It gives me great pleasure to present this report on Treasury’s performance for 2008–09.

In my 16 years as Secretary, this has undoubtedly been one of the most challenging, largely, but not solely because of the widespread fallout from the global financial crisis. The fall in GST receipts from a slowing national economy and a steady decline throughout the year in State tax receipts had a significant impact on the financial resources available to Tasmania (and, of course, all other jurisdictions).

Nevertheless, I was extremely pleased with how Treasury managed its tasks and responsibilities during the year, particularly in respect to formulating the 2009–10 State Budget. All agencies, including Treasury, have faced funding reductions. Within Treasury, we have sought to meet this challenge in ways which least impact our core business and therefore the Tasmanian community. For example, a “back-to-basics” theme has been chosen for this year’s Annual Report. By this, we hope to provide the same quality of information as in previous Annual Reports, but at a significantly lower cost. Therefore, while the Annual Report this year might look and feel different to previous years, it still provides a very comprehensive account of our performance during 2008–09.

There were a number of key achievements during the year. While these are outlined in more detail elsewhere in this report there are some that I believe deserve special attention.

Preparing the annual Budget is a key responsibility of any Treasury, so we were all very pleased with the external commentator feedback we received on the presentation of the 2009–10 State Budget papers. Given the considerable pressures under which Budget Management Branch staff and other agency contributors worked in order to prepare the Budget papers, to receive accolades such as the equal “most comprehensive and transparent set of Budget Papers of any government in Australia”¹ was very welcome indeed. The improvement in these papers also fitted well with the Government’s desire for greater overall transparency.

During 2008–09 considerable progress was also made in relation to the historically significant water and sewerage reforms that were, and still are, so badly needed in Tasmania. Of course, these were not introduced without controversy, but it would be a very rare major reform that was. In large part due to the intense effort and diligent work of the Treasury team, the execution and implementation of these reforms was exemplary. To date only minor transitional problems have come to light. I remain firmly of the view that in a few years time the benefits of these reforms will be widely recognised by most Tasmanians as both necessary and efficiently implemented.

One of the major tasks of the water and sewerage taskforce revolved around the creation of four new corporations, which commenced operations as scheduled on 1 July 2009. The work involved in this was substantial and the effort of the staff involved was much appreciated.

Another substantial reform implemented during the year related to the divestment of TOTE Tasmania. Once again, this reform was not without strong debate about the merits of divesting a State-owned business. The outcome of the sale process will be known during the coming year.

Government businesses, including our State-owned Companies, are custodians of substantial assets owned by the Tasmanian people. In most cases, these organisations are an important source of revenue to the State, through dividends, rate equivalent payments and/or guarantee fees. That being the case, the Shareholder Policy and Markets Branch has undertaken a considerable amount of work in relation to governance issues. This has resulted in a number of new guidelines and other publications, details of which can be found elsewhere in this report and on the Treasury website. The Branch has also arranged for an executive search service that is to be used to identify highly qualified candidates for board positions. It is hoped that, over time, this work will produce better governance and performance of the businesses.

During the year it was very pleasing to see the progress that the Revenue Branch made in improving its service delivery through the Business Process and Information Technology and the Standard Business Reporting projects. The aim of the BPIT project is to improve the business processes within the Branch, including in the important area of data matching. The benefits of such improvements include the more efficient collection of taxation revenue with lower compliance costs for taxpayers. The SBR process is a nationwide initiative which will make it easier for businesses to report relevant information to governments.

During the year, Parliament also approved the Audit Act 2008, which strengthens the independence of the Auditor-General, broadens the scope of inquiry in relation to government entities and ensures that entities face consistent reporting and audit responsibilities. The new Act was developed by Treasury after an extensive consultation process with key stakeholders and in close liaison with the Auditor-General, whose assistance was most appreciated.

Our Procurement and Property Branch managed a number of major projects during the year. One of the most exciting of these is the parliament square project, which will see a preferred developer take over the site, part of which has been unoccupied for many years. This project aims to reinvigorate the Parliamentary precinct. The Branch was also given responsibility for the renewal of Princes Wharf Number 1 Shed, well known to most Tasmanians as the venue for the ‘Taste of Tasmania’.

Given the rapidly changing world economic situation, providing economic policy advice to the Government during the year proved challenging. One outcome of this intensive activity is what I hope will be a more widely understood approach to forecasting key indicators of the Tasmanian economy. This approach was used in the preparation of the 2009–10 Budget papers and in the economic briefings provided to the two credit rating agencies.

The Australian Government is the single key source of revenue for states and territories, ranging from 45 per cent of revenues for Western Australia to 80 per cent for the Northern Territory. The distribution of these funds is recommended by the Commonwealth Grants Commission on the basis of detailed assessments of each jurisdiction’s need for financial assistance. Therefore, the excellent work undertaken by staff in our Intergovernment and Financial Policy Branch in the four-year lead up to the 2010 Review of Fiscal Equalisation Relativities is of utmost importance to supporting our revenues and the government services offered to all Tasmanians.

This Branch also took primary responsibility for preparing revenue estimates for the 2009–10 Budget (together with the preparation of key legislation to support Budget measures) and preparing legislation to support the sale of TOTE Tasmania. Overall, this represents an enormous workload for a relatively small policy unit.

Problem gambling is an issue which confronts all jurisdictions. Most people enjoy a harmless flutter on the races and/or the pokies, but for some people gambling can become obsessive, or even an addiction, with serious financial and related consequences for the gambler and their families.

During the year, a good deal of work went into providing advice to the Government on the results of the first regular Social and Economic Impact Study into Gambling in Tasmania. Such a study is undertaken every three years in accordance with the requirements of section 151 of the Gaming Control Act 1993. The Government’s response to the Study was announced in March 2009 and Treasury has provided advice to the Tasmanian Gaming Commission and the Treasurer on how the response should be implemented. Tasmania’s harm minimisation strategies compare favourably with other jurisdictions and in some respects, are ahead of best practice.

Treasury would not be able to achieve these outcomes without the support of the staff in our Corporate Support Division, through timely and high-quality human resource, information technology, information and records management and corporate finance services.

From a human resource perspective, it was therefore pleasing to note the benefits from our 2008–09 leadership pipeline program. The presentations made to senior management by the action learning groups undertaking the pipeline course give every confidence that we have the makings of some very fine leaders in our midst.

We made further improvements to the usability of the electronic document management system that supports our management of records and information which, as reported in the Annual Report last year, is already providing us with significant benefits.

In the finance area we successfully completed an upgrade to our financial management information system and this has led to efficiencies in the management of our financial data.

Information technology is of crucial importance to the way we do our business, manage information and connect with the rest of the world and during 2008–09 we completed a strategic review of our IT infrastructure. During the coming year we will implement the findings of the review to ensure our IT infrastructure will continue to meet our needs.

As noted elsewhere in this report, Treasury was involved in the consideration by Parliament of 15 pieces of legislation. Given that Parliament generally passes about 70 Acts during a year, Treasury’s efforts represent a substantial proportion of Parliament’s formal legislative activity. In addition to these legislative reforms, Treasury is also seeking to lead the way in reducing the amount of primary and subordinate legislation that remains on the statute book. Treasury has adopted a policy of trying to remove unnecessary legislation for which we are responsible whenever new or amending legislation is introduced into Parliament. This is a practice that we hope will be adopted by other State Service agencies.

Notwithstanding the challenging economic and financial environment we faced during 2008–09, Treasury has performed very well and, in doing so, has enhanced the well-being of Tasmanians. I would like to take this opportunity to thank Treasury staff for their efforts during 2008–09. I am confident that we will again be able to deliver on the Government’s priorities during 2009–10.

D W Challen
SECRETARY



¹ Saul Eslake, Tasmanian State Budget 2009–10: Not your typical pre-election budget, 14 June 2009.