1     Introduction

Key Issues

·       The Government has allocated significant additional funding in the 2018‑19 Budget to implement all of its 2018 election commitments as well as a range of other initiatives that will improve the delivery of services to the Tasmanian community. Together with the funding provided by the Government in previous Budgets, this new funding is providing strong support for the implementation of the Government’s key priorities of jobs and economic growth; health and education; keeping Tasmanians safe; building infrastructure; and supporting Tasmanians in need.

·       The new funding provided in this Budget has been allocated in the context of the ongoing achievement of all elements of the Government’s established Fiscal Strategy. It is only through an improvement in the Government’s Budget position, which now sees Net Operating Balance surpluses forecast over the Budget and Forward Estimates period, that new funding for services can be allocated in a sustainable and responsible manner.

·       This Budget Paper provides information on an entity basis that supports the whole‑of‑government information provided in The Budget Budget Paper No 1. Most importantly, this Budget Paper provides detailed information on the services provided by entities (Outputs) and the key deliverables that are being undertaken by the entities over the Budget and Forward Estimates period.

·       Other information provided in this Budget Paper includes:

-  performance information that enables an assessment of the efficiency and effectiveness of agencies;

-  details of infrastructure projects being undertaken by agencies; and

-  detailed financial statements for the 2018-19 Budget and Forward Estimates period for each agency.

·       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.


 

Budget Paper No 2 Information

This Budget Paper provides information, on an entity basis, about the Outputs (goods and services) the Government will deliver to the Tasmanian community through General Government Sector entities in 2018‑19 and over the Forward Estimates period (2019‑20 to 2021‑22). This Budget Paper 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 prepared by each entity (2017‑18 Annual Reports will be available by 31 October 2018).

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 Communities Tasmania and the Department of Education;

·       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 State Fire Commission and TasTAFE.

This Budget Paper 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.

2018-19 Budget Agency Presentation Issues

Information is provided in this chapter to highlight important matters to be taken into account when reviewing the information provided in this Budget Paper. These matters primarily relate to changes that have occurred in the presentation of agency information since the 2017-18 Budget. Comprehensive information on the Tasmanian Government financial management framework, the annual Budget process and the presentation of Budget Paper information is provided in the Guide to the Budget available at www.treasury.tas.gov.au.

Presentational and other matters highlighted in this chapter are:

·       changes to the structure of agencies made since the 2017-18 Budget;

·       presentation of agency 2018-19 Budget key deliverables information;

·       presentation of the Government’s 2018 election commitments;

·       presentation of agency performance information;

·       implementation of the new Budget Information Management System;

·       presentation of agency indexation in the 2018-19 Budget and Forward Estimates; and

·       the future implementation of the new Financial Management Act 2016.

2018-19 Budget Agency Restructures

Establishment of the new Departments of Communities Tasmania and Health

On 20 March 2018, the State Government announced that, effective from 1 July 2018, the Department of Communities Tasmania would be established through the amalgamation of the former Department of Health and Human Services and part of the Department of Premier and Cabinet. The establishment of the new Department of Communities Tasmania will result in the Department of Health and Human Services ceasing to exist on 30 June 2018. A number of the existing Department of Health and Human Services Outputs will transfer to the new Department of Communities Tasmania and remaining Outputs will transfer to the new Department of Health. Corporate and support services for the Department of Communities Tasmania will continue to be delivered by the Department of Health. The Department of Health and Human Services’ Output Groups have been allocated to the respective new Departments as follows:

·       Output Group 1 ‑ Health Services System Management has been reallocated to the Department of Health;

·       Output Group 2 ‑ Tasmanian Health Service has been reallocated to the Department of Health;

·       Output Group 3 ‑ Statewide Services has been reallocated to the Department of Health;

·       Output Group 4 ‑ Human Services System Management has been renamed Output Group 4 ‑ Housing Services System Management, and has been reallocated to the Department of Communities Tasmania;

·       Output Group 5 ‑ Human Services has been split in two and renamed Output Group 5 - Housing Services and Output Group 6 - Disability Services and Community Development. Both have been reallocated to the Department of Communities Tasmania;

·       Output Group 6 ‑ Children Services System Management has been renamed Output Group 1 ‑ Children Services System Management, and has been reallocated to the Department of Communities Tasmania; 

·       Output Group 7 ‑ Children Services has been renamed Output Group 2 ‑ Children Services, and has been reallocated to the Department of Communities Tasmania; and

·       Output Group 8 ‑ Independent Children’s and Young Persons’ Review Service has been renamed Output Group 3 ‑ Independent Children's and Young Persons’ Review Service, and has been reallocated to the Department of Communities Tasmania.

In addition to the above restructure, the following Output Groups have been reallocated from the Department of Premier and Cabinet:

·       Output Group 6 ‑ Community, Sport and Recreation has been reallocated to Output Group 6 ‑ Disability Services and Community Development in the Department of Communities Tasmania; and

·       Output Group 7 ‑ Safe Homes, Safe Families has been created within the Department of Communities Tasmania. This Output has been created to separate Tasmania’s Family Violence Action Plan functions. This was formerly within the Department of Premier and Cabinet’s Output Group 1 ‑ Support for Executive Decision Making.

Administrative Arrangements Order 2018

The allocation of Agency Outputs to Ministerial Portfolios included in this Budget Paper reflects the structure of the Tasmanian Government under the Administrative Arrangements Order 2018.

Agency Key Deliverables

The information provided in this Budget Paper on agency key deliverables reflects important information on the initiatives announced by the Government in this Budget together with other high priority initiatives being undertaken by agencies over the Budget and Forward Estimates period. These other high priority initiatives have either been funded by the Government in recent previous Budgets or are being funded by agencies from within existing resources. The Key Deliverables table can include a combination of recurrent and capital initiatives; totals are therefore not provided. The Policy and Parameter table in chapter 4 of The Budget Budget Paper No 1 provides information on the specific new policy initiatives in this Budget.

Summary of Government 2018 Election Commitments

Implementation of all of the Government’s 2018 election commitments represents the foundation of the 2018-19 Budget. All of the Government’s 2018 election commitments have been fully funded in the 2018‑19 Budget and Forward Estimates in accordance with proposed timeframes. This new funding has been allocated in the context of the ongoing achievement of all elements of the Government’s established Fiscal Strategy. This includes the achievement of Net Operating Balance surpluses in every year of the Budget and Forward Estimates period and remaining Net Debt free (ie. holding positive net cash and investments). The table below presents the Government’s 2018 election commitments in accordance with its Financial Policy document issued during the course of the election process.

Table 1.1:         Government 2018 Election Commitments (Recurrent)

 

2017-18

2018‑19

2019‑20

2020‑21

 

$m

$m

$m

$m

 

 

 

 

 

Expenditure Commitments

 

 

 

 

Health

.... 

21.2 

34.6 

53.2 

Education and Skills

.... 

10.0 

21.0 

29.6 

Police, Fire and Emergency Management

.... 

4.5 

7.8 

11.4 

Primary Industries

.... 

4.1 

7.3 

8.0 

Human Services

.... 

9.2 

9.4 

9.1 

Parks and Environment

.... 

1.1 

1.9 

1.9 

Tourism and Hospitality

.... 

8.4 

7.1 

5.9 

Sport and Recreation

.... 

11.8 

5.4 

1.8 

Regional Grants

10.0 

11.4 

.... 

.... 

Roads and Transport

.... 

1.1 

1.2 

1.3 

Other

.... 

8.0 

3.7 

3.0 

 

10.0 

90.8 

99.4 

125.2 

Revenue Commitments

 

 

 

 

Tax Policies - net impact

2.0 

13.0 

7.5 

8.1 

Increased Commonwealth Activity Based Funding Revenue

.... 

(2.2)

(5.7)

(13.1)

 

2.0

10.8 

1.8 

(5.0)

 

 

 

 

 

Total

12.0 

101.6 

101.2 

120.2 

 

 

 

 

 

Information in this table is not directly comparable with the presentation and classification of information in Table 4.5: Policy and Parameter Statement, 2017-18 to 2021-22 in chapter 4 of The Budget Budget Paper No 1. This is for a number of presentational reasons including:

·       recurrent expenditure impacts are presented in the Policy and Parameter Statement on a gross basis with offsetting revenues or savings, that were outlined in the Government’s Financial Policy document, being addressed on a separate basis;

·       the focus of the Government’s Financial Policy document and the information presented in Table 1.1 is on key policy areas rather than being directly aligned with specific government agencies. Information on election commitments on an agency basis is available in agency chapters of this Budget Paper;

·       the 2018-19 Budget is presented on the basis of a new agency structure with the creation of the new Department of Communities Tasmania and Department of Health. There has been a transfer of responsibilities and initiatives from the previous Department of Health and Human Services and the Department of Premier and Cabinet, to these new agencies;

·       general changes in the level of taxation estimates are parameter variations for the purposes of the Policy and Parameter Statement. Current estimates of the revenue impact of all taxation related election commitments have been included as parameter adjustments across the 2018-19 Budget and Forward Estimates. Further information on the Government’s taxation reforms can be found in chapter 12 of this Budget Paper; and

·       other matters such as the classification of commitments as policy or parameter, capital or recurrent and the appropriate accounting treatment.

All of the Government’s infrastructure and equity contribution election commitments have been incorporated in the 2018-19 Budget and Forward Estimates, in accordance with the Government’s relevant policy statements. Election commitment equity contributions include the provision of funding to Metro Tasmania Pty Ltd to support the establishment of a Derwent River ferry service and a single ticket system, Tasmanian Irrigation Pty Ltd for tranche 3 irrigation schemes and the energy on farms initiative; and to Taswater to support its 10 year capital program. Information on election commitments is also available in agency chapters of this Budget Paper. Information on the Government’s total infrastructure investment program can be found in chapter 6 of The Budget Budget Paper No 1.

Agency Performance Information

The public presentation of agency performance information is important in assisting an open and transparent assessment of agency expenditure of funding provided through the Budget process. Agencies continually review performance measures based on a number of factors including national approaches to performance measurement, the availability of information and the changing nature of services. This leads to changes in the performance information for some agencies between Budgets.

It should also be noted that the timing of the annual Budget process does not lend itself to the presentation of the most recent agency performance information. Due to the presentation of the 2018-19 Budget in June 2018, actual results are not available for 2017-18 and it is some time since the data for the previous financial year was published in agency annual reports or in national reporting documents. The 2018‑19 Budget Papers therefore present two years of actual information (2015-16 and 2016-17) and two years of targets (2017-18 and 2018‑19). The presentation of performance information in the Budget Papers is subject to ongoing review.

Agencies will next report on performance information in their 2017‑18 Annual Reports, due to be available by 31 October 2018.

Budget Information Management System Project

In April 2018, the Department of Treasury and Finance’s new Budget Information Management System commenced operation. As such, the 2018-19 Budget is the first Budget that has been prepared using the new system and follows extensive planning, development and implementation work that has been undertaken over a number of years.

BIMS replaced the previous Budget Management System which had been used to prepare the Budget for over 20 years. BIMS is utilising contemporary technology to support the development and management of the State Budget by Treasury and agencies. The development of BIMS will eliminate the risks associated with the operation of a legacy system and provide opportunities to improve Budget processes and be more responsive to changing Budget requirements. This includes the commencement of the operation of the new Financial Management Act on 1 July 2019. Over the next 18 months, the final phases of the BIMS Project will be undertaken, with a focus on improving useability features, including reporting and identifying process efficiencies which will be supported by the new system.

Indexation of Agency Budget Estimates

The commencement of the operation of BIMS has required the implementation of a number of transitional arrangements relating to the preparation of the 2018-19 Budget. While most of these arrangements have been administrative in nature and have had no impact on the presentation of Budget information, there has been a requirement to change the approach to the presentation of agency indexation funding for the purposes of the 2018-19 Budget. Indexation represents the increase in funding allocated to agencies to provide for base price increases in salary and non-salary costs.

The key elements of this transitional change to the presentation of agency indexation are detailed below:

·       all indexation relating to agency funding detailed in the 2017-18 Revised Estimates Report (including December Quarterly Report) is reflected in individual agency Budget Estimates;

·       all indexation relating to new agency funding provided subsequent to the 2017-18 Revised Estimates Report (including December Quarterly Report), including that related to additional funding provided in the 2018‑19 Budget, is reflected in a general indexation provision included in Finance-General; and

·       following the commencement of the 2018-19 Budget year, the indexation funding included within the Finance-General provision will be allocated to individual agencies.

It is emphasised that the transitional presentation of indexation in this manner has no impact on the level of the key fiscal measures presented in The Budget Budget Paper No 1. The provision for agency indexation in Finance-General is $25 million over the 2018‑19 Budget and Forward Estimates period and this has been fully reflected in all General Government Sector Budget Estimates calculated.

Financial Management Act Implementation

The Financial Management Act was passed by Parliament during 2016 and will replace the existing Financial Management and Audit Act 1990 and the Public Account Act 1986. The Act represents a further major step in an ongoing reform to Tasmania’s financial management framework.

The commencement of the FMA is now scheduled for 1 July 2019. The implementation of the FMA has been delayed to ensure that a comprehensive process of engagement with all affected stakeholders is able to be undertaken prior to its implementation. This recognises that the implementation of the provisions of the FMA will result in substantive change to long established processes and presentation practices and that it is therefore important that all affected stakeholders have a good understanding of how they will be affected by these changes.

The 2019-20 Budget will be presented in accordance with the provisions of the FMA. This will result in changes to the presentation of some Budget information. Details of these changes will be included in the 2019‑20 Budget Papers and the Guide to the Budget, and will be supported by additional explanatory material.


 

Conventions

The information presented 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:  Ministerial Portfolio and Departmental Structure

Table A1.1:          General Government Departments


Minister

Portfolio

Department

 

 

 

Hon Will Hodgman MP

Premier

Premier and Cabinet / Communities Tasmania

 

Minister for Heritage

Primary Industries, Parks, Water and Environment

 

Minister for Parks

Primary Industries, Parks, Water and Environment

 

Minister for Tourism, Hospitality and Events

Tourism Tasmania / State Growth

 

Minister for Trade

State Growth

 

 

 

Hon Jeremy Rockliff MP

Deputy Premier

 

 

Minister for Education and Training

Education / State Growth / TasTAFE

 

Minister for Infrastructure

State Growth

 

Minister for Advanced Manufacturing and Defence Industries

State Growth

 

 

 

Hon Elise Archer MP

Attorney-General

Justice

 

Minister for the Arts

State Growth

 

Minister for Corrections

Justice

 

Minister for Environment

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

 

Minister for Justice

Justice

 

 

 

Hon Guy Barnett MP

Minister for Building and Construction

Justice

 

Minister for Energy

State Growth / Treasury and Finance

 

Minister for Resources

State Growth / Justice

 

Minister for Veterans’ Affairs

Communities Tasmania

 

 

 

Hon Sarah Courtney MP

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

 

Minister for Police, Fire and Emergency Management

Police, Fire and Emergency Management

 

Minister for Science and Technology

State Growth / Premier and Cabinet

 

 

 

Hon Peter Gutwein MP

Treasurer

Treasury and Finance / Justice

 

Minister for Local Government

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

 

Minister for State Growth

State Growth

Table A1.1:          General Government Departments (continued)


Minister

Portfolio

Department

 

 

 

Hon Roger Jaensch MP

Minister for Housing

Communities Tasmania

 

Minister for Human Services

Communities Tasmania

 

Minister for Planning

Justice / Treasury and Finance

 

 

 

Hon Jacquie Petrusma MP

Minister for Aboriginal Affairs

Communities Tasmania / Primary Industries, Parks, Water and Environment

 

Minister for Disability Services and Community Development

Communities Tasmania

 

Minster for Sport and Recreation

Communities Tasmania

 

Minister for Women

Communities Tasmania

 

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 Sarah Courtney MP

Primary Industries, Parks, Water and Environment

Marine and Safety Tasmania

Hon Jeremy Rockliff MP

State Growth

Royal Tasmanian Botanical Gardens

Hon Will Hodgman MP

Primary Industries, Parks, Water and Environment

State Fire Commission

Hon Michael Ferguson MP

Police, Fire and Emergency Management

TasTAFE

Hon Jeremy Rockliff MP

State Growth