

• Compiling high level anthropological and other research to support certainty in the identification and protection of Aboriginal sacred sites and development.

• Highlighting the legislative responsibilities of the Aboriginal Sacred Sites Act and increased awareness of sacred site protection.


2012-13Mini Budget

$000 $000Protection of Sacred Sites 4 892 4 747

Protection of Sacred Sites 4 892 4 747




Appropriation


Commonwealth

38

Government Initiatives and Budget VariationsThe Aboriginal Areas Protection Authority budget is expected to reduce in line with operational efficiencies.

Overview

77

Part 3

2012-13 Mid-Year Fiscal Outlook Report

79

This Part of the Mini Budget documentation satisfies the requirements under the Fiscal Integrity and Transparency Act (FITA) in relation to the mid-year fiscal outlook report.

Section 14 of FITA states that the purpose of such a fiscal outlook report is to “…provide updated information to allow the assessment of the Government’s fiscal performance against the fiscal strategy set out in its current fiscal strategy statement.”

Consistent with previous years, the financial statements for all sectors are presented in accordance with accounting standard AASB 1049 – Whole of Government and General Government Sector Financial Reporting.

References to “…the budget year and the following three financial years” as required under section 10(1) of FITA throughout this fiscal outlook report encompass 2012-13 as the budget year and the years 2013-14, 2014-15 and 2015-16 as the following three financial years. The 2016-17 financial year will be incorporated into the forward estimates period at the time ofthe May 2013 Budget.

Under section 21(1) of FITA, the Under Treasurer is responsible for the accuracy, completeness and reliability of all financial projections and associated information contained in the statements and reports required to be published under the Fiscal Integrity and Transparency Framework.

As required under section 21(3) of FITA, the following signed certification statement is provided by the Under Treasurer:

Under Treasurer’s CertificationIn accordance with provisions of the Fiscal Integrity and Transparency Act, I certify that, to the fullest extent possible, the financial projections and associated information contained in this fiscal outlook report:

• reflect the best professional judgment of officers of the Department of Treasury and Finance;

• take into account all relevant information currently available to me; and

• incorporate the fiscal implications of all relevant Government decisions and circumstances that are currently known or have been disclosed to me.

Alan Tregilgas Under Treasurer27 November 2012

81

Chapter 1 – Overview

Fiscal OutlookIn recent years, in an environment of constrained revenues and lower private sector investment, the former Government responded with increased capital spending and higher levels of operating spending. These constrained revenues and higher spending levels put significant pressure on the fiscal position of the Northern Territory.

As a result, the Territory has moved from a position of low and reducing debt levels just four years ago to a path of increasing indebtedness. Based on the Pre-Election Fiscal Outlook (PEFO) report published in August 2012, by 2015-16 the net debt to revenue ratio of thenon financial public sector was estimated to reach 98 per cent, more than three times the 29 per cent recorded in 2009-10.

In response to this deteriorating position, an independent review of the Territory’s finances by the Renewal Management Board (RMB) was commissioned by the new Government on 5 September 2012.

The Interim Report of the RMB, released on 29 October 2012, confirmed the weakening position of the Territory’s Budget and emphasised as its key recommendation that the Budget be returned to a zero fiscal imbalance by 2014-15.

Both the general government and public non financial corporation sectors have shown an increased reliance on borrowings. Usually, the state of a jurisdiction’s budget can be assessed by reference to the general government sector. This is the sector that is generally reliant on untied revenue, such as taxes and GST revenue, to support government services.

The non financial public sector is a broader sector, as it includes both general government and the public non financial corporations. In the Territory, the non financial public sector includes the Power and Water Corporation (PWC). Rather than being self supporting as is normally the case for a commercially focused entity, PWC for some time has been heavily reliant on taxpayer support.

For this reason, in the current circumstances the Government’s finances must be assessed by reference to the non financial public sector. The focus is expected to return to the general government sector once PWC is made commercially sustainable.

In response to the RMB’s Interim Report the Government has adopted, as its immediate fiscal strategy, the stabilising of the Territory’s net debt by returning the non financial public sector to an overall fiscal balance by the end of 2015-16.

To that end, a number of significant fiscal repair measures have been implemented in this Mini Budget. These measures include:

• savings measures across all government agencies;

• a range of increases in own-source revenues, including agency fees and charges; and

• addressing the commercial sustainability of PWC.

Further details on the fiscal strategy and these fiscal repair measures are provided in chapters 2 and 3 of this mid-year fiscal outlook report.

This fiscal repair has resulted in a significant improvement in the Territory’s fiscal position compared to that recorded in PEFO.

Overview

82

Table 1.1 highlights the key fiscal aggregates for the non financial public sector and shows both a significant improvement since the time of PEFO and an improving trend over the budgetary cycle.

Table 1.1: Non Financial Public Sector – Key Fiscal Indicators2012-13 2013-14 2014-15 2015-16

Fiscal balance ($M)

2012-13 PEFO - 867 - 1 197 - 561 - 4752012-13 Mini Budget

Variation

- 772

95

- 895

302

- 196

365

- 53

422

Net debt to revenue (%)

2012-13 PEFO 66 86 93 98

2012-13 Mini Budget

Variation

63

- 3

75

- 11

76

- 17

73

- 25

Source: Department of Treasury and Finance

Chapter 3 provides a more detailed comparison of the Mini Budget aggregates with those at the time of PEFO, including an analysis of the main changes.

Chapter 4 provides an update on specific requirements under section 10(1) of the Fiscal Integrity and Transparency Act (FITA), namely an overview of the estimated tax expenditures and a statement of risks.

Chapter 5 meets the Territory’s reporting obligations under FITA and the Uniform Presentation Framework.

Economic OutlookThe overall outlook for the Territory economy is positive. Intensifying construction activity for the INPEX project, the Marine Supply Base, the Darwin Correctional Facility and residential construction in general, is expected to lead to record levels of private investment in both 2012-13 and 2013-14. In turn, this is expected to drive strengthening employment and population growth, which will underpin growth in expenditure by the household sector. While cost of living increases will impact household expenditure patterns over the forecast period, low interest rates, income tax cuts and higher household assistance payments will provide some offsetting support.

Declining public sector expenditure, reflecting tightening Commonwealth and Territory government budgets, and a narrowing of the Territory’s international trade surplus as pre-assembled modules for the INPEX project commence arriving, are expected to be the primary detractors to economic growth in the Territory over 2012-13 and 2013-14.Nevertheless, the Territory economy is forecast to grow by 3.9 per cent in 2012-13 and by4.4 per cent in 2013-14.

Growth in the Territory’s population is forecast to strengthen over the next year, with estimated growth of 1.6 per cent in 2012 and 2.2 per cent in 2013. This reflects the impact major projects such as INPEX will have on demand for labour, both directly and indirectly, which will not be able to be fully met from the Territory’s small labour market.

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Overview

Table 1.2 shows the Territory’s key economic indicators estimated for 2012-13 and forecast for 2013-14 compared to that at the time of PEFO.

Table 1.2: Key Economic Indicators

2012-13 2013-14

PEFO Mini Budget Difference PEFO Mini Budget Difference

% % ppts % % pptsGross state product1 3.9 3.9 0.0 n.p. 4.4 n.a.

Employment 2.0 2.5 0.5 n.p. 3.0 n.a.

Population2 1.6 1.6 0.0 2.2 2.2 0.0

CPI3 2.1 2.1 0.0 3.4 4.3 0.9

1 Year ended June, year-on-year percentage change, inflation adjusted.2 As at December, annual percentage change.3 As at December, year-on-year percentage change.ppts = percentage pointsn.a. = not applicablen.p. = not publishedSource: Department of Treasury and Finance

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Chapter 2 – Fiscal Strategy StatementOverview

The Fiscal Integrity and Transparency Act (FITA) requires that the Treasurer publicly release and table the first fiscal strategy statement of a new Government at or before the time of the Government’s first Budget.

On taking office in late August 2012, the Government was faced with a deteriorating fiscal position as evidenced by the emergence of operating deficits, increasing annual borrowing requirements and rapidly rising debt.

This fiscal deterioration was evident not only in the general government sector but also in the public non financial corporation sector. Together these two sectors make up the non financial public sector. Under normal circumstances the public non financial corporation sector contains commercially focussed and self supporting trading entities. However this is notthe case in the Territory, due to the significant capital investment program and over reliance on government financial support by the Power and Water Corporation (PWC), the Territory’s largest trading entity and only government owned corporation (GOC).

This fiscal deterioration could not be allowed to continue without negative effects on the Territory’s economic prosperity and credit rating. Accordingly, the newly elected Government has adopted as its immediate fiscal objective the stabilising of the Territory’s debt burdenby targeting the elimination of the overall fiscal deficit (‘fiscal imbalance’) in the non financial public sector by 2015-16.

Once this goal is achieved, the Government will be in a position to set targets that keep net debt at prudent levels over the medium term.

The rest of this chapter provides information on, and analysis of, the Government’s new fiscal strategy, including information as required under FITA. This includes:

• an analysis of recent historical fiscal trends that has led to the requirement for a new strategy;

• the new strategy’s medium-term fiscal objectives and targets; and

• an assessment of the new strategy against fiscal principles.

An assessment of the current fiscal outlook against the new fiscal strategy is provided in Chapter 3.

Recent Fiscal DevelopmentsThis section addresses the requirement under section 9(1)(c) of FITA that the key fiscal indicators considered important, and against which fiscal policy will be set, be specified. It also analyses recent fiscal developments and the no-policy-change fiscal outlook, in terms of these key fiscal indicators.

Key Fiscal IndicatorsThe fiscal indicators against which fiscal policy can be set and assessed are as follows:

• the general government sector’s net operating balance;

• the rate of return earned on capital employed by GOCs;

• the rate of growth in infrastructure assets due to annual net infrastructure investment, in both the general government sector and for GOCs;

• the non financial public sector’s fiscal balance; and

Fiscal Strategy Statement

86

• the non financial public sector’s net debt as a proportion of the sector’s total revenue.

The new fiscal strategy described in the next section is a direct response to the recent deterioration in the Territory’s fiscal performance and outlook as measured in terms of each of these key indicators.

General Government Sector’s Net Operating BalanceThe net operating balance is measured by the general government sector’s total annual revenues less its total annual operating expenses (including annual depreciation). Anet operating deficit indicates that total annual operating expenses exceed total annual revenues.

Although total annual revenues used to calculate the net operating balance under the Uniform Presentation Framework are inclusive of grants paid to the states and territories for capital purposes (asset sales revenue and other sources of capital financing areexcluded), it is generally recognised that the surge in capital grants from the Commonwealth in recent years served to distort measurement of the Territory’s net operating balance. An underlying net operating balance can be calculated by excluding grant revenue from the Commonwealth that is spent for capital purposes.

As shown in Figure 2.1 (and focussing on the underlying net operating balance), the Territory’s general government sector showed modest net operating deficits during the early years of the previous decade before moving into a strong net operating surplus positionas revenues surged prior to the global financial crisis (GFC). Since the GFC, underlying net operating deficits have re-emerged. Moreover, based on the forward estimates contained within the Pre-Election Fiscal Outlook (PEFO), significant net operating deficits were expected under no-policy-change conditions across all forward estimate years.Figure 2.1: General Government Sector – Underlying Operating Balance1 – PEFO

$M 400

200

0

-200

-4000203 0304 0405 0506 0607 0708 0809 0910 1011 1112 1213 1314 1415 1516

1 The underlying net operating balance excludes grant revenue from the Commonwealth that is spent for capital purposes.


This emergence of an underlying net operating deficit in the general government sector is largely the result of declining revenue growth following the start of the GFC in 2008-09 not being matched by corresponding adjustments to the annual growth in expenses.

The observed decline in revenue growth has been due to not only ongoing reduced growth in goods and services tax (GST) collections (and so GST revenue to the states and territories) but also a decline in the Territory’s own-source revenue-raising effort. As


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assessed by the Commonwealth Grants Commission (CGC), the Territory’s revenue efforts over the last four years are, on average,15 per cent lower than the Australian average.

As Figure 2.2 shows, the Territory’s revenue-raising effort has deteriorated steadily since 2005-06.Figure 2.2: General Government Sector – Revenue-Raising Effort

% 105

100

95

90

85

80

75

7000-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11

Source: 2002-03 to 2006-07 from CGC 2009 update; 2007-08 to 2010-11 from CGC 2012 update

Rate of Return Earned by Government Owned CorporationThe finances of the Territory’s only GOC, PWC, have also been under performing. Based on PEFO’s no-policy-change projections, the prospect was that this would continue.

The (pre-tax) rate of return earned on capital employed is the standard indicator of a GOC’s financial performance. This is measured by the GOC’s earnings before interest and taxes as a percentage of the current value of the total capital employed by that GOC.

Provided the capital employed figure to which the rate of return is applied is regularly revalued (as is the case for PWC), the pre-tax rate of return achieved can be benchmarked against the weighted average cost of capital measured in pre-tax inflation-adjusted (or real) terms. The weighted average cost of capital targeted by PWC is in excess of 6 per cent.

As Figure 2.3 shows, PWC’s actual annual rates of return have fallen well short of commercial levels. Based on its latest 2012-13 Statement of Corporate Intent forward estimates and asset values adjusted to a replacement cost methodology, PWC’s annual financial performance was projected to remain well below commercial levels over the period to 2015-16 under no-policy-change conditions.


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Figure 2.3: Pre-Tax Annual Rate of Return: Power and Water Corporation%5

4

3

2

1

0

-1

-206-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16


Rate of Growth in Infrastructure AssetsInvestment in infrastructure is a key component in the delivery of the Territory’s social and economic requirements thereby ensuring that current and future Territorians have access to public services that are at least maintained over time.

The ‘net acquisition of non financial assets’ aggregate as used under the Uniform Presentation Framework in effect measures net annual infrastructure investment. This involves the annual investment in infrastructure assets net of asset sales, which is over and above the investment required to maintain the service capacity of the existing infrastructure asset base (or depreciation). The associated annual rate of growth can be calculated by expressingthe net annual infrastructure investment amount as a percentage of the depreciated value (or service capacity) of all such assets at the beginning of the year concerned.

Figure 2.4 shows the implied rate of growth in infrastructure assets, both recently and as projected in PEFO on a no-policy-change basis, for both the general government sector and for PWC. Commonwealth-funded programs such as the Nation Building – Fiscal Stimulus Package, Remote Indigenous Housing and National Network roads have been excluded.Figure 2.4: Net Infrastructure Investment – Implied Annual Growth Rate in Infrastructure Assets – PEFO

% 12

10

8

6

4

2

00607 0708 0809 0910 1011 1112 1213 1314 1415 1516

General government sector Power and Water Corporation



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As can be seen from Figure 2.4, in the general government sector the net investment in infrastructure assets has stepped up above a rate in line with population growth in recent years. This is largely as a response by the former Government to mitigate the effects of lower private sector investment caused by the GFC. Although by 2015-16 net infrastructureinvestment was projected to return to around a rate in line with population growth, significant investment continues through to 2013-14 on account of the Darwin Correctional Facility being constructed under a public private partnership arrangement. While a sustainablelevel of net infrastructure investment is needed to ensure current and future generations of Territorians enjoy quality public services that are at least maintained over time, the levels experienced in recent years are not considered sustainable.

The implied annual rate of growth in PWC’s infrastructure assets shown in Figure 2.4 reflects the very significant increase of recent years. This followed a report into two major incidents at the Casuarina Zone Substation in late 2008 that caused widespread power outages across the northern suburbs of Darwin. The Davies Report made a number of recommendations, which led to a significant capital investment program in order to improve reliability standards and build capacity for future growth.

Non Financial Public Sector Fiscal BalanceNet operating deficits and high rates of net infrastructure investment in the general government sector combined with non-commercial rates of return and high rates of net infrastructure investment by PWC altogether mean that the Territory’s non financial public sector is now running an overall fiscal imbalance (or deficit).

An overall fiscal imbalance indicates that total annual expenditure (both operating and capital) exceed total annual revenues (both operating and capital).

As can be seen from Figure 2.5, and consistent with the trends shown in figures 2.1 to 2.4, the Territory’s non financial public sector fiscal balance showed modest deficits in the early part of the last decade before transitioning to a modest surplus position by the mid 2000s on the back of surging revenues in the general government sector prior to the GFC. However by 2008-09 this position began to turn around and, based on the forward estimates contained within PEFO, significant overall fiscal deficits were expected under no-policy-change conditions across all forward years.Figure 2.5: Non Financial Public Sector – Fiscal Balance – PEFO

$M

400

200

0

-200

-400

-600

-800

1 000

1 200

1 4000203 0304 0405 0506 0607 0708 0809 0910 1011 1112 1213 1314 1415 1516



90

Non Financial Public Sector’s Net IndebtednessThe recent emergence of fiscal imbalances means the Territory’s non financial public sector’s net indebtedness is high and rising.

Net debt is measured by a sector’s total borrowing (or gross debt) less available liquid financial assets. In the public sector it is also usual to express such net debt amounts as a percentage of the sector’s total annual revenues.

As is evident from Figure 2.6, the Territory’s non financial public sector’s net debt to revenue ratio was improving from 2002-03 until 2009-10. In most years of the previous decade, the Territory’s net debt ratio was below the 60 per cent average over the last 20 years.Figure 2.6: Non Financial Public Sector – Net Debt to Revenue – PEFO

% 120

100

80

60

40

20

00203 0304 0405 0506 0607 0708 0809 0910 1011 1112 1213 1314 1415 1516


The Territory’s net debt started to rise again in 2010-11, with PEFO projections confirming that this rise was to continue over the forward estimates period on a no-policy-change basis. The prospects were for the Territory’s net debt to revenue ratio to reach 98 per cent, more than three times the 29 per cent recorded in 2009-10.

New Fiscal StrategyAgainst the background of the fiscal deterioration described in the previous section, this section addresses the following requirements under section 9(1) of FITA, namely that a fiscal strategy statement is to specify:

• the Government’s medium-term fiscal objectives in the context of its broad strategic priorities; and

• for the budget year and the following three financial years:

– the Government’s fiscal objectives and targets; and

– the expected outcomes for the specified key fiscal indicator.

Medium-Term Fiscal ObjectivesThe Government’s overarching fiscal objective is to manage public assets, liabilities and budgetary risks in such a way as to ensure that it has the financial capacity to deliver itslong-term service and infrastructure commitments without having to resort to undue reliance on debt or excessive levels of taxation and/or other revenue raising.


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To ensure that the Government reaches a position where it has the uncommitted financial resources available to fund new policy initiatives, the aim of the fiscal strategy is to build the fiscal space needed:

• to ensure maintenance of service provision and associated infrastructure;

• to deal with fiscal risks; and

• to keep the Territory’s finances on a path of sustainability.

In this way the Government seeks to put the Territory’s finances on a fiscally responsible and sustainable course.

Fiscal Targets through to 2015-16To respond to the recent deterioration in the Territory’s fiscal performance and outlook described in the previous section, the Government has opted to target the elimination of the fiscal imbalance in the non financial public sector by 2015-16. Achieving this fiscal target will materially assist in returning the Territory’s net debt position to prudent levels.

Figure 2.7 shows that the annual change in the Territory’s net debt is explained by two general factors, namely:

• the overall fiscal deficit (or fiscal imbalance); and

• the net impact of a range of cash-accrual and stock-flow adjustments.Figure 2.7: Fiscal Balance, Cash-Accrual and Stock-Flow Adjustments, and Change in Net Debt – PEFO

$M 400

200

0

- 200

- 400

- 600

- 800

-1 000

-1 2000506 0607 0708 0809 0910 1011 1112 1213 1314 1415 1516

Change in net debt Fiscal balance/imbalance Cashaccrual and stockflow adjustments


While the Government has little control over the various cash-accrual and stock-flow adjustments, it can directly influence the fiscal imbalance. Since net debt started increasing in 2008-09, as Figure 2.7 shows, the fiscal imbalance amount has been the overwhelming explanation of the annual increases in the Territory’s net debt.

For this reason, the Government has chosen the elimination of the Territory’s fiscal imbalance as its sole fiscal target through to 2015-16.

Achieving this fiscal target can be expected to also achieve a number of associated fiscal outcomes, namely:

• by 2014-15, the Territory’s general government sector achieving at least a net operating surplus;


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• by 2014-15, taxation effort in the Territory’s general government sector being more on par with the average effort of the states;

• by 2014-15, the Territory’s GOC achieving annual financial performance that moves towards commercial rates of return on government capital employed; and

• by the end of 2015-16, the Territory’s non financial public sector net debt as a percentage of revenue returning towards the 60 per cent ratio observed on average over the last20 years.

Assessment of New Strategy Against FITA’s Fiscal PrinciplesThis section addresses the requirement under section 9(1)(e) of FITA that a fiscal strategy statement is to explain how the fiscal objectives and strategic priorities specified and explained relate to the principles of sound fiscal management laid out in section 5 of FITA.

FITA’s principles of sound fiscal management are set out as follows:

1. a. the Government must formulate and apply spending and taxing policies with consideration to the effect of these policies on employment and the economic prosperity and development of the Territory;

b. the Government must formulate and apply spending and taxing policies so as to give rise to a reasonable degree of stability and predictability;

c. the Government must ensure that funding for current services is to be provided by the current generation; and

d. the Government must manage financial risks faced by the Territory prudently (having regard to economic circumstances), including by maintaining Territory debt at prudent levels.

2. The financial risks referred to in paragraph (1)(d) include the following risks:

a. risks arising from excessive debt;

b. commercial risks arising from ownership of public trading enterprises and public financial enterprises;

c. risks arising from erosion of the Territory’s revenue base; and

d. risks arising from the management of assets and liabilities.

It is apparent from the recent review undertaken by the Renewal Management Board that the Territory’s fiscal outlook has recently deteriorated despite these principles being in place. Accordingly, a review of the fiscal management principles contained within FITA will be undertaken as part of the development of the 2013-14 Budget.

Until these amendments are made, however, fiscal strategies continue to be assessed against the existing Framework principles.

Effect on Employment and Economic Prosperity and DevelopmentThe first of the FITA’s current fiscal management principles is that spending and taxing policies are to be formulated and applied with consideration to the effect of these policies on employment and the economic prosperity and development of the Territory.

Fiscal consolidation can have a detrimental effect on employment and economic prosperity if undertaken when the economy is weak, though it is necessary to balance the stimulating effects in the short term against the long-term budget effects as they impact on inter-generational equity. The fiscal adjustment being delivered by the Mini Budget is taking place at a time when the Territory economy is relatively strong, with relatively high rates of growth in gross state product, employment and population.


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Furthermore, investor concerns about the Territory’s fiscal sustainability are being addressed by the fiscal adjustment delivered by the Mini Budget. Without such policy adjustment, investors in the Territory would be faced with inevitable and larger increases in government taxes and charges than those put in place in the Mini Budget, with a dampening effect on new investment in the Territory. In addition, the potential ratings downgrade if the Territory’s deteriorating fiscal position was not tackled would also impact negatively on the appetite for investment in the Territory.

Effect on Stability and PredictabilityThe second of FITA’s current fiscal management principles is that spending and taxing policies are to be formulated and applied to give rise to a reasonable degree of stability and predictability.

Stability and predictability are only really attainable when the Territory’s finances are in balance and sustainable. When the Territory’s finances are such that net debt is high and rising, fiscal adjustment is inevitable. The longer such adjustment is delayed, the greater any eventual rebalancing of revenue and expenditure. The new fiscal strategy is directly aimed at restoring budgetary conditions conducive to ongoing stability and predictability.

Extent to which Funding for Current Services is Provided by the Current GenerationThe third of FITA’s current fiscal management principles is that funding for current services is to be provided by the current generation.

While cyclical (as opposed to structural) deficits might have some role to play for their automatic stabiliser effects during an economic downturn and to ensure that tax smoothing occurs for taxpayers, structural operating deficits should be avoided.

Persistent operating deficits indicate that operating revenue is insufficient to finance current operations. In effect, future generations are being asked to finance public goods and services consumed by the current generation. Operating deficits also provide no capacity for investment in infrastructure beyond depreciation levels, which in the case of the Territory, due to its high infrastructure needs, is challenging.

The fiscal adjustment being delivered by the Mini Budget aims in part to return to operating surpluses and for this reason is aimed at ensuring that current services are funded by the current generation.

Effects on Financial Risks Faced by the TerritoryThe fourth of FITA’s current fiscal management principles is that the financial risks faced by the Territory are to be prudently managed (having regard to economic circumstances), including the maintenance of Territory debt at prudent levels.

These financial risks include the risks from: excessive debt; commercial risks from the ownership of trading entities; erosion of the Territory’s revenue base; and the management of assets and liabilities.

Risk of Excessive DebtThe risks associated with excessive debt are numerous. They not only restrict the fiscal capacity of governments to maintain an appropriate level of services to Territorians, due to increased borrowing costs, but also result in a legacy issue for future generations.

In addition, excessive debt will inevitably result in close scrutiny by credit ratings agencies with any ratings downgrades increasing the cost of debt and sending negative signals to a wide range of investors in the Territory.


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The new fiscal strategy directly tackles the risk of excessive debt because its single focus is to return the budget to a balanced position, therefore ceasing ongoing increases in net debt. In addition as the growth in net debt is substantially slowed over the forward estimates, previous requirements for new borrowings are substantially reduced.

Commercial Risks from the Ownership of Trading EntitiesCommercial entities by their very nature are meant to be self-supporting and largely autonomous. Government, in setting its fiscal policy, needs to be aware of the risks in relation to its continuing ownership of trading entities and ensuring their commercial sustainability.

The new fiscal strategy directly tackles the commercial risks of ownership of trading entities as it relies heavily on the Territory’s only GOC returning to a commercially sustainable position. Achieving the fiscal strategy target will require PWC to contribute positively to the Government’s fiscal position, rather than being over reliant on the general government sector as was the case prior to this Mini Budget.

Risk of Erosion of the Territory’s Revenue BaseThe Government’s fiscal strategy needs to be cognisant of and reactive to the effect of any significant changes in the Territory’s revenue base, irrespective of its short or longer-term source.

The new fiscal strategy directly tackles the risk of erosion of the Territory’s revenue baseby including policy measures aimed at lifting the Territory’s revenue-raising effort towards a level consistent with the average of the states.

Risk Arising from the Management of Assets and LiabilitiesThe new fiscal strategy tackles the risk arising from the management of assets and liabilities primarily by re-asserting control over the level and growth of the Government’s assets and liabilities and associated increases in repairs and maintenance.

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Chapter 3 – Updated Fiscal and Economic Outlook

Overview This chapter addresses the requirement under section 10(1)(a) of the Fiscal

Integrity and Transparency Act (FITA) that each fiscal outlook report contains updated financial projections for the budget year and the following three financial years for the Territory general government sector and the Territory non financial public sector.Although the full set of financial projections is provided in Chapter 5, this chapter provides an overview of these financial projections, the key assumptions underlying them anda comparison with the estimates provided in the last fiscal outlook report, being the Pre-Election Fiscal Outlook Report (PEFO) that was published in August 2012.

Updated Economic AssumptionsThis section addresses the requirements under section 10(1) of FITA that each fiscal outlook report is to contain:• an account of the economic and other assumptions on which the updated

financial projections are based; and• an analysis of the degree to which the updated financial projections are likely

to be affected by changes in the circumstances on which the economic and other assumptions are based.

Gross State ProductEconomic growth in the Territory strengthened to 4.4 per cent in 2011-12, up from1.2 per cent in 2010-11. The strong recovery in growth was driven by development activityfor major projects in the mining sector, particularly the development of the Kitan and Montaraoil fields, the scheduled maintenance shutdown of the Darwin liquefied natural gas (LNG)plant, and supported by the commencement of construction activity related to the INPEXIchthys project. Growth was also supported by: a strengthening household sector primarilydriven by increasing consumer confidence following the decision by INPEX to build its LNGplant near Darwin; declining interest rates over the year; discounting by retailers; stronggrowth in rents and house prices; and Commonwealth assistance payments to householdsto compensate for the introduction of the carbon price.The Territory economy is forecast to grow by a further 3.9 per cent in 2012-13 and by4.4 per cent in 2013-14 mainly due to record construction activity related to major projects,including intensifying activity related to the INPEX project, the Marine Supply Base and theGEMCO refinery expansion, increased residential construction activity and a strengtheninghousehold sector. Strong forecast growth in residential construction activity will be supported

96


by lower interest rates, land releases in Palmerston (Johnston, Bellamack, Zuccoli andDurack), Darwin’s northern suburbs (Muirhead) and Alice Springs (Kilgariff), and increasingconsumer and investor confidence, which have led to a number of unit developmentshaving commenced, particularly in the Darwin central business district (CBD). It will alsobe supported by the Territory Government’s new HomeBuild Access scheme scheduled tocommence on 1 January 2013.Household consumption expenditure is forecast to continue strengthening over the next two years underpinned by low interest rates, income tax cuts and higher household assistance payments. The increasing number of new dwellings expected to be completed over 2012-13

Updated Fiscal and Economic Outlook

97

and 2013-14 will also drive the household sector by stimulating growth in expenditure forhousehold items such as furniture, white goods and electronics.Declining public sector investment, reflecting tighter Commonwealth and Territory government capital works programs, and a further narrowing of the Territory’s international trade surplus are expected to be the primary detractors to economic growth over 2012-13 and 2013-14. Public sector consumption is also expected to detract from economic growth reflecting fiscal constraints. Growing oil exports following the commencement of production at the Montara field around March 2013, and manganese exports following the completionof the GEMCO refinery expansion in late 2013, will be more than offset by strong growth in imports reflecting the importation of the production platform for Montara in 2012-13 as well as machinery and equipment related to the Ichthys project and a number of other mining operations in the Territory over the forecast period.Figure 3.1: Economic Growth, Northern Territory versus Australia%8

Northern Territory 7

6

5

4 Australia

3

2

1

004 05 06 07 08 09 10 11 12 13f 14f

Year ended JuneSource: Australian Bureau of Statistics Catalogue Number 5220.0, Deloitte Access Economics and Department of Treasury and Finance

Population The Department of Treasury and Finance’s population growth forecast for the

Territory in 2012 remains unchanged from PEFO at 1.6 per cent. The present fiscal repair measures are not expected to have a material impact on population growth in 2012, which is expected to be primarily influenced by strengthening economic activity in the private sector, particularly due to the increased construction activity related to major projects and higher levels of residential and non-residential construction.Population growth in the Territory is forecast to strengthen further to 2.2 per cent in 2013, reflecting acceleration of major project activity. The Department of Treasury and Finance has taken into account anticipated labour requirements for the construction phase of the INPEX project, which is expected to peak in 2014 and 2015. In addition to direct labour requirements, INPEX is expected to have an effect on population growth through indirect employment opportunities due to increased economic activity, particularly in the services sectors.The extent to which the Territory has existing workforce capacity to address increased demand for labour will be a major determinant of population growth through migration over this period.


98

Figure 3.2: Population (annual percentage change)%

3.0

2.5

2.0

1.5

1.0

0.5

Northern Territory

Australia

003 04 05 06 07 08 09 10 11 12f 13f

Calendar year

Source: ABS Cat. No. 3101.0, Department of Treasury and Finance, Deloitte Access Economics

Labour MarketAfter employment growth in the Territory slowed to 0.5 per cent in 2011-12, growth is forecast to strengthen to 2.5 per cent in 2012-13. This is a slightly stronger outlook than at the timeof PEFO reflecting an upward revision to forecasts for the employment intensive residential construction sector, which is expected to more than offset slowing employment growth in the public sector over the year following the implementation of tighter Commonwealth and Territory government budgets.Employment growth is forecast to strengthen to 3.0 per cent in 2013-14 driven byincreasing construction activity at the INPEX LNG plant site and further growth in residentialconstruction activity, led by large apartment projects in the Darwin CBD such as SoHo,Kube, Catalina and The Avenue along with increasing house construction in Palmerston(Bellamack, Johnston, Zuccoli and Durack), Darwin’s northern suburbs (Muirhead) andAlice Springs (Kilgariff). Strong growth in residential construction activity will also supportemployment growth in other related industries such as the retail sector, as new housing willdrive increasing demand for new household goods.


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Figure 3.3: Employment (year-on-year percentage change)%7

Northern Territory6

5

4Australia

3

2

1

0

1

2

304 05 06 07 08 09 10 11 12 13f 14f

Year ended JuneSource: ABS Cat. No. 6202.0, Deloitte Access Economics, Department of Treasury and Finance

Prices and CostsDespite stronger growth in rent and house purchase prices and the introduction of the Commonwealth’s carbon price in 2012, in year-on-year terms growth in the Darwin consumer price index (CPI) is estimated to moderate to 2.1 per cent, which is unchanged from the estimate in PEFO. The moderation in inflation over the year reflects excess capacity in the economy, especially over the first half of the year, flowing on from weakness in economic activity in 2011 and falling fruit prices as the impacts of Cyclone Yasi unwound. In addition, the high Australian dollar and low rates of global inflation also led to lower prices forimported goods.In 2013, growth in the Darwin CPI is forecast to strengthen to 4.3 per cent reflecting increases in utility tariffs from January 2013, which are expected to add 1.1 percentage points to growth in the year. The impact of higher utilities prices is in part offset by lower expectations about housing pressures on consumer prices following the discontinuation of the My New Home and the HOMESTART EXTRA products. At the time of PEFO, these products had been expected to add 0.2 percentage points to growth in the Darwin CPI in 2013.


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Figure 3.4: Consumer Price Index, Darwin and Eight Capitals (year-on-year percentage change)%

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

Darwin

Eight capitals

003 04 05 06 07 08 09 10 11 12f 13f

Calendar yearSource: ABS Cat. No. 6401.0, Deloitte Access Economics, Department of Treasury and Finance

Risks to OutlookThere are several risks to the Territory’s economic growth outlook. The combination of a very large resource project, relatively high exchange rate and credit constraints means that growth will be uneven across sectors of the economy. Strong growth will be reported in the construction industry, providing the infrastructure for future growth in mining andmanufacturing. Tourism and other sectors exposed to the external economic environment will face continuing challenges. Risks include:• the high level of the Australian dollar relative to the currencies of key trading

partners and source markets for tourism;• skills shortages in businesses not directly involved in major projects;• any global economic effects on the Territory economy;• the complexities around measuring the interstate trade flows associated with

major projects, which are reported by the Australian Bureau of Statistics (ABS) in the balancing item of gross state product; and

• timing lags between when actual capital expenditures take place by private companies and when they are reported to ABS, and therefore included in official economic statistics.


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Updated Fiscal ProjectionsThis section provides an overview of updated financial projections, which take account of this Mini Budget and other policy changes introduced by this Government.

Key Fiscal IndicatorsTables 3.1 and 3.2 update the key fiscal indicators.Table 3.1: Key Operating Statement Indicators

2012-13 2013-14 2014-15 2015-16$M $M $M $M

GENERAL GOVERNMENT SECTOR Net operating balance

2012-13 PEFO - 108 - 144 - 153 - 139

2012-13 Mini Budget - 75 - 17 29 56

Variation 33 127 182 195NON FINANCIAL PUBLIC SECTOR

Fiscal balance

2012-13 PEFO - 867 -1 197 - 561 - 4752012-13 Mini BudgetVariation

- 77295

- 895302

- 196365

- 53422


As shown in Table 3.1, since PEFO there will be significant improvements in both the general government sector operating deficit and the non financial public sector overall fiscal deficit over the forward estimates period.The general government sector operating balance is expected to return to surplus in 2014-15.The non financial public sector fiscal balance, while remaining in deficit in all years, is trending to improvement with a small deficit of $53 million now projected in 2015-16.Table 3.2: Non Financial Public Sector – Key Balance Sheet Indicators

2012-13 2013-14 2014-15 2015-16Net debt ($M)2012-13 PEFO 3 471 4 603 5 099 5 5402012-13 Mini BudgetVariation

3 400- 71

4 222- 381

4 347- 752

4 357-1 183

Net debt to revenue (%)2012-13 PEFO 66 86 93 98

2012-13 Mini BudgetVariation

63- 3

75- 11

76- 17

73- 25


Although the non financial public sector net debt is now projected to rise to $4.4 billion by 2015-16, this represents an improvement of $1.2 billion on PEFO estimates.Commensurate with this improved level of net debt, the net debt to revenue ratio by 2015-16 is also expected to improve since PEFO by 25 percentage points, down to 73 per cent.


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Table 3.3 sets out the revised projections for revenue for 2012-13 and the forward years, aftertaking account of this Mini Budget and other policy changes introduced by this Government.Table 3.3: Non Financial Public Sector – Operating Revenue

2012-13 2013-14 2014-15 2015-16$M $M $M $M

Revenue

Taxation revenue 457 476 495 514GST revenue 2 815 2 922 3 098 3 284Current grants 801 778 711 712Capital grants 231 206 152 105Sales of goods and services 830 961 1 014 1 028Interest income 62 66 69 73Dividend and income tax equivalent income

44 39 38 38Mining royalties income 103 103 103 103Other 73 74 74 76Total revenue 5 416 5 625 5 754 5 933

Year-on-year percentage increase (%) 4 2 3Source: Department of Treasury and Finance

Total operating revenue is projected to increase by an average of 3.2 per cent per annum over the forward estimates period, predominantly as a result of growth in taxation and goods and services tax (GST) revenue and increased revenue from sales of goods and services. This is higher than the 2.5 per cent at the time of PEFO, largely as a result of increased taxation revenue and higher revenue from sales of goods and services within the Power and Water Corporation (PWC).Taxation revenue is projected to increase by an average of 4.2 per cent over the forward estimates period. Although this growth is largely unchanged from PEFO estimates, it is from a higher base, predominantly due to improved levels of expected stamp duty and payrolltax collections. The increase in payroll tax is as a result of forecast employment growth as economic activity strengthens following the commencement of major projects. The increase in stamp duty on conveyances is consistent with the recovery in property market transaction volumes, combined with the re-targeting of home assistance schemes affecting stamp duty collections. In addition, motor vehicle registration fees are projected to improve in line with the increase in fees from 1 January 2013.In 2012-13, it is estimated that the Territory will receive $2815 million in GST revenue.This amount is $24 million higher than estimated in PEFO. The upward revision reflects a$440 million difference between the final determination of states’ GST entitlement and theamount of GST revenue paid to the states in 2011-12. The Commonwealth will pay thisdifference, of which $24 million relates to the Territory, through an adjustment payment in2012-13.Consistent with PEFO, current and capital grants are decreasing over the forward years as the result of agreements with the Commonwealth being for fixed periods. Until these are renegotiated, they are not included in the forward estimates.During each budget year there are significant changes in Commonwealth funding estimates as agreements are finalised. These adjustments tend not to affect the fiscal outcome as increases in revenue are generally matched by a corresponding increase in expenditure. However, timing differences in the


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receipt of tied revenue and associated expenditure introduce a degree of volatility affecting the budgeted and actual outcomes.


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The growth in sales of goods and services of 7.9 per cent over the forward estimates islargely a result of the recently announced utility tariff increases to move PWC towardscommercial sustainability together with a range of increased fees and charges acrossagencies.The remainder of own-source revenue is mainly mining royalties, which remain unchanged from estimates at the time of PEFO and are expected to remain constant over the forward estimates period.Table 3.4 sets out the revised projections for total expenditures for 2012-13 and the forward years, after taking account of this Mini Budget and other policy changes introduced by this Government.Table 3.4: Non Financial Public Sector – Operating Expenses and Net Capital Payments

2012-13 2013-141 2014-15 2015-16

Expenses

$M $M $M $M

Employee expenses 1 897 1 916 1 927 1 944Superannuation expenses 314 326 336 349Depreciation and amortisation 369 385 409 421Other operating expenses 1 721 1 763 1 819 1 883Interest expenses 274 293 356 361Current grants 776 781 729 762Capital grants 64 64 26 23Subsidies and personal benefit payments 88 86 89 95Total operating expenses 5 503 5 614 5 691 5 838

Year-on-year percentage increase (%) 2 1 3Net capital 1 066 1 303 669 576

Total expenditure 6 569 6 917 6 360 6 414

Year-on-year percentage increase (%) 5 - 8 11 Net capital includes accounting for the total cost of the Darwin Correctional Facility.Source: Department of Treasury and FinanceOperating expenses are expected to grow at an average of 2 per cent per annum over the forward estimates, lower than the average revenue growth over the same period and consistent with the fiscal strategy target to eliminate the fiscal imbalance by 2015-16.Variations to operating expenditure across the forward years since PEFO predominantly relate to additional funding for election commitments and legacy issues offset by savings and efficiency measures across government agencies and PWC.Agency budgets are developed from a forward estimate model consistent with that usedin other jurisdictions. These estimates are maintained and adjusted by inflator and deflatorfactors as necessary and form the basis for government resource and policy decisionsduring the Budget development phase. New policy decisions and funding decisions linkedto anticipated demand changes are added to each agency’s base and then flow through toadjusted estimates for the forthcoming year.The basis of the parameters used, including the allocation of a contingency allowance, remains unchanged from the 2012-13 Budget. The parameters used to adjust estimates are:


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• wages – inflator;• CPI – inflator; and• efficiency dividend – deflator.


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A contingency amount of around 1 per cent per annum ongoing of operating expensesincorporates capacity for unforeseen items in the form of a $30 million annual allocationtowards Treasurer’s Advance and incorporates an amount to support limited new andexpanded initiatives.Over the forward estimates period, employee expenses are estimated to increase on average by less than 1 per cent per annum. Underlying growth in other operating expenses are estimated at 3.1 per cent per annum, largely as a result of the CPI inflator in agency budgets offset by efficiency and savings measures.Interest expenses, while increasing over the forward estimates, are significantly lower than PEFO in line with the improvement to the fiscal balance and the reduced requirement for new borrowings.The decline in current and capital grants expense is in line with the reduction in tied Commonwealth funding agreements ceasing over the forward estimates.Total expenditure including net capital payments is projected to decline by an average of 1 per cent over the forward estimates period predominantly as a result of further reductions in infrastructure investment, including by PWC, together with the cessation of the HOMESTART EXTRA equity share scheme.

Reconciliation with Previous Fiscal ProjectionsThis section addresses the requirement under section 10(1)(f) of FITA that each fiscaloutlook report is to contain an explanation of the factors and considerations that contributedto any material differences between the updated financial projections and the equivalentprojections published in the last fiscal outlook report.The most recent fiscal outlook report published under FITA was PEFO.Since PEFO, the fiscal projections of the Territory have been updated to reflect the following significant items, grouped into two main areas:• non-policy changes since PEFO; and• Government policy decisions since PEFO.

Non-Policy Changes since PEFOTable 3.5 highlights the effect of non-policy changes on the non financial public sector’s fiscal balance since PEFO.Table 3.5: Non-Policy Changes since PEFO

2012-13 2013-14 2014-15 2015-16

$M $M $M $MUntied revenues

GST revenue 24Taxation revenue 27 13 14 14

Timing and other minor changes - 33 9 2 5Darwin Correctional Facility - 26Total 18 - 4 16 19


In 2012-13, the Territory is expected to receive $2815 million in GST revenue. This represents a$24 million increase from the estimate in PEFO. The upward revision in 2012-13 reflects higher

Updated Fiscal and Economic Outlook107

than anticipated GST collections in 2011-12, with the increase paid to the states in 2012-13.

Updated Fiscal and Economic Outlook108

Taxation revenue is projected to increase over the forward estimates, compared to estimatesat the time of PEFO. The increases are largely in payroll tax as a result of employmentand wage growth, and increased stamp duty on conveyances following a large one-offtransaction in 2012-13 and some recovery in property market transaction volumes.The timing differences largely relate to expenditure requirements associated with tied Commonwealth funding. As foreshadowed in PEFO, the timing of expenditure related to Commonwealth funds received late in the 2011-12 financial year would not be finalised until agency outcomes for 2011-12 were finalised. Now that agency outcomes have beenfinalised, some additional timing changes to those provisionally included in PEFO have been included in the Mini Budget, largely accounting for the timing changes across years.The Darwin Correctional Facility that is being constructed and operated under a PublicPrivate Partnership (PPP) arrangement is due to be completed in the last quarter of 2013-14.In accordance with accounting standards, although the Territory will not make any paymentsduring the construction phase, the Territory will recognise the asset and associated financelease liability on its books once construction is completed.Subsequent to financial close in October 2011, the construction cost was recorded in the 2013-14 forward estimate as an asset and associated finance lease liability, at avalue of $495 million. Following further accounting advice, the fair value of the asset has been reassessed to incorporate certain costs incurred by the private consortium during the construction phase that meet the capitalisation criteria under accounting standards. Therefore the fair value of the asset and associated finance lease liability has been increased by $26 million to $521 million in 2013-14.This book entry adjustment to the construction component does not increase the quarterly service payment streams over the 30-year concession period that covers both the capital and ongoing maintenance costs of the facility.

Policy Changes since PEFOTable 3.6 highlights the effect of policy changes on the non financial public sector’s fiscal balance since PEFO.Table 3.6: Policy Changes since PEFO

2012-13 2013-14 2014-15 2015-16

Election commitments Legacy itemsOther policy decisions

$M-42-82- 4

- 128

$M- 86

-118- 15

$M- 93

-124- 14

$M- 97

-129- 10

Savings measures 71 202 270 299Revenue measuresPower and Water

Corporation Operational

23

11

69

36

79

47

81

59

Capital 36 38 39 60Tariffs 53 112 118 125

Housing assistance packages 11 68 27 15Subtotal 205 525 580 639


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Total 77 306 349 403Source: Department of Treasury and Finance


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The most significant policy changes to the Budget and forward estimates are the effect ofsavings and revenue measures, the review of PWC’s commercial operations and revisionsto housing assistance packages. These measures are partially offset by additional fundingfor election commitments and legacy items. In total the policy changes represent a netimprovement of $403 million in 2015-16. Key policy changes are discussed in further detailbelow. The effect on specific agencies for 2012-13 is included in the agency statements inPart 2 of this Mini Budget document.

Election CommitmentsElection commitments made in the lead up to the 2012 election have now been incorporated into the Mini Budget. These total $97 million ongoing from 2015-16 with key commitments including:• funding of $2.5 million in 2012-13, rising to $27.5 million ongoing from

2014-15, for an additional 100 police officers across the Top End and 20 police officers in Alice Springs, to be fully implemented by July 2014;

• funding of $6.5 million ongoing from 2012-13 for enhanced cardiac outreach and rehabilitation services and the commencement of low-risk angioplasty services;

• funding of $4.5 million ongoing from 2012-13 to provide an additional 400 elective surgeries per annum;

• funding of $3.3 million ongoing from 2012-13 to increase school vouchers from $75 per student to $150 per student;

• funding of $5.7 million ongoing from 2012-13 for increased peak sport and recreation body grants and the new Sport Voucher scheme; and

• funding of $2 million in 2012-13 rising to $6 million in 2015-16 for improving housing properties in homelands and outstations.

Legacy ItemsLegacy items primarily relate to demand-driven services that have been individuallyassessed with additional funding requirements included in the Mini Budget. These items total$129 million ongoing from 2015-16 with key items including:• funding of $24.2 million in 2012-13 and $30.1 million from 2013-14, including a

redirection of savings, to meet demand pressures in child protection and out-of-home care services;

• funding of $10.3 million ongoing from 2012-13 towards increasing costs associated with police housing and overtime;

• funding of $10 million in 2012-13 rising to $40 million by 2015-16 for increased repairs and maintenance expenditure across government;

• funding of $7.4 million in 2012-13 rising to $18 million by 2015-16 for a range of health-related operational costs, including operation of the Alice Springs Emergency Department, the Medi-Hotel at Royal Darwin Hospital and the Secure Care facilities in Darwin and Alice Springs; and

• funding of $3.3 million in 2012-13 rising to $5.6 million in 2015-16 for demand growth associated with rising prisoner numbers, including use of alternative options.


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Savings MeasuresAgencies have identified annual operating savings of $72 million in 2012-13, rising to$229 million by 2015-16, within the context of ensuring that there is minimal effect onfrontline government services. These savings measures in aggregate more than offset theapproved funding for election commitments and legacy items.In general these savings measures are being achieved by agencies through restructuring their operations with a greater focus on frontline services and reductions in discretionary spending such as consultancy and travel costs together with a rationalisation of corporate and other non frontline services.In addition to operational costs savings, general government infrastructure spending has also been reduced through the prioritisation and realigning of the forward works program. This resulted in reductions in planned capital spending totalling $150 million across the forward estimates.The former Government’s HOMESTART EXTRA scheme has been abolished and replaced with the new HomeBuild Access package. HomeBuild Access is aimed at new housing supply and is not reliant on government equity to support the scheme. Accordingly, thenet effect of this policy change represents a reduction in the Territory’s fiscal imbalance of$122 million across the forward years.

Revenue MeasuresAgencies have identified a range of increases in fees and charges across government within the context of bringing these amounts up towards the average of the states. In total these revenue measures will generate $23 million in 2012-13, rising to $81 million per annum by 2015-16.These increases incorporate the following changes made to first home owner assistance schemes and motor vehicle registration fees.From 4 December 2012, the stamp duty first home owner concession ceases. Instead, assistance for first home owners will be targeted towards the construction of new homes, affordable housing and housing in regional areas by increasing the $7000 first home owner grant to:• $12 000 for existing homes in the greater Darwin/Palmerston and Darwin rural

area;• $25 000 for new homes in the greater Darwin/Palmerston and Darwin rural area;

and• $25 000 for new or existing homes in regional Northern Territory.In addition, in order to target more affordable housing, the eligibility for the first home owner grant has been reduced from homes valued up to $750 000 to homes valued up to $600 000.Similarly, the existing principal place of residence rebate, which provides a $3500 stampduty rebate for non-first home buyers, will be increased to $7000 but limited to the purchasesof new homes or vacant land on which a new home will be built.Registration fees for light vehicles were last increased over 16 years ago. Northern Territory registration fees are currently among the lowest of all the states and territories across all categories. From 1 January 2013, registration fees will be increased towards the state average. Overall, the total cost of registering a motor vehicle will increase between 4 and 18 per cent, or$11 for a motorcycle or small-box trailer, $67 for a small vehicle and $105 for a large four-wheel drive vehicle.


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Power and Water CorporationAs highlighted in the previous chapter, the financial position of PWC has deteriorated in recent years and, based on the 2012-13 Statement of Corporate Intent, was set to worsen over the forward estimates period.In response to these concerns over the commercial sustainability of the corporation, the PWC Board has identified a range of operating and capital savings that could be achieved over the next five years.Operational savings have been identified in the areas of non-essential repairs and maintenance, the better use of plant and reductions in other discretionary expenditure, including consultancy and other external services.In addition, the deferral of capital expenditure has been identified, primarily with respect to electricity and water infrastructure, which represents an 18 per cent reduction to the five-year capital program. PWC is employing appropriate risk mitigation strategies and demand management to ensure that service standards and reliability of supply are not compromised by these efficiency measures.While these savings measures make an important contribution in moving PWC towards commercial sustainability, they are not sufficient for this purpose. Without increases to utility tariffs, PWC would be unable to achieve commercial sustainability. This is evident when comparing tariffs for electricity and water to the state average, with the Territory among the lowest in the nation.Accordingly, from 1 January 2013 tariffs for electricity, water and sewerage are to be increased by 30 per cent, 40 per cent and 25 per cent respectively. This revised tariff structure, together with efficiencies identified by the PWC Board, aims to move PWC towards commercial sustainability and reduce reliance on government support.The Expert Review that has been commissioned will undertake a detailed examination of PWC’s capital program, operating structure and external regulatory environment with a view to identifying further efficiencies in order to maintain its path to commercial sustainability.

Other Policy DecisionsOther policy decisions of Government include additional funding for the Territory’s share of additional costs arising from Fair Work Australia’s equal remuneration order for employees under the Social and Community Services Modern Award, increases to the first home owner grant and increased funding for the Pensioner Concession Scheme and government schools to offset 50 per cent of the increase in utility tariffs.Table 3.7 sets out changes in the fiscal balance for 2012-13 for the non financial public sector since PEFO.


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Table 3.7: Variations to the Non Financial Public Sector’s Fiscal Balance since PEFO 2012-13

$M2012-13 PEFO REVENUE Revenue – policy

Increased Power and Water Corporation tariffs

-867.4

53.0

Motor vehicle registration fees 5.2Revised stamp duty home owner assistance 9.7Other revenue measures 7.7Total revenue – policy Revenue – non policy

Taxation

75.6

26.7

GST revenue 24.0New/expanded Commonwealth revenueOther revenueTotal revenue – non policy

47.5- 5.892.4

VARIATION – TOTAL REVENUE OPERATING EXPENSES Expenses – policy

Election commitments

168.0

41.3

Legacy itemsSavings measures Other

80.7-

79.7 Total expenses – policy

Expenses – non policy

Commonwealth payments and transfers between years and to capital

46.6

17.8

Employee entitlements 4.0Depreciation 0.8Other 1.2Total expenses – non policy 23.8VARIATION – TOTAL OPERATING EXPENSES NET CAPITAL PAYMENTSNet capital payments – policySavings measures

70.4

- 38.5

Housing assistance packagesElection commitments

- 11.51.0

Legacy itemsTotal net capital payments – policy Net capital payments – non policy

Commonwealth payments and transfers between years and from operationalDepreciationTotal net capital payments – non policy

1.3- 47.7

51.1- 0.850.3

VARIATION – TOTAL NET CAPITAL PAYMENTS 2.6TOTAL VARIATION2012-13 MINI BUDGET

95.0- 772.4



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Assessment of Updated Fiscal Outlook Against New Fiscal Strategy

This section addresses the requirement under section 10(1)(g) of FITA that each fiscal outlook report is to contain an explanation of the factors and considerations that contributed to any material differences between the updated financial projections and the expected outcomes for the key fiscal indicators as specified in the Government’s fiscal strategy statement.The following provides an assessment of the updated fiscal outlook against the Government’s new fiscal strategy.Key fiscal target: by 2015-16 the fiscal imbalance in the Territory’s non financial public sector is to be eliminatedWhile remaining in a small deficit position of $53 million by 2015-16, the fiscal balance forthe non financial public sector shows a significant improvement on the $475 million deficitprojected in PEFO. Figure 3.5 highlights this improved position.Figure 3.5: Non Financial Public Sector – Fiscal Balance

$M 0

- 200

- 400

- 600

- 800

-1 000

-1 200

-1 4001112 1213 1314 1415 1516

201213 PEFO 201213 Mini BudgetSource: Department of Treasury and FinanceIn the absence of any further increases in untied revenues, modest additional budget improvement measures will be required as part of the May 2013 Budget in order to meet this key fiscal target.Associated fiscal outcome: by 2014-15 the Territory’s general government sector is achieving a net operating surplusFollowing the Mini Budget, the general government net operating balance is now projectedto be in a surplus of $29 million in 2014-15. Figure 3.6 highlights this improved positionsince PEFO.


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Figure 3.6: General Government Sector – Operating Balance$M

200

150

100

50

0

- 50

-100

-150

-2001112 1213 1314 1415 1516

PEFO 201213 Mini BudgetSource: Department of Treasury and Finance

Associated fiscal outcome: by 2014-15, taxation effort in the Territory’s general government sector is more on par with the average effort of the statesThe policy changes of re-targeting home assistance stamp duty measures together withincreases in motor vehicle registrations contained within the Mini Budget means that theTerritory’s taxation effort is once again moving towards being on par with the state average.Associated fiscal outcome: by 2014-15, the Territory’s government owned corporation is moving towards commercial rates of return on capital employedThe increases in electricity, water and sewerage tariffs combined with reduced operatingand capital costs of PWC means that the corporation is now on the path towards commercialsustainability.PWC’s improved position is shown in Figure 3.7 that compares PEFO estimates based on PWC’s 2012-13 Statement of Corporate Intent (with asset values adjusted to a replacement cost methodology) with those in the Mini Budget and the weighted average cost of capital targeted by PWC.Figure 3.7: Pre-tax Annual Rate of Return – Power and Water Corporation%8

7 Target weighted average cost of capital (6.8%)

6

5

4

3

2

1


116

01112 1213 1314 1415 1516

201213 PEFO 201213 Mini BudgetSource: Department of Treasury and Finance


117

Lifting PWC’s rate of return to a full commercial rate and sustaining that level of return,depends importantly on the findings and recommendations of the current Expert Review ofPWC due for completion by March 2013. The Government’s response to the review’s findingsand recommendations will form the basis of PWC’s 2013-14 Statement of Corporate Intent.Associated fiscal outcome: by the end of 2015-16, the Territory’s non financial public sector net debt as a percentage of revenue is returning towards 60 per centReflecting the measures announced in the Mini Budget, the net debt to revenue ratio for thenon financial public sector is now projected to be 73 per cent in 2015-16. This improvementon the 98 per cent at the time of PEFO is two-thirds of the way towards the 60 per cent ratioas shown in Figure 3.8.Figure 3.8: Non Financial Public Sector – Net Debt to Revenue

% 100

90

80

70

60

50

401112 1213 1314 1415 1516

PEFO 201213 Mini BudgetSource: Department of Treasury and Finance

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Chapter 4 – Additional FITA RequirementsThis chapter provides updated information on risks that could affect the updated financial projections (including contingent liabilities), and an overview of estimated tax expenditures.

Risks to the Updated Financial ProjectionsAs required under section 10(1)(e) of the Fiscal Integrity and Transparency Act (FITA), this section outlines the potential effect of risks to the Budget due to changes in revenue and expense estimates and the likelihood of contingent liabilities becoming actual liabilities. Any changes in risks or liabilities that are apparent since the 2012 Pre-Election Fiscal Outlook (PEFO) are also identified.

GST RevenueVolatility in goods and services tax (GST) revenue represents the largest revenue risk forthe Territory. GST revenue on average accounts for about 60 per cent of the Territory’s totalgeneral government revenue and therefore changes in GST estimates have a significantimpact on the Territory’s funding capacity and budget outcome.The Territory’s GST entitlement is dependent on three parameters: national GST collections; the Territory’s share of the national population; and GST relativities as recommended by the Commonwealth Grants Commission (CGC).

National GST CollectionsEstimates of national GST collections are informed by the Commonwealth’s most recent published advice and national economic indicators. Compared with the 2012-13 Budget, estimates of national GST collections over the budget and forward estimates period have remained relatively unchanged.The Territory’s GST revenue is directly impacted by variations in national GST collections. A± 1 percentage point change in the GST pool growth rate is estimated to have a ± $26 millionimpact on the Territory’s GST revenue in 2012-13. If variations of this size occurred in eachof the budget and forward estimates years, the cumulative impact on Territory GST revenueis about ± $300 million.

Territory’s Share of National PopulationThe Territory’s population growth rate is expected to increase in 2012, following the commencement of a number of major construction projects including the INPEX workers’ village and processing facilities. As a consequence, the Territory’s share of the national population is expected to increase over the forward estimates period, with forecasts of population growth in the Territory above the forecast national average increase.In June 2012, the Australian Bureau of Statistics (ABS) released updated population data that was, for the first time, benchmarked to the 2011 Census of Population and Housing. The updated ABS estimated resident population determination for December 2011increased the Territory’s share of the national population to 1.0336 per cent, compared with1.0157 per cent estimated at the time of the 2012-13 Budget. The increase in the Territory’sshare of the national population has a positive impact on the estimates of the Territory’s GSTrevenue and has been incorporated in the current GST estimates.

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Estimates of the Territory’s population growth relative to the national average influences the Territory’s share of the national population and therefore impacts on forecasts of the Territory’s GST revenue. The effect of a ± 1 percentage point variation in the Territory’s forecast

Additional FITA Requirements

115

population growth is estimated at ± $26 million in 2012-13, all other things being equal.The cumulative impact of a ± 1 percentage point variation in the estimate of the Territory’spopulation growth rate over the budget and forward estimates period is about ± $290 million.

GST RelativitiesThe CGC is responsible for determining GST relativities. The CGC updates GST relativities each year but it does not forecast relativities for forward years. The CGC has recommended the relativities that will be used to distribute GST revenue between the states in 2012-13.Due to the complexity and the large number of variables that are used to determineGST relativities, the Territory’s budget forecasts hold relativities constant over the forwardestimates period.As the Territory’s GST relativity for 2012-13 is final and will not be revised by the CGC, it does not represent a fiscal risk to the Territory in 2012-13. However, over the forward years, the approximate impact of a 1 per cent variation in the Territory’s GST relativity would be± $28 million with a cumulative impact over the forward estimates period of ± $88 million.While the sensitivity analysis for each GST parameter yields a similar result in 2012-13, the cumulative impact over the period 2012-13 to 2015-16 varies for each parameter. This is due to the compounding effect of varying the growth rates for the GST pool and the Territory population by 1 percentage point in each year. That is, the change in the GST pool and Territory population growth rates in one year affects the subsequent years. On the other hand, the cumulative impact of revising GST relativities by ± 1 per cent is lower because there is no compounding effect as revisions to the Territory’s GST relativity in one year have no impact on the subsequent years.In March 2011, the Prime Minister announced the Review of GST Distribution, which is examining whether the current GST distribution process will ensure that Australia is best placed to respond to future challenges and will make recommendations on whether the GST distribution process could be made more efficient, equitable, simple, predictable and stable.For its 2013 Update, the CGC has requested state submissions on the use of 2011 Census data. The increase in self-identification of Indigenous people, primarily in other states, inthe 2011 Census has reduced the Territory’s preliminary share of the national Indigenous population. While no decision has been made by the CGC, this could impact negatively on the Territory’s relativity from 2013-14.

Other Commonwealth Grants and SubsidiesCommonwealth funding is provided under either the Intergovernmental Agreement on Federal Financial Relations (IGA-FFR) through Specific Purpose Payments (SPPs), National Health Reform Payments (NHRPs) and National Partnership (NP) payments or through Commonwealth Own Purpose Expenses (COPE) provided directly to agencies. The IGA-FFR affords flexibility of expenditure across the relevant sector for the SPPs (which in 2012-13 are provided for the education, skills and workforce, disability and housing sectors) without input controls, matching and maintenance of effort requirements. These payments are not time limited and are indexed on a sector-specific basis. These arrangements provide a degree of certainty for the Territory’s budgeting, although adequacy of indexation in terms of capturing cost growth remains an ongoing risk.In 2012-13 NHRPs replaced the National Healthcare SPP. Although payments for the first two years will be the same as if the National Healthcare SPP continued, from 2014-15 payments will predominantly be made on the basis of hospital activity. While the Territory will receive


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some payments as ‘block funding’ in recognition of its small hospitals, it is currently unclear ifthe Territory’s circumstances will be adequately recognised in the funding methodology, whichis still under development, potentially impacting on the adequacy of Commonwealth funding.While an improvement on previous funding agreements, and although less prescriptive than COPE funding agreements, NP agreements continue to contain many risks to states including co-investment, input controls, application of national costs, burdensome reporting and administrative arrangements and potential withdrawal of seed funding. Expiry ofNP agreements (which by nature are time limited) also potentially poses a risk to the Territory’s Budget, particularly where funding supports ongoing service provision. The Commonwealth’s current fiscal position may make it more likely for it not to renew expiring NPs as well as being more stringent regarding performance-based payments.In addition, with the potential budget issues prevailing at the Commonwealth level, there is a further risk to all state and territory tied and untied funding of reduced funding levels if these funds are used to achieve a Commonwealth Budget surplus.The risks related to SPPs, NHRPs, NPs and COPEs cannot be quantified, however remain unchanged from the time of PEFO.

Own-Source RevenueThe amount of revenue received from Territory taxes and royalties is dependent on the performance of the Territory economy and other external factors. Forecasting such revenue involves making judgments and assumptions about the performance of the various economic factors and indicators that impact directly on Territory taxes and royalties, such as growth in wages, employment, average hours worked, prices, market activity and exchange rates.It is difficult to accurately predict revenue collections into the future, particularly for the later years of the forward estimates. The most difficult source of revenue to forecast is mining royalty revenue because it is influenced by mineral prices, production levels and exchange rate conditions.Mining revenue forecasts rely on advice from mining companies of their expected or estimated liability for the financial year. Unpredicted market changes in mineral prices, production or exchange rates will have a material impact on this forecast.Forecasting conveyance stamp duty is also difficult because it is linked to activity in the property market. For example, there was strong growth in the residential property market activity prior to 2010-11, followed by a slowing in transaction volumes in 2011, withsignificant recovery in transaction levels in 2012. The extent and timing of market changes or growth or decline in property prices or transaction levels is difficult to predict and can havea significant impact on conveyance duty collections. In addition, the Territory has a relatively small conveyance duty base, which includes valuable commercial properties including pastoral properties and mining projects. Duty on any large commercial transactions also introduces significant variability in collections.In total, a variation of ± 1 per cent to the parameters used to forecast Territory taxes and royalties would affect revenue by about $5 million for 2012-13.


117

Expenses and PaymentsThe forward estimates for expenses are based on known policy decisions, with adjustments for non-policy changes.The most significant risk to these estimates on the expense side is increasing budget pressure due to increased cost and demand influences.A further risk is in relation to any future enterprise bargaining agreements. The outcome of future enterprise bargaining agreements over and above amounts currently factored into the forward estimates will increase budgetary pressures.Minimal additional capacity exists in the forward estimates to respond to budget pressures, over that already factored into forward estimates. In addition, the capital contingency reserve included in the forward estimates needs to be considered in light of recent indications that capital construction project costs could increase by around 10 per cent per annum as a result of the expected increase in construction industry wages.In accordance with FITA, the Mini Budget includes forward estimates up to 2015-16. There is the potential for fiscal aggregates beyond the forward estimates period to be affectedby existing commitments. These could either take the form of recurrent costs that arenot expected to crystallise until later in the forward estimates period, recurrent initiativesthat roll out over time and have therefore not yet reached their peak of funding, or capitalinfrastructure for which the associated recurrent costs are not fully incorporated into forwardyears as their completion falls either close to or outside of the forward estimates period.The former Government announced two new housing assistance packages on 25 July 2012 namely the My New Home and HOMESTART EXTRA housing assistance packages. PEFO included the estimated effects on additional capital spending, borrowings, interest payments and net debt of each scheme using the best information available at the time.These schemes have since been abolished by the new Government and replaced by the HomeBuild Access scheme. As such, the forward estimates have been reassessed and amended as appropriate, and the risks associated with the uptake of these previous schemes have been extinguished.

Contingent LiabilitiesA contingent liability is a liability that the Government may be called on to meet at some future date if a specified event should occur. Contingent liabilities of the Territory may arise out of a range of circumstances, the most common of which are indemnities and guarantees contained in agreements executed by the Territory. Contingent liabilities may also ariseas a result of undertakings made by the Territory or as a result of legislation containing a guarantee or indemnity.Contingent liabilities have the potential to materially affect the Budget due to the likelihood of an actual liability arising. As such, where possible, the potential extent of the actual liability should be quantified.Material contingent liabilities of the Territory are defined as guarantees and indemnities with potential exposure greater than $5 million and are disclosed in annual financial statements of the Territory in accordance with Australian Accounting Standards requirements. Quantifiable and unquantifiable material contingent liabilities of the Territory remain unchanged since PEFO.


118

Details of estimated amounts of material contingent liabilities as at 30 June 2012, resultingfrom guarantees or indemnities granted by the Territory, remain as published in the2011-12 Treasurer’s Annual Financial Report.Unquantifiable material contingent liabilities of the Territory include Government’s risk exposure through legislated guarantee of Territory Insurance Office’s customers’ deposits and insurance contracts. These remain unchanged since PEFO except in relation to the former Government’s housing assistance packages. The former Government’s My New Home scheme included a deposit guarantee provided by the Territory for off-the-plan purchases of dwellings. This form of financing, whereby the Territory is guaranteeingthe 10 per cent deposit for the dwelling, amounted to a contingent liability that would be realised should the purchaser default on the contractual obligations. However, given thenew Government’s decision to cease the scheme and the limited number of applicants who had taken advantage of the guarantee by the time the scheme was abolished, the risk of a contingent liability crystallising is considered to be immaterial.

Tax ExpendituresThis section addresses the requirement under section 10(1)(d) of FITA that each fiscal outlook report is to contain an overview of the estimated tax expenditures for the budget year and the following three financial years.Tax concessions are often provided to benefit a specified activity or class of taxpayer. These are known as ‘tax expenditures’ as the impact on the budget is similar to direct expenditure and can be used to achieve similar outcomes. Tax expenditure can be provided in a variety of ways, including by way of exemption, deduction, rebate or a concessionary tax rate.The tax expenditure statement details revenue estimated to be forgone by the Government as a result of tax exemptions or concessions provided by the Government. The tax expenditures identified below relate to the more important and material concessions available in the Territory.

MethodologyTax expenditure has been estimated by applying the benchmark rate of taxation to the forecast volume of activities or assets exempted by a particular concession. Only future events that are certain or highly likely to impact on assumed tax bases or tax rates have been taken into consideration in estimating future tax expenditure. Otherwise, existing taxation arrangements have been assumed to apply for future years.

Payroll TaxThe benchmark tax base for payroll tax is assumed to be all wages (as defined under the payroll tax legislation) paid in the Territory. The benchmark tax rate is 5.5 per cent.Table 4.1: Payroll Tax Expenditure

2012-13 2013-14 2014-15 2015-16Tax expenditure ($M) 148.2 155.0 162.3 169.9Source: Department of Treasury and FinanceThe reported estimated tax expenditure in relation to payroll tax mainly comprises the following exemptions.


119

Small Business ExclusionEmployers with wages below $1.5 million are not required to pay tax and employers with payrolls exceeding $1.5 million but less than $7.5 million receive a deduction of up to$1.5 million, which reduces by $1 for every $4 in wages paid by the employer over the$1.5 million threshold.Charities and Other Exempt BodiesNon-profit organisations having a sole or dominant purpose, that is, charitable, benevolent, philanthropic or patriotic, are exempt from payroll tax to the extent that wages are paid for an employee’s services that relate directly to the purpose for which the organisation was established.Apprentices and GraduatesBusinesses receive payroll tax exemptions for apprentices, graduates of approved tertiary institutions and employees receiving wages funded under the Community Development Employment Projects program.

Stamp Duty on ConveyancesThe benchmark tax base is assumed to be sales of all dutiable property. The benchmark tax scale is the currently applicable stamp duty scale.Table 4.2: Stamp Duty on Conveyances Expenditure

2012-13 2013-14 2014-15 2015-16Tax expenditure ($M) 23.3 11.6 11.8 12.1Source: Department of Treasury and Finance

Conveyance duty tax expenditure estimates mainly comprise the following concessions.Corporate Reconstructions ExemptionCorporate groups formed by commonly owned corporations are able to reorganise the ownership of assets without incurring a stamp duty liability.First Homeowner ConcessionPrior to 4 December 2012, first homebuyers were eligible for a stamp duty concession on the first $540 000 of the value of a home valued up to $750 000.Principal Place of Residence RebatePrior to 4 December 2012, other homebuyers were entitled to a rebate of $3500 when purchasing a principal place of residence to a maximum value of $750 000. From4 December 2012, that rebate was increased to $7000, but applies only in respect of new homes or vacant land on which a new home will be built.Seniors, Pensioner and Carer ConcessionA concession of $8500 is provided for seniors (aged 60 years and over) and Northern Territory Pensioner and Carers Concession cardholders when purchasing a principal place of residence.


120

Stamp Duty on General Insurance PoliciesThe benchmark tax base is all classes of general insurance policies. This does not includelife insurance policies, which are treated differently for stamp duty purposes. The benchmarktax rate is 10 per cent of the premium which is the tax rate applied to general insurance.Table 4.3: Stamp Duty on General Insurance


The Territory provides stamp duty concessions on certain insurance products to reduce the costs of such insurance, namely workers compensation insurance and private health insurance.

Motor Vehicle Registration FeesMotor vehicle registration concessions are available to Northern Territory Pensioner and Carer Concession or Northern Territory Seniors cardholders to an annual value of up to$154 and $50, respectively. Actual registration fee data has been used to estimate this item of tax expenditure.Table 4.4: Motor Vehicle Registration Fees Expenditure


Mineral RoyaltiesThe benchmark tax base is assumed to be all profitable mining operations in the Territory and the benchmark tax rate is 20 per cent.Table 4.5: Mineral Royalties Expenditure


The first $50 000 of a miner’s profit is not subject to royalty and royalty payers are able to reduce the amount of royalty they pay in the Territory for eligible exploration expenditure incurred in their mining operations in the Territory.


121

121

Chapter 5 – Uniform Presentation Framework Statements Under the Uniform Presentation Framework, jurisdictions have agreed to publish information in a standard format in their budget papers and outcome and mid-year reports to facilitate a basis for meaningful comparisons of each government’s financial results and projections.

The financial statements in this report are presented in accordance with accounting standard AASB 1049 – Whole of Government and General Government Sector Financial Reporting.

Section 10(3)(c) of the Fiscal Integrity and Transparency Act specifically requires each fiscal outlook report to “...publish the financial projections in at least the level of detail required by the Uniform Presentation Framework”.

The tables in this chapter meet these reporting obligations. They include an Operating Statement, Balance Sheet and Cash Flow Statement for the general government, public non financial corporation and non financial public sectors in 2012-13 for the 2012 Pre-Election Fiscal Outlook (PEFO), and 2012-13 revised and 2013-14 to 2015-16 forward estimates for the Mini Budget.

Also included are tables presenting general government sector taxes and the revised 2012-13 Loan Council Allocation.

Uniform Presentation Framework Statements

Table 5.1

General Government Sector Comprehensive Operating Statement2012-13

PEFO

2012-13

Revised

2013-14 2014-15 2015-16

Forward Estimates

122

$000 $000 $000 $000 $000

REVENUE

Taxation revenue 424 706 466 180 485 238 504 298 523 457

Current grants 3 564 063 3 615 613 3 700 360 3 807 944 3 997 531

Capital grants 210 792 230 736 206 217 151 878 104 536

Sales of goods and services 207 077 210 283 235 210 247 563 236 878

Interest income 63 975 62 239 65 730 69 429 73 180

Dividend and income tax equivalent income 49 280 55 791 92 965 108 893 107 471

Other 137 620 138 528 140 129 139 249 139 380

TOTAL REVENUE 4 657 513 4 779 370 4 925 849 5 029 254 5 182 433

less EXPENSES

Employee benefits expense 1 800 665 1 803 260 1 811 312 1 818 517 1 826 588

Superannuation expenses

Superannuation interest cost 90 512 109 727 106 400 120 811 142 638

Other superannuation expenses 208 944 193 813 207 452 204 141 194 839

Depreciation and amortisation 226 102 227 492 231 679 246 052 248 920

Other operating expenses 1 233 288 1 247 801 1 310 897 1 360 069 1 423 234

Interest expenses 188 218 190 059 199 791 260 153 260 755

Other property expenses

Current grants 810 251 829 783 836 189 784 873 819 716

Capital grants 65 852 101 366 81 080 43 151 40 812

Subsidies and personal benefit payments 141 720 150 598 158 443 162 979 169 054

TOTAL EXPENSES 4 765 552 4 853 899 4 943 243 5 000 746 5 126 556

equals NET OPERATING BALANCE - 108 039 - 74 529 - 17 394 28 508 55 877

plus Other economic flows – included in operating result

590 697 17 697 426 860 478 911 219 256

equals OPERATING RESULT 482 658 - 56 832 409 466 507 419 275 133

plus Other economic flows – other non-owner changes in equity

98 781 161 930 187 066 201 921 216 909

equals COMPREHENSIVE RESULT – total change in net worth before transactions with owners in their capacity as owners

581 439 105 098 596 532 709 340 492 042

NET OPERATING BALANCE - 108 039 - 74 529 - 17 394 28 508 55 877

less Net acquisition of non financial assets

Purchases of non financial assets 780 748 822 327 592 811 501 077 391 183

Sales of non financial assets - 72 622 - 74 922 - 67 208 - 70 678 - 60 228

less Depreciation 226 102 227 492 231 679 246 052 248 920

plus Change in inventories

plus Other movements in non financial assets - 23 313 - 23 313 500 359 - 5 739

equals Total net acquisition of non financial assets 458 711 496 600 794 283 178 608 82 035

equals FISCAL BALANCE - 566 750 - 571 129 - 811 677 - 150 100 - 26 158

Totals on financial statements may not add due to rounding.


Table 5.2

General Government Sector Balance Sheet2012-13

PEFO

2012-13

Revised

2013-14 2014-15 2015-16

Forward Estimates

123

ASSETS Financial assets Cash and deposits

$000

157 029

$000

186 321

$000

191 252

$000

159 340

$000

180 027Advances paid 262 156 237 701 239 498 240 991 242 160

Investments, loans and placements 702 401 703 151 741 513 778 533 818 221

Receivables

Equity

Investments in other public sector entities

187 911

2 643 519

198 328

2 669 393

214 668

2 856 459

202 400

3 058 380

200 642

3 275 289

Investments – other

Other financial assets Total financial assets

100

3 953 116

100

3 994 994

100

4 243 490

100

4 439 744

100

4 716 439

Non financial assets

Inventories 9 157 9 275 9 275 9 275 9 275

Property, plant and equipment 10 653 737 10 891 014 11 699 791 11 898 958 11 995 477

Investment property 110 700 99 200 93 493 87 786 82 079

Other non financial assets 3 780 66 047 65 663 65 279 64 895

Total non financial assets 10 777 374 11 065 536 11 868 222 12 061 298 12 151 726

TOTAL ASSETS 14 730 490 15 060 530 16 111 712 16 501 042 16 868 165

LIABILITIES

Deposits held 241 298 193 701 161 991 158 345 166 182

Advances received 414 080 378 277 369 461 360 101 350 905

Borrowing 2 639 676 2 669 660 3 516 342 3 604 901 3 646 978

Superannuation 2 965 245 3 840 861 3 474 287 3 052 553 2 877 577

Other employee benefits 564 491 563 563 573 415 581 415 587 415

Payables 147 457 146 550 147 756 162 137 162 006

Other liabilities 118 865 155 116 159 126 162 916 166 386

TOTAL LIABILITIES 7 091 112 7 947 728 8 402 378 8 082 368 7 957 449

NET ASSETS/(LIABILITIES) 7 639 378 7 112 802 7 709 334 8 418 674 8 910 716

Contributed equity Accumulated surplus/(deficit) 1 448 184 555 610 965 076 1 472 495 1 747 628

Reserves 6 191 194 6 557 192 6 744 258 6 946 179 7 163 088

NET WORTH 7 639 378 7 112 802 7 709 334 8 418 674 8 910 716

NET FINANCIAL WORTH1 -3 137 996 - 3 952 734 - 4 158 888 - 3 642 624 - 3 241 010NET FINANCIAL LIABILITIES2 5 781 515 6 622 127 7 015 347 6 701 004 6 516 299

NET DEBT3 2 173 468 2 114 465 2 875 531 2 944 483 2 923 657

1 Net financial worth equals total financial assets minus total liabilities.2 Net financial liabilities equals the sum of total liabilities less total financial assets excluding investments in other public sector entities.3 Net debt equals the sum of deposits held, advances received and borrowing, minus the sum of cash and deposits, advances paid and

investments, loans and placements.


Table 5.3

General Government Sector Cash Flow Statement2012-13

PEFO2012-13Revised

2013-14 2014-15 2015-16Forward Estimates

124

Cash receipts from operating activities$000 $000 $000 $000 $000

Taxes received 424 616 466 090 485 107 504 023 523 307Receipts from sales of goods and services 252 138 255 344 280 271 292 624 281 939Grants and subsidies received 3 774 855 3 846 349 3 906 577 3 959 822 4 102 067Interest receipts 63 944 62 208 65 702 69 411 73 172Dividends and income tax equivalents 40 275 44 220 59 008 116 121 109 387Other receipts 353 621 354 529 356 078 355 766 355 975Total operating receipts 4 909 449 5 028 740 5 152 743 5 297 767 5 445 847Cash payments for operating activitiesPayments for employees - 2 032 096 -2 041 056 -2 069 304 -2 099 789 -2 129 905Payment for goods and services - 1 495 366 -1 509 879 -1 571 935 -1 619 796 -1 684 717Grants and subsidies paid - 994 465 -1 058 389 -1 054 721 - 985 219 -1 029 537Interest paid - 187 890 - 189 908 - 198 585 - 247 303 - 260 981Other paymentsTotal operating payments - 4 709 817 -4 799 232 -4 894 545 -4 952 107 -5 105 140NET CASH FLOWS FROM OPERATING ACTIVITIES 199 632 229 508 258 198 345 660 340 707Cash flows from investments in non financial assetsSales of non financial assets 72 622 74 922 67 208 70 678 60 228Purchases of non financial assets - 763 859 - 795 438 - 575 035 - 495 744 - 391 183Net cash flows from investments in non financial assets - 691 237 - 720 516 - 507 827 - 425 066 - 330 955NET CASH FROM OPERATING ACTIVITIES AND - 491 605 - 491 008 - 249 629 - 79 406 9 752

INVESTMENTS IN NON FINANCIAL ASSETSNet cash flows from investments in financial assets - 157 413 - 68 985 - 1 797 - 1 493 - 1 169

for policy purposes1

Net cash flows from investments in financial assets 342 771 342 021 - 28 494 - 26 566 - 28 614 for liquidity purposes

NET CASH FLOWS FROM INVESTING ACTIVITIES - 505 879 - 447 480 - 538 118 - 453 125 - 360 738Net cash flows from financing activitiesAdvances received (net) 145 497 109 694 - 8 816 - 9 360 - 9 196Borrowing (net) 497 123 527 126 325 377 88 559 42 077Deposits received (net) - 562 925 - 610 478 - 31 710 - 3 646 7 837Other financing (net)NET CASH FLOWS FROM FINANCING ACTIVITIES 79 695 26 342 284 851 75 553 40 718NET INCREASE/DECREASE IN CASH HELD - 226 552 - 191 630 4 931 - 31 912 20 687Net cash flows from operating activities 199 632 229 508 258 198 345 660 340 707Net cash flows from investments in non financial assets - 691 237 - 720 516 - 507 827 - 425 066 - 330 955CASH SURPLUS (+)/DEFICIT (-) - 491 605 - 491 008 - 249 629 - 79 406 9 752Future infrastructure and superannuation contributions/ - 17 392 - 17 392 - 18 436 - 19 543 - 20 715

earnings2

UNDERLYING SURPLUS (+)/DEFICIT (-) - 508 997 - 508 400 - 268 065 - 98 949 - 10 963Additional information to the Cash Flow StatementCASH SURPLUS (+)/DEFICIT (-) - 491 605 - 491 008 - 249 629 - 79 406 9 752Acquisitions under finance leases and similar - 521 305

arrangementsABS GFS SURPLUS (+)/DEFICIT (-) including finance - 491 605 - 491 008 - 770 934 - 79 406 9 752

leases and similar arrangements

1 Includes equity acquisitions, disposals and privatisations (net).2 Contributions for future infrastructure and superannuation requirements.


Table 5.4

Public Non Financial Corporation Sector Comprehensive Operating Statement2012-13

PEFO

2012-13

Revised

2013-14 2014-15 2015-16

Forward Estimates

125

$000 $000 $000 $000 $000

REVENUE

Current grants 132 092 136 113 142 808 146 187 149 652

Capital grants 23 450 37 748 16 861 17 282 17 714

Sales of goods and services 625 185 674 726 777 846 803 713 821 731

Interest income 3 602 4 102 3 167 3 043 2 869

Other 39 714 39 714 39 123 40 295 41 553

TOTAL REVENUE 824 043 892 403 979 805 1 010 520 1 033 519

less EXPENSES

Employee benefits expense 94 304 94 170 104 138 108 323 117 700

Superannuation expenses 13 443 13 443 13 755 14 072 14 072


Other operating expenses 510 188 513 036 492 442 499 119 499 791


Other property expenses 3 108 3 108 8 815 31 195 30 714

Current grants

Capital grants


TOTAL EXPENSES 872 237 873 082 885 092 930 839 955 070

equals NET OPERATING BALANCE - 48 194 19 321 94 713 79 681 78 449


- 1 549 - 1 549 - 1 858 - 1 227 - 1 289

equals OPERATING RESULT - 49 743 17 772 92 855 78 454 77 160


150 639 150 639 146 935 157 985 168 933


100 896 168 411 239 790 236 439 246 093

NET OPERATING BALANCE - 48 194 19 321 94 713 79 681 78 449


Purchases of non financial assets 354 708 318 808 256 480 239 112 244 829

Sales of non financial assets - 126 - 126 - 126 - 126 - 126


plus Change in inventories - 661 - 661 - 4 208 - 8 195 - 19 163

plus Other movements in non financial assets 12 000 12 000 12 300 12 608 12 923


equals FISCAL BALANCE - 272 269 - 169 452 - 16 392 - 951 11 944


Table 5.5

Public Non Financial Corporation Sector Balance Sheet2012-13

PEFO

2012-13

Revised

2013-14 2014-15 2015-16

Forward Estimates

126

$000 $000 $000 $000 $000

ASSETS Financial

assets Cash and

deposits 151 373 101 675 94 021 103 524 120 170

Advances paid

Investments, loans and placements Receivables 79 129 121 363 129 117 134 212 137 656

Equity

Other financial assets

Total financial assets

3

230 505

3

223 041

3

223 141

3

237 739

3

257 829


Inventories 106 126 96 238 92 030 83 835 64 672





TOTAL ASSETS 4 000 023 3 955 162 4 213 422 4 466 757 4 725 586

LIABILITIES

Deposits held 1 189 333 333 333 333

Advances received

Borrowing 1 447 700 1 386 727 1 440 199 1 506 077 1 553 602

Superannuation


Payables 57 620 77 978 69 724 71 039 74 639



NET ASSETS/(LIABILITIES) 2 348 770 2 367 642 2 561 879 2 758 781 2 965 838

Contributed equity 627 748 563 942 563 942 563 942 563 942

Accumulated surplus/(deficit) 562 647 651 974 699 276 738 193 776 317

Reserves 1 158 375 1 151 726 1 298 661 1 456 646 1 625 579

TOTAL EQUITY 2 348 770 2 367 642 2 561 879 2 758 781 2 965 838

NET FINANCIAL WORTH1 - 1 420 748 -1 364 479 -1 428 402 -1 470 237 -1 501 919NET DEBT2 1 297 516 1 285 385 1 346 511 1 402 886 1 433 765

1 Net financial worth equals total financial assets minus total liabilities.2 Net debt equals the sum of deposits held, advances received and borrowing, minus the sum of cash and deposits,

advances paid and investments, loans and placements.


Table 5.6

Public Non Financial Corporation Sector Cash Flow Statement2012-13PEFO

2012-13Revised


127

$000 $000 $000 $000 $000Cash receipts from operating activitiesReceipts from sales of goods and services 597 005 620 046 758 549 796 812 822 626Grants and subsidies received 161 142 179 461 159 669 163 469 167 366Interest receipts 3 598 4 098 3 164 3 040 2 869Other receipts 22 407 22 407 21 114 21 827 22 567Total operating receipts 784 152 826 012 942 496 985 148 1 015 428Cash payments for operating activitiesIncome tax equivalents paid - 532 - 1 437 - 8 617 - 31 684 - 31 620Payments for employees - 115 628 - 115 520 - 123 256 - 129 349 - 138 798Payment for goods and services - 529 253 - 532 115 - 488 129 - 480 463 - 471 182Grants and subsidies paid - 19 965 - 19 965 - 15 909 - 16 387 - 17 796Interest paid - 89 072 - 87 624 - 96 159 - 98 295 - 102 240Other payments - 1 868 - 1 868 - 5 623 - 102 - 369Total operating payments - 756 318 - 758 529 - 737 693 - 756 280 - 762 005NET CASH FLOWS FROM OPERATING ACTIVITIES 27 834 67 483 204 803 228 868 253 423Cash flows from investments in non financial assetsSales of non financial assets 126 126 126 126 126Purchases of non financial assets - 354 708 - 318 808 - 256 480 - 239 112 - 244 829Net cash flows from investments in non financial assets - 354 582 - 318 682 - 256 354 - 238 986 - 244 703NET CASH FROM OPERATING ACTIVITIES AND - 326 748 - 251 199 - 51 551 - 10 118 8 720

INVESTMENTS IN NON FINANCIAL ASSETSNet cash flows from investments in financial assets


Net cash flows from investments in financial assets for liquidity purposes

NET CASH FLOWS FROM INVESTING ACTIVITIES Net cash flows from financing activitiesAdvances received (net) Borrowing (net)

- 354 582

191 740

- 318 682

128 389

- 256 354

53 472

- 238 986

65 878

- 244 703

47 525Deposits received (net) Dividends paidOther financing (net)

- 1 909- 3 08363 805

- 3 083 - 9 575 - 46 257 - 39 599

NET CASH FLOWS FROM FINANCING ACTIVITIES 250 553 125 306 43 897 19 621 7 926NET INCREASE/DECREASE IN CASH HELD - 76 195 - 125 893 - 7 654 9 503 16 646Net cash flows from operating activities 27 834 67 483 204 803 228 868 253 423Net cash flows from investments in non financial assets - 354 582 - 318 682 - 256 354 - 238 986 - 244 703Dividends paid - 3 083 - 3 083 - 9 575 - 46 257 - 39 599CASH SURPLUS (+)/DEFICIT (-) - 329 831 - 254 282 - 61 126 - 56 375 - 30 879

Additional information to the Cash Flow Statement CASH SURPLUS (+)/DEFICIT (-)Acquisitions under finance leases and similar

- 329 831 - 254 282 - 61 126 - 56 375 - 30 879

arrangementsABS GFS SURPLUS (+)/DEFICIT (-) including finance

leases and similar arrangements- 329 831 - 254 282 - 61 126 - 56 375 - 30 879

1 Includes equity acquisitions, disposals and privatisations (net).


Table 5.7

Non Financial Public Sector Comprehensive Operating Statement2012-13

PEFO

2012-13

Revised

2013-14 2014-15 2015-16

Forward Estimates

128

$000 $000 $000 $000 $000

REVENUE

Taxation revenue 415 967 457 441 476 300 495 156 514 315

Current grants 3 564 063 3 615 613 3 700 360 3 807 944 3 997 531

Capital grants 210 792 230 736 206 217 151 878 104 536

Sales of goods and services 777 496 830 282 961 056 1 014 482 1 027 754

Interest income 64 035 62 299 65 730 69 429 73 180

Dividend and income tax equivalent income 41 146 44 146 38 597 38 161 37 721

Other 174 750 175 658 176 616 176 856 178 245

TOTAL REVENUE 5 248 249 5 416 175 5 624 876 5 753 906 5 933 282

less EXPENSES

Employee benefits expense 1 894 969 1 897 430 1 915 450 1 926 840 1 944 288

Superannuation expenses

Superannuation interest cost 90 512 109 727 106 400 120 811 142 638

Other superannuation expenses 219 853 204 722 218 621 215 575 206 273


Other operating expenses 1 703 234 1 720 634 1 763 297 1 818 941 1 882 978


Other property expenses

Current grants 756 935 776 474 781 485 728 737 762 110

Capital grants 42 402 63 618 64 219 25 869 23 098


TOTAL EXPENSES 5 432 821 5 503 233 5 614 056 5 690 993 5 837 992

equals NET OPERATING BALANCE - 184 572 - 87 058 10 820 62 913 95 290


589 148 16 148 425 002 477 684 217 967

equals OPERATING RESULT 404 576 - 70 910 435 822 540 597 313 257


176 863 176 008 160 710 168 743 178 785


581 439 105 098 596 532 709 340 492 042

NET OPERATING BALANCE - 184 572 - 87 058 10 820 62 913 95 290


Purchases of non financial assets 1 135 456 1 141 135 849 291 740 189 636 012

Sales of non financial assets - 72 748 - 75 048 - 67 334 - 70 804 - 60 354


plus Change in inventories - 661 - 661 - 4 208 - 8 195 - 19 163

plus Other movements in non financial assets - 11 313 - 11 313 512 659 6 869 12 923


equals FISCAL BALANCE - 867 358 - 772 431 - 894 568 - 196 327 - 53 250


129

Table 5.8

Non Financial Public Sector Balance Sheet2012-13 2012-13 2013-14 2014-15 2015-16PEFO Revised Forward Estimates

ASSETS Financial assets Cash and deposits

$000

157 058

$000

186 350

$000

191 281

$000

159 369

$000

180 056Advances paid 262 156 237 701 239 498 240 991 242 160

Investments, loans and placements 702 401 703 151 741 513 778 533 818 221

Receivables

Equity

Investments in other public sector entities

225 239

318 062

270 324

325 064

275 894

338 839

280 997

349 597

284 006

359 449

Investments – other

Other financial assets Total financial assets

103

1 665 019

103

1 722 693

103

1 787 128

103

1 809 590

103

1 883 995


Inventories 115 283 105 513 101 305 93 110 73 947





TOTAL ASSETS 16 211 911 16 520 350 17 645 631 18 099 906 18 503 478

LIABILITIES

Deposits held 88 765 92 388 68 332 55 183 46 374

Advances received 414 080 378 277 369 461 360 101 350 905

Borrowing 4 089 754 4 056 387 4 956 541 5 110 978 5 200 580

Superannuation 2 965 245 3 840 861 3 474 287 3 052 553 2 877 577


Payables 193 863 215 031 207 977 223 663 227 125



NET ASSETS/(LIABILITIES) Contributed equity Accumulated surplus/(deficit)

7 639 378

1 987 518

7 112 802

1 184 271

7 709 334

1 620 093

8 418 674

2 160 690

8 910 716

2 473 947

Reserves 5 651 860 5 928 531 6 089 241 6 257 984 6 436 769

NET WORTH 7 639 378 7 112 802 7 709 334 8 418 674 8 910 716

NET FINANCIAL WORTH1 - 6 907 514 - 7 684 855 - 8 149 169 - 7 871 642 - 7 708 767NET FINANCIAL LIABILITIES2 7 225 576 8 009 919 8 488 008 8 221 239 8 068 216

NET DEBT3 3 470 984 3 399 850 4 222 042 4 347 369 4 357 422

1 Net financial worth equals total financial assets minus total liabilities.2 Net financial liabilities equals the sum of total liabilities less total financial assets excluding investments in other public sector entities.3 Net debt equals the sum of deposits held, advances received and borrowing, minus the sum of cash and deposits, advances paid and

investments, loans and placements.


Table 5.9

Non Financial Public Sector Cash Flow Statement2012-13

PEFO2012-13Revised


130

Cash receipts from operating activities$000 $000 $000 $000 $000

Taxes received 415 967 457 441 476 300 495 156 514 315Receipts from sales of goods and services 834 579 870 865 1 025 542 1 063 714 1 073 710Grants and subsidies received 3 780 455 3 851 949 3 906 577 3 959 822 4 102 067Interest receipts 64 004 62 268 65 702 69 414 73 175Dividends and income tax equivalents 36 694 39 694 40 806 38 165 38 161Other receipts 375 978 376 886 377 142 377 543 378 492Total operating receipts 5 507 677 5 659 103 5 892 069 6 003 814 6 179 920Cash payments for operating activitiesPayments for employees - 2 139 091 -2 147 917 -2 183 740 -2 220 252 -2 259 700Payment for goods and services - 1 993 134 -2 010 534 -2 028 963 -2 069 158 -2 124 998Grants and subsidies paid - 858 888 - 904 493 - 910 961 - 838 137 - 879 967Interest paid - 273 424 - 273 494 - 291 580 - 342 561 - 360 355Other payments - 1 868 - 1 868 - 5 623 - 102 - 369Total operating payments - 5 266 405 -5 338 306 -5 420 867 -5 470 210 -5 625 389NET CASH FLOWS FROM OPERATING ACTIVITIES 241 272 320 797 471 202 533 604 554 531Cash flows from investments in non financial assetsSales of non financial assets 72 748 75 048 67 334 70 804 60 354Purchases of non financial assets - 1 135 456 - 1 141 135 - 849 291 - 740 189 - 636 012Net cash flows from investments in non financial assets - 1 062 708 - 1 066 087 - 781 957 - 669 385 - 575 658NET CASH FROM OPERATING ACTIVITIES AND - 821 436 - 745 290 - 310 755 - 135 781 - 21 127

INVESTMENTS IN NON FINANCIAL ASSETSNet cash flows from investments in financial assets


Net cash flows from investments in financial assets for liquidity purposes

-93 608

342 771

-68 985

342 021

- 1 797

-28 494

- 1 493

-26 566

- 1 169

-28 614

NET CASH FLOWS FROM INVESTING ACTIVITIES - 813 545Net cash flows from financing activitiesAdvances received (net) 145 497Borrowing (net) 688 863Deposits received (net) - 488 639Other financing (net)NET CASH FLOWS FROM FINANCING ACTIVITIES 345 721NET INCREASE/DECREASE IN CASH HELD - 226 552Net cash flows from operating activities 241 272Net cash flows from investments in non financial assets - 1 062 708CASH SURPLUS (+)/DEFICIT (-) - 821 436

- 793 051

109 694655 515

- 484 585

280 624- 191 630

320 797-1 066 087

- 745 290

-812 248

- 8 816 378 849- 24 056

345 9774 931

471 202-781 957- 310 755

-697 444

- 9 360 154 437- 13 149

131 928- 31 912533 604

-669 385- 135 781

-605 441

- 9 19689 602- 8 809

71 59720 687

554 531-575 658-21 127

Future infrastructure and superannuation contributions/ earnings2 -17 392 -17 392 -18 436 -19 543 -20 715

UNDERLYING SURPLUS (+)/DEFICIT (-) - 838 828Additional information to the Cash Flow Statement

-762 682 -329 191 -155 324 -41 842

CASH SURPLUS (+)/DEFICIT (-) - 821 436 - 745 290 - 310 755 - 135 781 - 21 127Acquisitions under finance leases and similar - 521 305

arrangementsABS GFS SURPLUS (+)/DEFICIT (-) including finance - 821 436 - 745 290 - 832 060 - 135 781 - 21 127

leases and similar arrangements similar arrangements

1 Includes equity acquisitions, disposals and privatisations (net).2 Contributions for future infrastructure and superannuation requirements.


131

Table 5.10

General Government Sector Taxes

2012-13PEFO

2012-13Revised

2013-14Forward Estimate

$M $M $M

Taxes on employers’ payroll and labour force 183 191 200

Payroll taxes 183 191 200

Taxes on property 102 131 130

Stamp duties on financial and capital transactions 102 131 130

Taxes on the provision of goods and services 88 88 91

Taxes on gambling 52 52 53

Taxes on insurance 36 36 38

Taxes on the use of goods and performance of activities 52 57 64

Motor vehicle registration fees 52 57 64

TOTAL TAXES 425 466 485

Table 5.11

2012-13 Loan Council AllocationBudget-time Mid-Year

Estimate Estimate$M $M

General government sector cash deficit (+)/surplus (-) 432 491

Public non financial corporations sector cash deficit (+)/surplus (-) 307 254

Non financial public sector cash deficit (+)/surplus (-) 738 745

less Acquisitions under finance leases and similar arrangements

equals ABS GFS cash deficit (+)/surplus (-) 738 745 less Net cash flows from investments in financial assets for policy purposes - 12 -

69 plus Memorandum items

2012-13 LOAN COUNCIL ALLOCATION 750 814

Department of Treasury and Finance 38 Cavenagh StreetGPO Box 1974, Darwin NT 0801Telephone: (08) 8999 7406Facsimile: (08) 8999 7150Website: www.minibudget.nt.gov.au

2012-13 mini budget - treasury.nt.gov.au€¦ · web viewforward estimates. uniform presentation...

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