DEPARTMENT of Treasury
Objectives
The Department of Treasury provides strategic financial and economic advice to the Government with the aim of promoting the Territory’s financial position and economic management.
The Department plays a leading role in promoting accountability and transparency in the delivery of services to the community.  This is achieved through sound financial policies, management practices and robust analysis.
2005-06 Highlights
Strategic and operational priorities to be pursued in 2005‑06 include:
•	assisting the Government to maintain the Territory’s AAA credit rating through sound and sustainable economic and financial management;
•	managing the ACT’s input into the Commonwealth Grants Commission’s Update of Revenue Sharing Relativities 2006 and the Commission’s 2010 Methodology Review;
•	analysing and implementing potential changes required by International Accounting Standards, which are to be adopted from 1 July 2005;
•	refining the performance measurement framework to progress towards a Triple Bottom Line accountability framework;
•	continuing improvement of the Territory’s financial management framework, including the Financial Management Act 1996 and the Budget Process;
•	reviewing the ACT vehicle fleet arrangements to operate from 2006‑07;
•	refinancing the maturing inscribed stock of $52m consistent with the debt management strategy;
•	implementing arrangements pursuant to the closure of the Public Sector Superannuation (PSS) defined benefits scheme and the commencement of the PSS accumulation scheme;
•	implementing the Government’s revenue initiatives; and
•	undertaking efficiency and effectiveness reviews of departments as part of the Expenditure Review Process.

Output Classes
	Total Cost	Government Payment for Outputs	
	2004‑05
Est. Outcome
$’000	2005‑06
Budget
$’000	2004‑05
Est. Outcome
$’000	2005‑06
Budget
$’000	
Output Class 1
Financial and Economic Management	
36  568	
52  420	
26  336	
40  116	
Output 1.1 Economic Management	6  093	2  956	6  266	3  041	
The decrease in the 2005‑06 from the estimated outcome is due to the transfer of Water and Electricity Policy from Treasury to CMD in November 2004.
Output Description
Develop and pursue initiatives to ensure the economic interests of the ACT and its residents are protected and maximised, including through providing advice on economic and regulatory reform and major projects, and ensuring appropriate returns on assets and appropriate intergovernmental financial relations.  Economic Management will provide for:
•	monitoring and regular advice on the state of the ACT economy;
•	an annual submission to the Commonwealth Grants Commission's (CGC) update of general revenue sharing relativities;
•	on-going submissions, representations and participation in the CGC's major review of general revenue sharing relativities to apply from 2010-2011 onwards;
•	monitoring GST revenues and participation in the GST Administration sub-groups;
•	an annual submission to the credit rating agency; and
•	a review of vehicle fleet funding arrangements.
			
	Total Cost	Government Payment for Outputs	
	2004‑05
Est. Outcome
$’000	2005‑06
Budget
$’000	2004‑05
Est. Outcome
$’000	2005‑06
Budget
$’000	
Output 1.2 Financial Management	11  233	28  362	7  336	21  517	
The increase in the 2005‑06 Budget from the estimated outcome is due to the inclusion of the restructuring fund.
Output Description
Provision of analysis, monitoring and reporting on financial performance to assist the Government to achieve its preferred outcomes.  Financial Management will provide for:
•	the preparation and presentation of the Australian Capital Territory’s annual Budget and annual financial statements;
•	quarterly Whole of Government consolidated management and capital works reports;
•	reporting to external agencies including the Loan Council, the Australian Bureau of Statistics and the Commonwealth Grants Commission;
•	Expenditure Review Capacity Reviews; and
•	advice on the structure and operation of government business enterprises.

Output Classes cont.

	Total Cost	Government Payment for Outputs	
	2004‑05
Est. Outcome
$’000	2005‑06
Budget
$’000	2004‑05
Est. Outcome
$’000	2005‑06
Budget
$’000	
Output 1.3 Revenue Management	11  517	12  013	10  863	11  067	
Output Description
Optimise tax revenue concurrent with achieving a simple, equitable and efficient tax system; develop policy; and advise and assist clients to meet their obligations.  In 2005-06 it is estimated that Revenue Management will process:
•	150 objections and reviews of decision;
•	1,600 Stamp Duty Homebuyer Concessions;
•	2,000 First Home Owner Grant applications;
•	over 500,000 assessments, reminder notices and reconciliations; and
•	applications and data quality checks.
			
	Total Cost	Government Payment for Outputs	
	2004‑05
Est. Outcome
$’000	2005‑06
Budget
$’000	2004‑05
Est. Outcome
$’000	2005‑06
Budget
$’000	
Output 1.4 Procurement Support Services	7  725	9  089	1  871	4  491	
Output Description
Includes procurement policy; buyers and sellers information services (basis), including on‑line procurement services; business opportunities, supplier notification of tenders and contracts, support to ACT Government purchasing officers; and the implementation of construction industry reforms, including pre‑qualification of suppliers and the provision of risk management services to ACT Government agencies.  Procurement Solutions will provide for:
•	whole of government procurement support services;
•	the buyers and sellers information service (basis);
•	contracts register;
•	e-Tendering;
•	supplier pre-qualification arrangements;
•	notifying 2,000 business opportunities to local suppliers; and
•	commencement of 400 client requested projects.

Strategic Indicators
Strategic Indicator 1

A Balanced General Government Sector Budget
Part of the Government’s Budget Strategy is for a balanced budget over the budget and forward estimate period.  While there will inevitably be surpluses and deficits in individual budget years, the balanced budget approach reflects the Government’s belief that there should not be sustained periods of deficit and government borrowing, and that surpluses should be returned to the community as services and infrastructure.  

Strategic Indicator 2
Maintaining a AAA credit rating
Standard and Poor’s assess the Territory’s credit rating each year.  The Territory currently has the highest possible credit rating - a AAA credit rating.  
The Department of Treasury assists the Government to maintain this credit rating.

Strategic Indicators cont.
Strategic Indicator 3
Total General Government Sector Borrowings (Debt)
 	2004-05	2005-06	2006-07	2007-08	2008-09	
	Est Outcome	Budget	Estimate	Estimate	Estimate	
	$m	$m	$m	$m	$m	
						
GGS Sector Borrowings	   701	   681	   668	   652	   637	

The ACT has a small, in relative terms, amount of debt on issue.  Much of this relates to low interest rate loans provided to the ACT by the Commonwealth under housing assistance agreements and other programs.  To retire this debt would represent a poor financial decision by the Territory, as surplus cash can be invested at a higher rate than is currently charged on these debt instruments.
Treasury also maintains an amount of debt in the capital market to maintain a liquid market for ACT bonds.  This has the effect of, if required, providing a greater borrowing capacity for the ACT.  A stable and low level of debt is desirable.

Strategic Indicator 4
Net interest cost as a proportion of total own‑source revenue for the General Government Sector
 	2004-05	2005-06	2006-07	2007-08	2008-09	
	Est Outcome	Budget	Estimate	Estimate	Estimate	
	$m	$m	$m	$m	$m	
						
Interest Expense	  47	  49	  49	  52	  54	
						
Interest Revenue	  78	  69	  58	  54	  55	
						
Net Interest Cost	-  31	-  20	-  8	-  2	-  2	
						
Own Source Revenue	1  617	1  568	1  669	1  763	1  857	
						
Net Interest Cost as a % of Own Source Revenue	-1.9%	-1.3%	-0.5%	-0.1%	-0.1%	

Net interest is the difference between interest earned on investments and interest paid on debt.  Total own-source revenue is the difference between total revenue and Commonwealth Grants on the operating statement. 
This provides an indication of the Government’s ability to meet its debt obligations.  The projections for this indicator remain negative over the forward estimates, indicating the Territory can comfortably meet interest expenses.

Accountability Indicators
	2004‑05
Targets	2004-05
Est. Outcome	2005-06
Target	
1.1 Economic Management	
a.	Briefings on ACT Economy	148	148	120	
b.	Submission to Commonwealth Grants Commission Annual Update	1	1	1	
c.	Submissions to the Commonwealth Grants Commission Major Review	n/a	n/a	3	
d.	Submission to credit rating agency	1	1	1	

1.2 Financial Management	
a.	Budget	1	1	1	
b.	Annual Financial reports	1	1	1	
c.	Quarterly Reports	4	4	4	
d.	Expenditure Capacity Reviews	4	4	3	

1.3 Revenue Management	
a.	Debt Management — level of outstanding debt as a percentage of Treasury tax revenue.	2%	2%	2%	
b.	Compliance revenue per inspector.	$280  000	$381  993	$300  000	

1.4 Procurement Support Services 	
a.	Proportion of Government funded annual Capital Works program supported with project procurement services	60%	62%	60%	
b.	Quality Management Systems Compliance with ISO9001:2000 –number of category 1 non‑conformance findings	<2	<2	<2	

Budgeted Financial Results
Section 31 of the Financial Management Act 1996 (FMA) advises that Chief Executives are responsible for achievement of financial results. For the purpose of Section 31 of the FMA, key budgeted results are specified in the Budget papers to improve accountability. An outcome of the increased accountability will be the requirement for Chief Executives to explain material variances from specified budget results.
In accordance with Section 31 of the FMA, following are the key budgeted results for the Department:
Departmental
•	Operating Result ($6.758m deficit) – this measure focuses on the financial performance of the Department, and will measure the Department’s success in managing expenditure levels within government funding and other revenue limitations.  The deficit is due to the anticipated expenditure for whole-of-government restructuring and non-cash expense of depreciation; and
•	Current Ratio (1.3:1) – the current ratio is an indication of the ability to fund short term liabilities from short term assets. The Department has sufficient funds to cover its short term liabilities in the next financial year. 
Territorial
•	Taxes, fees and fines ($685.174m) – this measures the Department’s performance in relation to the collection of taxes, fees and fines revenue for the Territory; 
•	Debt collection ratio (0.1:1) – this indicates the proportion of taxes, fees and fines that were earned, but uncollected.

Changes to Appropriation
Changes to Appropriation - Departmental						
 	2004-05	2005-06	2006-07	2007-08	2008-09	
Government Payment for Outputs	Est. Outc.	Budget	Estimate	Estimate	Estimate	
 	$'000	$'000	$'000	$'000	$'000	
2004-05 Budget	  29  610	  30  377	  31  134	  31  632	  31  632	
2nd Appropriation						
Wage Negotiations	    409	    459	    553	    560	    561	
2005-06 Budget Policy Adjustments						
New Restructure Fund	    0	  12  300	  6  000	    0	    0	
Improved Revenue Office service and tax compliance measures	    0	    390	    361	    395	    411	
General Savings	    0	-1  321	-1  321	-1  321	-1  321	
2005-06 Budget Technical Adjustments						
Communication Contract Savings	    0	-54	-81	-81	-81	
Increased Expense in Agency Fees	    0	    40	    40	    40	    40	
Revised Indexation Parameters	    0	    0	    0	    0	    516	
Rollover – Budget and Finance System Funding	-300	    300	    0	    0	    0	
Rollover - Social Plan Evaluation Framework	-200	    200	    0	    0	    0	
Rollover - Sustainable Infrastructure Capital Funding	    0	  2  500	    0	    0	    0	
Transfer of Energy and Water to Chief Minister's Department	-634	-993	-1  009	-1  025	-1  041	
Transfer of Gambling and Racing to Department of Economic Development	-2  549	-4  082	-4  177	-4  246	-4  300	
						
2005-06 Budget 	  26  336	  40  116	  31  500	  25  954	  26  417	

Changes to Appropriation - Territorial						
 	2004-05	2005-06	2006-07	2007-08	2008-09	
Payment for Expenses on Behalf of Territory	Est. Outc.	Budget	Estimate	Estimate	Estimate	
 	$'000	$'000	$'000	$'000	$'000	
2004-05 Budget	  42  408	  45  182	  45  875	  44  783	  44  783	
2nd Appropriation						
Red Cross Tsunami Appeal	    500	    0	    0	    0	    0	
Wage Negotiations - Exhibition Park in Canberra	    3	    3	    4	    4	    4	
2005-06 Budget Technical Adjustments						
Transfer of Gambling and Racing to Department of Economic Development	-3  251	-7  029	-7  231	-7  439	-7  439	
Revised Indexation Parameters	    0	    0	    0	    0	    7	
						
2005-06 Budget 	  39  660	  38  156	  38  648	  37  348	  37  355	

Changes to Appropriation - Departmental						
 	2004-05	2005-06	2006-07	2007-08	2008-09	
Capital Injections	Est. Outc.	Budget	Estimate	Estimate	Estimate	
 	$'000	$'000	$'000	$'000	$'000	
2004-05 Budget	  14  000	    0	    0	    0	    0	
						
2005-06 Budget Policy Adjustments						
Capital Injection - ACT Insurance Authority	    0	  23  000	    0	    0	    0	
Capital Injection - Rhodium Asset Solutions	    0	  1  500	    0	    0	    0	
2005-06 Budget Technical Adjustments						
Rollover - Sustainable Infrastructure Capital Funding	-2  500	    0	    0	    0	    0	
						
2005-06 Budget 	  11  500	  24  500	    0	    0	    0	

Changes to Appropriation - Territorial						
 	2004-05	2005-06	2006-07	2007-08	2008-09	
Capital Injections	Est. Outc.	Budget	Estimate	Estimate	Estimate	
 	$'000	$'000	$'000	$'000	$'000	
2004-05 Budget	    695	    0	    0	    0	    0	
						
2005-06 Budget Policy Adjustments						
Capital Injection - EPIC	    0	    450	    450	    450	    450	
						
2005-06 Budget 	    695	    450	    450	    450	    450	

2004-05 Capital Works Program
Departmental
 	Estimated	Estimated	2005-06	2006-07	2007-08	Expected 	
	Total	Expenditure	Financing	Financing	Financing	Completion 	
	Cost	Pre 2005-06				Date  	
 	$’000	$’000	$’000	$’000	$’000	 	
							
New Capital Works							
							
Sustainable  Infrastructure1	4  000	1  500	2  500	-	-	June 2006	
							
Total Works in Progress	4  000	1  500	2  500	-	-	 	
							
Total Departmental Capital Works	4  000	 1  500	2  500	-	-	 	

1 The project was initially treated as capital, however, the treatment has been changed to correctly reflect these payments as operating expenses in 2004-05 and 2005-06 with project values of $1.5m and $2.5m respectively each year.  Matching GPO of $2.5m, rather than capital injection, has been recognised in
2005-06.

Commonwealth Grants
The major payments for which the Department has responsibility are:

Name of Grant	Activities Funded by Grant	2005-06
Estimate
$'000	
			
Assistance for Water and Sewerage	Assistance in meeting the additional cost for water and sewerage arising from Canberra's role as the National Capital	9  250	
Financial Assistance Grants for Local Government	Financial assistance in relation to the operation of local governing bodies.	33  942	
ACT National Capital Influences	Compensation for the effect of National Capital influence on the costs of providing municipal services.	23  004	
National Competition Payments	Funding arrangement between the Commonwealth and the ACT in relation to implementation of the national competition policy and related reforms.	12  600	
GST Revenue Grants	GST revenue passed on to the ACT by the Commonwealth under A New Tax System arrangements	721  400	

Total
		
800  196	

Department of Treasury	
Operating Statement	
  2004-05			  2004-05	   2005-06		  2006-07	  2007-08	  2008-09		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		Income								
		Revenue								
29  610		Government Payment for Outputs	26  336	40  116	52	31  500	25  954	26  417		
56		User Charges - Non ACT Government	56	56	-	56	56	56		
4  242		User Charges - ACT Government	4  242	4  284	1	4  327	4  350	4  350		
816		Interest	1  000	706	-29	761	816	816		
500		Resources Received free of charge	500	500	-	500	500	500		
35  224		Total Revenue	32  134	45  662	42	37  144	31  676	32  139		
		Gains								
0		Total Gains	0	0	-	0	0	0		
35  224		Total Income	32  134	45  662	42	37  144	31  676	32  139		
		Expenses								
21  658		Employee Expenses	17  425	33  188	90	22  364	16  603	16  797		
2  343		Superannuation Expenses	2  197	2  223	1	2  288	2  292	2  320		
11  229		Supplies and Services	10  869	11  795	9	11  159	11  438	11  684		
2  855		Depreciation and Amortisation	2  855	2  302	-19	1  094	324	217		
4  200		Grants and Purchased Services	3  222	2  912	-10	426	435	430		
102		Other Expenses	0	0	-	0	0	0		
42  387		Total Ordinary Expenses	36  568	52  420	43	37  331	31  092	31  448		
-7  163		Operating Result	-4  434	-6  758	-52	-187	584	691		

Department of Treasury	
Balance Sheet	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/05			as at 30/6/05	as at 30/6/06	   Var	as at 30/6/07	as at 30/6/08	as at 30/6/09		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
		Current Assets								
2  001		Cash	2  257	1  406	-38	1  286	1  286	1  286		
1  634		Receivables	2  519	2  519	-	2  519	2  519	2  519		
20  829		Investments	29  997	25  624	-15	26  530	27  541	28  552		
0		Other	773	773	-	773	773	773		
24  464		Total Current Assets	35  546	30  322	-15	31  108	32  119	33  130		
		Non Current Assets								
387		Property, Plant and Equipment	547	407	-26	267	160	160		
3  061		Intangibles	3  036	874	-71	720	674	457		
4  000		Capital Works in Progress	0	851	#	171	0	0		
7  448		Total Non Current Assets	3  583	2  132	-40	1  158	834	617		
31  912		TOTAL ASSETS	39  129	32  454	-17	32  266	32  953	33  747		
		Current Liabilities								
1  756		Payables	10  443	10  410	-	10  369	10  398	10  427		
2  170		Employee Benefits	2  305	2  392	4	2  422	2  473	2  525		
13  899		Other	10  482	10  482	-	10  482	10  482	10  482		
17  825		Total Current Liabilities	23  230	23  284	-	23  273	23  353	23  434		
		Non Current Liabilities								
2  273		Employee Benefits	2  207	2  236	1	2  246	2  269	2  291		
2  273		Total Non Current Liabilities	2  207	2  236	1	2  246	2  269	2  291		
20  098		TOTAL LIABILITIES	25  437	25  520	-	25  519	25  622	25  725		
11  814		NET ASSETS	13  692	6  934	-49	6  747	7  331	8  022		
		REPRESENTED BY FUNDS EMPLOYED								
11  814		Accumulated Funds	13  692	6  934	-49	6  747	7  331	8  022		
11  814		TOTAL FUNDS EMPLOYED	13  692	6  934	-49	6  747	7  331	8  022		

Department of Treasury	
Cash Flow Statement	
  2004-05			  2004-05	   2005-06		  2006-07	  2007-08	  2008-09		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		CASH FLOWS FROM OPERATING ACTIVITIES								
		Receipts								
29  610		Cash from Government for Outputs	26  336	40  116	52	31  500	25  954	26  417		
86  545		User Charges	86  545	87  583	1	88  632	88  756	88  756		
816		Interest Received	1  000	706	-29	761	816	816		
18  089		Other Revenue	18  089	18  293	1	18  498	18  498	18  498		
135  060		Operating Receipts	131  970	146  698	11	139  391	134  024	134  487		
		Payments								
23  936		Related to Employees	19  602	35  295	80	24  612	18  821	19  043		
10  712		Related to Supplies and Services	10  352	11  224	8	10  599	10  909	11  155		
4  200		Grants and Purchased Services	3  222	2  912	-10	426	435	430		
100  543		Other	100  441	101  640	1	102  848	102  848	102  848		
139  391		Operating Payments	133  617	151  071	13	138  485	133  013	133  476		
-4  331		NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES	-1  647	-4  373	166	906	1  011	1  011		
		CASH FLOWS FROM INVESTING ACTIVITIES								
		Payments								
4  000		Purchase of Property, Plant and Equipment	0	0	-	0	0	0		
0		Purchase of Land and Intangibles	0	851	#	120	0	0		
10  000		Capital Payments to Government Agencies	10  000	24  500	145	0	0	0		
14  000		Investing Payments	10  000	25  351	154	120	0	0		
-14  000		NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES	-10  000	-25  351	-154	-120	0	0		
		CASH FLOWS FROM FINANCING ACTIVITIES								
		Receipts								
14  000		Capital Injection from Government	11  500	24  500	113	0	0	0		
14  000		Financing Receipts	11  500	24  500	113	0	0	0		
14  000		NET CASH INFLOW/(OUTFLOW) FROM FINANCING ACTIVITIES	11  500	24  500	113	0	0	0		
-4  331		NET INCREASE/(DECREASE) IN CASH HELD	-147	-5  224	#	786	1  011	1  011		
27  161		CASH AT BEGINNING OF REPORTING PERIOD	32  401	32  254	..	27  030	27  816	28  827		
22  830		CASH AT THE END OF THE REPORTING PERIOD	32  254	27  030	-16	27  816	28  827	29  838		

Department of Treasury	
Statement of Changes in Equity	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/05			as at 30/6/05	as at 30/6/06	   Var	as at 30/6/07	as at 30/6/08	as at 30/6/09		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
14  977		Opening Balance	16  457	13  692	-17	6  934	6  747	7  331		
		Accumulated Funds								
-7  163		Operating Result for the Period	-4  434	-6  758	-52	-187	584	691		
		Reserves								
-7  163		Total Income And Expense For The Period	-4  434	-6  758	-52	-187	584	691		
		Transactions Involving Equity Holders Affecting Accumulated Funds								
4  000		Capital Injections	1  500	0	-100	0	0	0		
0		Inc/Dec in Net Assets due to Admin Restructure	169	0	-100	0	0	0		
11  814		Closing Balance	13  692	6  934	-49	6  747	7  331	8  022		
Notes to the Budget Statements
Significant variations are as follows:
Operating Statement
•	government payment for outputs: 
•	the decrease of $3.274m in the 2004‑05 estimated outcome from the original budget is mainly due to the transfers of Energy and Water ($0.634m), and Gambling and Racing ($2.549m) as a result of 4 November 2004 Administrative Arrangement Order (AAO), rollovers of the Budget and Financial system funding ($0.3m) and the Social Plan Evaluation Framework ($0.2m) to 2005‑06.  These are partly offset by wages increases of $0.409m;
•	the increase of $13.780m in the 2005‑06 Budget from the 2004‑05 estimated outcome is mainly due to the Restructuring Fund of $12.3m, initiative funding for a Tax Compliance/Online Revenue System of $0.390m and the rollover and subsequent transfer of capital injection to GPO for the Sustainable Infrastructure project of $2.5m.  These are partially offset by general savings ($1.321m) which will be achieved by making administrative savings and by reducing the breadth and detail of economic and financial policy advice;
•	user charges – ACT Government: the increase in the 2005‑06 Budget from the 2004‑05 estimated outcome represents indexation of charges;
•	interest: the increase of $0.184m in the 2004‑05 estimated outcome from the original budget is mainly due to additional interest earned from the higher levels of cash holdings relating to the unspent Restructuring Fund as at 30 June 2005.  The decrease of $0.294m in 2005‑06 Budget from the 2004‑05 estimated outcome is a result of a decrease in cash holdings during 2005‑06 as the cash holdings for the Restructuring Fund are fully expended.
•	employee expenses: 
•	the decrease of $4.233m in the 2004‑05 estimated outcome from the original budget is mainly due to rollover of unspent funds from the Restructuring Fund ($3m) to 2005‑06, internal savings of employee costs ($0.873m), the transfers of Energy and Water ($0.425m), and Gambling and Racing ($0.051m) as a result of the AAO’s, partly offset by wage increases;
•	the increase of $15.763m in 2005‑06 Budget from the 2004‑05 estimated outcome is mainly due to wage increases of $0.625m, the Restructuring Fund of $12.3m and its rollover from 2004‑05 of $3m, partly offset by general savings in salary $0.281m; 
•	superannuation expenses:  the decrease of $0.146m in 2004‑05 estimated outcome from the original budget is mainly due to associated cost saving ($0.167m) in superannuation expenses as a result of internal cost savings from a number of business units within the department;
•	supplies and services:  
•	the decrease of $0.360m in the 2004‑05 estimated outcome from the original budget is mainly due to rollovers of the Budget and Financial system funding ($0.3m) and Social Plan Evaluation Framework Initiative ($0.2m) to 2005‑06 respectively;
•	the increase of $0.926m from the 2004‑05 estimated outcome to the 2005‑06 Budget is mainly due to rollovers of $0.5m from 2004‑05 and additional funding for a Tax Compliance/Online Revenue System of $0.212m;
•	depreciation:  the decrease of $0.553m in the 2005‑06 Budget from 2004‑05 estimated outcome represents reduction in depreciation of Budget and Financial system as it will become fully depreciated during 2005‑06;
•	grants and purchased services:  the decreases of $0.978m in the 2004‑05 estimated outcome from the original budget, and $0.310m in 2005‑06 Budget from the 2004‑05 estimated outcome, are primarily due to the cessation of service purchase payments for Gambling and Racing as a result of the AAO’s, partly offset by capital grant expenditure related to the Sustainable Infrastructure project which was initially recognised as an asset; and
•	other expenses:  the decrease of $0.102m in the 2004‑05 estimated outcome from the original budget is primarily due to the transfer of Energy and Water from the Department as a result of the AAO’s transfer.
Balance Sheet
•	cash and current investments:  the increase of $9.424m in the 2004‑05 estimated outcome from the original budget and the decrease of $5.224m in the 2005‑06 Budget from the 2004‑05 estimated outcome are mainly due to cash movements from the Restructuring Fund and contract payments for capital works received by Procurement Solutions;
•	property, plant and equipment:  
•	the increase of $0.160m in the 2004‑05 estimated outcome from the original budget is primarily related to additional leasehold improvements; 
•	the decrease of $0.140m in 2005‑06 Budget from the 2004‑05 estimated outcome represents depreciation expenses of the leasehold improvements for  2005‑06;
•	intangibles:  the decrease of $2.162m in 2005‑06 Budget from the 2004‑05 estimated outcome represents the amortisation of the Budget and Financial, and Territory revenue systems;
•	capital works in progress: 
•	the decrease of $4m in the 2004‑05 estimated outcome from the original budget is related to Sustainable Infrastructure project, which was initially recognised as an asset but is now reflected as a capital grant expense in 2004‑05 and 2005‑06 respectively.  
•	the increase of $0.851m in 2005‑06 Budget from the 2004‑05 estimated outcome is mainly related to self funded works in progress to upgrade the Department’s Rating and Tax Compliance/Online Revenue Systems totalling $0.850m;
•	current payables: the increase of $8.687m in the 2004‑05 estimated outcome from the original budget is mainly due to revised estimates of payable levels for Procurement Solutions; 
•	current employee entitlements:  the increase of $0.135m in the 2004‑05 estimated outcome from the original budget is mainly due to the impact of wage increases on the provision for annual leave; and
•	other current liabilities: the decrease of $3.417m in the 2004‑05 estimated outcome from the original budget is mainly due to revised estimates of project revenue paid in advance by agencies to Procurement Solutions for work yet to be done. 
Statement of Changes in Equity
•	increase/decrease in net assets from administrative restructuring:  the increase in 2004‑05 estimated outcome from the original budget is primarily due to the transfer of Energy and Water from the Department, and Gambling and Racing to the Department of Economic Development as a result of the AAO transfers; and
•	capital injection: the decrease of $2.5m in 2004‑05 estimated outcome from the original budget and $1.5m in the 2005‑06 Budget from the 2004‑05 estimated outcome is primarily due to the rollover of funding for the Sustainable Infrastructure project ($2.5m) to 2005‑06.  This was initially treated as capital funding but is now to be recognised as an operating expense with matching GPO in 2005‑06.

Department of Treasury	
Statement of Income and Expenses on Behalf of the Territory	
  2004-05			  2004-05	   2005-06		  2006-07	  2007-08	  2008-09		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		Income								
		Revenue								
42  408		Payment for Expenses on behalf of Territory	39  660	38  156	-4	38  648	37  348	37  355		
653  915		Taxes Fees and Fines	650  485	685  174	5	734  400	783  993	837  139		
748  359		Grants from the Commonwealth	775  162	800  196	3	821  991	859  978	901  253		
118		Interest	29	0	-100	0	0	0		
174  725		Dividend Revenue	170  638	182  648	7	176  414	203  162	195  329		
6  763		Other Revenue	2  935	230	-92	230	230	230		
1  626  288		Total Revenue	1  638  909	1  706  404	4	1  771  683	1  884  711	1  971  306		
		Gains								
0		Total Gains	0	0	-	0	0	0		
1  626  288		Total Income	1  638  909	1  706  404	4	1  771  683	1  884  711	1  971  306		
		Expenses								
9  300		Supplies and Services	9  300	9  600	3	9  800	9  800	9  800		
34  325		Grants and Purchased Services	30  290	28  363	-6	28  674	27  381	27  596		
4  806		Other Expenses	5  306	5  307	..	4  822	4  838	4  855		
1  577  857		Transfer Expenses	1  594  013	1  663  134	4	1  728  387	1  842  692	1  929  055		
1  626  288		Total Ordinary Expenses	1  638  909	1  706  404	4	1  771  683	1  884  711	1  971  306		
0		Operating Result	0	0	-	0	0	0		

Department of Treasury	
Statement of Assets and Liabilities on Behalf of the Territory	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/05			as at 30/6/05	as at 30/6/06	   Var	as at 30/6/07	as at 30/6/08	as at 30/6/09		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
		Current Assets								
1  474		Cash	3  226	3  273	1	3  332	3  350	3  350		
67  599		Receivables	82  731	76  109	-8	78  513	80  060	80  842		
351		Investments	0	0	-	0	0	0		
69  424		Total Current Assets	85  957	79  382	-8	81  845	83  410	84  192		
		Non Current Assets								
2  000		Investments	2  000	2  000	-	2  000	2  000	2  000		
2  000		Total Non Current Assets	2  000	2  000	-	2  000	2  000	2  000		
71  424		TOTAL ASSETS	87  957	81  382	-7	83  845	85  410	86  192		
		Current Liabilities								
56  513		Payables	79  476	72  955	-8	75  418	77  112	78  023		
12  911		Other	7  824	7  770	-1	7  770	7  641	7  512		
69  424		Total Current Liabilities	87  300	80  725	-8	83  188	84  753	85  535		
69  424		TOTAL LIABILITIES	87  300	80  725	-8	83  188	84  753	85  535		
2  000		NET ASSETS	657	657	-	657	657	657		
		REPRESENTED BY FUNDS EMPLOYED								
2  000		Accumulated Funds	657	657	-	657	657	657		
2  000		TOTAL FUNDS EMPLOYED	657	657	-	657	657	657		

Department of Treasury	
Budgeted Statement of Cashflows on Behalf of the Territory	
  2004-05			  2004-05	   2005-06		  2006-07	  2007-08	  2008-09		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		CASH FLOWS FROM OPERATING ACTIVITIES								
		Receipts								
42  104		Cash from Government for EBT	39  353	37  843	-4	38  327	37  020	37  020		
304		Cash from Government - CSO Payments	307	313	2	321	328	335		
653  917		Taxes, Fees and Fines	649  989	684  666	5	734  381	783  860	836  989		
118		Interest Received	29	0	-100	0	0	0		
748  359		Grants Received from the Commonwealth	776  819	800  396	3	821  991	859  978	901  253		
6  896		Other Revenue	3  265	590	-82	590	590	590		
1  451  698		Operating Receipts	1  469  762	1  523  808	4	1  595  610	1  681  776	1  776  187		
		Payments								
9  300		Related to Supplies and Services	9  300	9  600	3	9  800	9  800	9  800		
34  325		Grants and Purchased Services	30  290	28  363	-6	28  674	27  381	27  596		
353		Other	1  496	580	-61	580	580	580		
1  564  679		Territory Receipts to Government	1  582  486	1  674  226	6	1  730  513	1  845  603	1  932  749		
1  608  657		Operating Payments	1  623  572	1  712  769	5	1  769  567	1  883  364	1  970  725		
-156  959		NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES	-153  810	-188  961	-23	-173  957	-201  588	-194  538		
		CASH FLOWS FROM INVESTING ACTIVITIES								
		Receipts								
155  640		Dividends	152  743	189  008	24	174  016	201  606	194  538		
155  640		Investing Receipts	152  743	189  008	24	174  016	201  606	194  538		
		Payments								
695		Capital Payments to Government Agencies	695	450	-35	450	450	450		
695		Investing Payments	695	450	-35	450	450	450		
154  945		NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES	152  048	188  558	24	173  566	201  156	194  088		
		CASH FLOWS FROM FINANCING ACTIVITIES								
		Receipts								
695		Capital Injection from Government	695	450	-35	450	450	450		
695		Financing Receipts	695	450	-35	450	450	450		
		Payments								
0		Payments of Transferred Cash Balances	1  343	0	100	0	0	0		
0		Financing Payments	1  343	0	100	0	0	0		
695		NET CASH INFLOW/(OUTFLOW) FROM FINANCING ACTIVITIES	-648	450	169	450	450	450		
-1  319		NET INCREASE/(DECREASE) IN CASH HELD	-2  410	47	102	59	18	0		
3  144		CASH AT BEGINNING OF REPORTING PERIOD	5  636	3  226	-43	3  273	3  332	3  350		
1  825		CASH AT THE END OF THE REPORTING PERIOD	3  226	3  273	1	3  332	3  350	3  350		

Department of Treasury	
Statement of Changes in Equity on Behalf of the Territory	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/05			as at 30/6/05	as at 30/6/06	   Var	as at 30/6/07	as at 30/6/08	as at 30/6/09		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
2  000		Opening Balance	2  000	657	-67	657	657	657		
		Accumulated Funds								
0		Operating Result for the Period	0	0	-	0	0	0		
		Reserves								
0		Inc/Dec in Net Assets due to Admin Restructure	-1  343	0	-100	0	0	0		
2  000		Closing Balance	657	657	0	657	657	657		
Notes to the Budget Statements
The Department of Treasury’s territorial financial statements include taxes, fees and fines collected on behalf of the Territory.  A detailed explanation of the movement in taxes, fees and fines for 2005‑06 is provided in Budget Paper 3, Part 5.2 – Revenue 2005‑06 and Forward Estimates.  An explanation of the movement from the original 2004‑05 budget to the estimated outcome is detailed in Budget Paper 3, Part 3 – 2005‑06 Estimated Outcome.
Significant variations are as follows:
Statement of Income and Expenses on Behalf of the Territory
•	payment for expenses on behalf of the Territory: the decrease ($2.748m) in the 2004‑05 estimated outcome from the original budget is mainly due to the transfer of the Racing and Development Fund ($3.251m) to the Department of Economic Development as a result of 4 November 2004 AAO’s, partly offset by funding of $0.5m for the Tsunami Appeal Contribution.  The decrease ($1.504m) in the 2005‑06 Budget from the 2004‑05 estimated outcome is mainly due to the full-year effect ($3.778m) of the Administrative Arrangement Order, partly offset by the increase in funding for the First Home Owners Grants Scheme ($2.1m); 
•	taxes, fees and fines: the decrease ($3.430m) in the 2004‑05 estimated outcome from the original budget reflects decreased revenue from conveyancing ($16.143), offset by greater than expected payroll tax ($7.740m), duty on transfers of unlisted shares ($3.220m), general rates ($1.607m) and income tax equivalents ($1.580m).  The conveyancing decrease reflects the drop in volume of property transactions despite the employment and business health of the ACT economy.  The increase ($34.689m) in the 2005‑06 Budget from the 2004‑05 estimated outcome reflects increased conveyancing revenue ($11.529m) and an increase of rates revenue ($18.113m) and payroll tax ($16.284m), partially offset by the abolition of debit tax ($14.832m); 
•	grants from the Commonwealth: the increase ($26.803m) in the 2004‑05 estimated outcome from the original budget is due to an increase in GST Revenue grants ($24.4m), Natural Disaster Relief Arrangements ($1.149m) and competition payments ($1.2m).  The increase ($25.034m) in the 2005‑06 Budget from the 2004‑05 estimated outcome is mainly due to an increase in GST Revenue grants ($39.4m), partly offset by a decrease in Special Revenue Assistance ($14.2m); 
•	dividends: the decrease ($4.087m) in the 2004‑05 estimated outcome from the original is mainly due to decreased dividends from ACTEW ($5.985m) and the Department of Urban Services ($0.505m), partly offset by an increased dividend from ACTTAB of $2.431m. The increase ($12.010m) in the 2005‑06 Budget from the 2004‑05 estimated outcome is mainly due to an increased Land Development Agency dividend ($44.690m), partly offset by decreased dividends from ACTEW ($32.080m) and ACTTAB ($0.769m);
•	grants and purchased services: the decrease ($4.035m) in the 2004‑05 estimated outcome from the original budget is due to the transfer of the Racing Development Fund ($4.538m) to the Department of Economic Development as a result of the AAO, partly offset by the one-off payment for Tsunami Appeal Contribution ($0.5m). The decrease of $1.927m in the 2005‑06 Budget from the 2004‑05 estimated outcome is mainly due to the non-recurrence of 2004‑05 Tsunami Appeal contribution of $0.5m and cessation of the Racing and Development Fund payments of $3.732m as a result of the AAO, partly offset by increased First Home Owners Grants payments ($2.1m) and ACTEW service purchase payments ($0.199m); and
•	transfer expenses: the increase ($16.156m) in the 2004‑05 estimated outcome from the original budget and the increase ($69.121m) in the 2005‑06 Budget from the 2004‑05 estimated outcome relates to the transfer of revenues to the Central Financing Unit (CFU).
Statement of Assets and Liabilities on Behalf of the Territory
•	cash and current investments: the increase ($1.401m) in the 2004‑05 estimated outcome from the original budget is mainly due to timing of creditor payments  relating to the First Home Owners Grant Scheme and the ACTEW services purchase payment;
•	current receivables: the increase ($15.132m) in the 2004‑05 estimated outcome from the original budget and the decrease ($6.622m) in the 2005‑06 Budget from the 2004‑05 estimated outcome is mainly due to revised estimate for dividend and tax accruals; 
•	current payables: the increase ($22.963m) in the 2004‑05 estimated outcome from the original budget and the increase ($6.521m) in the 2005‑06 Budget from the 2004‑05 estimated outcome mainly relates to the accrued transfer of revenues to the Central Financing Unit; and
•	other current liabilities: the decrease ($5.087m) in the 2004‑05 estimated outcome from the original budget is mainly due to a decrease in the provision for refund of taxes. 
Statement of Changes in Equity
•	increase/decrease in net assets from administrative restructuring: the decrease in 2004‑05 estimated outcome from the original budget is mainly due to the transfer of the Racing Development Fund to the Department of Economic Development as a result of the AAO.