2018-19 budget paper 2 - chapter 4 - finance-general (word … · web view2018-07-25 · the...

4 FINANCE-GENERAL

AGENCY OUTLINEThe Finance-General Division is administered by the Department of Treasury and Finance. The major activities transacted through Finance-General include the management of the Government’s financial assets and liabilities, meeting the Government’s pension and other superannuation commitments, administration of the Tasmanian Risk Management Fund, management of the Government’s light vehicle fleet and property portfolio and payments to government businesses.Finance-General also includes funding to assist with the replacement of the Spirits of Tasmania (I and II) within the TT-Line Vessel Replacement Fund and funding for the transformation and replacement of critical agency ICT infrastructure.Certain provisions have been made in the Special Deposits and Trust Fund to meet future liabilities of the Government, including a provision within the Tasmanian Risk Management Fund for workers’ compensation and other insurable risks in respect of inner-Budget agencies. Information on the Government’s superannuation liabilities and administration of the Tasmanian Risk Management Fund is provided in chapter 7 of The Budget Budget Paper No 1.

OUTPUT INFORMATIONOutputs of Finance-General are provided under the following Output Groups: Output Group 1 - Debt Servicing and Management; Output Group 2 - Employee Related Costs; Output Group 3 - Government Businesses; and Output Group 4 - Miscellaneous.Table 4.1 provides an Output Group Expense Summary for Finance-General.

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Table 4.1: Output Group Expense Summary2017-18 2018-19 2019-20 2020-21 2021-22

Forward Forward Forward Budget Budget Estimate Estimate Estimate

$'000 $'000 $'000 $'000 $'000

Treasurer

Output Group 1 - Debt Servicing and Management1.1 Debt Servicing 49 62 35 44 43 1.2 Interest on Sundry Deposits1 1 566 1 838 1 790 2 265 2 762 1.3 Debt Management 7 727 7 384 7 033 6 677 6 316

9 342 9 284 8 858 8 986 9 121 Output Group 2 - Employee Related Costs

2.1 Superannuation and Pensions2 373 734 364 915 362 434 358 989 354 645 373 734 364 915 362 434 358 989 354 645

Output Group 3 - Government Businesses3.1 Sustainable Timber Tasmania 2 000 2 000 2 000 2 000 2 000 3.2 State Fire Commission 2 836 2 836 2 836 2 836 2 836 3.4 Government Businesses3 1 504 1 870 1 355 1 339 1 323

6 340 6 706 6 191 6 175 6 159 Output Group 4 - Miscellaneous

4.2 Treasurer's Reserve 10 000 10 000 10 000 10 000 10 000 4.3 Miscellaneous4 35 891 23 829 33 813 35 346 38 103 4.4 Payment to Australian Tax Office:

GST Administration5 13 289 12 524 9 776 9 727 9 727 4.5 Tasmanian Risk Management Fund6 69 432 66 165 66 834 67 336 70 321 4.6 Fleet Management Services 14 872 13 960 13 868 13 811 13 803 4.7 Property Management Services7 27 509 27 528 30 058 30 614 31 279 4.8 Infrastructure Investment Project Planning 2 000 2 000 2 000 2 000 2 000

172 993 156 006 166 349 168 834 175 233

Grants and Subsidies8 488 923 495 075 368 958 253 992 284 288

Capital Investment Program .... 292 583 583 583

Special Capital Investment Funds9 13 428 7 313 1 084 1 116 624

TOTAL1 064 760

1 039 591 914 457 798 675 830 653

Notes:

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1. The variations in Interest on Sundry Deposits are primarily due to anticipated variations in interest rates and cash balances over the Budget and Forward Estimates period.

2. The decrease in Superannuation and Pensions over the Budget and Forward Estimates period reflects revised actuarial estimates.

3. The increase in Government Businesses in 2018-19 primarily reflects grant funding of $500 000 to Metro Tasmania Pty Ltd for a preliminary study to inform the introduction of a new Derwent River ferry service.

4. The decrease in Miscellaneous in 2018-19 primarily reflects the transfer of the Health Funding Provision of $20 million to the Department of Health. The increases from 2019-20 reflect revised cash flows for the Mobile Radio Network.

5. The decrease in GST Administration costs from 2019-20 reflects the end of the GST Voluntary Compliance Program from 1 July 2019.

6. The variations in Tasmanian Risk Management Fund reflect the most recent actuarial estimates of expenditure and revised cash flows associated with the June 2016 flood event and the major fire claim at the Peacock Centre.

7. The increase in Property Management Services from 2019-20 reflects the inclusion of rent paid for buildings newly leased as a result of the restructure of the property portfolio.

8. The variations in Grants and Subsidies across the Budget and Forward Estimates period primarily reflects cash flow movements in Australian Government Funding expenditure.

9. The decrease in Special Capital Investment Funds reflects the winding down of these funds. Further details are provided in the Special Capital Investment Funds section of this chapter.

Output Group 1: Debt Servicing and Management

1.1 Debt ServicingThis Output provides for the interest cost on the end of year borrowing.

1.2 Interest on Sundry DepositsThis Output provides for the payment of interest on balances held in certain accounts in the Special Deposits and Trust Fund.

1.3 Debt ManagementThis Output reflects transactions associated with the repayment of Australian Government debt relating to housing activities. The expense of $7.4 million in 2018-19 ($7.7 million in 2017-18) represents interest payments to the Australian Government on debt incurred under various Commonwealth-State Housing Agreements.Principal repayments by Housing Tasmania of $7.9 million in 2018-19 ($7.8 million in 2017-18) are capital transactions and are therefore not included in the expenses of Output 1.3, or in the expenses reported in the Statement of Comprehensive Income, but are reflected within Interest bearing liabilities in the Statement of Financial Position and included under Cash flows from investing activities in the Statement of Cash Flows.

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Output Group 2: Employee Related Costs

2.1 Superannuation and PensionsThis Output meets the Government’s share of pension and superannuation costs.In 2018-19, superannuation and pension expenses are estimated to total $364.9 million, an anticipated decrease of $8.8 million in comparison with the budgeted cost in 2017-18 of $373.7 million. The 2018-19 estimate includes service costs of $93.7 million ($88.1 million in 2017-18) and nominal interest of $271.3 million ($285.6 million in 2017-18). The estimated value of the expense is based on the most recent actuarial assessment of the superannuation liability.

92 Finance-General

The estimated superannuation liability as at 30 June 2019 is $6 874.9 million (excluding the estimated Housing Tasmania pre-July 1994 superannuation liability of $8.7 million as at 30 June 2019, the estimated Tasmanian Ambulance Services Superannuation Scheme liability of negative $11.1 million as at 30 June 2019 and the estimated State Fire Commission superannuation liability of negative $4.4 million as at 30 June 2019). This is an increase of $611.4 million from the 2017-18 estimate of the liability as at 30 June 2018 of $6 263.5 million. The estimated value reflects the most recent actuarial assessment of the liability. Further information in relation to the General Government superannuation liability can be found in chapter 7 of The Budget Budget Paper No 1.

Output Group 3: Government Businesses

3.1 Sustainable Timber TasmaniaThe 2018-19 Budget provides funding of $2 million in 2018-19 ($2 million in 2017-18) and subsequent years to Sustainable Timber Tasmania to maintain its fire fighting capacity and assist with fighting wild fires.

3.2 State Fire CommissionA provision of $2.8 million has been made for the State Fire Commission in 2018-19 and subsequent years ($2.8 million in 2017-18). Of this amount, a provision of $790 000 has been made for the Bushfire Mitigation Program and $240 000 has been appropriated as a contingent provision for funding excess fire fighting costs. This represents base additional funding for bushfire fighting costs. Due to the uncertain nature of these costs from year to year, it is established practice that additional funding is provided as required in response to the actual costs incurred by the Commission. The remaining $1.8 million represents the State Government’s annual funding contribution to the Commission in accordance with section 101 of the Fire Service Act 1979. Further information in relation to the State Fire Commission can be found in chapter 25 of this Budget Paper.

3.4 Government BusinessesThis Output provides for expenses arising from the Government’s ownership interests in Government businesses.An amount of $1.4 million is being provided in 2018-19 ($1.5 million in 2017-18) in accordance with the Government’s agreement to reimburse Tasracing Pty Ltd for the costs (including principal where necessary) associated with Tasracing’s borrowings with the Tasmanian Public Finance Corporation, where Tasracing cannot meet those costs. The 2018-19 Budget also provides grant funding of $500 000 to Metro Tasmania Pty Ltd, for a preliminary study to inform the introduction of a new Derwent River ferry service.

Finance-General 93

Output Group 4: Miscellaneous4.2 Treasurer’s Reserve

An amount of $10 million has been provided in the Treasurer’s Reserve in 2018-19 ($10 million in 2017-18) to meet expenditure that could not reasonably be foreseen at the time of developing the 2018-19 Budget and which is essential for efficient financial management.

4.3 MiscellaneousItems of expenditure under this Output relate to various miscellaneous payments, including the Mobile Radio Network, Government Business Reviews and Tasmanian Cycle Tourism Strategy.

Mobile Radio Network

An amount of $15 million is provided in 2018-19 ($8 million in 2017-18) for the funding of the whole-of-government Mobile Radio Network upgrade administered by the Department of Police, Fire and Emergency Management. The increase reflects the anticipated cash flows for the Project.

Government Business Structural Reviews

Funding of $1.1 million has been provided in 2018-19 to provide for costs associated with structural reviews relating to the Government business portfolio. This will include the continuation of the review of the regulated wholesale electricity pricing framework as part of the Government’s commitment to de link from the volatility in the Victorian market. Other reviews will include a capital structure review of Tasmanian Irrigation to ensure that the company remains on a sustainable basis while delivering the Government’s policy irrigation objections.

Tasmanian Cycling Tourism Strategy

As part of the Government’s T21 - Tasmanian Visitor Economy Strategy 2015-2020, a Cycle Tourism Strategy was developed. Funding of $3.1 million is available in 2018-19 to support the Government’s Strategy.

4.4 Payment to Australian Taxation Office: GST AdministrationUnder the Intergovernmental Agreement, the states and territories meet the costs of the Australian Taxation Office in administering the goods and services tax. The states and territories share the GST administration costs on a per capita basis. Tasmania’s contribution to collection and compliance costs for 2018-19 is estimated at $12.5 million ($13.3 million in 2017-18).

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4.5 Tasmanian Risk Management FundThe estimated expenses of $66.2 million in 2018-19 ($69.4 million in 2017-18) represent anticipated claim and administration costs. Claim expenditure estimates for the Fund reflect the most recent actuarial advice. The variation in estimated expenses between 2017-18 and 2018-19 is mainly attributed to the re-projection over future years of costs associated with the June 2016 flood event and a major fire claim at the Peacock Centre. Some costs relating to these property claims are being recovered through the Industrial Special Risks Insurance Policy (purchased in the external insurance market to cover catastrophic risk for State-owned assets) and the Natural Disaster Relief and Recovery Arrangements.

4.6 Fleet Management ServicesAll direct transactions associated with whole-of-government light vehicle fleet management activities are recorded in the Government Car Fleet Account within the Special Deposits and Trust Fund. Revenue in the Government Car Fleet Account is derived from the sale of vehicles and receipts from the Government’s Fleet Manager of lease, registration and insurance payments by agencies, net of the fleet management fee. Estimated expenses for this Output in 2018-19 of $14 million ($14.9 million in 2017-18) include motor vehicle registration expenses of $1.1 million ($1.1 million in 2017-18) and estimated depreciation on motor vehicles of $12.8 million ($13.8 million in 2017-18).

4.7 Property Management ServicesIt is estimated that expenditure for Property Management Services will amount to $27.5 million in 2018-19 ($27.5 million in 2017-18), which primarily reflects depreciation of $3.8 million ($3.7 million in 2017-18), and rental and other occupancy costs totalling $23.6 million ($23.7 million in 2017-18).The first stage of the implementation of centralised management and coordination of major office accommodation leases for Government, within the Hobart CBD, has been fully implemented. This strategic approach to major leases is enabling more efficient and effective management of the Government’s leased office accommodation in the Hobart CBD. Treasury has made significant progress on the second stage of centralised property management to consolidate major office accommodation leases in Launceston. Treasury is working with agencies to ensure that all leases are reviewed leading up to expiry to achieve the best use of office space and optimise whole-of-government outcomes in relation to more efficient and effective management of the Government’s leased office accommodation. Further strategic divestments of the State’s property portfolio proposed by the Government will be managed, by Treasury, on a case by case basis to improve the State’s social and economic outcomes.

Finance-General 95

4.8 Infrastructure Investment Project PlanningThe Infrastructure Investment Project Planning Output provides funding of $2 million in 2018-19 ($2 million in 2017-18) and subsequent years for the early planning stages of major infrastructure projects as part of the Structured Infrastructure Investment Review Process.

96 Finance-General

SPECIAL CAPITAL INVESTMENT FUNDS Within Finance-General, some specifically identified funds are held for investment in economic and social infrastructure. This section provides a description and the balance of each Fund and the projects to be funded in 2018-19 and over the Forward Estimates period.

Hospitals Capital FundThe Hospitals Capital Fund was established in 2007-08 to provide capital funding for hospitals across the State. In 2018-19, a total amount of $1.1 million has been allocated for Mersey Hospital Upgrades.

Table 4.2: Hospitals Capital FundEstimate

dTotalCost

2018-19

Budget

2019-20ForwardEstimate



$'000 $'000 $'000 $'000 $'000

Balance Brought Forward 1 064 9 9 9

TOTAL SOURCE OF FUNDS 1 064 9 9 9

OUTFLOWSDepartment of Health

Minister for HealthMersey Hospital Upgrades 1 900 1 055 .... .... ....

TOTAL OUTFLOWS 1 055 .... .... ....

Closing Balance ) 9 9 9 9

Finance-General 97

Housing FundThe Housing Fund was established in 2007-08, with an allocation of $60 million for the purpose of increasing the supply of public housing. In 2018-19, it is anticipated that $1.1 million will be expended from the Housing Fund on public housing projects.Further detail on Housing Fund expenditure in 2018-19 is provided in chapter 2 of this Budget Paper.

Table 4.3: Housing FundEstimate

dTotalCost

2018-19

Budget




$'000 $'000 $'000 $'000 $'000

Balance Brought Forward 3 877 2 824 1 740 624

TOTAL SOURCE OF FUNDS 3 877 2 824 1 740 624

OUTFLOWSDepartment of Communities Tasmania

Minister for HousingHousing Fund 60 000 1 053 1 084 1 116 624

TOTAL OUTFLOWS 1 053 1 084 1 116 624

Closing Balance ) 2 824 1 740 624 ….

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Infrastructure Tasmania FundThe Infrastructure Tasmania Fund was established in 2007-08, with proceeds of $312.9 million from the divestment of government businesses, to fund major capital projects. During 2007-08, $80 million was transferred from the ITF to the Water Infrastructure Fund administered by the Department of Primary Industries, Parks, Water and Environment and $25 million was transferred to the former Urban Renewal and Heritage Fund.Details of projects to be funded from the ITF in 2018-19 are provided in chapter 5 of this Budget Paper.

Table 4.4: Infrastructure Tasmania FundEstimate

dTotalCost

2018-19

Budget




$'000 $'000 $'000 $'000 $'000

Balance Brought Forward 6 013 808 808 808

TOTAL SOURCE OF FUNDS 6 013 808 808 808

OUTFLOWSDepartment of Health

Minister for HealthHealth Infrastructure 67 410 5 205 .... .... ....

TOTAL OUTFLOWS 5 205 .... .... ....

Closing Balance1 ) 808 808 808 808

Note:1. The allocation of the residual funds will be considered as part of future Budgets based upon funding

required for the completion of the ITF projects.

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CAPITAL INVESTMENT PROGRAMTable 4.5 provides financial information for Finance-General’s Capital Investment Program. Further information on these key deliverables is provided in chapter 6 of The Budget Budget Paper No 1.

Table 4.5: Capital Investment ProgramEstimate

d 2018-19 2019-20 2020-21 2021-22 Total Forward Forward Forward Cost Budget Estimate Estimate Estimate

$'000 $'000 $'000 $'000 $'000

Existing Infrastructure Commitments

TreasurerDigital Transformation - Project Unify 11 888 7 798 2 334 .... .... Digital Transformation Priority Expenditure

Program Ongoing 10 000 10 000 10 000 10 000 Launceston Government Office

Accommodation 7 000 7 000 .... .... ....

Total CIP Allocations 24 798 12 334 10 000 10 000

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DETAILED BUDGET STATEMENTSTable 4.6: Statement of Comprehensive Income - Administered

2017-18 2018-19 2019-20 2020-21 2021-22 Forward Forward Forward

Budget Budget Estimate Estimate Estimate $'000 $'000 $'000 $'000 $'000

Revenue and other income from transactions

Appropriation revenue - recurrent1 599 360 574 842 611 764 627 184 642 562 Appropriation revenue - works & services 27 718 24 798 12 334 10 000 10 000 Grants2 3 259 251 3 420 301 3 361 722 3 442 890 3 600 413 Taxation3 1 021 245 1 103 100 1 130 912 1 152 909 1 175 762 Sales of goods and services4 90 362 98 344 103 252 106 191 109 549 Interest 21 353 19 645 14 705 13 654 14 221 Dividend, tax and rate equivalent income5 358 418 409 749 391 580 369 874 368 931 Other revenue 109 723 108 948 106 765 107 305 106 430

Total revenue and other income from transactions

5 487 430

5 759 727

5 733 034

5 830 007

6 027 868

Expenses from transactionsEmployee benefits 373 534 364 715 362 234 358 789 354 445 Depreciation and amortisation 17 510 16 969 17 163 17 100 17 087 Supplies and consumables 136 664 117 753 119 723 119 238 121 500 Grants and subsidies6 527 540 528 680 402 263 287 114 316 554 Borrowing costs 9 512 9 484 9 058 9 186 9 321 Transfers to the Consolidated Fund 4 654 131 4 965 819 5 083 805 5 036 521 5 126 016 Other expenses7 .... 1 990 4 016 7 248 11 746

Total expenses from transactions5 718 891

6 005 410

5 998 262

5 835 196

5 956 669

Net result from transactions (net operating balance) (231 461) (245 683) (265 228) (5 189) 71 199

Other economic flows included in net resultNet gain/(loss) on non-financial assets 2 291 1 977 2 459 3 259 3 619 Movement in investments in GBEs and SOCs8 (104 198) (93 726) (35 640) (6 507) 15 002 Other gains/(losses) from other economic

flows9 15 683 1 511 121 200 4 926 Total other economic flows included in net result (86 224) (90 238) (33 060) (3 048) 23 547

Net result (317 685) (335 921) (298 288) (8 237) 94 746

Finance-General 101

102 Finance-General

Table 4.6: Statement of Comprehensive Income - Administered (continued)



Other economic flows - other non-owner changes in equityOther movements taken directly to equity (2) (2) (2) (2) (2)

Total other economic flows - other non-owner changes in equity (2) (2) (2) (2) (2)

Comprehensive result (317 687) (335 923) (298 290) (8 239) 94 744

Notes:1. Explanations for significant variances and further information can be found in Table 4.7 Revenue from

Appropriation by Output.2. Grants represents funding from the Australian Government in the form of GST receipts, National

Partnership Payments and Specific Purpose Payments. Further information on Australian Government Funding can be found in chapter 5 of The Budget Budget Paper No 1.

3. Further information regarding Taxation can be found in chapter 5 of The Budget Budget Paper No 1.4. The increase in Sales of goods and services primarily reflects the most recent actuarial estimates for

the Tasmanian Risk Management Fund. 5. Further information on Dividend, tax and rate equivalent income can be found in chapter 5 of The

Budget Budget Paper No 1.6. The variation in Grants and subsidies reflects the timing of cash flows for programs funded by the

Australian Government.7. This represents a provision for the indexation of additional agency expenditure that has been

allocated since the finalisation of the Revised Estimates Report 2017-18 (including December Quarterly Report). For further information, see chapter 1 of this Budget Paper.

8. Movement in investments in GBEs and SOCs represents the estimated change in the value of net assets of government businesses, excluding any equity contributions, between 1 July and 30 June each year.

9. Other gains/(losses) from other economic flows represents the estimated change in deferred tax assets and liabilities held by government businesses.

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Table 4.7: Revenue from Appropriation by Output2017-18 2018-19 2019-20 2020-21 2021-22


$'000 $'000 $'000 $'000 $'000

Treasurer

Output Group 1 - Debt Servicing and Management

1.1 Debt Servicing 12 37 62 35 44 1.2 Interest on Sundry Deposits 5 600 6 273 6 412 7 727 8 937

5 612 6 310 6 474 7 762 8 981 Output Group 2 - Employee Related Costs

2.1 Superannuation and Pensions 441 350 350 350 350 2.3 Provision for 27th Pay 6 707 6 707 6 707 6 707 6 707

7 148 7 057 7 057 7 057 7 057 Output Group 3 - Government Businesses

3.1 Sustainable Timber Tasmania 2 000 2 000 2 000 2 000 2 000 3.2 State Fire Commission 2 836 2 836 2 836 2 836 2 836 3.4 Government Businesses1 23 504 48 870 61 805 64 039 62 023

28 340 53 706 66 641 68 875 66 859 Output Group 4 - Miscellaneous

4.3 Miscellaneous2 35 891 23 829 33 813 35 346 38 103 4.4 Payment to Australian Tax Office: GST

Administration 13 289 12 524 9 776 9 727 9 727 4.7 Property Management Services3 11 394 29 964 8 732 8 804 8 891 4.8 Infrastructure Investment Project Planning 2 000 2 000 2 000 2 000 2 000

62 574 68 317 54 321 55 877 58 721

Grants and Subsidies 185 276 129 832 152 460 149 590 151 536

Capital Investment Program 27 718 24 798 12 334 10 000 10 000

Finance-GeneralTotal Recurrent Services 288 950 265 222 286 953 289 161 293 154 Total Works and Services 27 718 24 798 12 334 10 000 10 000

316 668 290 020 299 287 299 161 303 154

104 Finance-General

Table 4.7: Revenue from Appropriation by Output (continued)



Reserved by LawAppropriation to the Treasurer's Reserve

(Public Account Act 1986) 10 000 10 000 10 000 10 000 10 000 Payments to Municipalities under the Local

Government (Rates and Charges Remissions) Act 1991 17 355 17 963 18 593 19 244 19 244

Payments under the Retirement Benefits (Parliamentary Superannuation) Regulations 2012 1 016 1 002 996 991 985

Superannuation Benefits Payable under the Governor of Tasmania Act 1982 112 112 113 113 113

Superannuation Benefits Payable under the Judges' Contributory Pensions Act 1968 2 096 2 089 2 105 2 113 2 115

Superannuation Benefits Payable under the Public Sector Superannuation Reform Act 2016 279 564 278 188 292 736 305 293 316 682

Superannuation Benefits Payable under the Solicitor-General Act 1983 267 266 268 269 269

310 410 309 620 324 811 338 023 349 408

Total Revenue from Appropriation 627 078 599 640 624 098 637 184 652 562

Administered Revenue from Appropriation 627 078 599 640 624 098 637 184 652 562 627 078 599 640 624 098 637 184 652 562

Notes:1. The increase in 2018-19 for Government Businesses primarily reflects a contribution of $20 million to

support TasWater’s 10 year capital program. The increase in 2019-20 primarily reflects the transfer of $15 million in rail infrastructure funding, which was previously held within the Department of State Growth.

2. The decrease in 2018-19 for Miscellaneous primarily reflects the transfer of the Health Funding Provision of $20 million to the Department of Health. The increase from 2019-20 reflects a provision for the indexation of additional agency expenditure that has been allocated since the finalisation of the Revised Estimates Report 2017-18 (including December Quarterly Report). For further information see chapter 1 of this Budget Paper.

3. The increase in 2018-19 for Property Management Services reflects funding for the purchase of 21 Kirksway Place as part of the Government’s public sector superannuation reforms.

Finance-General 105

Table 4.8: Administered Expenses2017-18 2018-19 2019-20 2020-21 2021-22


$'000 $'000 $'000 $'000 $'000

Grants and SubsidiesEnergy Retailer Concession 40 980 43 583 44 821 46 049 47 320 First Home Builder Assistance1 13 440 9 130 4 710 2 880 2 880 Launceston Flood Levee 1 000 .... .... .... .... Local Government: Grants2 77 213 45 099 83 255 83 916 86 638 Management of Australian Government

Funding3 280 494 347 248 197 871 85 124 113 474 Natural Disaster Relief Scheme4 12 731 532 532 532 532 Other Grants and Subsidies5 26 030 16 532 2 034 34 34 Payments under Local Government (Rates and

Charges Remissions) Act 1991 17 355 17 963 18 593 19 244 19 244 Payroll Tax Assistance6 4 215 5 856 7 806 6 668 4 408 Tasmanian Forestry Agreement7 5 768 .... .... .... .... TT-Line Pensioner Concession Subsidy 285 297 312 327 342 Water and Sewerage Concessions and

Subsidies 9 412 8 835 9 024 9 218 9 416 488 923 495 075 368 958 253 992 284 288

Transfer to the Consolidated Fund4 654 131

4 965 819

5 083 805

5 036 521

5 126 016

Other Administered Expenses 575 837 544 516 545 499 544 683 546 365

Total Administered Expenses5 718 891

6 005 410

5 998 262

5 835 196

5 956 669

Notes:1. From 1 July 2018 to 30 June 2019, the Government has extended the availability of the First Home

Owner Grant of $20 000. The estimated cash flows reflect the extension of the scheme, the winding down of previous schemes and a lower number of claims made against those schemes.

2. The decrease in Local Government Grant expenditure primarily reflects an advance payment of $36.8 million relating to the 2018-19 entitlement which will be received and paid to councils in 2017-18.

3. The variation in Management of Australian Government Funding is primarily related to the timing of the receipt of grant funding from the Australian Government and the payment of grants.

4. The decrease in Natural Disaster Relief Scheme in 2018-19 is due to the finalisation of costs associated with the June 2016 flood event, February 2016 flood event and the January 2016 bushfire event.

5. The decrease in Other Grants and Subsidies across the Budget and forward estimates primarily reflects the finalisation of support for Copper Mines of Tasmania in 2018-19 and cessation of the Energy Rebates for Business in 2019-20.

6. The variation in Payroll Tax Assistance primarily reflects the extension of the payroll tax rebate scheme for apprentices and trainees in specific industries.

7. The decrease from 2018-19 for the Tasmanian Forestry Agreement reflects the transfer of residual funds to the Department of State Growth.

106 Finance-General

Finance-General 107

Energy Retailer ConcessionIn accordance with the Electricity Supply Industry Act 1995, the Government has entered into a Community Service Obligation Agreement with Aurora Energy Pty Ltd to provide a range of concessions to eligible low income households and pensioners to assist them in meeting the costs of electricity provided by Aurora Energy Pty Ltd. The increase in the Energy Retailer Concession over the Budget and Forward Estimates period reflects expected increases in the number of households in receipt of the annual electricity concession and changes in electricity prices.

First Home Builder AssistanceFrom 1 July 2018 until 30 June 2019, the Government has extended the First Home Owner Grant of $20 000, which is expected to support ongoing demand for newly constructed homes by first home buyers.

Local Government GrantsLocal Government Grants includes funding under the Australian Local Government (Financial Assistance) Act 1995, whereby the Australian Government provides funds to the states for on-passing as general purpose grants to local government. This funding includes general purpose funding and identified local road funding.This item also includes funding provided by the Government for the Accelerated Local Government Capital Program to support expanded investment in infrastructure by local government authorities, particularly in rural and regional areas, through the provision of targeted loan interest rebates.This item also includes funding for the City Deal Tamar River Catchment Projects of $3.5 million over the next four years timed to coincide with the commencement of the State’s partnership with TasWater on 1 January 2019. This will be the first stage of delivering on the $10 million program of recommended catchment actions proposed by the Tamar Estuary Management Taskforce. As part of the City Deal for Launceston, the TEMT has developed a River Health Action Plan with a total proposed investment of $95 million which included $85 million towards upgrades of the combined system and $10 million towards catchment actions with a recommendation they be cash-flowed at $1 million per annum.The Australian Government has committed $47.5 million towards the combined system projects with funding to begin in 2019-20 over five years. In the recently signed Memorandum of Understanding, the State Government and TasWater committed to working together to finalise the investment into the capital projects associated with the combined system as the timing of these projects needs to be in conjunction with the already proposed waste water treatment plant upgrades contained in TasWater’s 10 year plan.

108 Finance-General

Natural Disaster Relief SchemeA Tasmanian Natural Disaster Relief Scheme, administered by the Department of Premier and Cabinet, is funded within Finance-General. This Scheme provides for payments to local government authorities that face the eligible costs of restoring or replacing essential public assets, which have been damaged as a direct result of a disaster, to a pre-disaster standard. Disasters for which relief is available are determined at the national level and include any one of, or a combination of, the following natural hazards: bushfire; earthquake; flood; storm; cyclone; storm surge; landslide; tsunami; meteorite strike or tornado.A provision of $532 000 has been included in the 2018-19 Budget and forward estimates ($12.7 million in 2017-18 related to the June 2016 flood event, February 2016 flood event and the January 2016 bushfire event) for payments that may be made under the Natural Disaster Relief Scheme.

Other Grants and SubsidiesFunding of $18.6 million has been provided for Other Grants and Subsidies across the Budget and Forward Estimates period. This includes $3.5 million for Copper Mines of Tasmania in 2018-19 and $15 million over two years for Energy Rebates for Business. Further information is provided in chapter 12 of this Budget Paper.

Payments under Local Government (Rates and Charges Remissions) Act 1991In accordance with the provisions of the Local Government (Rates and Charges Remissions) Act 1991, the pensioner rates remission scheme provides a remission of 30 per cent off council rates and charges, up to a defined maximum annual amount for eligible pensioners. The maximum remission is indexed annually to ensure that rate relief increases in line with inflation.

Payroll Tax AssistanceThe purpose of this grant is to provide financial assistance to organisations, subject to various eligibility criteria being met. Some organisations receive assistance by way of grants equivalent to their payroll tax liability and are entitled to assistance when their payroll expenditure exceeds the threshold limit, currently $1.25 million per annum.

Payroll Tax Rebate (Trainees, Apprentices and Youth)Funding of $20.7 million is provided over the Budget and Forward Estimates period for a targeted Payroll Tax Rebate for apprentices, trainees and youth employees. This scheme provides a payroll tax rebate for two years from the date that apprentices and trainees are employed, and one year from the date that youth employees are employed, where they are employed between 1 July 2017 and 30 June 2019. The scheme will remain open to new apprentices and trainees employed in identified skill shortage areas between 1 July 2019 and 30 June 2021. Expenditure is expected

Finance-General 109

to peak in 2019-20, reflecting the expected peak in the number of eligible employees in the scheme at the one time. Expenditure will gradually decrease from 2020-21 as apprentices and trainees complete their training and the period of the exemption for youth employees concludes.

110 Finance-General

Qantas Airways LimitedThe Government is continuing its financial assistance package to Qantas, including payroll tax relief of $1 million per annum for nine years from 2015-16, ending with a final reimbursement of $250 000 in 2024-25. This payroll tax relief is part of a broader agreement with Qantas to secure existing Qantas Contact Centre positions and, through the consolidation of Australia-wide operations, provides for increased employment at the Hobart Contact Centre.

TT-Line Pensioner Concession SubsidyThe Government provides a subsidy to TT-Line Company Pty Ltd for the additional cost of providing concession arrangements to pensioners following an extension by the Australian Government, from 1 April 1993, of eligibility for the Pensioner Concession Card.

Water and Sewerage Concessions and SubsidiesUnder the Water and Sewerage Industry (Community Service Obligation) Act 2009, concessions are made available to eligible low income households and pensioners to assist them in meeting the cost of services provided by Tasmanian Water and Sewerage Pty Ltd. Payments are made to TasWater which passes the benefit on to eligible concession card holders as lower service charges.

Finance-General 111

Table 4.9: Statement of Financial Position as at 30 June - Administered

2018 2019 2020 2021 2022 Forward Forward Forward


AssetsFinancial assets

Cash and deposits 1 094 397 911 871 797 920 814 028 840 784 Investments 170 629 202 575 245 853 250 089 244 480 Receivables 87 611 96 474 96 474 96 474 96 474 Equity investments1 5 654 024 5 418 334 5 463 514 5 524 707 5 615 409 Other financial assets2 797 243 780 132 802 932 817 740 835 277

7 803 904

7 409 386

7 406 693

7 503 038

7 632 424

Non-financial assetsAssets held for sale 912 624 624 624 624 Property, plant and equipment3 138 662 154 248 151 389 129 985 129 220 Infrastructure 17 218 29 554 41 888 51 888 61 888 Other assets 1 080 1 028 1 028 1 028 1 028

157 872 185 454 194 929 183 525 192 760

Total assets7 961 776

7 594 840

7 601 622

7 686 563

7 825 184

LiabilitiesPayables 13 394 16 198 15 916 15 708 15 495 Interest bearing liabilities4 1 152 117 1 121 466 1 354 042 1 390 658 1 393 705 Superannuation5 6 263 508 6 874 877 6 940 743 6 990 603 7 024 734 Other liabilities 256 984 256 635 263 547 270 459 277 371

Total liabilities7 686 003

8 269 176

8 574 248

8 667 428

8 711 305

Net assets (liabilities) 275 773 (674 336) (972 626) (980 865) (886 121)

EquityReserves 22 384 22 384 22 384 22 384 22 384

Accumulated funds 253 389 (696 720) (995 010)(1 003

249) (908 505)Total equity 275 773 (674 336) (972 626) (980 865) (886 121)

Notes:1. Equity investments represents the Government’s equity interest in government businesses measured

as the consolidated value of their net assets.

112 Finance-General

2. The movement in Other financial assets represents the estimated movement of deferred tax assets and liabilities held by government businesses.

3. The increase in Property, plant and equipment primarily reflects the purchase of 21 Kirksway Place as part of the Government’s public sector superannuation reforms.

4. Interest bearing liabilities as at 30 June 2019 consists of Australian Government borrowings of $157.6 million incurred under various Commonwealth - State Housing Agreements, estimated end of year borrowings of $507.5 million through Tascorp and deposits of $456.3 million held on behalf of agencies in the Special Deposits and Trust Fund.

5. The increase in the Superannuation liability reflects the most recent actuarial estimates of the liability. Further information on Superannuation is included in chapter 7 of The Budget Budget Paper No 1.

Table 4.10: Statement of Cash Flows - Administered2017-18 2018-19 2019-20 2020-21 2021-22


$'000 $'000 $'000 $'000 $'000

Cash flows from operating activitiesCash inflows

Appropriation receipts - recurrent 599 360 574 842 611 764 627 184 642 562 Appropriation receipts - capital 27 718 24 798 12 334 10 000 10 000 Grants 3 259 251 3 420 301 3 361 722 3 442 890 3 600 413 Taxation 1 022 300 1 103 968 1 131 151 1 153 725 1 176 317 Sales of goods and services 90 362 98 344 103 252 106 191 109 549 GST receipts 13 500 13 500 13 500 13 500 13 500 Interest received 21 298 19 638 14 748 13 605 14 191 Dividends received 372 420 411 950 375 277 361 157 362 453 Other cash receipts 109 723 108 948 106 765 107 305 106 430

Total cash inflows5 515 932

5 776 289

5 730 513

5 835 557

6 035 415

Cash outflowsSuperannuation (283 296) (281 807) (296 368) (308 929) (320 314)Borrowing costs (9 486) (9 447) (9 088) (9 142) (9 282)GST payments (13 500) (13 500) (13 500) (13 500) (13 500)Grants and subsidies (527 540) (528 680) (402 263) (287 114) (316 554)

Transfers to the Consolidated Fund(4 654

131)(4 965

819)(5 083

805)(5 036

521)(5 126

016)Supplies and consumables (136 664) (117 753) (119 723) (119 238) (121 500)Other cash payments .... (1 990) (4 016) (7 248) (11 746)

Total cash outflows(5 624

617)(5 918

996)(5 928

763)(5 781

692)(5 918

912)

Net cash from (used by) operating activities (108 685) (142 707) (198 250) 53 865 116 503

Cash flows from investing activitiesPayments for acquisition of non-financial

assets (58 938) (74 390) (40 880) (39 938) (40 564)

Finance-General 113

Proceeds from the disposal of non-financial assets 16 251 16 300 16 700 37 500 17 860

Equity injections and cash flows from restructuring (54 779) (94 650) (80 820) (67 700) (75 700)

Net advances paid 8 642 8 749 8 512 8 617 8 754 Net receipts/(payments) for investments .... (40 504) (51 789) (12 852) (3 144)

Net cash from (used by) investing activities (88 824) (184 495) (148 277) (74 373) (92 794)

114 Finance-General

Table 4.10: Statement of Cash Flows - Administered (continued)



Cash flows from financing activitiesNet borrowings 124 970 132 488 232 576 36 616 3 047

Net cash from (used by) financing activities 124 970 132 488 232 576 36 616 3 047

Net increase (decrease) in cash and cash equivalents held (72 539) (194 714) (113 951) 16 108 26 756

Cash and deposits at the beginning of the reporting period

1 166 936

1 106 585 911 871 797 920 814 028

Cash and deposits at the end of the reporting period

1 094 397 911 871 797 920 814 028 840 784

Finance-General 115

2018-19 budget paper 2 - chapter 4 - finance-general (word … · web view2018-07-25 · the...

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