Treasury Annual Report 1999-2000 · TREASURY DEPARTMENT ANUAL REPORT 1999-2000. The Hon R.F. Court,...
Transcript of Treasury Annual Report 1999-2000 · TREASURY DEPARTMENT ANUAL REPORT 1999-2000. The Hon R.F. Court,...
1999-2000Annual Report
TREASURY D E P A R T M E N T
TR
EA
SU
RY D
EPA
RT
ME
NT
AN
UA
L R
EP
OR
T 1999-2000
The Hon R.F. Court, B Comm., MLA
TREASURER OF WESTERN AUSTRALIA
1999-2000 Annual Report
I have pleasure in presenting the Treasury
Department’s Annual Report for the year ended
30 June 2000 for your information and presentation
to Parliament.
We have prepared this report in accordance with the
requirements of sections 62 and 64 of the Financial
Administration and Audit Act, section 31 of the
Public Sector Management Act and other relevant
written laws.
J L Langoulant
UNDER TREASURER
C o n t e n t s
Overview
Under Treasurer’s Review . . . . . . . . . . . . . . . . . . . . . . . .1
Operational Summary . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Special Feature – Treasury Management Review . . . . . . .8
Treasury at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Our People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Customer Focus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Report on Operations
Economic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Resourcing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Performance Assessment
Opinion of the Auditor General . . . . . . . . . . . . . . . . . .34
Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
Performance Assessment . . . . . . . . . . . . . . . . . . . . . . .36
Financial Summary
Treasury Financial Results . . . . . . . . . . . . . . . . . . . . . . .50
Treasury Administered Items . . . . . . . . . . . . . . . . . . . . .51
Financial Statements
Opinion of the Auditor General . . . . . . . . . . . . . . . . . .54
Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . .56
Notes to the Financial Statements . . . . . . . . . . . . . . . .63
Trust Funds - Statements of
Receipts and Payments . . . . . . . . . . . . . . . . . . . . . . .79
Appendices
A Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104
B New Trust Fund Statements . . . . . . . . . . . . . . . . .106
C Project Evaluations . . . . . . . . . . . . . . . . . . . . . . . .109
D Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110
E Ministerial Circulars . . . . . . . . . . . . . . . . . . . . . . .111
F Freedom of Information . . . . . . . . . . . . . . . . . . . .112
G Government Purchasing Charter . . . . . . . . . . . . . .113
H Office Directory . . . . . . . . . . . . . . . . . . . . . . . . . .114
Overview
1T R E A S U R Y D E P A R T M E N T
U n d e r T r e a s u r e r ’ s R e v i e w
Treasury achieved considerable success over the past
12 months. We secured a fiscal outcome for the State
consistent with budget targets, developed and implemented
both new policy settings and new financial management
systems, and embarked on enhanced internal management
arrangements.
The contribution of Treasury staff, in particular in embracing
the new management arrangements has been a key factor
behind these achievements. Each issue has involved its own
complexities and challenges, and the positive manner in which
they have been approached by staff has ensured that success
has been achieved.
I will return to these areas in more detail shortly, however it
is appropriate to briefly review the economic and financial
circumstances which have needed to be managed over the
past 12 months.
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Economic
Economic activity in Western Australia lifted
in 1999-2000, with growth in Gross State
Product over the year likely to exceed
the budget time forecast of 4 per cent.
This compares with average annual growth
of 4.9 per cent over the past five years.
Exports grew by a solid 16.8 per cent over
1999-2000, after falling by 4.3 per cent in
1998-99. Western Australia’s trade surplus
also rose strongly over 1999-2000, with
growth of 24.7 per cent recorded over the
year. However, business investment remained
slow, although it appears that the recent
decline in investment (from record levels in
1997-98) has bottomed out.
The strong base to the economy underpinned
a pick-up in consumption activity which grew
by 3.5 per cent in 1999-2000 and dwelling
investment which grew by a strong 12.7 per
cent. A significant bringing forward of new
construction to precede the introduction of
the Goods and Services Tax contributed to
this healthy position, and similar effects were
felt in retail sales, although new motor
vehicle sales suffered an opposite impact.
Commodity prices improved significantly
over the course of the year with notable
strengthening occurring in the alumina,
petroleum, nickel, liquefied natural gas and
gold sectors. The improved outlook in these
prices was timely as the mining sector
experienced some difficulties early in the
year. This was particularly evident in the gold
sector, where there was major rationalisation
to reduce production costs in response to the
lower price outlook.
Despite the weaker mining sector, the labour
market remained stable through the year,
with unemployment continuing to edge lower
to 5.9 per cent by 30 June 2000, even though
the participation rate remained high.
Overall, continued strong growth in exports
and a pick-up in business investment are
expected to underpin a steady improvement
in output growth and markets over coming
years.
Finances
The State’s financial position was stronger
at year’s end than had been forecast in the
1999-2000 Budget. This reflected higher than
anticipated revenue, partly offset by higher
expenses.
The strengthening in commodity prices
boosted revenues from minerals, while the
bring-forward effect of the Goods and
Services Tax on housing construction boosted
conveyance duty collections. These more than
offset an unexpected shortfall from Payroll
Tax resulting from employment growth being
concentrated in small firms, many of which
were under the Payroll Tax exemption
threshold.
The strengthening in the State’s financial
position is welcomed and contributes to the
management of debt growth, which remains a
priority. Debt has increased in recent years
due to high capital infrastructure works in the
1999-2000Annual Report
T R E A S U R Y D E P A R T M E N T
Overview
2
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transport, water and energy sectors. While
the debt burden is substantially lower than
recent historically high levels, constant
vigilance is necessary to protect against debt
growth. Higher interest costs reduce the
State’s capacity to provide essential services
in accordance with government policies.
Policy Issues
There were, as usual, a wide range of policy
initiatives in which Treasury was involved in
1999-2000. The most significant of these was
the development and implementation of the
Goods and Services Tax. This work had
several dimensions including policy issues
concerning the formulation and operation of
the Tax, the preparation and passage of
legislation facilitating the new arrangements,
determining the coverage of the Tax across
State agencies particularly as to its impact on
agency charges, preparing State agencies to
be Goods and Services Tax payers and
changing Commonwealth-State financial
arrangements as a consequence of the Tax
changes.
The introduction of new financial and
information technology systems to
accommodate the Goods and Services Tax
was, in many respects, a larger task than the
preparation for the Year 2000 issue. The
complexity of the task was heightened by the
limited time which was available to prepare
for the Goods and Services Tax. While it is
early times, these preparations appear to have
been successful in seeing a smooth
introduction of the new arrangements.
In other policy areas, significant issues dealt
with over the past 12 months were:
• the continued development of the accrual
output management basis to the State’s
budget arrangements. This initiative
commenced in 1996-97 and is now firmly
in its consolidation phase. Nevertheless,
further policy aspects associated with its
implementation require development.
While improvements are continuing to be
made, the accrual information on agency
outputs contained in the budget papers,
and in agency documents, contributes to a
better understanding of the efficiency and
effectiveness of delivery of government
services;
• presentation of the aggregate State budget
in an accrual government finance statistics
format for the first time. Positive comment
was received from users of the budget
papers about the clarity of the new
presentation;
• competition policy continued to contribute
to a more competitive economy. There are
a number of dimensions to this policy
which involved us working closely with
other agencies, such as legislation reviews
to avoid anti-competitive provisions,
competitive neutrality arrangements,
structural reviews and national reforms in
the water, gas and transport sectors. We
also liaised with the National Competition
Council to ensure that the State’s
competition policy payments from the
Commonwealth are secured each year;
3T R E A S U R Y D E P A R T M E N T
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• the sales of AlintaGas and Westrail Freight
business, which have seen considerable
Treasury involvement, have required the
resolution of complex policy and
regulatory issues specific to the two
industry sectors and have significant
financial consequences for the State. Both
sale processes moved towards their final
phases during the year as the passage of
legislation allowed both to be taken to the
market. The sales will increase the
competitiveness of the State’s economy
and the proceeds will strengthen State
finances;
• the successful completion of the transfer
of over 560 State agency bank accounts to
the Commonwealth Bank to deliver
significant savings on banking charges
and provide a wider range of services. The
selection of the Commonwealth Bank as
the preferred tenderer for provision of
merchant services was also progressed.
This will further reduce costs and provide
greater flexibility for the public dealing
with State agencies; and
• the Commonwealth Grants Commission
process continuing to have an important
impact on State finances. While recent
Commission assessments have not been
favourable, largely reflecting the State’s
strong economic growth, Treasury is
continuing to work to improve the State’s
share of the Goods and Services Tax
revenues into the future. We are also
involved in reviews of indigenous funding
and local government grant shares now
underway by the Grants Commission.
Financial Systems
Accountability is enhanced by the clarity of
information that is provided to the
community. This is particularly the case in
the world of public finance as overly
complex, and irregular financial reporting can
frustrate the accountability process. Treasury
has been working over recent years to
improve the quality of financial information
which it includes in various publications –
such as the budget papers – to ensure there is
as clear an understanding as possible of the
State’s financial position and trends.
The 2000-01 Budget, which was brought
down in May 2000, made significant progress
in this endeavour. The clarity of reporting
contributed to understanding both the State’s
aggregate financial position and outlook, as
well as agency outcomes and outputs. The
former, in particular, was widely recognised
as being improved in these papers.
We have embarked on a program to upgrade
the collection and management of financial
information across the public sector. This
program will be implemented in the first half
of 2000-01 and be available for the 2001-02
Budget. It will simplify the information
collection process, make it more timely and
reliable, and free staff time to concentrate on
analysis of the information which will benefit
the policy advising role, both in Treasury and
across agencies.
1999-2000Annual Report
T R E A S U R Y D E P A R T M E N T
Overview
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The Government Financial Responsibility Act
has also recently been passed by the
Parliament. This Act provides for regular and
specific reporting requirements, both in the
budget and through the course of the year.
These requirements will, over time, provide
enhanced accountability in regard to the
management of State finances.
Management
We have embarked on a complete review of
our management processes with the aim of
improving the clarity of our roles and
responsibilities and to ensure the Department
is well focused on working with our many
customers. A number of factors gave rise to
this review, including staff concerns that too
great an emphasis on technical issues was
concentrated in senior management levels
and, as a result, management issues did not
receive enough attention. The allocation of
responsibilities within the Department was
also considered to be sub-optimal, which had
implications for our organisational structure.
Following a comprehensive review of our
arrangements and practices, a Treasury
Management Review program was
commenced late in the year. The main
features of the review are outlined later in
this report, including the structural changes
that have been associated with the review.
The successful implementation of the review
will be a major priority in 2000-01 as it will
provide the basis for us to respond most
effectively to the Government’s requirements.
Finally, I would like to again express my
gratitude to Treasury staff for their individual
and collective contributions to the
Department throughout the year.
5T R E A S U R Y D E P A R T M E N T
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Overview
1999-2000Annual Report
T R E A S U R Y D E P A R T M E N T
Activities
Key Achievements
Future Directions
O p e r a t i o n a l S u m m a r y
Economic
• Provides advice and analysis on State revenues, the economy, competition policy,intergovernmental financial relations and government trading enterprises.
• Facilitated legislation to implement tax reform and provided support to newintergovernmental processes associated with this reform.
• Provided quality analysis of economic and revenue trends to government andcontributed to the maintenance of the State’s AAA credit rating.
• Published a paper on the identification, costing and funding of communityservice obligations.
• Contributed to 46 legislation reviews under National Competition Policy whichassisted the State to secure the full competition policy payment of $45.6 million.
• Coordinated preparation of new guidelines for improving the efficiency andeffectiveness of Commonwealth specific purpose payments to the States.
• Developed a draft Memorandum of Understanding between the State and localgovernments to enhance cooperation and coordination between these sectors.
• Prepare a third tranche report on progress with the implementation of NationalCompetition Policy to the National Competition Council.
• Monitor the new tax reform arrangements from a State financial perspective andin terms of its impact on Western Australia.
• Push for reforms in Commonwealth specific purpose payments through theremoval of unnecessary ‘strings’ on funding.
• Contribute to the Commonwealth Grants Commission’s reviews into indigenousfunding, methods for distributing general purpose grants between localgovernments and methods for allocating Goods and Services Tax revenuesbetween the States.
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7T R E A S U R Y D E P A R T M E N T
Finance
• Advises on accounting policy and frameworksfor government operations. Participates inrationalising major assets. Provides corporateand information systems, including strategicand internal audit services.
• Assisted agencies prepare for theintroduction of the Goods and Services Tax.
• Completed a round of agency visits to helpthem with management reporting bestpractice and promote the use of accrualaccounting concepts.
• Successfully completed the transfer of theState’s banking business to theCommonwealth Bank resulting in significantsavings on banking charges and a wider rangeof services than was available under theprevious arrangement.
• Made a significant contribution to thesteering committees and working groups setup to oversee the sale of AlintaGas and theWestrail Freight business.
• Undertook a major review of our role andoperations. The Treasury ManagementReview will see benefits to Treasury, ouremployees and our customers.
• Undertook a comprehensive review of ourplanning processes that will provide us with aclearer focus for our operations.
• Review the Financial Administration and AuditAct, Regulations and Treasurer’s Instructionsto reflect recent reforms in financialmanagement.
• Finalise the sale of AlintaGas and the WestrailFreight business.
• Implement the recommendations from theTreasury Management Review.
Resourcing
• Advises on and manages the allocation of taxpayers’ resources to achievegovernment outcomes. Provides fiscal policy advice and financial monitoring andreporting services. Provides government property related policy, advice andinformation.
• Produced the 2000-01 State Budget. The Budget was presented on time andreceived positive comment form users, particularly in relation to the clarity of the information which, for the first time, was presented in a simplified (accrual government finance statistics) format.
• Developed the Government Financial Responsibility Act to establish a framework forgovernment financial planning and reporting that facilitates public scrutiny offinancial policy and performance.
• Prepared legislative amendments to facilitate the introduction of accrualappropriations, a capital user charge and e-commerce.
• Commenced quarterly acquittal of agencies outputs.
• Developed a Purchasing and Analysing Outputs Manual to assist agencies implementOutput Based Management.
• Developed Project Evaluation Guidelines to help agencies to apply a consistent andrigorous approach to major investment decisions. Provided advice on severalproposed major investments.
• Implemented new systems and procedures to ensure Goods and Services Taxcompliance for the government’s office accommodation portfolio.
• Implement a new information management system to improve agency dataexchange and to better manage budget estimates and production of government-wide financial information.
• Complete successful implementation of Output Based Management includingaccrual monthly and quarterly reporting.
• Subject to the necessary legislation being passed, implement accrualappropriations and a capital user charge for the 2001-02 State Budget.
• Continue to assist agencies in the implementation of financial managementreforms.
• Undertake a review of the issues that determine the extent to which governmentshould lease, own or otherwise procure its commercial property requirements.
0637-treas-ar4(finalattempt)-2 9/11/00 7:38 AM Page 7
During the first half of 2000 we undertook a
major review of our management practices
and organisational arrangements.
The review was assisted by a Melbourne-
based consulting firm who were asked to
make recommendations on our organisational
effectiveness, with particular emphasis on
corporate governance arrangements and the
roles and responsibilities across management
levels in the Department.
Substantial changes were proposed in relation
to:
• our officers’ roles and responsibilities;
• organisational structure and culture;
• employee performance monitoring and
appraisal systems;
• management behaviour and styles; and
• relationships with key clients.
Most of the consultant’s recommendations
were accepted and will be implemented over
the course of 2000-01.
The Treasury Management Review will result
in benefits to Treasury, its employees and our
customers.
The main outcomes will be:
• improved planning. Key strategic and
business planning systems are being
comprehensively overhauled. In addition,
four support committees have been
established to report direct to the
Corporate Executive on planning,
organisational development, finance and
audit, and information technology
matters. Improved strategic focus,
decision making and resource allocation
will result;
• better management. The existing Assistant
Under Treasurer positions will be replaced
with Executive Director positions. The
Executive Directors will have full
responsibility for their business units.
There will also be changes to the way in
which the Corporate Executive operates
which will see it less involved with
technical and day-to-day matters and
more involved in strategic planning,
directing and monitoring of Treasury’s
operations;
1999-2000Annual Report
T R E A S U R Y D E P A R T M E N T
Overview
S p e c i a l F e a t u r e – T r e a s u r y M a n a g e m e n t R e v i e w
8
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• greater clarity of the roles, responsibilities
and accountabilities of all staff. This will
provide staff with a clearer understanding
of what their job is. It will also facilitate
the delegation of policy and technical
work throughout the Department and
facilitate greater ownership by staff of the
work that they do. There will be a greater
devolution of responsibilities, particularly
from the Under Treasurer’s Office. As a
result officers will be more active in
working directly with agencies on
Treasury issues at all levels. They will also
have greater authority in determining
issues with agencies;
• systems to help manage and develop staff
and establish talent pools. In particular,
our Employee Development Scheme will
be revamped so that it provides better
feedback on how staff are going in their
jobs and what future opportunities are
available to them. It will also be better
linked to our new planning processes;
• a better structural organisation.
From 1 July 2000 a new organisational
structure will apply. A key change is the
establishment of the Agency Resources
business unit to look after both the
recurrent and capital departmental
budgets and governance at the non-
corporatised trading enterprises.
9T R E A S U R Y D E P A R T M E N T
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Our Mission
Treasury’s mission is to provide leadership in
advancing the State’s economic and financial
management.
The outcomes we seek to achieve are an
effective framework for:
• resourcing public services; and
• the development of a strong competitive
Western Australian economy.
More information on our outcomes and
outputs can be found in the Performance
Assessment section of this report.
Corporate Governance
There are a number of Acts that govern our
operations:
• we function under the Public Sector
Management Act for our general
administration;
• the Constitution Act and the Constitution
Acts Amendment Act provide the
framework under which we operate; and
• the Financial Administration and Audit Act,
and associated Treasurer’s Instructions,
provide the powers for our officers to
operate in government finance, control
and accountability matters.
A list of the Acts we administer is shown in
Appendix A.
Responsible Minister
The Hon. R.F. Court, B.Comm., MLA,
Premier; Treasurer; Minister for Public Sector
Management; and Federal Affairs.
Our Corporate Executive
At 30 June 2000 our Corporate Executive
comprised:
• Under Treasurer, John Langoulant;
• Assistant Under Treasurer (Economic),
Anne Nolan;
• Acting Assistant Under Treasurer
(Finance), David Smith;
• Acting Assistant Under Treasurer
(Resourcing), Andrew Chuk;
• Acting Assistant Under Treasurer (Asset
Financing), Robert Mianich; and
• Acting Director (Strategic Services),
Timothy Marney.
Electoral Act Disclosures
Under the Electoral Act we are required to
disclose any expenditures we make to
advertising agencies, market research
organisations, polling organisations, direct
mail organisations and media advertising
organisations.
1999-2000Annual Report
T R E A S U R Y D E P A R T M E N T
Overview
T r e a s u r y a t a G l a n c e
10
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11T R E A S U R Y D E P A R T M E N T
For the year ended 30 June 2000, we incurred
the following amounts:
• $80,337 to advertise staff vacancies;
• $7,533 to advertise unclaimed moneys;
and
• $9,735 on customer satisfaction surveys.
Other Disclosures
Treasurer’s Instruction 903 requires senior
officers to disclose interests in any existing or
proposed contracts made with the
Department (excluding normal employment
contracts) or an affiliated body of the
Department. Our senior officers have no such
interests to disclose with respect to 1999-2000.
Our Structure
Treasury’s structure reflected its three critical
business areas. These are economic analysis,
financial assessment and management and
resourcing agencies. Key services provided by
these areas are as follows:
Economic
• analyse and advise government on State
revenues and the economy;
• monitor the impact of national tax reform
on the State’s finances;
• forecast economic trends and evaluate
major economic policy initiatives;
• advise on and coordinate
intergovernmental financial issues,
particularly relating to Commonwealth
grants to the State;
• analyse and advise on the performance of,
and strategic issues affecting, government
trading enterprises (like Western Power
and the Water Corporation);
• improve the corporate governance of the
business activities of government through
appropriate policy development;
Treasury’s Corporate Executive
(left to right) David Smith,
Andrew Chuk, John Langoulant,
Anne Nolan,Timothy Marney
and Robert Mianich
0637-treas-ar4(finalattempt)-2 9/11/00 7:38 AM Page 11
• coordinate and drive the implementationof the National Competition PolicyAgreements; and
• work with agencies and other jurisdictionsto make sure that the State’s laws andregulations appropriately serve the publicinterest.
Finance
• facilitate and advise on privatisations,rationalising major assets and arrangingalternative asset financing for publicsector services and activities;
• manage, or monitor the management of,various asset financing arrangements;
• manage the State vehicle fleet fundingfacility;
• develop policy on the financial andaccounting framework for governmentoperations;
• advise agencies on legislative andaccountability frameworks;
• maintain the Treasurer’s Accounts;
• manage investment of the government’scash resources and servicing of publicdebt;
• coordinate the strategic development ofTreasury and a wide range of activitiesthat, in combination, ensure we effectivelydeliver services to our customers; and
• provide information systems and internalaudit and risk management functions.
Resourcing
• advise government on the best way toallocate funds to achieve its desiredoutcomes;
• help agencies develop and manage theirannual budgets on an accrual outputbasis;
• administer the parliamentaryappropriation process and relatedbudgeting functions;
• prepare whole-of-government budgetsand financial reports;
• coordinate and monitor the State’sforecasts of financial aggregates includingrevenue, expenditure, assets andliabilities;
• research, develop, promote andimplement improved financialmanagement practices;
• evaluate and coordinate new expenditureproposals;
• manage the State’s real propertyefficiently and effectively;
• develop policies related to the ownershipinterests and capital expenditure activitiesof government;
• provide systems and coordination foragencies to manage and dispose ofproperty assets;
• provide central management forgovernment owned, multi-tenanted officebuildings;
• provide office accommodation services,including management of leasenegotiation and administration; and
• provide advice to government on thefinancial implications of wages policydecisions.
1999-2000Annual Report
12 T R E A S U R Y D E P A R T M E N T
Overview
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13T R E A S U R Y D E P A R T M E N T
E C O N O M I C F I N A N C E R E S O U R C I N G
Under TreasurerJohn Langoulant
Executive OfficerExecutive Support
Yvonne Tavani
A/ManagerInternal AuditClaude Bonomi
A/Assistant Under TreasurerFinanceDavid Smith
A/AssistantUnder TreasurerResourcingAndrew Chuk
A/DirectorCapital and Ownership
Anthony Kannis
DirectorResourceManagementRay Illich
DirectorFiscal Policy
David Imber
A/DirectorStrategic Services
Timothy Marney
DirectorInformation SystemsDavid Cole
A/DirectorAccountingAdrian Duca
A/DirectorAsset FinancingDoug Tyler
DirectorGovernmentEnterprisesDonald Brunker
DirectorCompetition
PolicyDavid Morrison
A/DirectorIntergovernmentalRelationsAlex Scherini
Assistant UnderTreasurerEconomicAnne Nolan
DirectorEconomic
and Revenue Policy
Mark Altus
A/AssistantUnder TreasurerAsset FinancingRobert Mianich
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Our Major Asset
Our people are our major asset. In recognition
of this we placed increasing emphasis on the
development of staff through training
programs and the introduction of a job
rotation scheme. We also introduced an
employee health program. The health and
wellbeing of our staff is pivotal to the
efficiency and effectiveness of the
Department.
Staffing
We employed 169 full time equivalent staff at
30 June 2000, compared with 180 a year
earlier (175 if the Government Property Office
staff who were part of Treasury at 30 June
1999 are excluded for comparative purposes).
Women made up 28 per cent of Treasury’s
workforce at 30 June 2000, compared with
29 per cent a year earlier. The following chart
provides a comparative break-up of males to
females on a classification basis. It shows that
our classification profile continues to show an
under-representation of women at more
senior levels.
Training and Development
Training was a focus during 1999-2000, with
an increasing emphasis on attendance at
conferences and seminars to augment the
more traditional training courses.
1999-2000Annual Report
14 T R E A S U R Y D E P A R T M E N T
Overview
Our People
01
Level
5
10
15
20
25
30
Num
ber
2 3 4 5 6 7 8 9 Class 1 Class 3 Class 4
Key
Male
Female
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As a new initiative a Training Bulletin was
published in March 2000. The Bulletin
provides information on courses and training
schedules and is aimed at helping staff with
their training needs and development
programs identified through our Employee
Development Scheme. Bulletins are published
on a quarterly basis.
Particular attention was given to public
speaking and presentation skills training in
an effort to improve our skills in this area and
in recognition that increasingly our staff are
visiting customers to explain to them, and
gain their support for, our economic and
financial reforms.
Recruitment and selection was another area
of focus for our training. Basic training was
provided for staff needing to gain knowledge
of the selection process and our human
resource standards. Advanced training was
conducted for staff who were familiar with
these aspects of selection and who wanted to
improve their skills and ability to get the
right person.
In the second half of the year leadership and
management was identified as an area we
also needed to concentrate on.
Treasury became a corporate member of the
Australian Institute of Management in
March 2000. As well as attending some of
the Institute’s public training courses, staff
attended the various international seminars
run on topics such as management and
leadership.
This allowed for increased networking
opportunities with counterparts in other
agencies and the private sector.
A Job Rotation Program was introduced to
assist with the career development of our
people and to enhance organisational
communications and flexibility, thereby
enabling Treasury to adapt to an increasingly
demanding operating environment.
Graduate Development Scheme
Our Graduate Development Scheme was
comprehensively overhauled two years ago.
The new Scheme encompasses a much greater
role for senior managers in both the
recruitment process and in the development
of the graduates once they have commenced
at Treasury.
15T R E A S U R Y D E P A R T M E N T
Graduate Development
Scheme members -
Leanne Follows,
Audrey Formentin and
Leonie Buktenica
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 15
Overview
The new Scheme is producing good results
with very high calibre graduates having been
recruited in each of the past two years. As a
result of the success of the new Scheme, we
plan to increase our graduate intake for 2001.
Public Sector Standards
We have policies and procedures in place
which are consistent with the guidelines for
public sector standards that have been issued
by the Office of the Public Sector Standards
Commissioner.
The standards were first developed using a
participative approach with staff. To ensure
that new staff are familiar with the standards
they form part of the induction process for
new employees. In addition, the standards are
available for viewing on our Intranet facility,
are included in Treasury’s Policy
Compendium and marketed from time to
time in our internal newsletter, Inside
Treasury.
Training in recruitment and selection was
used to reinforce knowledge of the selection
process and the standards.
There were no formal applications claiming a
breach of the standards during 1999-2000.
1999-2000Annual Report
16 T R E A S U R Y D E P A R T M E N T
Our Help Desk Team -
Rodney George,
Graham Daniell,
Shayne Nedselsky and
Silvano Ciavatta
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 16
Code of Conduct
Treasury has a Code of Conduct that draws
from the principles of natural justice, respect
for persons and responsible care as embodied
in the Western Australian Public Sector Code
of Ethics. Our Code of Conduct provides a
guide for our officers in understanding their
rights and obligations, including the ethical
behaviours and values expected of them in
their day to day work.
Our Code of Conduct was developed using a
consultative approach and so there is a good
level of awareness about it amongst staff. It is
available for viewing on our Intranet facility.
Equal Opportunity
We are an equal opportunity employer and
encourage and support diversity in the
workplace.
We have a set of equal opportunity,
harassment and grievance policies and
procedures that were developed by our staff,
based on the general public sector standards.
These policies apply to everyone in the
Department and can be accessed through our
Intranet facility.
Trained grievance officers are available to
staff for counselling and for resolving
disputes.
Safety, Health and Welfare
The Department’s performance in relation to
the safety and health of employees is
monitored in part through workers’
compensation and rehabilitation statistics.
These show that there was one workers’
compensation claim during 1999-2000.
Workers’ Compensation Indicators
1998-99 1999-2000
Frequency rate(a) nil nil
Estimated cost of claims(b) nil nil
Premium ratepercent(c) 0.63 0.66
Rehabilitationsuccess rate na na
(a) Relates the number of lost time incidents, whereone or more days were lost, to total hours worked.
(b) Cost incurred per $100 of our annual payroll.(c) Premium is calculated as a proportion of our annual
payroll.na denotes not applicable
We recognise that the health and wellbeing of
our staff is important to the achievement of
our overall strategic objectives. In view of
this, and to foster a more rewarding and
caring work environment, we introduced an
employee health program in March 2000.
17T R E A S U R Y D E P A R T M E N T
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 17
The program consists of four components:
• health assessments – such as healthy heart
checks;
• promotion of exercise and fitness – for
example aerobics classes;
• stress management and relaxation –
including in-house workshops and yoga
classes; and
• information sessions – for example on
parenting and nutrition.
The first initiatives under this program have
been the provision of flu vaccinations and a
revised eyesight policy.
Communications
As a new initiative the Under Treasurer
commenced a process of quarterly briefings to
all staff. The first briefing was held in May
and was used to inform staff about the
Treasury Management Review (see feature
article).
Employee Relations
We have available for our staff a choice of
either an Enterprise Bargaining Agreement or
a Workplace Agreement.
The vast majority of our staff are signatories
to our Workplace Agreement, which is
available in 38 and 40 hour options.
In February 2000 a new Workplace Agreement
was registered. The new Agreement, which
was written so as to be more reader friendly,
has as its key initiative the introduction of
annual accrual of long service leave after the
first seven years of service.
This initiative seeks to make the taking of
long service leave more manageable, thereby
encouraging staff to take leave more
frequently, albeit in smaller amounts.
This initiative was one strategy we
introduced in an effort to better manage our
leave liability which at 30 June 2000 totalled
$3.4 million. A leave policy has been
introduced which places a limit on the total
amount of leave staff can have at any one
time.
Acting on the suggestion of a staff member,
we introduced service awards for staff who
had attained 15, 25 and 35 years in the public
sector. In recognition of the contribution
made by these people recipients are presented
with a framed certificate and for 25 and 35
years service an engraved pen.
Disability Services
We seek to ensure that:
• our functions and services meet the needs
of people with disabilities;
• access to buildings and facilities are
improved;
• information on facilities and services is
provided in formats that enhance the
communication needs of people with
disabilities;
1999-2000Annual Report
18 T R E A S U R Y D E P A R T M E N T
Overview
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 18
19T R E A S U R Y D E P A R T M E N T
• advice and services are delivered by staff
who are aware of and understand the
needs of people with disabilities; and
• opportunities are provided for people
with disabilities to participate in public
consultations, grievance mechanisms and
decision making processes that are
available to other members of the public.
During 1999-2000, there were no approaches
made from the public for services to be
modified to meet the needs of persons with
disabilities.
We continued to assist the operations of the
Technical Aid for the Disabled group by
donating to them our outdated computing
equipment.
Technical Aid for the Disabled provides a
long-term loan service of computers to
disabled people to assist them to
communicate with others, gain new skills and
in many cases gain employment.
Donations to Charity
The last Friday of each month is ‘casual for a
cause day’ at Treasury. Staff are encouraged
to come to work dressed casually and to
make a donation which is on-passed to a
different charity each month. Amongst the
recipients have been Princess Margaret
Hospital, the Cerebral Palsy Association of
Western Australia, the Australian Cancer
Research Foundation and the Leukaemia
Foundation.
Thirty-five years Service
Award Presentation
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 19
Our Customers
Our major customers are:
• the Treasurer and the Minister Assisting
the Treasurer;
• Cabinet and its Committees;
• Parliament; and
• the State’s public sector agencies.
Our Customer Commitment
Our customers can expect from us a
commitment to quality and responsive
services. We do this by:
• ensuring that our advice is clear, well
founded, timely and relevant;
• establishing clear points of contact for a
coordinated and effective service;
• understanding our customers’ needs and
helping them understand our views;
• streamlining our requests for information
from customers;
• consulting with our customers when
reviewing our practices;
• seeking customer feedback and acting on it;
• responding to requests for advice and
information within agreed time frames;
and
• keeping our customers informed of the
latest developments in economic and
financial management policies and
procedures.
Achieving Customer Focus
To gauge our customer effectiveness we
conduct a client/stakeholder survey each
year. The survey results provide valuable
feedback about areas where we can make
improvements. The results of the survey for
1999-2000 are outlined in the Performance
Assessment section of this report.
Our Customer Service Charter was reviewed
during the year and an updated brochure
provided to all ministers, members of
Parliament and chief executive officers.
Improved communications with our
customers was a focus.
To this end we:
• ensured interested parties had the
opportunity to provide input on
important and controversial issues
relating to National Competition Policy;
• provided numerous seminars and
presentations on tax reform and
implications for State finances,
government agencies, the economy and
the community;
1999-2000Annual Report
20 T R E A S U R Y D E P A R T M E N T
Overview
C u s t o m e r F o c u s
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21T R E A S U R Y D E P A R T M E N T
• used Treasury News and other
publications to inform customers about
developments in matters such as financial
management, tax reform and the
Commonwealth Grants Commission
process;
• consulted with agencies on financial
management reforms through forums
such as the Financial Reform Consultative
Committee and a briefing for chief
executives; and
• set up a Goods and Services Tax
implementation unit to assist the State
public sector prepare for the introduction
of the Tax.
We also sought to reduce ‘red tape’ by
coordinating National Competition Policy
legislation reviews, many of which
recommended removing unduly restrictive
laws, such as those restricting the services
water boards can offer or preventing a
university establishing a Trust fund. We also
participated in national efforts to promote
consistency in laws governing areas such as
road transport, water management, gas
pipelines and health professions.
Your Say
We are constantly striving to improve our
service and welcome your suggestions on
how this can be achieved. If you have any
comments, or would like to discuss any of
our services, please call us. Contact details are
provided at the back of this report.
Treasury's GST Implementation Unit -
John Nicolaou, Michael McLure and Chris Rodgers
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 21
Report on Operations
1999-2000Annual Report
T R E A S U R Y D E P A R T M E N T
Activities
Provides advice and analysis on State
revenues, the economy, intergovernmental
financial relations, government trading
enterprises and competition policy.
Key Achievements
During 1999-2000 the Economic area:
• reported to the National Competition
Council on progress in implementing a
range of specific reforms required by
National Competition Policy. The
Council assesses the extent to which the
States and Territories have met their
National Competition Policy obligations
and recommends whether they should be
paid. Our reporting contributed to
Western Australia being recommended to
receive its full payment for 2000-01;
• continued to develop Treasury’s general
equilibrium modelling capacity, and
undertook modelling projects in
partnership with other agencies;
• negotiated with the Commonwealth for
settlement of its $79.1 million obligations
under the Petroleum (Submerged Lands)
Act 1967. This settlement brought to an
end some complicated payment
arrangements with the Commonwealth.
The benefits will include greater
administrative efficiencies in the payment
of petroleum revenue between the
Commonwealth and the States;
• provided detailed submissions and
presentations to Standard and Poor’s and
Moody’s ratings agencies, contributing to
both agencies maintaining the State’s
AAA credit rating;
Anne NolanAssistant UnderTreasurer
Mark AltusDirector, Economic and Revenue Policy
Donald BrunkerDirector, GovernmentEnterprises
David MorrisonDirector,Competition Policy
Alex ScheriniActing Director,IntergovernmentalRelations
E c o n o m i c
22
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 22
• contributed to several submissions to
the Commonwealth highlighting the
potential economic costs to the State of
actions to reduce greenhouse gas
emissions. Also played a key role in
advocating that the Liquefied Natural Gas
industry be given special consideration
under any emission reduction measures
employed, given the environmental
benefits of increased natural gas usage;
• published an updated and revised policy
paper on community service obligations.
The paper outlined the Government’s
preferred approach to the identification,
costing and funding of these obligations.
The policy also outlines the process for
having new Community Service
Obligations recognised and also requires a
periodic review of existing obligations;
• advised on a range of competition policy
matters including:
– access to essential infrastructure for
rail, the electricity grid and gas
pipelines to facilitate competition.
Improved access will lessen monopoly
effects, significantly benefit existing
and future consumers and suppliers of
these products. However, it requires
careful balancing between the need to
encourage competition, through better
access, while also providing sufficient
incentive to invest significant
infrastructure facilities;
– on the conduct of legislation,
competitive neutrality and structural
reform reviews, contributing to the
completion of 130 legislation reviews
by the end of 1999-2000;
– the New Tax System Price Exploitation
Code (Western Australia) Act 1999 which
enables the Australian Competition
and Consumer Commission to monitor
prices and take action on Goods and
Services Tax exploitation of consumers
by businesses outside the
Commonwealth’s constitutional power
(ie. unincorporated entities); and
– the First Home Owner Grant Act 2000.
This legislation provides a $7,000 grant
to first home buyers to help offset the
impact of the Goods and Services Tax
on house prices;
23T R E A S U R Y D E P A R T M E N T
Members of the
Community Service
Obligations team -
Corey Dykstra and
Donald Brunker
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 23
• coordinated the preparation of
legislation to implement tax reform.
The Intergovernmental Agreement on the
Reform of Commonwealth-State Financial
Relations (signed by all jurisdictions in
June 1999) required Western Australia to
undertake a range of legislative measures
to implement its commitments under tax
reform. The legislation included:
– the Financial Relations Agreement
(Consequential Provisions) Act 1999. This
legislation included the State’s
commitment to comply with, and give
effect to, the Intergovernmental
Agreement, abolishes financial
institutions duty and stamp duty on
listed shares from 1 July 2001, and
abolished off-road diesel fuel subsidies
from 1 July 2000; and
– the State Entities (Payments) Act 1999
which enables all State government
entities to operate as if they were
subject to the Commonwealth’s Goods
and Services Tax legislation (to ensure
that the tax is neutral between the
government and private sectors);
• worked with the Commonwealth in
finalising a detailed paper on the
calculation of the guarantee payments
designed to ensure that States would be
no worse off under the national tax
reform;
• compiled the list of State taxes and
charges to be tax free under the
Commonwealth’s Goods and Services
Tax legislation;
• addressed issues relating to the
implementation of tax reform in the
government sector, including agency
savings from tax reform and adjustments
to fees and charges;
• oversaw the commencement of new
intergovernmental processes associated
with tax reform. These included the first
meeting in March 2000 of the Ministerial
Council which has oversight of the tax
reforms, and the establishment of the
Goods and Services Tax Administration
Sub-Committee to monitor Goods and
Services Tax operational and policy issues;
• coordinated the State’s participation in
the Commonwealth Grants
Commission’s Indigenous Funding
Inquiry, which is due to report in March
2001. This inquiry is reviewing the
allocation of Commonwealth funding for
indigenous services between both
Aboriginal and Torres Strait Islander
Commission regions and States. The
State’s participation included a
comprehensive submission, attendance at
a Grants Commission conference, and
meetings with the Commission;
• progressed reform of Commonwealth
specific purpose payments and better
reporting of these payments. The
Commonwealth Department of Finance,
Commonwealth Treasury and all State and
Territory Treasuries jointly developed best
practice guidelines for improving the
efficiency and effectiveness of specific
purpose payments. In addition, it has
been agreed that the Commonwealth will
1999-2000Annual Report
24 T R E A S U R Y D E P A R T M E N T
Report on Operations
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 24
compile a database of specific purpose
payments; and
• coordinated the development of a draft
Memorandum of Understanding between
the State and local governments in
Western Australia, to enhance cooperation
and coordination between these sectors of
government.
Future Directions
Our key goals for 2000-01 are to:
• analyse the impact of the
Commonwealth’s environmental
commitments (eg. the Kyoto Protocol) on
the State’s economy;
• contribute, through discussion papers, to
debate on current and emerging public
policy issues impacting, or likely to
impact, on the State’s economy;
• coordinate the implementation of the
National Tax Equivalent Regime in
Western Australia;
• ensure that National Competition Policy
reviews that are of greatest potential
impact on the economy and/or are
controversial are conducted with
analytical rigour and an appropriate
degree of independence and consultation;
• prepare the State’s report to the National
Competition Council, required in March
2001;
• advise on the implementation of access
arrangements, to achieve a balance
between the competing interests of
infrastructure investors and competitive
pricing;
• prepare, with Parliamentary Counsel, a
second omnibus Bill to implement
legislative amendments recommended by
Competition Policy reviews;
• provide advice to reviews of regulatory
arrangements, both nationally and within
the State, that will have significant impact
on community welfare;
• monitor the impact of tax reform on the
State’s finances, including the impact on
own-source revenues;
• continue efforts to reform Commonwealth
specific purpose payments to maximise
their efficiency and effectiveness;
• continue to support and develop
improvements in processes relating to
State/local government financial relations;
and
• contribute to the Commonwealth Grants
Commission’s inquiries into indigenous
funding, the methods of distributing
general purpose grants between local
governments, and methods for allocating
Goods and Services Tax revenues between
the States.
25T R E A S U R Y D E P A R T M E N T
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 25
Activities
Advises on accounting policy and
frameworks for government operations.
Participates in rationalising major assets.
Provides corporate and information systems,
including strategic and internal audit
services.
Key Achievements
During 1999-2000 the Finance area:
• assisted agencies prepare for the
introduction of the Goods and Services
Tax through establishment of a Goods and
Services Tax coordinators network and
provision of advice and liaison with the
Australian Taxation Office;
• visited 49 agencies to advise on
management reporting best practice and
promote the use of accrual accounting
concepts. Improved accounting by
agencies, consistent with financial reforms
developed in recent years, has been
evident;
• successfully completed the transfer of
the State’s banking business to the
Commonwealth Bank. This complex
project involved 140 agencies and
568 bank accounts. The transfer provides
significant savings on banking charges
and a wider range of services than was
available previously.
The Commonwealth Bank was also
selected as the preferred tenderer for the
provision of a Merchant Service facility to
State agencies. This will further reduce
cost and provide greater flexibility for
those making payments to government
agencies;
• achieved a return on short term
investments (5.35 per cent) in excess of
the cash management benchmark
(5.08 per cent), continuing the trend of
the 1990s in management of the public
bank account. The average daily balance
of the investment pool for the year was
$990 million;
1999-2000Annual Report
26 T R E A S U R Y D E P A R T M E N T
Report on Operations
David SmithActing Assistant Under Treasurer
Adrian DucaActing Director,Accounting
ClaudeBonomiActing Manager,Internal Audit
David ColeDirector,Information Systems
F i n a n c e
TimothyMarneyActing Director,Strategic Services
Doug TylerActing Director,Asset Financing
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27T R E A S U R Y D E P A R T M E N T
• undertook a major review of our role and
operations over the first half of 2000. The
review was conducted with the help of an
external consultant and involved wide
consultation with our employees and
customers.
The Treasury Management Review, which
incorporates a major restructuring of the
Department, will provide benefits to
Treasury, its employees and staff (see
Special Feature section of this Report);
• undertook a comprehensive review of
our planning processes that will provide
us with a clearer focus for our
operations. The new planning process will
allow us to concentrate on what is truly
strategic to our operations and will result
in our planning processes being integrated
more fully with our day-to-day work;
Banking Implementation Team -
Colin Santa Maria, Ray Willis,
Lee-Anne Donaldson and
Josef Netolicky
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 27
• implemented a Disaster Recovery Plan to
ensure we could resume critical functions
as quickly as possible in the event of a
disaster. The plan is one of a number of
strategies in our overall risk management
approach to business planning and
development;
• successfully managed the Year 2000 issue
and introduction of the Goods and
Services Tax thereby avoiding any
disruption to Treasury’s business
activities; and
• helped progress the sale of AlintaGas
and the Westrail Freight business.
The sale of AlintaGas is progressing in the
context of continuing reforms in the
energy sector. The State has decided to sell
the securities in AlintaGas in a process
involving the sale of 45 per cent of the
securities to a cornerstone shareholder
with the balance of the securities to be
sold by a public offer.
It was announced in May 2000 that
Westrail Freight will be offered for sale.
The Rail Freight System Act 2000 (WA)
enables the sale to proceed.
Future Directions
Our key goals for 2000–01 are to:
• review the Financial Administration and
Audit Act including related Regulations
and Treasurer’s Instructions.
Implementation of recent and continuing
financial management reforms – such as
output based management, accrual
budgeting and devolved bank accounts -
is becoming increasingly difficult within
the existing Act. The original Act was
drafted to accommodate cashbook
accounting and central responsibility for
bookkeeping and banking functions, with
limited devolution to agencies for
financial management;
• implement the Treasury Management
Review initiatives;
• undertake an Employee Opinion Survey
to obtain a better grasp of the
organisational development issues we face
and to obtain employee’s views on a range
of issues; and
• continue to assist with the sale of
AlintaGas and the Westrail Freight
business.
1999-2000Annual Report
28 T R E A S U R Y D E P A R T M E N T
Report on Operations
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29T R E A S U R Y D E P A R T M E N T
Activities
Advises on and manages the allocation of
taxpayers’ resources to achieve government
outcomes. Provides fiscal policy advice and
financial monitoring and reporting services.
Provides government property related policy,
advice and information.
Key Achievements
During 1999-2000 the Resourcing area:
• contributed significantly to the
production of the State budget which
was presented on time and which received
positive comment from users, particularly
in relation to the clarity of the information
which, for the first time, was presented in
an accrual government finance statistics
format;
• worked closely with agencies to improve
output performance measures. The
accuracy and relevance of output
measures is critical in assisting
government with its budget formulation
process as well as fulfilling output
performance reporting requirements of
agencies. The output measures published
in the 1999-2000 Budget Papers are a
marked improvement on measures
published in the previous year. However,
further work is required to enhance these
measures and, in some cases, for agencies
to implement systems to monitor
performance against these measures
throughout the year;
• commenced Quarterly Output Acquittals.
The acquittals identify variances between
agreed and actual performance against
budget and, where appropriate, proposes
corrective action or modification to
purchase price/supply of output.
Some agencies experienced teething
difficulties with this process. Our staff
continue to work closely with these
agencies to improve the quality and
relevance of the measures;
Andrew ChukActing AssistantUnder Treasurer
Ray IllichDirector,Resource Management
David ImberDirector,Fiscal Policy
Anthony KannisActing Director,Capital and Ownership
R e s o u r c i n g
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 29
• completed the development of the
Purchasing and Analysing Outputs
Manual. This manual will help:
– develop agency output structures,
measures and targets;
– implement a framework for reporting
and using output performance
information;
– analyse output delivery in terms of
quantity, quality, timeliness and cost;
– formulate recommendations to
government on the purchase of
outputs to achieve government desired
outcomes; and
– establish the link between financial
reforms such as Output Based
Management, performance reporting
and accrual output budgeting;
• negotiated the passage through
Parliament of the Government Financial
Responsibility Act, which received Royal
Assent on 5 July 2000. The Act establishes
a framework for government financial
planning and reporting to facilitate public
scrutiny of government financial policy
and performance. It contains financial
management principles for the
government to adhere to when setting its
financial plans and places reporting
requirements on the government for it to
release:
– a Financial Strategy Statement at least
once in each calendar year;
– a Financial Projections Statement with
each annual State Budget;
– a Mid-Year Financial Projections
Statement no later than 31 December
each year;
– a Financial Results Report no later
than 30 September each year; and
– a pre-election Financial Projections
Statement within 10 days after the
Legislative Assembly is dissolved or
expires;
• introduced the Financial Administration
Amendment Bill to Parliament, to
facilitate the introduction of accrual
appropriations, a capital user charge and
e-commerce. The Bill was passed through
the Legislative Assembly. The Legislative
Council has referred the Bill to the
Standing Committee on Estimates and
Financial Operations. Treasury has
participated in discussions and formal
hearings with members of the Standing
Committee on a regular basis, and it is
expected that the Standing Committee will
finalise its report on the Bill in the first
quarter of 2000-01;
• commenced the Treasury Information
Management System project to improve
agency data exchange and to better
manage budget estimates and production
of government-wide financial information;
1999-2000Annual Report
30 T R E A S U R Y D E P A R T M E N T
Report on Operations
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31T R E A S U R Y D E P A R T M E N T
• provided financial and economic advice
on a number of proposed major
government investments including the
Oakajee Deepwater Port, the Perth
Convention Centre and the Jervoise Bay
Marine Offshore Construction Facility;
and
• developed Project Evaluation Guidelines
to assist agencies to apply a consistent and
rigorous approach to major investment
decisions.
Future Directions
Our key goals for 2000-01 are to:
• complete the implementation of the
Output Based Management financial
reform. This is an activity based
information approach aimed at assisting
agencies and government to resource the
outputs required to achieve the
government's outcomes.
For Output Based Management to work
successfully it is critical that there is
adequate monitoring and assessment of
results. Through regular monitoring of
agency outputs, agency managers are
Treasury Information
Management System
Project Team
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 31
1999-2000Annual Report
32 T R E A S U R Y D E P A R T M E N T
Report on Operations
better placed to identify problems as they
emerge and to improve on service
delivery. This allows any corrective action
that may be required to be undertaken in
a timely manner rather than near year
end.
The quarterly output acquittal process will
acquire a sharper focus with the
introduction of the accrual output
appropriation regime in 2001-02. Under
the proposed regime, and consistent with
Australian accounting standards, revenue
recognition by agencies will only be
possible for outputs that are acquitted
under the quarterly output acquittals
process. The process of output acquittal
will therefore be necessary for agencies
and Treasury to properly account for
revenue, liabilities and assets.
These quarterly reports will also improve
the robustness of the mechanisms which
enforce service delivery and mark a
fundamental change from funding
agencies' operational expenditure to
purchasing outputs at a competitive price;
• implement accrual appropriations and a
capital user charge for the 2001-02 State
Budget, subject to timely passage of the
Financial Administration and Audit
Amendment Bill through Parliament;
• undertake a review of the issues that
determine the extent to which government
should lease, own or otherwise procure its
commercial property requirements.
The review will produce a policy
incorporating guiding principles to aid
decision making for the Treasury portfolio
and at agency level; and
• implement the Treasury Information
Management System.
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 32
Performance Assessment
1999-2000Annual Report
34 T R E A S U R Y D E P A R T M E N T
O p i n i o n o f t h e A u d i t o r G e n e r a l
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35T R E A S U R Y D E P A R T M E N T
Treasurer’s Instruction 905
Financial Administration and Audit Act 1985
I hereby certify that the performance indicators are based on proper records and fairly
represent the performance of the Treasury Department for the year ended 30 June 2000.
J L Langoulant
UNDER TREASURER
15 August 2000
C e r t i f i c a t i o n o f P e r f o r m a n c e I n d i c a t o r s
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 35
Our Outcomes
The outcomes we seek to achieve are an
effective framework for:
• resourcing public services; and
• the development of a strong, competitive
economy. (This is a revised outcome to
that published in the 1999-2000 Budget
Papers and it better reflects our economic
advisory role, as detailed in the 2000-01
Budget Papers).
Our Outputs
We aim to achieve these outcomes through:
• the policy advice we provide to
government;
• the systems we provide to assist with
economic and financial management and
financial reporting for government
accountability; and
• the implementation of arrangements and
strategies to help government allocate and
manage resources and deliver services
more efficiently.
Measuring Our Performance
Treasury’s role in achieving its outcomes and
outputs is primarily that of an economic and
financial management adviser to the
government and its agencies. We have
measured our performance (effectiveness,
quality, and timeliness) primarily through a
survey of our key clients/stakeholders.
Detailed questions were asked of each client
group to elicit meaningful responses and to
obtain a good understanding of how our
clients/stakeholders view our performance.
Responses to the detailed questions were
grouped to obtain the performance indicators
for outcomes (effectiveness) and outputs
(quality and timeliness).
In previous years we have experienced
difficulty in linking our effectiveness
performance indicators to our stated
outcomes. To address this shortcoming a
broader more direct approach has been taken.
This shift in approach has resulted in
effectiveness measures moving away from an
output emphasis to that of outcomes with a
focus on:
• Financial Management:
– resource allocation;
– resource management;
– public sector accountability; and
– service delivery;
1999-2000Annual Report
36 T R E A S U R Y D E P A R T M E N T
Performance Assessment
P e r f o r m a n c e A s s e s s m e n t
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 36
• Economic Management:
– information for decision making.
This change in approach has meant that
comparisons between effectiveness indicators
previously published and those developed for
the current survey are not meaningful.
Accordingly, interpretation of the series of
effectiveness performance measures must
recognise the break in the data due to this
change.
Survey results pertaining to output
performance measures are considered
comparable, with many of the questions used
in previous surveys being asked in the
current survey. Where changes were made,
they were only slight and focused the
question(s) more to the sample types being
surveyed.
Non-survey based effectiveness indicators
have been included to help measure
performance in both outcome and output
areas. The use of in-house data complements
the survey based results and adds scope and
objectivity to the sources of information used
in gauging our performance.
The efficiency indicators have been sourced
from information held on our output
measurement system.
The Client Survey
The client/stakeholder survey was
undertaken on our behalf by an external
consultant in July 2000 through a
telephone-based questionnaire.
255 stakeholders were approached, with
interviews held with 149, a response rate of
58 per cent. The numbers sampled and
responses were as follows:
Client/Stakeholder Total ResponsesGroupings Surveyed
Ministers 17 11Chiefs of Staff 14 9Members of
Parliament 76 44Agencies 141 82Economic
and FinancialCommentators 7 3
Total 255 149
Interview questions were aimed specifically
at each market segment.
37T R E A S U R Y D E P A R T M E N T
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 37
Effectiveness Indicators (Audited)
Outcome 1:An effective framework for
resourcing public services.
The framework referred to in this outcome
contains a range of financial management
initiatives designed to improve the resource
allocation, performance management and
accountability of agencies and government.
The key components of the framework are:
• accrual financial reporting;
• output based management – identification
of outcomes and outputs, accrual output
budgets combined with output
performance measures and targets;
• presentation of whole of government
financial statements in accordance with
external reporting standards; and
• a legislated financial planning, targeting
and reporting process incorporating the
disclosure of the government’s budget
strategy, financial projections and periodic
reporting including actual results against
targets and quarterly acquittal reports
against budget targets.
Taking the above attributes into
consideration, the framework for resourcing
public services is considered effective if it:
• improves public sector resource allocation
and management;
• increases accountability; and
• enhances public sector service delivery.
Indicators of effectiveness include:
• the extent to which public sector resource
allocation and management has improved,
as indicated by the number and
percentage of clients/stakeholders who
indicate:
– improvement in the resource allocation
process;
– that our financial management
initiatives have assisted them in
improving their resource management
processes;
• the extent to which public sector
accountability has increased as indicated
by the number and percentage of:
– agencies that comply with our
accountability reporting requirements;
– clients/stakeholders who indicate that
implementation of financial
management initiatives have increased
public sector accountability; and
• the extent to which public sector service
delivery has been enhanced, as indicated
by the number and percentage of
clients/stakeholders who indicate that our
financial management initiatives have
assisted them to improve service delivery.
1999-2000Annual Report
38 T R E A S U R Y D E P A R T M E N T
Performance Assessment
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 38
(A) The extent to which public sector
resource allocation and management
processes have improved.
We play a major role in the resource
allocation process through our accrual output
based management initiative. This initiative
provides the basis for the contestable
allocation and management of public sector
resources. It aims to improve the budget
process by focussing decision makers on
outputs generated from the expenditure of
public funds and assist managers in their
allocation and management of public sector
resources.
Clients/stakeholders indicating animprovement in the resource
allocation process in 1999-2000
Total No. of Respondees Indicating Respondees Improvement
Number Per cent
77 33 43
The 77 respondees represent a 49 per cent
response rate out of a total of
158 clients/stakeholders (ministers
and agencies) surveyed.
There were significant differences in the
survey results with ministers providing the
highest ratings of improvement at 78 per cent
through to agencies, which recorded the
lowest measure of 34 per cent. This wide
range in responses may be attributable to the
settling in of the large number of budget
related reforms that have been implemented
since 1998-99. These reforms have impacted
most on those sample groups which
responded with low improvement ratings.
We will continue to work with these
clients/stakeholders to enhance their
understanding of the new initiatives.
Treasury’s financial management initiatives
have been developed to assist agencies
improve their resource management
processes.
Clients/stakeholders who consider ourfinancial management initiatives haveimproved their resource management
processes in 1999-2000
Total No. of Respondees IndicatingRespondees Improvement
Number Per cent
124 61 49
The 124 respondees represent a 50 per cent
response rate out of a total of 248
clients/stakeholders surveyed.
This result was drawn from all sample types
with ministers and members of Parliament
recording high improvement ratings (90 per
cent and 73 per cent respectively) through to
agencies with a low improvement rating of
31 per cent.
This result aligns with the responses recorded
for the previous measure (by sample type)
and requires working with agencies in
building their confidence in the resource
management reforms being promoted by us.
39T R E A S U R Y D E P A R T M E N T
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 39
(B) The extent to which public sector
accountability has increased.
We undertake monitoring and reporting of
agency output delivery performance through
quarterly whole of government and output
acquittal reports.
The high level of whole of government
returns, in comparison with the acquittal
returns, is explained by the former process
having been in place for a longer period of
time.
The financial management initiatives we
implemented are intended to promote
increased public sector accountability through
an improved budget process, the adoption of
good business practices and the
empowerment of managers and employees.
The initiatives include changing the budget
management process to an output process,
introducing accrual budget appropriations
and associated reporting, enhancing
performance measurement and targeting,
establishing separate agency bank accounts,
etc.
Clients/stakeholders who indicatedTreasury’s financial management initiativeshave increased public sector accountability
in 1999-2000
Total No. of Respondees Indicating Respondees Increased Accountability
Number Per cent
133 92 69
The 133 respondees represent a 52 per cent
response rate out of a total of
255 clients/stakeholders surveyed.
The effectiveness response rating was high
and fairly consistent across all client/
stakeholder sample types. This was an
encouraging result, which supported the
1999-2000Annual Report
40 T R E A S U R Y D E P A R T M E N T
Performance Assessment
The number of agencies that submitted accountability returns for 1999-2000
Total No. of Agencies Number of Agencies Percentage of Agencies Submitting Returns Submitting Returns
Quarterly Whole of Quarterly Whole of Quarterly Whole ofAcquittal Government Acquittal Government Acquittal GovernmentReturns Returns(a) Returns Returns(a) Returns Returns(a)
% %
September 80 168 65 166 81 98.8December 80 166 61 164 76 98.8March 80 169 59 167 74 98.8June(b) na na na na na na
(a) All public sector agencies are required to provide a set of financial statements (Operating Statement, BalanceSheet and Statements of Cash flow) covering their year to date position, on a quarterly basis.
(b) June data were not available at the time of publication. However, it will be reported in 2000-01.
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 40
41T R E A S U R Y D E P A R T M E N T
overall benefits to government flowing from
the financial management reforms introduced
over the past two years.
(C) The extent to which public sector
service delivery has been enhanced.
Financial management initiatives we
promoted support the output/outcome
approach in meeting service delivery
improvements.
Client/stakeholders indicating that ourfinancial management initiatives assistedthem to improve their service delivery
in 1999-2000
Total No. of Respondees Indicating Respondees Improvement
Number Per cent
114 44 39
The 114 respondees represent a 45 per cent
response rate out of a total of 255
clients/stakeholders surveyed.
The survey results varied considerably, with a
high improvement rating of 88 per cent
recorded from ministers through to a low
rating recorded from agencies of 25 per cent.
The low improvement rating results received
from those who were most directly impacted
by the new financial management initiatives
can be attributed to the early stage of the
transition in the budget process to a focus
on output based decision making. An
improvement in the ratings for this measure
is expected as this transition proceeds and as
the full year benefits of enhanced budget
monitoring and management based on
accrual output based measures is
implemented in 2000-01.
The ability to monitor performance targets
and measure outputs against desired
outcomes will be an increasingly important
factor in gauging service delivery
improvements.
We will be working to assist agencies and
government businesses in improving their
service delivery through this approach.
Outcome 2: An effective framework for
development of a strong, competitive
economy.
An effective framework for development of a
strong, competitive economy is important in
maintaining the State’s high standard of
living. It is particularly important for the
Western Australian economy to remain
competitive given its export orientation and
the pressures of globalisation.
While the Federal Government controls
macroeconomic policy (national fiscal,
monetary and tariff policy), the State
Government’s role is primarily to develop
efficient revenue systems, economic and
social infrastructure and supporting services
at as low a cost as possible, and to ensure
support for, and implementation of, national
economic policies (eg National Competition
Policy).
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 41
The framework for development of a strong,
competitive economy is one where:
• clients/stakeholders make informed
decisions based on an increased awareness
of economic matters and trends; and
• systems for collecting revenue are
efficient. A tax system impacts on decision
making (eg investment, savings and
consumption). However, broad-based
taxes levied on a growing tax base (eg
payroll, property, motor vehicle and
gambling taxes) tend to be more desirable
as they are less distortionary in terms of
their impact on decisions.
Grants from the Commonwealth
Government may be tied, such as specific
purpose payments, or untied, such as
financial assistance grants. Untied grants
are preferable because financial resources
can be allocated to where they will have
most impact. Other problems with tied
grants include a focus on program inputs
rather than outcomes, duplication of roles
and responsibilities, high compliance and
administration costs, blurred
accountability to clients and a lack of
consultation between Commonwealth and
State agencies; and
• government businesses (public
non-financial corporations and public
financial corporations as defined by the
Australian Bureau of Statistics and
reported in Budget Paper No. 3 –
“Economic and Fiscal Outlook”) adopt a
commercial approach in the provision of
economic and social infrastructure.
The provision of economic and social
infrastructure in a commercial manner
encourages government businesses to
minimise operating costs, ensure that
prices reflect the cost of providing goods
and services, and explore opportunities
for adding value to the business. These
outcomes in turn act to encourage the
establishment of economic activity within
the State on a sustainable economic and
financial basis.
A framework for developing a strong
competitive economy is considered effective if
it:
• assists clients/stakeholders to make
informed decisions by increasing their
awareness of economic matters and
trends;
• improves the efficiency of revenue
systems; and
• promotes a more commercial approach
by government businesses.
Indicators of effectiveness include:
• the extent to which clients/stakeholders
indicate that information on economic
matters and trends has increased their
awareness and assisted with their decision
making. This is measured by the
percentage of clients/stakeholders who
indicate that the information we provide
on economic matters and trends has
increased their awareness and assisted in
their decision making. This includes
information on economic conditions
impacting on the State’s growth prospects
1999-2000Annual Report
42 T R E A S U R Y D E P A R T M E N T
Performance Assessment
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 42
43T R E A S U R Y D E P A R T M E N T
and revenue collections, and
intergovernmental relations impacting on
Commonwealth funding received by the
State;
• the extent to which the efficiency of
revenue systems has improved as
measured by the percentage of the State
tax revenue raised from broad-based taxes
levied on a growing tax base and the
percentage of Commonwealth
Government funding received as untied
grants; and
• the extent to which a more commercial
approach is being adopted by government
businesses which have been corporatised,
commercialised or are subject to separate
accountability arrangements.
Separate accountability arrangements for
business activities within government
businesses, which themselves have not been
corporatised or commercialised, act to
provide incentives for more commercial
behaviour as these arrangements enable the
performance of these activities to be
separately monitored and benchmarked.
(A) The extent to which
clients/stakeholders indicated that
information on economic matters and
trends increased their awareness and
assisted with their decision making.
Treasury provides advice and produces a
number of publications to assist
clients/stakeholders improve their ability to
make informed decisions in respect to
economic matters and trends.
Clients/stakeholders who consider theinformation we provided increased theirawareness and assisted in their decision
making in 1999-2000
Total No. of Respondees IndicatingRespondees Increased Awareness
Number Per cent
125 80 64
The 125 respondees represent a 49 per cent
response rate out of a total of
255 clients/stakeholders surveyed.
All client/stakeholder sample types were
canvassed in respect to this measure.
While there was some variations in the results
across the sample types, most were positive,
with a ‘very effective’ rating of 15 per cent
recorded as part of the overall effectiveness
rating of 64 per cent. This result is
encouraging and we will continue to
investigate better ways of keeping out
clients/stakeholders informed on economic
matters.
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 43
(B) The extent to which the efficiency of
revenue systems has improved.
• Own Source Revenue
Broad based taxes levied on a growing tax
base enable funds to be raised for essential
government goods and services while
keeping distortions in producer and
consumer behaviour to a minimum.
Percentage of State tax revenue raised
from broad-based taxes levied on a
growing tax base
n.a. denotes not available
The results indicate a consistency in
movement towards broad-based taxes.
• Commonwealth Grants
Untied Commonwealth grants allow the State
to allocate resources to their most productive
uses.
Commonwealth Government funding
received as untied grants
Sourced from Commonwealth budget papers.
(a) These figures exclude ‘Safety Net Revenues’ of$696,934,176 in 1997-98, $903,235,987 in 1998-99and $924,260,786 in 1999-2000.These werepreviously State sourced revenues but due to aHigh Court ruling in 1997 they are now collectedon behalf of the State by the CommonwealthGovernment and as such are not consideredCommonwealth grants.
1999-2000Annual Report
44 T R E A S U R Y D E P A R T M E N T
Performance Assessment
01996-97
20
40
60
80
100
1997-98 1998-99 1999-2000
% o
f Sta
te t
ax r
even
ue r
aise
d
01996-97
20
40
60
80
100
1997-98 1998-99(a) 1999-2000(b)
% o
f fun
ding
rec
eive
d
n.a.
82.5 82.8 83.1
57.3 56.8 56.2 56.6
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 44
(C) The extent to which a more commercial
approach is being adopted by
government businesses.
The adoption of a more commercial
operational approach by government
businesses provides for the establishment of
economic activity on a sustainable economic
and financial basis and encourages those
businesses to add value to their operations.
Government businesses that moved to a more
commercial approach in 1999-2000 included
the Western Australian Treasury Corporation,
the Western Australian Land Authority
(Landcorp) and five port authorities. This
represents a movement from six out of 33 to
13 out of 40 government businesses that have
moved to operating on a more commercial
basis.
The percentage of government
businesses that have been corporatised,
commercialised or are subject to
accountability arrangements
The results represent the increasing approach
in implementing government policy for
government businesses to operate on a more
sustainable economic and financial basis.
45T R E A S U R Y D E P A R T M E N T
01996-97
20
40
60
80
100
1997-98 1998-99 1999-2000
% o
f gov
ernm
ent
busi
ness
es
11.818.2 18.2
32.5
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 45
Efficiency Indicators (Audited)
The efficiency indicators have been designed
to measure the unit cost of our outputs –
policy advice, systems and implementation.
Unit cost measures including the allocation
between policy advice, systems, and
implementation, have been obtained from the
Treasury Output Management System.
For measurement purposes:
• policy advice is defined as recorded policy
advice provided to a minister or to
Cabinet (eg. Cabinet comments and
submissions, minutes of meetings and
ministerial correspondence). It is
measured as the average cost of providing
an item of policy advice;
• systems are defined as the provision of
broad systems and systems advice to
government and agencies (eg the budget
management system, capital planning
system, and the Government Finance
Statistics system) as well as systems
designed to provide better information
and advice and to manage services better.
It is measured as the average cost of
providing a system; and
• implementation is defined as services
provided to implement, and to enable
implementation of, government policies
(eg reports, presentations, consultancies,
and project management). It is measured
as the cost per report, presentation, or
hours of consultation or project
management.
1999-2000Annual Report
46 T R E A S U R Y D E P A R T M E N T
Performance Assessment
Efficiency Measures 1998-99 1999-2000(a)
$ $
Policy AdviceCost per item of policy advice(b) 4,854 2,827SystemsCost per system(c) 490,876(d) 49,266ImplementationCost per report 7,170 2,201Cost per presentation to external clients/stakeholders 5,589 4,122Cost per hour of coordination and consultation 91 97Cost of project management (per hour) 817(e) 883
(a) State Fleet ($42,257,369) and property costs ($5,828,179) have been excluded from the efficiency measures for1999-2000 because they are not considered to be directly attributable to the production of outputs.
(b) We have identified three types of advice: strategic policy advice (advice on major issues); tactical policy advice(advice on complex matters); and routine policy advice (advice on day to day policy issues). The average cost ofproviding that break up of policy advice in 1999-2000 was as follows: strategic - $15,672; tactical - $5,104; androutine - $2,263 compared to 1998-99 of: strategic - $82,329; tactical - $23,711 and routine - $2,522.
(c) Treasury develops and maintains systems. The average cost of developing new systems in 1999-2000 was$59,532 and $47,126 to maintain compared to 1998-99 costs of $332,192 for new systems and $135,264 formaintained systems.
(d) This figure includes State Fleet costs of $5,416,391. For purposes of comparison to the 1999-2000 reportedfigure, the 1998-99 cost per system was $189,965.
(e) This figure includes property costs of $5,042,000. For purposes of comparison with the 1999-2000 reportedfigure the cost per hour for project management was $413.
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47
Output Measures (Not Audited)
Treasury produces three outputs:
• policy advice to ministers and agencies on
economic and financial management
matters;
• systems and support to agencies for the
budget process and to help meet the
government’s accountability requirements;
and
• support, advice and guidance to agencies
to help implement the government’s
economic and financial management
initiatives.
Our performance with each of these outputs
in terms of quantity produced, quality,
timeliness and cost is outlined in this section.
Quality and timeliness measures were
obtained from the same client/stakeholder
survey as our effectiveness performance
measures. The quantity and cost of our
outputs were obtained from our internal
output management and financial
information systems.
Policy Advice
We provide policy advice to government to
enable it to acquire, allocate, and manage
resources for the sustainable provision of
public services as well as for development of
a strong, competitive economy.
Measure 1997-98(a) 1998-99 1999-2000Target Actual
QuantityUnits of strategic policy advice 32 23 29 26Units of tactical policy advice 219 104 175 183Units of routine policy advice 2,030 1,612 1,484 1,335QualityProportion of clients/stakeholders who believe
our advice is clear, concise, relevant, completeand identifies options and alternatives (per cent) na 66 70 66
TimelinessProportion of clients/stakeholders who believe
that our advice has been timely (per cent) na 50 60 63CostCost per unit of strategic policy advice($) 50,625 50,049 71,000 15,672Cost per unit of tactical policy advice($) 10,594 14,250 12,000 5,104Cost per unit of routine policy advice($) 1,493 1,516 2,000 2,263
(a) Approximate estimates only.na denotes not available
T R E A S U R Y D E P A R T M E N T
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Systems
We also develop and introduce systems that
assist government in acquiring, allocating and
managing resources for sustainable provision
of public services as well as to encourage a
more competitive Western Australian
economy.
The only systems we have identified under
this output are those used primarily to
produce an external product (eg whole of
government reporting systems, budget
systems).
1999-2000Annual Report
48 T R E A S U R Y D E P A R T M E N T
Performance Assessment
Measure 1997-98(a) 1998-99 1999-2000Target Actual
QuantityNumber of newly developed systems 23 5 7 4Number of maintained systems 46 12 18 21QualityProportion of clients/stakeholders who believe the
budget/reporting approach we developed waseffective/very effective in helping them to better judgethe government’s financial performance (per cent) na 64 70 63
TimelinessProportion of clients/stakeholders who consider we
were timely/very timely in helping them meet budget milestones and whole of government reporting (per cent) na 53 60 56
CostCost per newly developed system($) 56,652 43,702 33,000 59,532Cost per maintained system($) 26,739 79,263 85,000 47,126
(a) Approximate estimates only.na denotes not available
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49T R E A S U R Y D E P A R T M E N T
Implementation
Our third output is the implementation of
arrangements and strategies to help
government to acquire, allocate and manage
resources for the sustainable provision of
public services as well as to promote a more
competitive Western Australian economy.
We help to implement the government’s
policies through reports we prepare,
presentations to clients, coordination and
consultation, as well as through project
management.
Measure 1997-98(a) 1998-99 1999-2000Target Actual
QuantityNumber of reports 478 442 597 833Number of presentations to external
clients/stakeholders 73 72 73 77Hours of coordination and consultation 66,000 73,376 100,000 103,152Hours of project management 14,000 12,476 14,000 5,694QualityProportion of clients/stakeholders who
believe our timeframes for implementingeconomic and financial management initiatives have been effective (per cent) na 86 90 71
TimelinessProportion of clients/stakeholders who
believe our timeframes for implementingfinancial management initiatives have been reasonable (per cent) na 53 60 66
Proportion of clients/stakeholders whoconsider we provided economicinformation within reasonable timelinesto assist their decision making (per cent) na 85 90 69
CostCost per report($) 3,703 4,312 5,000 2,201Cost per presentation to external
clients/stakeholders($) 2,877 3,361 6,000 4,122Cost per hour of coordination and
consultation($) 89 54 80 97Cost per hour of project management($) 124 258 300 883
(a) Approximate estimates only.na denotes not available
0637-treas-ar4(finalattempt)-2 9/11/00 7:39 AM Page 49
Key Points
• Our financial results were affected by the
exclusion of the Government Projects
Office from Treasury from 1 July 1999.
This reduced our net assets by
$11.9 million in 1999-2000.
• The government owned buildings remain
in Treasury but we no longer receive the
net rentals from these buildings. The
operating statement includes $5.8 million
of expenses and revenues, consisting of
rentals received by the property managers
and paid by them in outgoings, but the
remaining net rentals are paid directly
into the Consolidated Fund.
• Our financial results also reflect a full year
of management of the government's State
Fleet operations, (resulting in the
inclusion of $39.3 million in operating
expenses and $40.9 million in operating
revenues).
Discussion and Analysis
Net Cost of Services
The net cost of services in 1999-2000
was $22,729 million, compared with
$25,881 million in the previous year
(after adding back in the net revenue from
government owned buildings for
consistency).
This effective reduction is due mainly to a
surplus on State Fleet operations in 1999-2000
of $1.6 million and costs in 1998-99 relating to
the Government Projects Office operations of
$3.9 million.
This was only partially offset by an increase
in property maintenance costs of $2.3 million.
Net Revenue from Restructuring
This is an expense in 1999-2000, and is
mainly assets and cash transferred to the
Government Projects Office at 1 July 1999.
Financial Position
Our total equity changed only marginally, the
reduction caused by the transfer of assets and
liabilities to the Government Projects Office
being offset by revaluation of the remaining
land and buildings we control.
The substantial increase in current liabilities
is due to an amount of $4.5 million payable to
the Government Projects Office not being
paid until July 2000.
1999-2000Annual Report
50 T R E A S U R Y D E P A R T M E N T
Financial Summary
T r e a s u r y F i n a n c i a l R e s u l t s
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51T R E A S U R Y D E P A R T M E N T
Treasury administers a range of transactions
on behalf of government.
The expenditures include appropriation
payments to all government agencies,
community service obligations and equity
contributions paid to government trading
enterprises, various subsidies and grants to
both government and private sector agencies,
refunds, payments relating to superannuation
and interest and capital repayments on the
government's debt.
The receipts include mainly Commonwealth
grants to the State, payments to government
for tax equivalents, dividends, surpluses and
recoveries of loan expenses, superannuation
charges by government trading enterprises
and proceeds of asset sales.
Consolidated Fund appropriations to all
government agencies have been included for
the first time this year. The comparative
figures for 1998-99 have not been adjusted.
Administered payments increased by
$7,037 million over the previous year,
mainly due to inclusion of the appropriation
payments, an increase in payments under
Superannuation Acts and increased loan
repayments under Loan Acts.
Treasury Financial Highlights 1995-96 1996-97 1997-98 1998-99 1999-2000$m $m $m $m $m
Net Cost of Services 17.5 18.1 18.8 15.7 22.7Operating expenses 17.6 18.5 20.6 37.7 69.5Operating revenues 0.1 1.1 2.1 22.0 46.8Revenues from government 20.8 19.2 21.0 22.2Net revenue from restructuring na na 75.8 1.6 (13.5)
Total Assets 2.5 5.7 95.6 113.7 118.7Current assets 0.3 3.5 2.8 14.8 15.6Non-current assets 2.2 2.2 92.8 98.9 103.1
Total Liabilities 2.8 3.3 3.6 9.1 14.1Current liabilities 1.8 2.4 2.5 8.0 13.1Non-current liabilities 1.0 1.0 1.1 1.1 1.0
Equity (0.3) 2.3 92.0 104.6 104.6
nadenotes not applicable
T r e a s u r y A d m i n i s t e r e d I t e m s
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Financial Summary
1999-2000Annual Report
52 T R E A S U R Y D E P A R T M E N T
The Consolidated Fund Appropriations are as
published in the annual estimates. The
increase in payments under Superannuation
Acts is due to application of a fund surplus
from the previous year and general salaries
and wages growth. The increase in capital
repayments is due to special repayments
made at the end of the financial year.
The increase in revenues of $186 million
is substantially due to increased
Commonwealth grants.
Administered assets have reduced, due to
lower cash and investment balances at
30 June 2000 and a decline in recoverable
advances that have been repaid ahead of
schedule, partially offset by other revenues
receivable, which largely consist of tax
equivalents and inclusion of property under
finance lease.
The increase in administered liabilities of
$5,147.0 million is due mainly to the inclusion
in 1999-2000 of employers unfunded liability
under State Government superannuation
schemes of $5,354.0 million, liability under
finance lease for property of $17.4 million
and unfunded liability in the Government
Insurance Fund of $48.5 million. This is offset
by reductions in the trust fund liability and in
the liability under Loan Acts.
Treasury Administered Items 1995-96 1996-97 1997-98 1998-99 1999-00$m $m $m $m $m
Expenses 1,309.0 1,539.4 2,436.3 8,273.5 8,527.4
Revenues 2,860.9 3,020.9 4,766.2 4,097.4 4,283.3
Total Assets 2,106.4 1,768.1 1,757.2 1,981.6 1,618.2Current 1,168.8 1,184.5 1,285.1 1,872.5 1,574.1Non-Current 937.6 583.6 472.1 109.1 44.1
Total Liabilities 2,261.7 2,123.7 2,305.5 2,445.6 7,592.6Current 271.2 396.1 1,196.0 1,541.5 1,696.5Non-Current 1,990.5 1,727.6 1,109.5 904.1 5,896.1
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