2011-12 Northern Territory Treasury Annual Report

NORTHERN TERRITORY TREASUR Y

AnnualReport

2011- 12

Published by the Department of Treasury and Finance

Northern Territory Government 2012

Apart from any use permitted under the Copyright Act, no part of this document may be reproduced without prior written permission from the Northern Territory Government through the Department of Treasury and Finance.

ISSN: 0729-1442

Department of Treasury and Finance 38 Cavenagh Street

GPO Box 1974, Darwin NT 0801

Telephone: (08) 8999 7406

Facsimile: (08) 8999 7150

Website: www.nt.gov.au/ntt

The Honourable Robyn Lambley MLA Treasurer

GPO Box 3146

DARWIN NT 0801

Dear Treasurer

In accordance with the provisions of section 28 of the Public Sector Employment and Management Act, I am pleased to provide to you the Annual Report of Northern Territory Treasury for 2011-12 and to confirm that, in terms of that Act, all Employment Instructions have been satisfied.

This report describes developments and operational outcomes during the year to inform a wide range of readers including Parliamentarians, other government agencies, the public and Treasury employees. Pursuant to the Financial Management Act, I advise that to the best of my knowledge and belief:

proper records of all transactions affecting Treasury are kept and that employees under my control observe the provisions of that Act, the Financial Management Regulations and the Treasurers Directions;

procedures within Treasury afford proper internal control, and that these procedures are recorded in the Accounting and Property Manual, which has been prepared in accordance with the requirements of the Financial Management Act;

no indication of fraud, malpractice, major breach of legislation or delegation, major error in or omission from the accounts and records exists;

in accordance with the requirements of section 15 of the Act, the internal audit capacity available to Treasury is adequate and the results of internal audits have been reported to me; and

the financial statements included in the Annual Report have been prepared from proper accounts and records and are in accordance with Treasurers Directions.

Pursuant to section 131 of the Information Act, I advise that to the best of my knowledge and belief, the agency has implemented processes to achieve compliance with the archives and records management provisions as prescribed in Part 9 of the Information Act.

Yours sincerely

Alan Tregilgas Under Treasurer

28 September 2012

This report is designed to meet Northern Territory Treasurys (Treasury) annual reporting requirements, as specified for public sector agencies

in the Public Sector Employment and Management Act (PSEMA),

Financial Management Act (FMA) and Information Act. It reports Treasurys performance to the Treasurer, the Legislative Assembly, government agencies and other stakeholders, including Treasurys own staff. It reflects on Treasurys many and varied endeavours during 2011-12, and provides information about Treasurys culture, responsibilities and internal governance arrangements.

The 2011-12 Annual Report is divided into the Under Treasurers Review and six key sections. A summary of the various sections of the report is as follows:

Treasury The Organisation introduces Treasury, detailing the organisations purpose, objectives and functions.

Achievements provides a detailed account of Treasurys performance in 2011-12 measured against achievement of the five strategic objectives. Output performance tables report on Treasurys performance in terms of the measures published in Budget Paper No. 3.

Corporate Governance outlines Treasurys corporate governance arrangements including performance of the six corporate governance committees and risk management strategies.

Managing Treasury provides an overview of Treasurys people and details Treasurys human resource management, fulfilment of corporate social responsibilities and legislation administered over 2011-12.

Financial Performance provides financial statements for Treasury and the Central Holding Authority (CHA).

Appendixes provides a glossary of common Treasury terms and a list of abbreviations, tables and figures.

The report is published in an electronic PDF format (rather than in print), providing options for downloading the entire report or individual sections. Alternative document formats are available upon request from the agency.

Please consider the environment and avoid unnecessary paper usage before printing this document.

For more information, visit our website at www.nt.gov.au/ntt

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How to Use This Report

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2011-12 Annual Report

Contents

Under Treasurers Review

2

Treasury The Organisation

5

Our Purpose and Role

6

Functions of Treasury

8

Achievements

11

Preface

12

Financial Management

13

Economic Management

17

Intergovernmental Relations

22

Revenue Management

26

Superannuation

28

Output Performance Tables

30

Corporate Governance35

Corporate Governance36

Corporate Governance Committees39

Risk Management45

Managing Treasury53

Treasury People54

Managing and Developing Treasury Staff59

Corporate Social Responsibility77

Publications79

Legislation Administered84

Legislative Changes 2011-1285

Membership of Boards and Committees86

Financial Performance89

Treasurys Dual Role 90 2011-12 Financial Statements Treasury 92 2011-12 Financial Statements Central Holding Authority 125

Appendixes157

Directory Appendix 1158

Glossary Appendix 2160

Abbreviations Appendix 3163

Tables and Figures Appendix 4164

This report has been prepared after the August 2012 election in which there was a change of Government. As a result of this change, a review of Treasurys strategic direction and structure is underway that will have an impact on the future priorities and programs that Treasury undertakes in its role as a lead agency. The new Government created the Department of Treasury and Finance, which incorporates Treasury along with Shared Services from the previous Department of Business and Employment. However this annual report only deals with Treasury as it existed in 2011-12.

The ongoing challenges for the Territorys finances remained in 2011-12 and Treasury continued to produce high-quality outputs in difficult circumstances. The commitment of Treasury staff underpins our achievements.

Financial Management

The 2012-13 Budget was handed down in May 2012. The development of the Territorys Budget provided considerable challenges due to the continuing period of uncertainty in the global economy and subdued economic conditions at the national level.

Work continued in 2011-12 to expand the range of Treasurers Directions and policy briefs, providing agencies with a central source of quality information on resource and infrastructure management, performance and governance practices. The Financial Management Act (FMA) was also amended to incorporate changes required to implement the National Health Reform Agreement.

The 2010-11 Treasurers Annual Financial Report (TAFR), including an audited final budget outcome for the year, was tabled in October 2011, meeting the Territorys reporting obligations under its own legislation and in line with relevant intergovernmental agreements.

Economic Management

In 2011-12 Treasury was involved in a number of agency-initiated reforms and Commonwealth reviews and schemes. This included participating in a working group to discuss the full implementation

of the National Disability Insurance Scheme (NDIS), submissions for the Natural Disaster Relief and Recovery Arrangements (NDRRA)

review, assisting with the development of the Darwin Port Corporation

Legislation Amendment Act (No. 11 of 2011) and working on a package of reforms to improve protection for home builders in the Northern Territory.

2011-12 saw a collaborative arrangement between Treasury and the Australian Bureau of Statistics (ABS) for the 2011 Census, including the deployment of approximately 40 employees from Territory Government agencies. While the majority of staff worked as Remote Area Mobile Team members in Territory communities, other staff were engaged

Under Treasurers Review

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Under Treasurers Review

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2011-12 Annual Report

as special collectors in urban locations. Twenty eight Treasury employees and an agency coordinator were seconded to the ABS.

Treasury continued its work on official Population Projections for the Northern Territory to assist with the future planning of development in the Territory, including service delivery and infrastructure provision. Treasury published an update in September 2011 with projections by single year of age, gender and Indigenous status for the period 2010 to 2040.

High-quality advice to Government and agencies continued to be provided on the Territorys economic and social indicators with the release of 151 economic briefs, 12 editions of the Territory Economic Review,

11 editions of the Territory Social Indicators, and the detailed Northern Territory Economy book as part of the 2012-13 Budget.

Intergovernmental Relations

During 2011-12, Treasury continued to play an active role in the implementation of the Intergovernmental Agreement (IGA) on Federal Financial Relations both within the Territory and nationally. Treasury worked closely with relevant Government agencies, and was also involved in reviewing the performance frameworks of several national agreements.

The Review of Goods and Services Tax (GST) Distribution (the Review) continued in 2011-12. Treasury has provided three submissions to the Review and the Review Panel is expected to submit its Final Report to the Commonwealth Treasurer in October 2012.

Treasury provided input to the Commonwealth Grants Commission (CGC) in 2011-12, including the Report on GST Revenue Sharing Relativities 2012 Update. Treasury officials are participating in the next major review of state revenue sharing relativities through the CGCs Data Working Party.

Treasury officials are members of the Steering Committee responsible for preparing the Indigenous Expenditure Report (IER). During 2011-12, Treasury contributed to the second national IER, which was released in September 2012.

Revenue Management

In 2011-12, Treasury administered and receipted $609.5 million in own-source revenue.

As part of the 2011-12 Budget, Treasury developed and implemented the framework for the new BuildBonus grant scheme. The scheme was extended twice during 2011-12 and applies to contracts and owner-builder commencements up to 31 December 2012.

A range of changes were made to systems, publications and processes to implement the 2011-12 Budget revenue measures, including legislative changes as part of the 2012-13 Budget.

In 2011-12, a data warehouse, associated business intelligence platform and reporting system were successfully implemented and will facilitate improved and timely reporting and more accurate compliance targeting.

Superannuation

Approval has been provided to draft legislation for Stage 2 of the superannuation reform project, which involves a number of changes, including expanding the Superannuation Trustee Board (STB), modernising three schemes, replacement of the Superannuation Review Board with the Superannuation Complaints Tribunal and amalgamating Territory superannuation legislation for all schemes (except the Supreme Court

Judges Pension Scheme) into one Act. Stage 1 of the reform project has already seen amendments to legislation.

The Superannuation Office continued with their project to convert paper records to electronic documents. The scanning of 4000 creditor records was undertaken in 2011-12.

The Superannuation Office has maintained its efforts to provide detailed information to members to assist them in understanding their entitlements and superannuation more generally, including the provision of fact sheets, website content and information seminars. In 2011-12 a number of publications were revised in line with legislative changes or updated practices, new forms were added and a new fact sheet was published.

How we did it

In 2011-12, Treasury continued to strive to be an employer of choice through maintaining a well-managed and flexible organisation that identifies and builds on the capabilities of its employees. Treasury concluded its succession planning initiative in 2011-12 and planning is currently underway for the next phase. In

2011-12, Treasury continued development of managerial capabilities and leadership, placed emphasis on professional and technical development of its staff, and promoted and expanded Treasurys various employment programs.

Treasurys six corporate governance committees continued to meet regularly and reviewed and approved various organisational policies and procedures. In 2011-12, Treasurys Indigenous Employment and Career Development (IECD) strategy was completed and rolled out, human resources delegations

and relevant policies and procedures affected by the revised PSEMA and subordinate legislation were reviewed. Occupational Health and Safety (OHS) policies and procedures affected by the revised Work Health and Safety (National Uniform Legislation) Act 2011 were reviewed and subsequently Treasurys

OHS Management System (OHSMS) was created. Corporate governance arrangements for Treasurys information management framework was reviewed and updated.

The Auditor-General conducted 13 audits or reviews on Treasurys processes, procedures and financial reports with no adverse findings. Treasury conducted 13 internal audits or reviews in a number of different areas and no major issues were identified.

Finally, I would like thank my predecessor, Jennifer Prince, for her dedication and integrity in the role as Under Treasurer and in particular her success in building a dedicated, loyal and committed team able to provide frank and unbiased advice to government on financial matters.

Alan Tregilgas

28 September 2012

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Under Treasurers Review

Treasury The OrganisationOur Purpose and Role6

Functions of Treasury8

Our Purpose and Role

Treasury The Organisation

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2011-12 Annual Report

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Services

The services Treasury provides include advice, analysis and administration of matters relating to:

financial management and fiscal responsibilities;

economic frameworks and the Territory economy;

commercial projects;

intergovernmental financial relations;

own-source revenue, including taxation;

public sector superannuation; and

grants, subsidies and community service obligations (CSOs) related to our responsibilities.

Through a well-managed and flexible organisation, Treasury:

recruits and retains high-quality staff and provides professional training and development opportunities;

maintains a commitment to high-quality outputs; and

ensures a safe, supportive workplace that recognises diversity and respects every staff member.

Treasury was established at Self Government in 1978. The organisation is responsible to the Treasurer.

What We DoPurpose

Treasurys purpose is to promote sustainable fiscal strength and economic development of the Northern Territory and contribute to improved social and fiscal wellbeing for Territorians.

Role

Treasurys primary role is to provide specialist fiscal, economic and commercial policy advice and services to the Northern Territory Government to assist it in delivering services and infrastructure for the benefit of Territorians.

Treasurys Strategic Objectives

Treasury strives to provide:

best practice financial management;

quality analysis and public policy advice on economic, social and commercial issues;

effective intergovernmental financial relations;

a fair and efficient Territory revenue system; and

effective public sector superannuation arrangements.

Stakeholders

Treasury stakeholders include:

the Treasurer, Cabinet and government agencies;

the Territory community, business groups and commentators;

the Legislative Assembly and the Auditor-General; and

Treasury staff.

How We Do It

As at 30 June 2012, Treasury employed 178 full-time equivalent staff, including those in the Northern Territory Treasury Corporation (Treasury Corporation).

Treasury has five divisional groups and a government business division (Treasury Corporation). Further details can be found in this section at page 8.

The Utilities Commission and Treasury Corporation produce their own annual reports. Each forms part of Treasury for administrative purposes and summary information about their performance is included in Treasurys Annual Report.

Treasurys Organisation Chart

Figure 1: Organisation Chart as at 30 June 2012

The functions of Treasury are provided through six divisional groups Financial Management Group, Economic Group, Territory Revenue Office, Northern Territory Superannuation Office, Treasury Corporation and Treasury Services Group.

Financial Management Group

responsible for the Territorys financial management framework

analysis and advice on whole of government resource issues including major government projects and initiatives with resource implications

whole of government budgeting and financial reporting

responsible for the development of the Territorys infrastructure program from a whole of government perspective

monitoring agency financial performance

management of the Central Holding Authority (CHA)

management of financial and commercial accountabilities and

risks as prescribed in the Financial Management Act (FMA) and the

Fiscal Integrity and Transparency Act, including the fiscal strategy

advice and analysis of National Agreements (NA) and National Partnerships (NP) agreements including Implementation Plans (IP) and respective Council of Australian Governments (COAG) Reform Council performance reports

Economic Group

advice on economic policy and reform issues

development and monitoring of economic frameworks

monitoring and analysis of macro-economic trends

publication of information and analysis on the Territory economy and the Territory community

responsible for demographic analysis and research, and statistical coordination across government

advice and analysis of intergovernmental financial relations including goods and services tax (GST) policy and revenue distribution

management of submissions and data returns to the Commonwealth Grants Commission (CGC)

commercial advice to government on major government projects and initiatives, and on the government owned corporations framework

Functions of Treasury

Territory Revenue Office collection of Territory revenue in accordance with the relevant tax and royalty legislation

advice on, and administration of, tax and royalty legislation

minimisation of losses to revenue through compliance activity and education programs

administration of First Home Owner Grant, First Home Owner Boost, BuildBonus, Buildstart and other home ownership incentive schemes

revenue modelling and forecasting

tax and royalty-related systems development

Northern Territory Superannuation Office

Northern Territory Treasury Corporation

management and development of Territory public sector superannuation policy and legislation

management and payment of benefit payments

investment of members funds, and support services to members and the trustee and review boards of various schemes

as the central financing authority, borrow, lend and invest funds on behalf of the Territory

invest surplus short-term cash balances of Government accounts

loans to Government, agencies, government owned corporations and (in certain circumstances) local governing authorities

Treasury Services Group provision of Treasurys own:

finance, procurement and office services

human resource management, recruitment, employment and staff development programs

information technology (IT), communications and records management

publishing services

central coordination and liaison between the Treasurers office, Ministers, Cabinet Office, Legislative Assembly and other Government agencies on Cabinet and ministerial business

Figure 2: Our Purpose, Objectives and Outputs

AchievementsPreface12

Financial Management13

Economic Management17

Intergovernmental Relations22

Revenue Management26

Superannuation28

Output Performance Tables30

Preface

Treasurys overall purpose is to promote sustainable fiscal strength

and economic development of the Northern Territory and contribute to improved social and fiscal wellbeing for Territorians.

Achievement of this purpose is measured through five strategic objectives:

1. Best practice financial management

Financial Management

2. Quality analysis and public policy advice on economic, social and commercial issues

Economic Management

3. Effective intergovernmental financial relations

Intergovernmental Relations

4. A fair and efficient Territory revenue system

Revenue Management

5. Effective public sector superannuation arrangements

Superannuation

This section reports on Treasurys performance in delivering outputs to meet these strategic objectives. Details are provided on key projects and achievements during the year, with performance recorded for the priorities identified in last years annual report.

Performance against the measures published in Budget Paper No. 3 is reported in the output performance tables. In almost all cases, measures were met or exceeded. Where performance did not meet the estimate, an explanation is provided.

Performance reporting for the Utilities Commission and Treasury Corporation is included in this section. These two statutory offices form part of Treasury for administrative purposes, however full details of achievements in 2011-12 are reported in their respective annual reports.

Our Performance Symbols

Completed priorities have been finalised in the previous financial year

In Progress priorities have a deadline, and should be completed in the near future

Ongoing priorities are a long-term project and therefore do not have a set deadline, or are priorities that need to be met annually and will then carry over to the following year

Achievements

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2011-12 Annual Report

Financial Management

Strategic Objective

Best practice financial management

Outputs Delivered Analysis and policy advice on resource allocation and

reporting of the Territorys financial resources through:

whole of government budgeting and financial reporting;

monitoring agency financial and output performance;

analysis of agency budget requirements and proposals;

contribution to the

development of major projects across government;

reporting and analysis of infrastructure budget requirements and responsibility for development of the Territorys Infrastructure Program;

management of financial accountabilities as prescribed in the Financial Management Act (FMA); and

prudent management of the Governments loans, borrowings and investment programs.

Key Achievements2012-13 Budget

Developing the Northern Territory Budget is one of Treasurys primary roles and a major annual activity. The 2012-13 Budget, tabled in Parliament in May 2012, was developed in a continuing period of uncertainty in the global economy that has dampened consumer

and business confidence in Australia. This continuation of subdued economic conditions at the national level contributed to a further reduction in Government revenues, most notably the goods and services tax (GST) and mining royalties, providing considerable challenges in developing the Territorys Budget. In an effort to offset these significant revenue losses, Treasury provided Government

with detailed advice in the lead up to the 2012-13 Budget on the implications for the Territorys financial position and fiscal strategy. Treasurys advice was aimed at ensuring the ongoing commitment to expenditure restraint measures in order to restrict operational growth. In addition, advice was provided in relation to capital spending on the back of a positive Territory economic outlook and increasing private sector investment.

2010-11 Treasurer's Annual Financial Report

Treasury is responsible for the preparation of the Treasurer's Annual Financial Report (TAFR), which includes the audited final budget outcome for the year. The 2010-11 TAFR was tabled in the Legislative Assembly in October 2011 and provided a complete set of financial statements for all sectors as required by national standards.

It also included detailed analysis on the end of year fiscal position and approved Budget variations in accordance with the FMA.

The Auditor-General issued an unqualified audit opinion for the TAFR, against Australian Accounting Standards Board (AASB) 1049 Whole of Government and General Government Sector Financial Reporting.

2011-12 Mid-Year Report

The Fiscal Integrity and Transparency Act requires the release of a mid-year fiscal outlook report each year. The 2011-12 Mid-Year Report was tabled in the Legislative Assembly in November 2011 and provided updated Budget projections from the May 2011 Budget by incorporating the effect of the 2010-11 outcome, new and expanded policy decisions and revised revenue estimates. The report also provided updated financial statements on a sector and whole of government basis in line with the revised parameters, discussion on updated economic estimates and the fiscal outlook for 2011-12 and three forward years.

Management of the Territorys Financial Assets and Liabilities

The Conditions of Service Reserve (COSR) is managed by the Treasury Corporation on behalf of Central Holding

Authority (CHA). The funds are managed by three investment managers: AMP Capital Investors Limited, Colonial First State Investments Ltd and MLC Implemented Consulting. The COSR fund has a long-term investment strategy oriented towards growth assets, such

as Australian and international equities, and is benchmarked against the Australian Superannuation Survey

'Multi-sector Growth' product category.

As at 30 June 2012, the COSR is valued at approximately

$435 million. The combined long-term investments

held in the COSR returned

-0.39 per cent in 2011-12, consistent with the benchmark return of -0.40 per cent. While this short-term, absolute performance is affected by global markets, driven largely by events in Europe, the fund has managed to out perform

its benchmark over a 3, 5, 7 and 10-year time frame, which more closely reflects the investment term for these funds.

Financial Management Policy Development

Treasury is responsible for administering the Territorys financial management framework, including the FMA, the Fiscal Integrity and Transparency Act and the Treasurers Directions. In 2011-12, work continued on expanding the range of Treasurers Directions and policy briefs to improve guidance and governance practices for agencies

on infrastructure management, Commonwealth revenue and the development of National Partnerships (NPs), project agreements and Implementation Plans (IPs) established under the Intergovernmental Agreement on Federal Financial Relations (IGA).

In addition to ongoing policy development, the FMA was amended to incorporate changes required to implement the National Health Reform Agreement (NHRA).

Major Projects Across the Territory

Treasury continues to be involved in the early development stages of major Territory Government projects and initiatives, to assist in providing a better understanding of project resource requirements and resource availability. In 2011-12, this included the funding implications arising from the national equal remuneration case for the social, community and disability services sector, Governments response to

the Review of the Youth Justice System and review of progress against recommendations from the Board of Inquiry into the Child Protection System.

Borrowing Program

As the Territory Governments central financing authority, Treasury Corporation implements the Governments borrowing program. The 2011-12 borrowing requirement was significantly higher than 2010-11, with approximately $906 million raised to refinance maturing debt and additional borrowings for Territory government agencies, business divisions and corporations. In addition, given the volatility in credit markets and the expected challenging conditions remaining in 2012-13, Treasury Corporation has successfully pre-funded $492 million of the 2012-13 program, taking total borrowings in 2011-12 to $1398 million.

Consistent with recent years, Treasury Corporations entire borrowing requirement was met from domestic financial and retail markets.

The bulk of the funds were raised through a number of medium to long-term fixed interest securities, issued to institutional investors through private placement and public issue. Treasury Corporations funding requirements in 2011-12 resulted in the establishment

of two new benchmark lines of bonds to November 2017 and September 2018. Territory Bonds contributed approximately $37 million in funding for the year.

The cost of the borrowing target for 2011-12 was revised down to 5 per cent from 6.50 per cent during the year to reflect lower outright medium-term bond rates despite the expansion in the credit margins demanded by investors for semi-government bonds.

The actual outcome for Treasury Corporations term funding was 4.97 per cent, 0.03 per cent below the revised budget estimate.

The weighted average cost of borrowing was 4.86 per cent if short-term promissory note issuances during the year are included.

Output Performance

Our Performance SymbolsCompletedIn ProgressOngoing

Priorities for 2011-12

Status

Results in 2011-12

Continued focus on monitoring, development and publication of critical whole of government financial information in the Budget, TAFR and Mid-Year Report.

2010-11 TAFR released October 2011.

2011-12 Mid-Year Report released November 2011.

Treasurers Quarterly Financial Report released December 2011, February 2012 and May 2012.

2012-13 Budget released 1 May 2012.

Continue to provide advice, analysis and assistance on whole of government, major project and

agency resource issues as required.

Treasury has been involved in the development stages of a number of commercial and infrastructure projects to support service delivery as well as major policy reforms and reviews.

Ongoing development and amendment of Treasurers Directions, with improvement to the agency budget management section a priority for 2011-12.

New Treasurers Directions introduced to improve guidance and governance practices for agencies on infrastructure management and the development of NPs, project agreements and IPs established under the IGA.

Final testing and implementation of an expanded infrastructure reporting system.

Testing of the new system is continuing with availability expected by December 2012.

Evaluate ongoing opportunities for enhancement to whole of government budget and reporting systems.

Testing of system upgrade and improved database environment is nearing completion, with conversion planned for late November 2012.

Implement the Governments 2011-12 borrowing program.

Implemented refinancing and a new borrowing program, with $1398 million borrowed in 2011-12.

Achievements

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2011-12 Annual Report

Continue to enhance Treasury Corporations business continuity planning and corporate governance framework.

Continue to ensure the Territorys funding investment liquidity benchmarks are met.

Future Priorities

Risk assessment processes reviewed and amendments made to monthly compliance reporting. Business continuity plan in place and worked with Treasury Information Technology (IT) Services to improve access to key systems.

Funding was sourced at approximately 0.38 per cent over AAA-rated semi-government issuers, slightly below the revised benchmark of 0.40 per cent. Investment returns on the CHA portfolio were 0.32 per cent above benchmark. Liquidity was managed throughout the

year by monitoring and forecasting cash flows on

a weekly basis and undertaking borrowing activity slightly ahead of the scheduled borrowing program.

Publish a Pre-Election Fiscal Outlook report within ten days of the issue of a writ for a Northern Territory general election as required by the Fiscal Integrity and Transparency Act.

Preparation of a Mini Budget.

Assist government in the development of the 2013-14 Budget.

Continue focus on monitoring, developing and publishing critical whole of government financial information in the Budget and TAFR.

Continue to provide advice, analysis and assistance on whole of government major projects and agency issues that have resource implications, including national funding agreements.

Ongoing development and amendment of Treasurers Directions.

Final testing and implementation of an expanded infrastructure reporting system.

Evaluate ongoing opportunities for enhancement to whole of government budget and infrastructure reporting systems.

Implement the Governments 2012-13 borrowing program.

Continue to enhance Treasury Corporations business continuity planning and corporate governance framework.

Continue to ensure the Territorys funding, investment and liquidity benchmarks are met.

Economic Management

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Achievements

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2011-12 Annual Report

Strategic Objective Quality analysis and public policy advice on economic,

social and commercial issues

Outputs Delivered Analysis and policy advice on national and Territory

economic, commercial, social, demographic and statistical issues.

Key AchievementsNational Disability Insurance Scheme

Following the release of the Productivity Commissions final report on a national long-term disability care and support scheme, COAG agreed on reform of disability services through the introduction of a NDIS,

in August 2011. The NDIS aims to provide appropriate lifetime care, support, therapy and equipment to individuals who have a disability, regardless of how they acquired it. The scheme will be trialled in select areas from July 2013. Treasury has been involved in a Commonwealth, state and territory working group to discuss and develop key design and threshold issues, such as funding and governance, which will underpin the full implementation of the NDIS.

Natural Disaster Relief and Recovery Arrangements

Following the extensive flooding in Queensland in late 2010 and early 2011, the Commonwealth advised states and territories that a review of the NDRRA would be undertaken and that states and territories would be required to submit details on their essential public assets and associated insurance arrangements to the Commonwealth

Department of Finance and Deregulation for review. Subsequently, the Commonwealth requested that local governments also submit their asset and insurance arrangements for review.

Treasury was responsible for preparing the submission for the Territory Government and coordinating for the Territory local government, which were submitted in September 2011 and March 2012, respectively. Further work may be required in 2012-13 following the release of

a report on the appropriateness of insurance arrangements by the Department of Finance and Deregulation.

Statistical Liaison Network

Treasury officials are members of, and provide secretariat to, the Territory Governments Statistical Liaison Network (SLN), which was established to provide a central portal for data needs and capabilities across Territory Government agencies.

During 2011-12, Treasury coordinated and chaired a SLN meeting in May 2012, with attendance by most Northern Territory Government agencies and the ABS.

The Port of Darwin

Treasury, in consultation with Darwin Port Corporation and the Department of Lands and Planning, assisted in the development of the Darwin Port Corporation Legislation Amendment Act (No. 11 of 2011) (the Act), which was assented to on 18 April 2011. The Act formalises

a non-exclusive pilotage licensing framework, specifies stevedoring licence criteria and establishes an independent appeals mechanism for

Housing Supply and Affordability Reform Working Group 2011-12

Treasury, along with the Department of Lands and Planning and the

Department of Housing, Local Government and Regional Services, continued its participation and contribution to the work program of

the Housing Supply and Affordability Reform (HSAR) inter-governmental working group.

The Standing Council on Federal Financial Relations presented the Final Housing Supply and Affordability Reform Report to COAG out of session in February 2012. The report provided COAG

with a list of recommendations aimed at improving the efficiency of housing

supply and affordability. Key recommendations in the HSAR final report include:

nationally consistent principles for housing development infrastructure charges;

greater consistency in planning approval processes;

an analysis of the effectiveness of the First Home Owners Scheme; and

the impact of affordable housing initiatives.

stevedore and pilotage licensing decisions to enhance transparency in the licensing process.

Commencement of the Act was subject to consequential amendments to port-related regulations, the development of instruments of appointment of the Harbourmaster and the preparation of pilotage technical and safety standards that are required to be published by the Harbourmaster under the Act.

On 12 December 2011, sections 5(3), 5(4) and 9 of the Act were commenced, with the remaining sections commenced on 4 July 2012. In addition, on 4 July 2012, notices advising the making of by-laws, Marine (Pilotage) Amendment Regulations, appointment of the Harbourmaster, the technical and safety standards for pilotage and the provision of pilotage services for the Port of Darwin were gazetted.

Residential Building Cover Package

Treasury, in conjunction with the Department of Lands and Planning, has been working on a package of reforms to improve consumer protection for home builders in the Northern Territory. This work has included advice on options for potential reforms to the Home Building Certification Fund (HBCF) and arrangements for the provision of residential building cover products in the Northern Territory.

In March 2012 the Building Amendment (Residential Building Consumer Protection) Bill 2011 was passed by Parliament and is scheduled to commence on 1 January 2013. Treasury has provided input on the establishment of the industry fidelity fund, along with the prudential and financial standards that the fund will be required

to meet. Treasury has also provided advice on the management and financial arrangements for the HBCF, which will be closed on the commencement of the Bill.

Economic Publications

Treasury provides a range of publications that analyse key economic, demographic and social indicators as a basis for policy development by Government. The publications also serve to improve awareness, quality and use of statistics in the Territory.

Publications released through 2011-12 include:

the Northern Territory Economy book (as part of the 2012-13

Northern Territory Budget);

12 editions of the Territory Economic Review, with weekly updates;

11 editions of the Territory Social Indicators; and

151 economic briefs.

Further details on publications released throughout 2011-12 are provided in the Publications section of this report.

Grocery Price Survey

The Grocery Price Survey was conducted in December 2011 and

June 2012. The survey monitors grocery prices by measuring the cost of purchasing an average basket of goods at major supermarkets across the Territory. The June 2012 survey covered 18 supermarkets across the Territory including the Woolworths Supermarket in Nhulunbuy and the IGA Supermarket in Yulara.

Northern Territory Population Projections

Population projections have been prepared to assist in future planning

of the Territory including service delivery and infrastructure provision. In conjunction with Charles Darwin University (CDU), Treasury published an update of the official Northern Territory Government Population Projections in September 2011. The projections are by single year of age, gender and Indigenous status, for the period 2010 to 2040.

Projections are also available for the six Territory Government statistical regions to 2026 by five-year age groups, Indigenous status and gender.

Commercial Projects

Treasurys assessment and advice on commercial projects seeks to optimise financial and service delivery outcomes at an appropriate level of risk.

During 2011-12, commercial and financial assessment and advice was provided on a number of Government projects including:

the Darwin Correctional Precinct Public Private Partnership Project;

the Darwin Marine Supply Base; and

various residential land release projects.

2011 Census

Treasury worked closely with the Australian Bureau of Statistics (ABS) to encourage community and Territory Government participation in the 2011 Census. Treasury signed

a collaborative arrangement with the ABS, which underpinned the engagement between Treasury and the

ABS including employment of Territory Government staff on the Census project. As a result of the arrangement, about

40 employees from Territory Government agencies were deployed to assist the ABS in Census-related activities. The majority worked as Remote Area Mobile Team members going to remote areas to assist local community members engaged by the ABS to enumerate local residents. Other staff were engaged as special collectors in urban locations. This role involved working with both the ABS

and local non-government organisations to enumerate local homeless people, campers living temporarily in

locations and people in caravan parks. These groups are often missed in Census counts due

to their transient nature.

An initial indicator of the success of this collaboration was a reduction in the Census undercount rate

from 7.6 per cent in the

2006 Census to 6.9 per cent in the 2011 Census.

Output Performance

Our Performance SymbolsCompletedIn ProgressOngoing

Priorities for 2011-12

Status

Results in 2011-12

Continue to ensure the Territory maintains an efficient regulatory framework for business and industry that promotes economic development, including meeting national reform commitments.

Participation in the implementation of various National Partnership Agreement to Deliver a Seamless National Economy (SNE) reforms.

Participate in development and implementation of the Territorys electricity market reform program.

Government commenced a Guaranteed Service Level scheme, which prescribes for electricity suppliers

to provide rebates to customers affected by poor performance. Further, an Electricity Standards of Service Code has been developed and is expected to be finalised in November 2012.

Continue to provide advice and assistance on major government projects as required.

Assisted in achieving financial close on the Darwin Correctional Precinct Public Private Partnership Project and provided commercial and financial assessment

and advice on other agency projects. Treasury participated in the evaluation of the bids for the

Marine Supply Base Project, and negotiations with the preferred proponent. An agreement was reached and finalised with ShoreAsco in April 2012.

Produce monthly social indicator publications.

Treasury prepared 11 Social Indicator publications during 2011-12, which summarise publicly available data on the state and territory and national social and demographic characteristics.

Continue to provide advice on the performance of the Territory economy and demographic issues.

Published Northern Territory Economy, a Budget-related document that provides a comprehensive annual review of the Territory economy as well as forecasts for major economic parameters and industries.

Published weekly economic briefs on key economic and demographic parameters.

Published weekly updates of the Territory Economic Review, a summary publication of key economic and demographic parameters released in the month.

Continue to monitor grocery prices across the Territory.

Collaboration with ABS to improve the quality and accuracy of the Territory Census count in 2011.

Future Priorities

Published the findings of grocery price surveys conducted in June 2011 and December 2012.

Deployment of staff to assist ABS in Census-related activities, particularly in remote areas. Census coverage improved with 93.1 per cent of the Territorys population counted in the 2011 Census compared to 92.4 per cent in the 2006 Census.

Continue to ensure the Territory maintains an efficient regulatory framework for business and industry that promotes economic development, including meeting national reform commitments.

Participate in development and implementation of the Territorys electricity market reform program.

Continue to provide advice and assistance on major government projects as required.

Continue development of economic, social and demographic analysis and forecasting capacity, and contribute to whole of government planning for future growth and service enhancement.

Liaise with ABS to evaluate the outcomes of the 2011 Census and develop strategies to optimise the outcomes of the next census in 2016.

Restructure and update the population projections model, in conjunction with CDU, based on data from the 2011 Census.

Continue to enhance forecasting and economic and demographic modelling capacities.

Intergovernmental Relations

22

Achievements

23

2011-12 Annual Report

Strategic Objective Effective intergovernmental financial relations

Outputs Delivered Analysis and policy advice on intergovernmental financial

relations issues including management of the Territorys interests under the IGA and other public finance matters.

Key AchievementsIntergovernmental Agreement on Federal Financial Relations Reform

In 2011-12, Treasury continued to play an active role in the implementation of the IGA, both within the Territory and nationally. This included involvement in the development and implementation of NPs.

Treasury has worked closely with the Department of the Chief Minister and relevant Government agencies to develop, negotiate and monitor the suite of funding agreements established under the IGA. In 2011-12, Treasury was part of the Territory Governments core negotiating

team involved in the development of the Stronger Futures Northern Territory National Partnership Agreement. Treasury was also involved

in progress reviews of the performance frameworks of several national agreements, including the National Disability Agreement, the National Affordable Housing Agreement, the National Healthcare Agreement and the National Education Agreement.

In 2011-12, Treasury also continued to participate in a range of other forums progressing federal financial relations matters including Heads of Treasuries (HoTs), HoTs Deputies and the GST Administration

Sub-committee.

Commonwealth Grants Commission

In 2011-12, Treasury provided input to the Commonwealth Grants Commission's (CGC) work program, including the Report on GST Revenue Sharing Relativities 2012 Update. Treasurys input included providing the CGC with data and submissions to its New Issues for the 2012 Update Discussion Paper.

The CGC has commenced work on the next major review of state revenue sharing relativities. The CGCs preliminary work program is focused on improving the quality of the data used in the methodology for determining state GST shares. Treasury officials are participating in this process through the CGCs Data Working Party.

Goods and Services Tax

Treasury continued to monitor and provide advice on changes in the underlying parameters that determine the Territorys GST revenue share, including population, national GST collections and the CGCs recommended GST revenue sharing relativities.

Treasury also provided advice to Government on a range of

GST-related legislative proposals by the Commonwealth throughout the year, in order to protect the GST base.

Review of GST Distribution

On 30 March 2011, the Prime Minister announced the Review of GST Distribution (the Review), which is considering whether the current arrangements for distributing GST revenue between states and territories are appropriate to allow Australia to respond to future challenges, including continued globalisation, climate change, population growth and demographic change, changes in technology and addressing Indigenous disadvantage. The Review is being undertaken by a panel comprising the Hon Nick Greiner AC, the

Hon John Brumby and Mr Bruce Carter.

In considering the methodology for distributing GST revenue, the Review Panel will have regard to equity, efficiency, simplicity and budget stability.

Treasury has provided three submissions to the Review, which comprehensively address the Review Panels Issues Papers and Interim Reports. The Review Panel is expected to submit its Final Report to the Commonwealth Treasurer in October 2012, for consideration by the Council of Australian Governments (COAG) by the end of 2013.

Indigenous Expenditure

Treasury officials are members of the Steering Committee for the Review of Government Service Provision and the IER Working Group, which is responsible for preparing the national IER. The national IER

is a COAG initiative designed to provide a national framework for reporting of government expenditure on services to Indigenous people.

During 2011-12, Treasury contributed to work in preparing the second national IER, released in September 2012. Treasurys involvement included providing input through intergovernmental working groups on the methodology for estimating Indigenous shares and providing the requested data to allow the Productivity Commission to estimate the Territory Governments Indigenous-related expenditure.

Treasury will continue to participate in the biennial reporting of government expenditure on services for Indigenous people in the national IER.

Health Reform

During 2011-12, Treasury contributed to the development of the NHRA, agreed by all governments in August 2011.

A key aim of the NHRA is to provide a more secure funding base for hospitals, which includes sharing of funding responsibilities between

the Commonwealth and the states, the implementation of activity-based hospital funding and the establishment of Hospital Networks, responsible for managing small groups of hospitals. However, states will retain overall responsibility of hospitals through their role as system managers.

Treasury officials will continue to actively participate in the various intergovernmental and Territory Government working groups, which are responsible for implementing the NHRA.

Output Performance

Our Performance SymbolsCompletedIn ProgressOngoing

Priorities for 2011-12

Status

Results in 2011-12

Actively participate in the ongoing implementation of the IGA including:

providing advice to Northern Territory agencies on specific agreements under the IGA; and

participation in relevant HoTs forums.

Treasury has continued its involvement in the implementation of the IGA, particularly the provision of advice regarding National Agreements (NAs), NPs and IPs, including those pertaining to the Territorys

performance and the development of new and revised NPs and IPs.

Treasury participated in the national review of NAs, NPs and IPs and is continuing to be involved in its implementation.

Participation in the CGC 2012 Update and CGC Data Working Party.

Treasury provided input into the 2012 Update through provision of Territory data and submission to the CGCs Discussion Paper New Issues for the 2012

Update. Treasury is also a member of the CGCs Data Working Party, which was established to improve the quality of data used in the CGCs methodology for the next review.

Participation in the development of the 2012 IER.

Treasury has an ongoing role in the development of the second national IER through its membership on the Steering Committee for the Review of Government Services and the IER Working Group.

Participation in the Review of GST Distribution.

Treasury prepared comprehensive submissions to the Review of GST Distribution on behalf of the Territory Government, which responded to the Review Panels issues papers and interim reports.

Actively participate in the negotiation and implementation of the NHRA.

Treasury participated in working groups with Department of Health officials and intergovernmental working groups in order to negotiate the terms of the NHRA and its implementation in the Territory.

24

Achievements

25

2011-12 Annual Report

Future Priorities

Actively participate in the ongoing implementation of the IGA including:

providing advice to Territory Government agencies on specific agreements under the IGA, including finalisation of Treasurers Directions for NAs, NPs and IPs;

implementation of NA and NP performance frameworks that are conceptually valid and supported by robust data;

ongoing participation in the implementation of the HoTs Review; and

participation in relevant HoTs forums.

Ongoing participation in the development of IER.

Actively participate in the implementation of the NHRA.

Participate in CGC working groups in preparation for the next major methodology review.

Revenue Management

Output Performance

30

Achievements

31

2011-12 Annual Report

Strategic Objective A fair and efficient Territory revenue system

Outputs Delivered Administration and management of the Territorys revenue

framework encompassing:

policy and legislative advice;

revenue collection including taxpayer management;

compliance activities;

administration of home assistance schemes;

royalty administration; and

community awareness and advisory services.

Key AchievementsChanges to the Territory Tax System

A range of changes were made to systems, publications and processes to implement the 2011-12 Budget revenue measures. In addition, legislative changes were made as part of the 2012-13 Budget that are summarised in the Legislative Changes 2011-12 section of this report.

Home Ownership Incentive Schemes

As part of the 2011-12 Budget, Treasury developed and implemented the framework for the BuildBonus grant scheme. This administrative scheme provides a one-off $10 000 grant for owner-builders and home buyers, including investors, who are building or purchasing a new

home up to the value of $600 000. The scheme applies to contracts and owner-builder commencements up to 31 December 2012. The scheme was extended twice during 2011-12, with the value threshold increased from $530 000 to the current level of $600 000.

Information System Developments

In 2011-12, a data warehouse, associated business intelligence platform and reporting system were successfully implemented. Business Intelligence is a tool used by most regulatory agencies to increase data holding and analysis capabilities. It will facilitate

improved and timely reporting, more accurate compliance targeting through data matching and predictive analysis.

Following the comprehensive business process mapping undertaken in 2010-11, a strategic refresh of the priorities for development of a new tax and royalty administration led to a focus on an affordable solution that reduced reliance on externally contracted programming resources. The integration and upgrading of current systems will be undertaken, including delivering improvements to existing online processing of payroll tax, the introduction of online processing of stamp duties,

mining royalties, and racing and gaming taxes.

Finally, a successful recruitment process was undertaken to create a capable information systems unit, enhancing capabilities in business analysis and business systems support.

Our Performance SymbolsCompletedIn ProgressOngoing

Priorities for 2011-12

Status

Results in 2011-12

Continue business information system development and enhancement by:

completing functional and

non-functional specifications for a new revenue administration system;

Comprehensive business process mapping and gap analysis was undertaken leading to the decision to implement modular, scalable upgrade of existing systems.

finalising request for tender documentation for development of an integrated IT solution to replace mainframe and supplementary systems; and

Initial scope developed for tender documentation, which will be released in 2012-13.

developing a data warehouse to enable more effective analysis, reporting of information and to support revenue compliance activities.

Data warehouse, associated business intelligence platform and reporting system were successfully implemented.

Develop and implement 2012-13

Budget-related revenue options.

Legislation commenced from July 2012, including changes to the payroll tax exemption for parental leave and clarification of the taxation provisions in the Gaming Control Act.

Enhance revenue administration practices and legislation.

Enhancements were made to Territorys revenue administration practices in line with legislative changes commencing during the year.

Progressed review of taxation and royalty administration legislation.

Progressed review of Commissioners taxation and royalty delegations.

Future Priorities

Continue business information system development and enhancement by:

completing integration and upgrading of current systems;

commence implementation of modular upgrade of revenue administration systems; and

continue development of data warehouse and reporting systems to enable more effective analysis, reporting of information and to support revenue compliance activities.

Develop and implement 2013-14 Budget-related revenue options.

Continue to enhance revenue administration practices and legislation.

Superannuation

Output Performance

Strategic Objective Effective public sector superannuation arrangements

Outputs Delivered Superannuation policy for Government and administration

of Government-managed superannuation schemes, including the relationship between national and Territory legislation and advice and assistance to investment and review boards.

Key AchievementsSuperannuation Reform Project

Progress continues to be made on the Superannuation Reform project, which is reviewing the administration of the Territorys public sector superannuation schemes.

Stage 2 of the Reform Project involves a number of changes, including:

expanding the Superannuation Trustee Board (STB);

modernising three schemes (Northern Territory Government and Public Authorities' Superannuation Scheme (NTGPASS), Northern Territory Supplementary Superannuation Scheme (NTSSS) and Northern Territory Government Death and Invalidity Scheme (NTGDIS));

replacing the Superannuation Review Board with the Superannuation Complaints Tribunal; and

amalgamating Territory superannuation legislation for all schemes (except the Supreme Court Judges Pension Scheme) into one Act.

Legislation has been introduced for the expansion of the STB. Drafting of legislation for the remaining Stage 2 changes will continue.

Electronic Records Project

Continuing on from the project to scan around 9000 active member records in the previous year, scanning of approximately 4000 creditor records was undertaken in 2011-12. These members records are

now fully electronic, resulting in administrative efficiencies. Electronic retention of various records will continue as part of continuous business improvement practices.

Member Education

The Superannuation Office aims to provide informative material to assist members in understanding their NTGPASS entitlements, as well as superannuation in general. Information is available through a range of publications, including forms, fact sheets and information books, as well as our website content and information seminars. Information is kept up to date and new items are developed as required.

In the past year, a number of publications were revised in line with legislative changes or updated practices. New forms were added for members to advise change of pension details and claim death benefits, and a new fact sheet was published to explain anti-detriment payments.

Legislative Amendment

A number of amendments were made to the Superannuation Act, the Superannuation Regulations, the Legislative Assembly Members Superannuation Fund Act and the Northern Territory Police Supplementary Benefit Scheme Trust Deed to formalise changes approved as part of the reform project.

Our Performance SymbolsCompletedIn ProgressOngoing

Priorities for 2011-12

Status

Results in 2011-12

Stage 2 of the Superannuation Reform project, to formalise the composition of the new STB, establish a mechanism for a second tier review of appeals and simplify NTGPASS and NTSSS through the establishment of a single benefit system.

Approval was provided for Stage 2 and legislation has been introduced for the expanded board representation.

Refocus effort to reduce the number of accounts where benefits remain unclaimed for a lengthy period.

Work continued to reunite members with their benefit.

Progressively introduce electronic retention of records throughout the Superannuation Office, including member records.

Work continued with scanning of approximately 4000 creditor member records. Electronic retention

of various records will continue as part of continuous business improvement practices.

Proceed with changes resulting from the Superannuation review culminating in the Stronger Super reforms, as they impact on the Northern Territory Public Sector (NTPS) superannuation schemes.

Discussion is continuing with the Commonwealth to determine the extent these changes will apply to public sector superannuation schemes.

Finalise an anti-detriment policy in line with contemporary practices.

An anti-detriment policy has been implemented and relevant publications are available to assist members.

Future Priorities

Superannuation Reform Project continue stage 2 of the reforms to amalgamate the Territory schemes into one Act, establish a second tier review of appeals mechanism and simplify NTGPASS and NTSSS through the establishment of a single benefit system.

Commonwealth reviews continue to work with the Commonwealth and other jurisdictions to consider Stronger Super changes and their impact on Territory superannuation schemes.

Lost members and unclaimed monies continue effort to reduce the number of accounts where benefits have remained unclaimed for a lengthy period.

Complete tender for a default superannuation service provider by April 2014.

Financial Management

Table 1: Financial Management Output Performance

Performance Measures

2010-11

Actual

2011-12

Actual

2012-13

Estimate

Quantity

Develop and present the Budget

1

1

1

Financial performance reporting TAFR, Mid-Year Report, Treasurers quarterly financial reports

5

5

5

Capacity to provide policy advice and analysis on financial management issues

$6.65M

$7.07M

$7.12M

Quality

Acceptable audit opinion from Auditor-General for TAFR

yes

yes

yes

Timeliness

Budget published by date set by Treasurer

yes

yes

yes

TAFR published in accordance with legislation

yes

yes

yes

Mid-Year Report published in accordance with legislation

yes

yes

yes

Treasurers quarterly financial reports published in accordance with legislation

yes

yes

yes

Output Performance Tables

Economic Management

Table 2: Economic Management Output Performance

Performance Measures

2010-11

Actual

2011-12

Actual

2012-13

Estimate

Quantity

Capacity to provide policy advice and analysis on economic and related issues

$6.94M

$7.85M

$7.65M

Publish Northern Territory Economy

1

1

1

Publish Territory Economic Review

11

12

12

Publish Social Indicators

11

11

11

Timeliness

Briefings on ABS economic data provided on day of release

100%

100%

100%

Economic publications published by agreed date

100%

100%

100%

Table 3: Payments on Behalf of Government

Performance Measures

2010-11

Actual

2011-12

Actual

2012-13

Estimate

Quantity

CSO payment for uniform tariff subsidy

$60.73M

$61.56M

$63.08M

GST collection costs

$6.92M

$6.90M

$7.28M

Territory Revenue Management

Table 4: Territory Revenue Management Output Performance

Performance Measures

2010-11

Actual

2011-12

Actual

2012-13

Estimate

Quantity

Territory revenue collected1

$610.42M

$616.25M

$595.33M

Capacity to manage Territory revenue-related activities

$6.85M

$6.77M

$7.65M

Subsidy payments

$9.35M

$9.77M

$10.06M

Quality

Territory revenue forecast accuracy2

0.4%

- 1.2%

5%

Stakeholder satisfaction survey rating:

Taxpayers3

5.08

5.08

5

Assessment accuracy4

99.9%

99.9%

99%

Accuracy of first home owner grant payments processed

100%

100%

100%

Timeliness

Revenue received within agreed timeframes

96.4%

95.8%

95%

Services completed within agreed service standards5

97.3%

96.2%

95%

1 Includes taxes, gambling revenue and mining royalties.

2 This figure reflects the difference between the estimate in the 2012-13 Budget and actual revenue collected.

3 Taxpayer satisfaction was determined via an email survey issued to more than 1700 clients.

4 This is the percentage of assessments issued for the year that have not been revised by way of allowed objections and appeals.

5 The measure is the weighted average performance of a series of lower level measures in the Territory Revenue Office Service Charter as published on the Territory Revenue Office website. Table 5 details the components that comprise the weighted average.

Table 5: Territory Revenue Office Standards Published in the Service Charter

2010-11

Actual

2011-12

Actual

2012-13

Estimate

%

Stamp duty assessing document turnaround (proportion assessed94 within five working days)

Response to written inquiries within 14 days of receipt90

Audits completed within respective timeframes177

Objections determined within 120 days80

Other grant applications determined within respective timeframes2100

% 94

87

67

87

100

% 90

100

80

80

100

1 The measure reflects Territory payroll tax, stamp duty and first home owner grant audits completed within 120 days and mining and petroleum royalty audits completed within 180 days of commencement.

2 The measure is the weighted average performance of other grant applications processed within the timeframes stated in the Territory Revenue Office Service Charter. The relevant standards are that 95 per cent of approved first home owner grant payments are made within 24 hours of the payment eligibility date and other grant applications are paid within five business days of receipt of all relevant information.

32

Achievements

33

2011-12 Annual Report

Superannuation

Table 6: Superannuation Output Performance

Performance Measures

2010-11

Actual

2011-12

Actual

2012-13

Estimate

Quantity

Capacity to provide policy advice and services on superannuation

$4.13M

$4.37M

$4.03M

Quality

Benefits processed

2 017

1 453

1 900

Compliance with legislative processing timeframes

100%

100%

100%

Number of NTGPASS and NTSSS lost member accounts

5 475

3 984

3 500

Seminars held

22

15

15

Stakeholder satisfaction1

5

5

5

1 Stakeholders are the superannuation scheme members and associated boards.

Statutory Bodies

Table 7: Utilities Commission Output Performance

Performance Measures

2010-11

Actual

2011-122

Actual

2012-13

Estimate

Quantity

Capacity to administer regulatory regime

$0.59M

$0.68M

$0.81M

Capacity to advise Regulatory Minister

$0.40M

$0.46M

$0.54M

Timeliness

Determinations and approvals issued within statutory timeframes1

100%

100%

100%

1 Covers determinations and approvals on monopoly pricing, minimum service standards and other activities as provided for under the

Utilities Commission Act and other relevant industry regulation legislation.

2 The increase in capacity measures values for both administration of the regulatory regime and advice to the Regulatory Minister, relates to a change in funding arrangements for the Commissioners position and one Regulatory Officer position, which were previously unfunded.

Northern Territory Treasury Corporation

Table 8: Treasury Corporation Business Line Performance

Performance Measures

2010-11

Actual

2011-12

Actual

2012-13

Estimate

Quantity

Weighted average cost of borrowings during the year

5.29%

4.86%

6.00%

Quality

Borrowing rate margin compared to industry peers1

+ 0.22%

+ 0.38%

0.50%

Investment portfolio return above benchmark2

+ 0.31%

+ 0.32%

> indices

Volatility of investment portfolio return against benchmark2

+ 0.31%

0.32%

0.25%

1 State and territory governments' central financing authorities.

2 The benchmark is the weighted relevant UBS Warburg indices. The composite benchmark return for 2011-12 was 4.70 per cent while the Treasury Corporation achieved a return of 5.02 per cent.

34

Achievements

Corporate GovernanceCorporate Governance36

Corporate Governance Committees39

Risk Management45

Corporate Governance

36

Corporate Governance

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2011-12 Annual Report

What is Corporate Governance? Corporate Governance refers

to Treasurys internal controls, decision making and approval processes that support the organisation in achieving its desired objectives.

This could also be expressed as our self-governing arrangements. Corporate governance is the means

by which Treasury directs and controls its operations to enable it to achieve set objectives and meet its

responsibilities. It also ensures that decision making and operations are guided by a

set of principles that maintain ethical standards.

This section describes and reports on Treasurys corporate governance arrangements, referring to the principles that guide decision making and the structures in place to govern our organisation.

The corporate governance and accountability framework is presented in Figure 3. Further information is provided against Treasurys Corporate Governance Principles in this section.

Findings from audits and reviews conducted in 2011-12 are reported in this section, reflecting the important role of risk management in corporate governance.

Each year the Under Treasurer and Senior Management Group (SMG) identify Treasurys strategic objectives, which guide the direction of Treasurys core business areas in the delivery of government outcomes. Because of the nature of Treasurys responsibilities, the strategic objectives are generally consistent over time with the greatest influence being the economic and fiscal environment and the Governments priorities. Achievement of Treasurys objectives, output groups and outputs are provided in the Achievements section of this report.

Our Achievements 2011-12

Treasurys six corporate governance committees continued to meet regularly and approve various organisational policies and procedures. In particular:

Treasurys Indigenous Employment and Career Development (IECD) strategy was completed and rolled out;

Reviewed human resources delegations in addition to policies and procedures affected by the revised Public Sector Employment and Management Act (PSEMA) and subordinate legislation;

Reviewed occupational health and safety (OHS) policies and procedures affected by the revised Work Health and Safety (National Uniform Legislation) Act 2011, subsequently Treasurys Occupational Health and Safety Management System (OHSMS) was created; and

Reviewed and updated governance arrangements for Treasurys information management framework.

Treasurys conflict of interest policy remained a priority with a review of all conflict of interest declarations undertaken. All middle to senior managers, as well as staff with a perceived or actual conflict of interest, completed conflict of interest declarations in July 2011.

The Auditor-General conducted thirteen audits or reviews during 2011-12 on Treasurys processes, procedures and financial reports, with no adverse findings.

Treasury conducted thirteen internal audits or reviews during 2011-12 in a number of different areas. No major issues were identified.

Corporate Governance Framework

Values

Treasurys values are underpinned by trust, integrity and professionalism. We are committed to providing frank, accurate and timely strategic advice. Treasury staff take responsibility

for their work and behaviour and act in a collaborative way with integrity, respect and fairness. We recognise the dedication

and expertise of our employees and support them in balancing professional and personal priorities.

Strategic Objectives

Treasury strives to provide:

best practice financial management;

quality analysis and public policy advice on economic, social and commercial issues;

effective intergovernmental financial relations;

a fair and efficient Territory revenue system; and

effective public sector superannuation arrangements.

Through a well-managed and flexible organisation, we:

recruit and retain high quality staff; and

are committed to high quality output in a safe, supportive workplace.

Corporate Governance Principles The key principles that Treasury endeavours to consider when making decisions and taking action on

day-to-day operations are:

Accountability: Treasury and its staff take responsibility for their decisions and actions;

Transparency: decisions, actions and advice are open to, and can withstand, the scrutiny necessary to ensure that stakeholders can have confidence in Treasury decision-making processes;

Leadership: modelling and fostering behaviour that supports Treasurys values, inspires and influences others and shapes organisational culture;

Integrity: actively promoting honesty and ethical conduct by upholding appropriate standards of behaviour; and

Equity: fairness and equity in decision making that is free from bias.

Figure 3: Treasurys Corporate Governance and Accountability Framework

38

Corporate Governance

39

2011-12 Annual Report

Corporate Governance Committees

Six standing committees support Senior Management Group (SMG) in carrying out its responsibilities in providing leadership on key issues affecting the organisation:

risk and audit;

human resource management;

professional development;

information management;

OHS; and

energy management.

SMG considers reports and briefings from each committee and provides direction and approval of corporate policy and organisational projects. Each committees role, membership and performance in 2011-12 are outlined in this section.

Membership reflects current committee members as at

30 June 2012.

Accountability

The accountability of Treasury and its staff are clearly defined through the organisation structure and relationships between staff. Reporting structures are clearly outlined between SMG, Directors, staff and Corporate Governance Committees. Control processes are clearly defined in delegations and developed frameworks, which are reviewed annually. There are many components to ensure Treasury and its staff maintains accountability in terms of Corporate Governance and some of those are outlined below.

Senior Management Group

Treasurys SMG is responsible for strategic decision making and policy setting in relation to Treasurys operations and internal processes.

The group also provides leadership and strategic direction to the organisation.

Another key priority of SMG is to develop Treasurys corporate capabilities, including people, systems and the work environment. For administrative efficiency and to ensure appropriate senior involvement and oversight, SMG sits as the risk and audit, human resource management and information management subcommittees.

Chaired by the Under Treasurer, SMG generally meets on a weekly basis.

Directors and Staff

Treasurys Directors are responsible for managing the day-to-day operations of business units, managing and developing performance and producing outputs that meet the agencys desired outcomes. They are accountable to their respective SMG members (see Organisation Chart at page 7).

Corporate Delegations

Agency delegations create a clear guideline for staff on accountable officers in Treasury and their financial and human resource limitations. Treasury reviews its delegations annually to ensure they meet current legislation, staffing levels and appropriate processes, or as required. Treasury has three agency delegations:

financial;

human resources; and

procurement.

Corporate Governance Committees

Risk and Audit Committee

Role Membership

Responsible for:

monitoring business risk assessments and adequacy of established internal controls to manage identified risks, and review the appropriateness of policies, practices and procedures that affect those controls;

overseeing the audit and risk management function within Treasury, including internal audit and risk management programs, and monitoring their outcomes, terms of reference and the implementation of recommendations;

reviewing the effectiveness of structures and practices that support the key elements of Treasurys corporate governance framework; and

reviewing the outcomes and monitoring responses to recommendations of external auditors.

Under Treasurer, Jennifer Prince (Chair) Deputy Under Treasurer, Peter Caldwell Deputy Under Treasurer, Jodie Kirkman Deputy Under Treasurer, Tony Stubbin

Assistant Under Treasurer (Budgets and Finance), David Braines-Mead

Assistant Under Treasurer (Economic and Intergovernmental Policy), Craig Graham

Assistant Under Treasurer (Economic and Commercial Analysis), Bruce Michael

Assistant Under Treasurer (Funds Management), John Montague

Assistant Under Treasurer (Revenue), Grant Parsons

Director Corporate Support, Gerard Taylor

2011-12 Performance 2012-13 Priorities

Implemented the 2011-12 internal audit plan.

Developed the 2012-13 internal audit plan.

Implemented the control self-assessment program to test internal controls.

Reviewed and updated Treasurys Risk Framework, including Treasurys OHSMS, to ensure compliance with legislation.

Reviewed and updated Treasurys Business Continuity Plan.

Implement the 2012-13 internal audit plan.

Continue to develop and test detailed plans and systems for business interruption events, particularly relating to information technology (IT) systems.

Human Resource Management CommitteeRole Membership

Professional Development Committee

Role

Membership

44

Corporate Governance

43

2011-12 Annual Report

Responsible for guiding the development and implementation of human resource management policy and planning in Treasury.

Under Treasurer, Jennifer Prince (Chair) Deputy Under Treasurer, Peter Caldwell Deputy Under Treasurer, Jodie Kirkman Deputy Under Treasurer, Tony Stubbin

Assistant Under Treasurer (Budgets and Finance), David Braines-Mead

Assistant Under Treasurer (Economic and Intergovernmental Policy), Craig Graham

Assistant Under Treasurer (Economic and Commercial Analysis), Bruce Michael

Assistant Under Treasurer (Funds Management), John Montague

Assistant Under Treasurer (Revenue), Grant Parsons

Director Corporate Support, Gerard Taylor

2011-12 Performance 2012-13 Priorities

Continued Treasurys succession planning initiative with rotations for staff to act in more senior and/or different roles.

Completion and roll out of Treasurys revised IECD strategy.

In-house training sessions were offered on cross-cultural, Indigenous awareness and

anti-discrimination training as well as Giving and Receiving Feedback workshops to complement Treasurys Employee Development Framework (EDF).

Undertook review of human resource delegations in addition to policies and procedures affected by the revised PSEMA and subordinate legislation.

Continued development of entry-level and other attraction programs aimed at students.

Continued leadership development within Treasury to enhance professional development opportunities, management capabilities and generally broaden skills and expertise.

Implementation of Treasury 2012-15 IECD Strategy, specifically providing greater focus on attracting entry-level Indigenous staff through structured training programs, and targeting university and secondary students by promoting Treasury as an employer of choice to students studying subjects related to Treasurys core business.

Finalise amendments to human resource delegations and policies and procedures affected by the introduction of the revised PSEMA, Regulations, By-laws and Employment Instructions.

Responsible for setting policy and considering applications for assistance relating to professional development of staff.

Deputy Under Treasurer, Jodie Kirkman Deputy Under Treasurer, Tony Stubbin

Assistant Under Treasurer (Budgets and Finance), David Braines-Mead

Human resource representative

2011-12 Performance

Approved 27 study assistance applications.

$261 112 (1.24 per cent of employee expenses) spent on training and development for Treasury staff, compared to $264 324 (1.56 per cent of employee expenses) in 2010-11 and $334 568

(1.97 per cent of employee expenses) in 2009-10.

Continued emphasis on professional and technical development, including sponsored study, tailored training and participation in professional body activities.

Information Management Committee

Role

Membership

Responsible for guiding development, management and use of Treasurys information, communication and technology resources.

Under Treasurer, Jennifer Prince (Chair) Deputy Under Treasurer, Peter Caldwell Deputy Under Treasurer, Jodie Kirkman Deputy Under Treasurer, Tony Stubbin

Assistant Under Treasurer (Budgets and Finance), David Braines-Mead

Assistant Under Treasurer (Economic and Intergovernmental Policy), Craig Graham

Assistant Under Treasurer (Economic and Commercial Analysis), Bruce Michael

Assistant Under Treasurer (Funds Management), John Montague

Assistant Under Treasurer (Revenue), Grant Parsons Director Corporate Support, Gerard Taylor

Manager Information Services and Strategic IT, Joanne Boustead

2011-12 Performance 2012-13 Priorities

Liaised with workgroup stakeholders to improve existing SharePoint sites.

Created a framework for internal and external developers outlining Treasurys SharePoint development requirements regarding security, structure, look and feel, architecture and project management requirements.

Identified and upgraded pilot work groups to Microsoft Office 2010.

Worked with the Department of Business and Employment (DBE) and relevant service providers to upgrade and improve Treasurys server infrastructure.

In conjunction with work groups, undertook a review of local area network (LAN) content, archiving information where required.

Continued to redevelop Treasurys internet and staff-only website to improve interaction with stakeholders and comply with national website accessibility standards.

Improved reporting processes and introduced stringent procedures for account requests in relation to staff security accounts created or modified in Treasurys record keeping system, HP TRIM.

Implemented electronic document records management practices in the Treasury Corporation and Utilities Commission.

Reviewed and updated governance arrangements for Treasurys information management framework.

In conjunction with work groups, undertook a review of all Treasury systems in relation to Windows 7 and Office 2010 readiness.

Continue to liaise with workgroup stakeholders to review current business practices and develop electronic systems to streamline processes.

Work with Records Management Unit to implement

a business classification scheme on the LAN, which will include development of naming conventions, standard hierarchy and Active Directory integration.

Continue to work towards using SharePoint as the collaborative tool, workflow agent, agency intranet portal and Total Records and Information Management System (TRIM) overlay across the agency.

Transition Treasury work groups to electronic document records management.

Responsible for overseeing and setting direction for OHS activities.

Director Corporate Support, Gerard Taylor (Chair)

Business Support Coordinator, Nadine Parkinson (Secretary)

Executive Assistant to the Under Treasurer, Tamara Hutcheon

Financial Management Group Financial Analyst, Tracy Bailey

Economic Group Principal Policy Analyst, Doug Burns

Economic Group Coordinator, Ra