1 Introduction

Key Issues

       This Budget Paper provides information on an entity‑by‑entity basis that supports the whole‑of‑government information that is provided in The Budget Budget Paper No 1.

       Information is provided in two volumes. Volume 1 comprises Government Departments and volume 2 comprises other Budget Sector entities.

       The information detailed in this Budget Paper reflects the important strategies being implemented by the Government in the 2015‑16 Budget to achieve its policy priorities and its Fiscal Strategy.

       Other information provided in this Budget Paper includes:

-  information on key deliverables being undertaken by entities, including critical deliverables under the Government's 365 Day Plan;

-  details of the Outputs (goods and services) the Government will deliver through departments, agencies and General Government Sector statutory authorities;

-  information which assists in assessing the performance of agencies in delivering Outputs;

-  details of infrastructure projects being undertaken by agencies; and

-  detailed financial statements for the 2015‑16 Budget and Forward Estimates period.

       A summary of some of the important across‑agency issues affecting the Budget information provided by agencies is included in this introductory chapter.

       Detailed information that assists in understanding the financial and other information provided in this Budget Paper and The Budget Budget Paper No 1, is provided in the Guide to the Budget available at www.treasury.tas.gov.au.

 


The 2015‑16 Budget

The information included in this Budget Paper supports the whole‑of‑government information that is provided in The Budget Budget Paper No 1. Budget Paper No 1 also provides important context for the information in this document, including the Government's Budget priorities, the economic environment, the Government's Fiscal Strategy and the major risks to the current Budget estimates. Key points from Budget Paper No 1 are:

       the 2015-16 Budget continues the work started by the Government in the 2014‑15 Budget to return the Budget to a sustainable long‑term position. It builds on the momentum that has been created by the implementation of 2014 election commitments and the Government's 365 Day Plan through the provision of significant additional funding to support the economy and jobs growth and improve services to the Tasmanian community;

       the 2015-16 Budget and Forward Estimates presented in this Budget Paper show that the General Government Net Operating Balance is expected to return to a surplus in 2016-17 which is three years ahead of the Government's target of 2019‑20 as set out in the Government's first Budget. Furthermore, it is no longer expected that the General Government Sector will return to a Net Debt position. Instead, by the end of the current Forward Estimates period, on 30 June 2019, Net Cash and Investments will be $493 million;

       the improvement in the Government's Budget position largely reflects a number of significant factors such as the implementation of structural savings in the Government's first Budget and the impact of Government decisions to constrain expenditure growth, consistent with its Fiscal Strategy. The improvement also reflects higher than expected GST revenues, although revenue growth still remains well below long‑run trend levels;

       this improvement has been achieved while delivering on the Government commitment to implement no new additional structural savings in the 2015-16 Budget;

       the 2015-16 Budget has been prepared in an economic environment that has seen increased activity and jobs growth and high levels of business confidence. However, the economic recovery is uneven across Tasmania and remains challenging in some regions. Addressing this situation has been prioritised in this Budget;

       over the 2015-16 Budget and Forward Estimates period, Government investment in infrastructure is estimated to total $1.8 billion which includes $179 million of new infrastructure funding including an additional $56 million for schools and LINCs and funding of $60 million to support major infrastructure projects in the North and North West of the State; and

       there continue to be a number of risks to the achievement of the 2015-16 Budget and Forward Estimates. The Government remains fully committed to the ongoing implementation of all aspects of its Fiscal Strategy and to ensuring that its financial management decisions reflect an appropriate balance between the requirements of the Budget position, the potential impact of the external financial and economic environment and the needs of the Tasmanian community.


 

Budget Paper No 2 Information

This Budget Paper provides information, on an entity‑by‑entity basis, about the Outputs (goods and services) the Government will deliver to the Tasmanian community through General Government Sector entities in 2015‑16 and over the Forward Estimates period (2016‑17 to 2018‑19). Budget Paper No 2 is a major source of financial and non‑financial information on the operations of Government departments, agencies and General Government Sector statutory authorities. The other major source of detailed information on these entities is the annual report required to be published by each entity (available in October 2015).

This chapter highlights some of the key across‑entity issues which have been important factors in the preparation, by entities, of the financial information presented within this Budget Paper. These issues include the:

       ongoing implementation of election commitments and savings announced in the 2014‑15 Budget;

       key deliverables to be achieved by agencies under the Government's 365 Day Plan;

       impact of the implementation of a number of agency restructures;

       presentation of agency performance information; and

       impact on agency Budget information of the 27th pay in 2015‑16.

Budget Paper No 2 comprises two volumes and three separate parts that reflect the differing nature of entities within the General Government Sector:

       Part 1 includes government departments, such as the Department of Education and the Department of Health and Human Services;

       Part 2 includes Parliamentary agencies, such as the House of Assembly and the Legislative Council, and other independent entities, such as the Tasmanian Audit Office and the Office of the Ombudsman; and

       Part 3 includes other statutory authorities within the General Government Sector, such as the Tasmanian Health Service and TasTAFE.

Budget Paper No 2 does not provide information on government businesses. Information on these entities is available in each entity's annual financial report.

Some of the information presented in this Budget Paper is provided on a Ministerial Portfolio basis. Appendix 1.1 to this chapter includes a summary of current Ministerial portfolio responsibilities.

Key Across‑Agency Issues

Government Policy Priorities

Agencies continue to implement the Government's 2014 election commitments that were fully funded as part of the 2014‑15 Budget. The timing of funding for a small number of election commitments has been re‑profiled following updated advice from responsible agencies. The information provided in agency chapters also highlights those major initiatives included in the Government's 365 Day Plan that are required to be actioned by the agency.

2014‑15 Budget Savings Strategies

As part of the 2014‑15 Budget, agencies were required to implement important Budget Savings Strategies. These savings are important to return the Budget to a sustainable position and remain embedded within the 2015‑16 Budget and Forward Estimates. There are no new additional structural savings required of agencies in the 2015‑16 Budget.

Pay Pause

In the 2014‑15 Budget, the Government announced a 12‑month pay pause that would apply across the public sector, including general public servants, teachers, nurses, police, fire fighters, ambulance staff and doctors and also State parliamentarians and the senior executive service. It was noted that if the pay pause was not implemented, it would be necessary to reduce public sector employment by in excess of a further 500 Full Time Equivalents (FTEs) to achieve the same Budget outcome.

Implementation of the proposed pay pause required passage of supporting legislation through Parliament. This legislation passed the House of Assembly but did not pass through the Legislative Council.

While these savings were then required to be delivered through a reduction of an additional 500 FTEs, the allocation of these FTEs across agencies varied slightly from the pay pause savings included in the 2014‑15 Budget and Forward Estimates. As a result, some agencies were provided with additional funding while a small number of agencies had an offsetting reduction in funding. This reallocation was detailed in the December 2014 quarter Section 19 Return required under the Public Account Act 1986 and debated in both Houses in April 2015.

The impact on agency estimates in 2014‑15 is shown in Table 1.1.

Table 1.1: 2014‑15 Pay Pause Reallocation

 

2014‑15 

 

$'000 

 

 

Department of Education

1 095)

Department of Health and Human Services

(768)

Department of Justice

707)

Department of Police and Emergency Management

416)

Department of Primary Industries, Parks, Water and Environment

668)

Department of State Growth

(4 137)

Tasmanian Health Service

2 018)

 

 

Total Budget Impact

....)

 

 

 


 

Full Time Equivalents

The 2014‑15 Budget was prepared on the basis of achieving savings the equivalent of 361 FTEs in 2014‑15 as well as the implementation of a 12‑month pay pause that would apply across the public sector. It was noted that if the pay pause was not implemented, it would be necessary to reduce public sector employment by in excess of a further 500 FTEs to achieve the same Budget outcome.

Implementation of the proposed pay pause required passage of supporting legislation through Parliament. This legislation passed the House of Assembly but faced unacceptable delays in the Legislative Council so was not progressed through that House. To achieve additional savings equal to the pay pause proposal, further savings targets were determined by the Government that equated to an additional reduction of 500 FTEs. This resulted in an FTE reduction target of 861 in 2014‑15 which was then reduced to 821 after the Police Association of Tasmania agreed to a pay pause proposal specific to uniformed police officers. Pay pause arrangements were also put in place for Parliamentarians and the Senior Executive Service.

Table 1.2 shows the progress the Government has made towards this reduction target of 821 as at 31 March 2015.

Table 1.2: Reduction in FTEs as at 31 March 2015

 

31 March

2015

 

FTEs

 

 

Health

(221)

Education

(287)

State Growth

(116)

Other

(142)

 

 

Total

(766)

 

 

Agency Restructures

From 1 July 2015 the Government will implement a number of agency restructures to improve the efficiency and effectiveness of agency service delivery. These restructures include:

       the amalgamation of the existing three Tasmanian Health Organisations to form a single Tasmanian Health Service (THS). Cancer Screening Services has also transferred from the Department of Health and Human Services to the THS to reflect new service delivery arrangements as part of this restructure;

       the transfer of the Service Tasmania output within the Department of Primary Industries, Parks, Water and Environment to the existing Service Tasmania output within the Department of Premier and Cabinet to reflect the consolidation of Service Tasmania's operations within a single agency; and

       the transfer of the Racing Regulation and Policy output within the Department of State Growth to the Department of Primary Industries, Parks, Water and Environment to consolidate animal welfare and veterinary resources within a single agency.

Minor restructures have also occurred within the Department of Education and the Department of Primary Industries, Parks, Water and Environment. These minor restructures better reflect the delivery of services by these departments.

More information is provided on agency restructures at Appendix 4 of The Budget, Budget Paper No 1 and within relevant agency chapters of Government Services Budget Paper No 2.

Agency Performance Information

Due to the timing of the 2014‑15 Budget, agency performance information presented in the Budget Papers included 2013‑14 actuals data and only one year of projections. Since that time, no additional performance information has been released as the 2014‑15 Budget year is yet to finish. The 2015‑16 Budget Papers therefore revert to displaying two years of actual information and two years of forward projections (as was the case prior to the 2014‑15 Budget).

Agencies will next report on performance information in 2014‑15 annual reports, due for release by 31 October 2015.

27th Pay in 2015‑16

Salary payments to employees in the General Government Sector are made fortnightly. Usually this means that there are 26 pay days in each year. Approximately once every 11 years, there are 27 fortnightly pay days in a financial year with 2015‑16 being such a year. The Department of Health and Human Services makes its salary payments fortnightly on alternative weeks to the rest of the General Government Sector and will therefore not be required to make a 27th pay in 2015‑16.

Additional funding is provided to agencies for this additional cost from the Consolidated Fund. On a cash basis, this is reflected as an increase in 2015‑16 in the level of appropriation to agencies and in Employee benefits in the agency Statement of Cash Flows. However, on an accrual basis, there is no impact on the agency Statement of Comprehensive Income, as the additional cash payment is offset by a reduction in the accrued Employee benefits expense. This reduction in accrued Employee benefits expense is also reflected in the liability for Employee benefits in the agency Statement of Financial Position. It should also be noted that the impact of the 27th pay on the financial statements of some agencies may not be apparent due to other movements in the financial statements.


 

Conventions

The information provided in the Budget Papers has been prepared taking into account the following conventions.

       Figures in tables and in the text have been rounded. Discrepancies in tables between totals and sums of component items reflect rounding. Percentage changes in all tables are based on the underlying unrounded amounts.

       The notation used in the Budget Papers is as follows:

na

not available, or not applicable

.

zero, or rounded to zero

$'000

$ thousand

$m

$ million

 


 

Appendix 1.1: 2015‑16 Ministerial Portfolio and Departmental Structure

The 2015‑16 Ministerial portfolio and departmental structure of the Tasmanian Government reflects a number of changes which will take effect from 1 July 2015. These include the amalgamation of the three Tasmanian Health Organisations to form the Tasmanian Health Service and the movement of the Racing Services portfolio from the Department of State Growth to the Department of Primary Industries, Parks, Water and Environment.

Table A1.1: General Government Departments


Minister

Portfolio

Department

 

 

 

Hon Will Hodgman MP

Premier

Premier and Cabinet

 

Minister for Tourism, Hospitality and Events

Tourism Tasmania / State Growth

 

Minister for Sport and Recreation

Premier and Cabinet

 

Minister for Aboriginal Affairs

Premier and Cabinet

 

 

 

 

 

 

Hon Jeremy Rockliff MP

Deputy Premier

 

 

Minister for Education and Training

Education / Premier and Cabinet

 

Minister for Primary Industries and Water

Primary Industries, Parks, Water and Environment

 

Minister for Racing

Primary Industries, Parks, Water and Environment

 

 

 

 

 

 

Hon Michael Ferguson MP

Minister for Health

Health and Human Services

 

Minister for Information Technology and Innovation

State Growth / Premier and Cabinet

 

 

 

 

 

 

Hon Dr Vanessa Goodwin MLC

Attorney‑General

Justice

 

Minister for Justice

Justice

 

Minister for Corrections

Justice

 

Minister for the Arts

State Growth

 

 

 

 

 

 

Hon Matthew Groom MP

Minister for State Growth

State Growth

 

Minister for Energy

State Growth

 

Minister for Environment, Parks and Heritage

Primary Industries, Parks, Water and Environment / Premier and Cabinet

 

 

 

 

Table A1.1: General Government Departments (continued)


Minister

Portfolio

Department

 

 

 

Hon Peter Gutwein MP

Treasurer

Treasury and Finance / Justice

 

Minister for Planning and Local Government

Justice / Premier and Cabinet / Treasury and Finance / State Growth

 

 

 

 

 

 

Hon Paul Harriss MP

Minister for Resources

State Growth/Justice

 

 

 

 

 

 

Hon Rene Hidding MP

Minister for Police and Emergency Management

Police and Emergency Management

 

Minister for Infrastructure

State Growth

 

 

 

 

 

 

Hon Jacquie Petrusma MP

Minister for Human Services

Health and Human Services

 

Minister for Women

Premier and Cabinet

 

 

 

General Government Sector Authorities

These Statutory Authorities are established under specific legislation, which defines the purpose of the authority and the general functions for which it is responsible.

Table A1.2 identifies the current Ministerial portfolio allocations for the General Government Sector Authorities.

Table A1.2: General Government Sector Authorities

Statutory Authority

Portfolio Minister

Portfolio Department

 

 

 

Inland Fisheries Service

Hon Jeremy Rockliff MP

Primary Industries, Parks, Water and Environment

Marine and Safety Tasmania

Hon Rene Hidding MP

State Growth

Royal Tasmanian Botanical Gardens

Hon Matthew Groom MP

Primary Industries, Parks, Water and Environment

State Fire Commission

Hon Rene Hidding MP

Police and Emergency Management

Tasmanian Health Service

Hon Michael Ferguson MP

Health and Human Services

TasTAFE

Hon Jeremy Rockliff MP

Education