The 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.
Outputs 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.
Table 4.1: Output Group Expense Summary
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Notes:
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.
This Output provides for the interest cost on the end of year borrowing.
This Output provides for the payment of interest on balances held in certain accounts in the Special Deposits and Trust Fund.
This 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.
This 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.
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.
The 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.
A 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.
This 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.
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.
Items of expenditure under this Output relate to various miscellaneous payments, including the Mobile Radio Network, Government Business Reviews and Tasmanian Cycle Tourism Strategy.
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.
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.
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.
Under 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).
The 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.
All 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).
It 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.
The 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.
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.
The 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 Fund
The 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 Fund
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|
Estimated Total Cost |
2018-19
Budget |
2019-20 Forward Estimate |
2020-21 Forward Estimate |
2021-22 Forward Estimate |
|
|
$'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 |
|
|
|
|
|
|
|
|
OUTFLOWS |
|
|
|
|
|
|
Department of Communities Tasmania |
|
|
|
|
|
|
Minister for Housing |
|
|
|
|
|
|
Housing 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 |
…. |
|
|
|
|
|
|
|
The 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 Fund
|
|
Estimated Total Cost |
2018-19
Budget |
2019-20 Forward Estimate |
2020-21 Forward Estimate |
2021-22 Forward Estimate |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
|
|
|
|
|
|
|
Balance Brought Forward |
|
6 013 |
808 |
808 |
808 |
|
|
|
|
|
|
|
|
TOTAL SOURCE OF FUNDS |
|
6 013 |
808 |
808 |
808 |
|
|
|
|
|
|
|
|
OUTFLOWS |
|
|
|
|
|
|
Department of Health |
|
|
|
|
|
|
Minister for Health |
|
|
|
|
|
|
Health 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.
Table 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 Program
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Table 4.6: Statement of Comprehensive Income - Administered
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Table 4.6: Statement of Comprehensive Income - Administered (continued)
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|||||||||||||||||||||||||||||
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Other economic flows - other non-owner changes in equity |
|
|
|
|
|
||||||||||||||||||||||||
|
Other 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 |
||||||||||||||||||||||||
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|
|
|
|
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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.
Table 4.7: Revenue from Appropriation by Output
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Table 4.7: Revenue from Appropriation by Output (continued)
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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.
Table 4.8: Administered Expenses
|
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.
In 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.
From 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 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.
A 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.
Funding 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.
In 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.
The 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.
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 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.
The 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.
The 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.
Under 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.
Table 4.9: Statement of Financial Position as at 30 June - Administered
|
Notes:
1. Equity investments represents the Government’s equity interest in government businesses measured as the consolidated value of their net assets.
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 - Administered
|
Table 4.10: Statement of Cash Flows - Administered (continued)
|