Treasurer's Annual Financial Report 2010-11 · 2010-11 Treasurer’s Annual Financial Report 5 Expense Variations Expenses from transactions was $4 790 million in 2010-11, which is

2010-11 Treasurer’s Annual Financial Report i

Treasurer’s Annual

Financial Report

2010-11

2010-11 Treasurer’s Annual Financial Report i

CONTENTS

1 Introduction 1

2 Executive Summary 3

General Government Outcome 4

Total State Sector Outcome 8

3 Interim Fiscal Strategy Overview 11

4 Treasurer’s Annual Financial Statements 21

Certification of Treasurer’s Annual Financial Statements 22

Opinion of the Auditor-General 23

Statement of Comprehensive Income 25

Statement of Financial Position 27

Statement of Cash Flows 29

Statement of Changes in Equity 31

Notes to the Treasurer’s Annual Financial Statements 33

5 Public Account Statements 117

Certification of Public Account Statements 2010-11 118

Opinion of the Auditor-General 119

Statement 1 - Public Account Balance 122

Statement 2 - Consolidated Fund Outcome 123

Statement 3 - Consolidated Fund Receipts 124

Statement 4 - Consolidated Fund Expenditure 127

Statement 5 - Excess Consolidated Fund Recurrent Services Expenditure 129

Statement 6 - Excess Consolidated Fund Works and Services Expenditure 129

Statement 7 - Excess Consolidated Fund Reserved by Law Expenditure 129

Statement 8 - Special Deposits and Trust Fund 130

6 Loan Council Outcome 2010-11 135

ii 2010-11 Treasurer’s Annual Financial Report

2010-11 Treasurer’s Annual Financial Report 1

1 INTRODUCTION

The 2010-11 Treasurer’s Annual Financial Report is prepared in accordance with section 26 of the

Financial Management and Audit Act 1990, which requires the tabling of the Report by 31 October in each

year.

The Report contains the following information:

Section 2 provides an Executive Summary that highlights key variations to the Budget outcomes.

Section 3 provides a summary of progress against the Key Interim Fiscal Strategy Measures contained

within the 2010-11 Budget Papers and commentary on significant variations to the Budget outcomes.

Section 4 presents the General Government and Total State Sector financial statements for 2010-11 in

accordance with AASB 1049 Whole-of-Government and General Government Sector Financial

Reporting. The statements also align with the requirements of the Uniform Presentation Framework.

Section 5 summarises details for the transactions and balances within the Public Account.

Section 6 presents the Loan Council Outcome for 2010-11 in accordance with the requirements of the

Uniform Presentation Framework.

2 2010-11 Treasurer’s Annual Financial Report


2 EXECUTIVE SUMMARY

The 2010-11 outcomes reflect the impact of additional Australian Government infrastructure funding and do

not necessarily represent an improvement in the underlying Budget position.

Table 2.1: Key Financial Indicators

2010-11)

Original

Budget

2010-11

Actual

2009-10

Actual

$m) $m $m)

General Government Sector

Net Operating Surplus/(Deficit) (65) (23) 18

Fiscal Surplus/(Deficit) (530) (446) (291)

Net Debt (309) (416) (748)

Net Worth 14 211 12 492 13 065)

Net Financial Liabilities 3 487 4 146 3 814)

Total State Sector

Net Operating Surplus/(Deficit) 69) 132 192

Fiscal Surplus/(Deficit) (861) (538) (483)

Net Debt 1 669 1 309 962

Net Worth 14 211 12 492 13 065

Net Financial Liabilities 8 609 8 866 8 276

Consolidated Fund Surplus/(Deficit) (235) (540) (266)


GENERAL GOVERNMENT OUTCOME The 2010-11 General Government Statements are prepared in accordance with AASB 1049 Whole of

Government and General Government Sector Financial Reporting.

Table 2.2 provides a summary of the key operating line items and budget variances. The full Statement of

Comprehensive Income is located at page 25 of the Report.

Table 2.2: General Government Sector Summary of Operating Result

2010-11

Original

Budget

2010-11

Actual

Variation Variation

$m $m $m %

Revenue from transactions 4 563 4 767 204 4

Expenses from transactions 4 627 4 790 163 4

Net Operating Balance – Surplus/(Deficit) (65) (23) 42 65

Less Net acquisition of non-financial assets 465 423 (42) (9)

Equals Fiscal Balance – Surplus/(Deficit) (530) (446) 84 16

Revenue Variations

Revenue from transactions was $4 767 million in 2010-11, $204 million higher than the 2010-11 original

Budget estimate of $4 563 million. The main changes are:

Grants revenue $280 million higher. This primarily reflects an increase in Australian Government funding

of $270 million towards the redevelopment of the Royal Hobart Hospital. There was also an advance

payment of 2011-12 funding in relation to Grants for Local Government amounting to $18 million.

Sales of goods and services $66 million lower. The decrease is primarily due to the Department of

Health and Human Services reclassifying $60 million of Mersey Community Hospital Australian

Government revenue to grants.

Taxation $16 million lower. The decrease primarily reflects a reduction in Financial transaction taxes of

$25 million due to reduced volume and value of property transactions. This is partially offset by

increases in Payroll tax ($5 million) and Vehicle registration fees ($3 million).


Expense Variations

Expenses from transactions was $4 790 million in 2010-11, which is $163 million higher than the 2010-11

original Budget estimate of $4 627 million. The major expense variations by agency are:

Health and Human Services $129 million higher. The increase primarily reflects cost pressures in

response to higher demand for Acute Health and Children and Family Services. This has resulted in an

increase in Employee expenses of $64 million and $28 million in Supplies and consumables.

Department of Education $51 million higher. This primarily reflects the Department incurring an

additional $37 million in Employee entitlements explained by the Post Year 10 reforms and a revision to

the long service leave liability calculations. There was also an increase in grants to non-government

schools of $15 million as a result of increased funding from the Australian Government.

Finance-General $38 million lower. This largely reflects savings of $20 million from the Treasurer’s

Reserve provision and lower than anticipated claims costs through the Tasmanian Risk Management

Fund of $11 million.

Net Acquisition of Non-Financial Assets Variations

Net Acquisition of Non-Financial Assets was $423 million in 2010-11, which is $42 million lower than the

2010-11 original Budget estimate of $465 million. The main changes are:

Department of Education $34 million lower. Purchases of non-financial assets were $49 million below

the original Budget estimate, primarily reflecting a revision of cash flows for project delays in relation to

Child and Family Centres and Building the Education Revolution. This decrease is partially offset by a

$13 million decrease in depreciation and sales of non-financial assets being $2 million above the original

Budget estimate.

Department of Health and Human Services $18 million lower. Purchases of non-financial assets is

$4 million below the original Budget estimate, reflecting a revision of cash flows for project delays in

relation to the National Health and Hospitals Network Reforms, partially offset by the bringing forward of

construction for the Launceston Acute Medical and Surgical Project. Depreciation is also $8 million

above the original Budget estimate and Sales of non-financial assets, relating to new housing projects,

is $6 million above the original Budget estimate.

Department of Infrastructure, Energy and Resources $18 million higher. Purchases of non-financial

assets is $11 million higher than the original Budget estimate, primarily as a result of bringing forward

expenditure for the Kingston Bypass and Brighton Transport Hub, partially offset by a decrease in

infrastructure maintenance. Depreciation is also $7 million below the original Budget estimate due to

revised asset valuations and a change in the Department’s depreciation policy.


Table 2.3: General Government Sector Summary Statement of Financial Position

2011

Actual

2010

Actual

Variation Variation

$m $m $m %

Financial Assets 8 113 8 102 11 ....

Non-Financial Assets 10 459 10 930 (471) (4)

Total Liabilities 6 081 5 966 115 2

Net Worth 12 492 13 065 (573) (4)

Budget estimates for the 2010-11 Statement of Financial Position were compiled in June 2010 prior to

completion of the actual outcomes for 30 June 2010. As a result, the outcome variance from the original

Budget estimate will be impacted by the difference between the estimated and actual opening balances for

2010-11. The commentary and table is therefore based on major movements between the 30 June 2010

actual outcome and the 30 June 2011 outcome.

General Government Assets are estimated to be $18 573 million at 30 June 2011, a decrease of

$458 million from the 30 June 2010 balance of $19 031 million.

Financial Asset Variations

Cash and Deposits $338 million lower. This reflects a reduction in cash holding primarily due to the

Consolidated Fund deficit of $540 million, partially offset by unspent Australian Government funding that

is to be carried forward to 2011-12. Details of the Consolidated Fund outcome are provided in Section 5

of this Report.

Equity investment in PNFC and PFC sectors $228 million higher. The increase reflects the increase in

net assets held by the electricity companies, Tasmanian Ports Corporation Pty Ltd, Tasmanian Railway

Pty Ltd, Motor Accidents Insurance Board and the water and sewerage corporations. This was offset by

a decrease in Forestry Tasmania’s net assets.


Non-Financial Asset Variations

Land and buildings $678 million higher. The increase is due to:

revaluations undertaken by the Department of Health and Human Services ($227 million) and the

Department of Education ($57 million) and transferred assets held by the Tasmanian Skills Institute

($96 million);

increased work-in-progress expenditure incurred by the Department of Health and Human Services

in relation to new housing construction and the Royal Hobart Hospital ($96 million). The Department

also had a $21 million increase in Land and Building additions from the previous year, mainly due to

the purchase of the North-West Regional Hospital; and

increased work-in-progress expenditure incurred by the Department of Education ($54 million).

Infrastructure assets $1 050 million lower. The decrease primarily reflects the change by the Department

of Infrastructure, Energy and Resources in its valuation methodology for Land under roads, and its

revised methodology for calculating depreciation on State sealed roads.

Heritage and cultural assets $111 million lower. The decrease is due to the write-down of assets held by

the Tasmanian Museum and Art Gallery.

Liability Variations

Superannuation $106 million higher. The increase is a result of an actuarial reassessment of the liability,

taking into consideration changes in assumptions used to value the defined benefit obligation.

Employee entitlements $27 million higher. The increase primarily reflects a $12 million increase in long

service leave and annual leave entitlements.


TOTAL STATE SECTOR OUTCOME

Table 2.4: Total State Sector Summary of Operating Result

2009 -10

Original

Budget

2010-11

Actual

Variation Variation

$m $m $m %

Revenue from transactions 7 445 7 856 411 6

Expenses from transactions 7 376 7 724 348 5

Net Operating Balance – Surplus/(Deficit) 69 132 63 91

Less Net acquisition of non-financial assets 930 670 (260) (28)

Equals Fiscal Balance – Surplus/(Deficit) (861) (538) 323 38

Financial results recorded by the Total State Sector were stronger than anticipated, with increases in the

Net Operating and Fiscal Balances. These movements reflect the trend in the General Government Sector

as well as other trends which are outlined below.

Revenue Variations

The Total State Revenue from transactions is $7 856 million in 2010-11, which is $411 million higher than

the 2010-11 Budget estimate of $7 445 million. The major revenue variations are due to:

increased General Government Sector revenue of $204 million;

Sales of goods and services up $193 million, primarily due to increased electricity entity revenue. This

revenue is largely offset by increases in operating expenses and energy and transmission purchases;

additional Dividend, tax and rate equivalent revenue in the Public Financial Corporations Sector

($64 million); and

decreased interest income of $60 million, primarily relating to the Public Financial Corporations Sector.

Expense Variations

The Total State Expenses from transactions is $7 724 million in 2010-11, which is $348 million higher than

the 2010-11 Budget estimate of $7 376 million. The major expense variations are due to:

increased General Government Sector expenditure of $163 million; and

Supplies and consumables up $159 million, largely due to increased operating expenses for electricity

entities.


Table 2.5: Total State Sector Summary Statement of Financial Position

2011

Actual

2010

Actual

Variation Variation

$m $m $m %

Financial Assets 6 858 5 036 1 822 36

Non-Financial Assets 21 358 21 341 17 ….

Total Liabilities 15 724 13 312 2 412 18

Net Worth 12 492 13 065 (573) (4)

Total State Sector Assets are estimated to be $28 216 million at 30 June 2011, an increase of

$1 839 million from the 30 June 2010 balance of $26 377 million.

Financial Asset Variations

Investments $1 793 million higher which represents a change in the structure of the portfolio held by the

Tasmanian Public Finance Corporation. There was a corresponding increase in borrowings by the

Corporation of $2 108 million.

Other equity investments $107 million lower. This primarily represents Roaring 40s Renewable Energy

Pty Ltd becoming a wholly owned subsidiary of Hydro Tasmania as at 30 June 2011.

Non-Financial Asset Variations

Land and buildings $747 million higher due to:

movements in the General Government Sector ($678 million higher);

Buildings acquired by Hydro Tasmania in the acquisition of HT Wind Operations Pty Ltd (formerly

Roaring 40s Renewable Energy Pty Ltd) of $26 million;

an increase in buildings held by Transend Networks Pty Ltd of $17 million, primarily due to the

completed construction of the southern accommodation building; and

land and building revaluations undertaken by the Tasmanian Ports Corporation Pty Ltd ($14 million).

Infrastructure $595 million lower due to movements in the GGS ($1 050 million lower), partially offset by

infrastructure acquired as part of Hydro Tasmania’s acquisition of HT Wind Operations Pty Ltd (formerly

Roaring 40s Renewable Energy Pty Ltd) valued at $272 million.

Heritage and cultural assets $111 million lower. The decrease is due to the write-down of assets held by

the Tasmanian Museum and Art Gallery.

Biological assets $87 million lower. The decrease relates to a write-down in forest estate assets held by

Forestry Tasmania.


Liability Variations

Superannuation $103 million higher. The increase in the superannuation liability reflects an actuarial

reassessment of the liability, taking into consideration changes in assumptions used to value the defined

benefit obligation.

Other liabilities $112 million higher. The increase is primarily the result of an increase in derivative

financial instruments held by the Tasmanian Public Finance Corporation ($54 million) and an increase in

the Motor Accidents Insurance Board’s unreported claims provision ($59 million).


3 INTERIM FISCAL STRATEGY

OVERVIEW

A fiscal strategy is an effective planning tool for the Government, providing clear signals to financial

markets, the business sector and the community as to the Government’s intentions in financial

management. The purpose of a fiscal strategy is to establish a benchmark for the evaluation of the

Government’s year-to-year and medium term fiscal performance and to increase public awareness of its

fiscal policies.

As a result of the global slowdown, the Government announced an Interim Fiscal Strategy in the 2009-10

Budget to address issues arising from the Global Financial Crisis and return the Budget to a sustainable

position over the medium-term. At the time of the 2010-11 Budget, the Government was on track to meet all

but one of its established targets.

There has been a significant deterioration in the State’s financial position since the 2010-11 Budget. This

change primarily reflects the ongoing impact of the GFC on Tasmania’s GST receipts and, to a lesser

extent, on State own-source revenues. A new Fiscal Strategy was established in the 2011-12 Budget which

reflects the State’s current financial position and the Government’s policy response.

While a new Fiscal Strategy has been developed and implemented, the targets apply to 2011-12 and

beyond. As a consequence, Table 3.1 presents progress against a number of key Interim Fiscal Strategy

measures that were in place for the 2010-11 Budget. The actual outcome for 2010-11 is compared to the

original Budget estimates for 2010-11 and to the actual 2009-10 outcome.


Table 3.1: Key Interim Fiscal Strategy Targets

Interim Targets

2009-10

Actual

Outcome

2010-11

Original

Budget

2010-11

Actual

Outcome

$m $m $m

Net Operating Surplus achieved on average over four-year rolling period by

2014-15 (12) (17) (8)

Underlying Net Operating Surplus achieved on average over four-year rolling

period by 2014-15 1 (114) (182) (243)

Fiscal Surplus achieved by 2014-15 (291) (530) (446)

General Government Sector to remain Net Debt free (748) (309) (416)

Net Unfunded Superannuation Liability to be extinguished by 2035 3 496 2 896 3 519

Capital Expenditure in excess of depreciation on average, over

four-year rolling period 120 235 235

Ratio of Net Financial Liabilities to Revenue for the Non-Financial Public Sector

to not exceed 110 per cent in 2014-15 2 101% 106% 105%

Consolidated Fund Surplus by 2014-15 (266) (235) (540)

Notes: 1. Achievement of an Underlying Net Operating Surplus on average over a four-year rolling period by 2014-15 is

measured on an underlying basis that removes the impact of one-off Australian Government funding for specific major capital programs.

2. For the purposes of the Interim Fiscal Strategy, Net Financial Liabilities represents Net Debt less Advances Paid plus the Superannuation Liability. Net Financial Liabilities is divided by Revenue from transactions to derive the Net Financial Liabilities to Revenue ratio. This is in accordance with the methodology used by Standard & Poor's ratings agency.


Net Operating Balance

The Interim Fiscal Strategy target is to achieve a General Government Sector Net Operating Surplus, on

average over a four-year rolling period by 2014-15.

The General Government Sector recorded a $23 million Net Operating Deficit in 2010-11, a deterioration of

$41 million on the $18 million Net Operating Surplus for 2009-10. On a four-year rolling average basis, the

2010-11 Net Operating Balance was a deficit of $8 million, an improvement of $4 million from 2009-10.

Chart 3.1: General Government Net Operating Balance

240

120

(39)

53

(78)

18

(23)

(150)

(100)

(50)

....

50

100

150

200

250

300

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

$ m

illio

n

GGS Net Operating Balance Four-year rolling average


Underlying Net Operating Balance

The Underlying Net Operating Balance is the Net Operating Balance adjusted to remove the effects of

one-off Australian Government funding for specific major capital projects linked to the Nation Building -

Economic Stimulus Plan, Nation Building, Water for the Future and the Royal Hobart Hospital

Redevelopment. The 2010-11 Underlying Net Operating Balance is estimated to be a deficit of $557 million,

a decrease of $225 million from the original Budget Deficit of $332 million.

Table 3.2: Underlying Net Operating Balance

2009-10

Actual

2010-11

Original

Budget

2010-11

Actual

$m $m $m

Net Operating Balance 18 (65) (23)

Less Impact of one-off Australian Government funding for specific major

capital programs 381 267 535

Underlying Net Operating Balance (363) (332) (557)

Underlying Net Operating Surplus on average over four-year rolling period

by 2014-151 (114) (182) (243)

Notes: 1. To calculate the four-year rolling average of the Underlying Net Operating Balance as at 30 June 2011, the prior

year outcomes for 2007-08, 2008-09 and 2009-10 were used, being a $53 million surplus, a $106 million deficit and a $363 million deficit respectively.


Fiscal Surplus

The Interim Fiscal Strategy target is to achieve a Fiscal Surplus by 2014-15.

Chart 3.2 shows the 2010-11 General Government Fiscal Balance was a deficit of $446 million, a

deterioration of $155 million from 2009-10. The deficit outcome for 2010-11 was affected by the significant

infrastructure investment that has occurred.

Chart 3.2: General Government Fiscal Balance

211

83

(6)

102

(95)

(291)

(446)(500)

(400)

(300)

(200)

(100)

....

100

200

300

400

500

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

$ m

illio

n


General Government Net Debt

The Interim Fiscal Strategy target to maintain the General Government Sector’s Net Debt free status was

met in 2010-11.

Chart 3.3 shows General Government Sector Net Debt was negative $416 million as at 30 June 2011, a

deterioration of $332 million from 30 June 2010.

Chart 3.3: General Government Net Debt as at 30 June

949

751

486

114

( 28)

(259)

(409)

(1 031) (982)

(748)

(416)

(1 500)

(1 000)

( 500)

....

500

1 000

1 500

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

$ m

illio

n


Superannuation

The Net Unfunded Superannuation Liability is an estimate of the obligations of the State with respect to

past service liabilities arising from current and former members of unfunded or partially funded Public

Sector superannuation schemes. It is calculated by subtracting the balance of the Superannuation

Provision Account from the Superannuation liability disclosed in the Statement of Financial Position.

Chart 3.4 shows that the Net Unfunded Superannuation liability for the General Government Sector

increased by $23 million between 30 June 2010 and 30 June 2011.

Further details on the General Government and Total State Superannuation liability are provided in

Note 7.5 of the Financial Statements.

Chart 3.4: General Government Net Unfunded Superannuation

1 447

2 147

2 5322 460

2 710

3 496 3 519

....

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2005 2006 2007 2008 2009 2010 2011

$ m

illio

n


Capital Expenditure

Investment in infrastructure is necessary to ensure delivery of Government services to the community and

to foster economic and industry development. Maintaining capital expenditure to be at least equal to

depreciation levels ensures that the real value of General Government infrastructure assets is maintained.

The Interim Fiscal Strategy target of at least matching capital expenditure to equal depreciation costs, on

average, over rolling four-year periods, was met in 2010-11. Investment in core infrastructure exceeded

depreciation by $485 million. This is $107 million above the 2009-10 result of $378 million. The majority of

this capital investment was undertaken by the Departments of Infrastructure, Energy and Resources;

Health and Human Services; and Education. For further detail on capital expenditure refer to individual

Agency financial statements.

Chart 3.5: General Government Capital Expenditure

71 8726 19

57

378

485

....

80

160

240

320

400

480

560

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

$ m

illio

n

Capital expenditure in excess of depreciation Four-year rolling average


Net Financial Liabilities to Revenue for the Total Non-Financial Public Sector

The Net Financial Liabilities to Revenue ratio is a key measure of the sustainability of the Total

Non-Financial Public Sector to meet its financial obligations from operating revenues.

The ratio for 2010-11 is 105 per cent, an increase of four per cent from 2009-10. The outcome is below the

threshold target of 110 per cent.

Chart 3.6: Ratio of Net Financial Liabilities1 to Revenue for the Non-Financial Public Sector

99%

102% 102%

88%

93%

101%

105%

60%

70%

80%

90%

100%

110%

120%

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Net Financial Liabilities to Revenue Target of 110%

Note 1. For the purposes of the Interim Fiscal Strategy, Net Financial Liabilities represents Net Debt less Advances Paid

plus the Superannuation Liability. Net Financial Liabilities is divided by Revenue from transactions to derive the Net Financial Liabilities to Revenue ratio. This is in accordance with the methodology used by Standard & Poor's ratings agency.

Consolidated Fund

The Interim Fiscal Strategy target is to achieve a Consolidated Fund surplus by 2014-15.

The 2010-11 Consolidated Fund balance was a $540 million deficit, a deterioration of $305 million from the

Budget estimate of a $235 million deficit.



4 TREASURER’S ANNUAL

FINANCIAL STATEMENTS


CERTIFICATION OF TREASURER’S ANNUAL

FINANCIAL STATEMENTS


The General Government Sector financial statements for the year ended 30 June 2011 have been prepared

in accordance with AASB 1049 Whole of Government and General Government Sector Financial

Reporting. The Statements incorporate the reporting requirements of the Australian Accounting Standards

Board and the Uniform Presentation Framework (which is based on the reporting standards of the

Australian Bureau of Statistics Government Finance Statistics framework) and are compiled from

information provided by agencies within the General Government Sector.

The Statements present fairly the transactions of the General Government Sector for the year ended

30 June 2011 and the financial position as at 30 June 2011.

At the date of signing we are not aware of any circumstances which would render the particulars included in

the General Government Sector Financial Statements misleading or inaccurate.

Total State Sector

The Total State Sector general purpose financial statements for the year ended 30 June 2011 has been

prepared in accordance with AASB 1049 Whole-of-Government and General Government Sector Financial

Reporting. The Statements incorporate the reporting requirements of the Australian Accounting Standards

Board and the Uniform Presentation Framework (which is based on the reporting standards of the

Australian Bureau of Statistics Government Finance Statistics framework) and are compiled from

information provided by entities within the Tasmanian State Sector.

The Statements present fairly the transactions of the Total State Sector for the year ended 30 June 2011

and the financial position as at 30 June 2011.


the Total State Sector Financial Statements misleading or inaccurate.

15 October 2011


OPINION OF THE AUDITOR-GENERAL



Statement of Comprehensive Income for the year ended 30 June 2011

General Government Total State

Notes

2010-11

Original

Budget

2010-11

Actual

2009-10

Actual

2010-11

Actual

2009-10

Actual

$m $m $m $m $m

Revenue from transactions

Grants 1.7(a), 3.1 2 911 3 191 3 110 3 190 3 129

Taxation 1.7(b), 3.2 876 860 872 808 829

Sales of goods and services 1.7(c), 3.3 370 303 289 3 345 3 021

Fines and regulatory fees 1.7(d), 3.4 89 84 97 84 97

Interest income 1.7(e) 48 40 45 201 147

Dividend, tax and rate equivalent income 1.7(f), 3.5 149 159 79 64 31

Other revenue 3.6 121 129 109 163 153

4 563 4 767 4 602 7 856 7 408

Expenses from transactions

Employee expenses 1.8(a), 4.1 2 007 2 070 1 957 2 513 2 358

Superannuation 1.8(b), 7.5 229 271 233 313 269

Depreciation 1.8(c), 4.2 249 236 229 572 540

Supplies and consumables 4.4 992 991 973 2 893 2 731

Nominal superannuation interest expense 1.8(d), 7.5 222 232 208 264 233

Borrowing costs 1.8(e) 17 14 18 291 212

Grant and subsidy expenses 1.8(f), 4.3 880 952 935 841 826

Dividend, tax and rate equivalent expense 4.5 …. …. …. 14 14

Other expenses 32 23 31 23 34

4 627 4 790 4 584 7 724 7 216

Equals NET OPERATING BALANCE (65) (23) 18 132 192

Plus Other economic flows – Included in Operating

Result

Gain/(loss) on sale of non-financial assets 1.9(a), 5.1 17 6 (24) 8 (26)

Change in equity investment in PNFC and

PFC Sectors 1.9(b), 6.2 239 228 1 893 …. ….

Movements in superannuation liability 1.9(c), 7.5 …. 85 (692) 101 (755)

Other gains/(losses) 1.9(d), 5.2 7 (124) (41) (279) (107)

262 195 1 136 (170) (888)

Equals Operating Result 197 172 1 153 (38) (697)


Statement of Comprehensive Income for the year ended 30 June 2011 (continued)


Notes

2010-11

Original

Budget

2010-11

Actual

2009-10

Actual

2010-11

Actual

2009-10

Actual

$m $m $m $m $m

Plus Other economic flows – Other movements in

equity

Revaluations of non-financial assets 242 (807) 387 (678) 116

Other non-owner movements in equity (102) 120 (14) 142 1 997

140 (688) 373 (536) 2 112

Equals Comprehensive Result 338 (515) 1 527 (574) 1 416

KEY FISCAL AGGREGATES 1.19

NET OPERATING BALANCE (65) (23) 18 132 192

Less Net acquisition of non-financial

assets

Purchase of non-financial assets 772 721 607 1 319 1 324

Less Sale of non-financial assets 59 62 69 77 109

Less Depreciation 249 236 229 572 540

465 423 309 670 675

Equals FISCAL BALANCE – SURPLUS/(DEFICIT) (530) (446) (291) (538) (483)

This Statement of Comprehensive Income should be read in conjunction with the accompanying notes. Budget information refers to original estimates and has not been subject to audit.


Statement of Financial Position as at 30 June 2011


Notes

2011

Original

Budget

2011

Actual

2010

Actual

2011

Actual

2010

Actual

$m $m $m $m $m

Assets

Financial assets

Cash and deposits 1.10(a), 10.2 551 628 966 139 147

Investments 1.10(b), 6.1 80 56 56 5 096 3 303

Equity investments:

PNFC and PFC sectors 1.10(c), 6.2 6 265 6 178 5 950 …. ….

Other equity investments 1.10(c), 6.2 6 4 3 136 243

Receivables 1.10(d), 6.3 204 216 214 691 576

Other financial assets 1.10(e), 6.4 1 167 1 031 913 795 767

8 273 8 113 8 102 6 858 5 036

Non-financial assets

Land and buildings 1.10(g), 6.5 5 616 5 897 5 219 6 248 5 501

Infrastructure 1.10(g), 6.6 5 041 3 787 4 837 13 573 14 168

Plant and equipment 1.10(g), 6.7 220 224 216 453 430

Heritage and cultural assets 1.10(g), 6.8 468 442 553 442 553

Biological assets 1.10(g), 6.9 .... .... .... 232 319

Investment property 1.10(h), 6.11 11 12 13 28 29

Goodwill 1.10(k) .... .... .... 55 55

Intangible assets 1.10(i), 6.12 27 34 34 128 106

Assets held for sale 1.10(f), 6.13 12 28 21 33 32

Other non-financial assets 6.14 39 35 37 168 149

11 434 10 459 10 930 21 358 21 341

Total Assets 19 707 18 573 19 031 28 216 26 377

Liabilities

Borrowings 1.11(a), 7.1 323 269 274 6 544 4 411

Superannuation 1.11(b), 7.5 4 356 4 966 4 860 5 600 5 497

Employee entitlements 1.11(c), 7.2 491 488 461 593 567

Payables 1.11(d), 7.3 118 97 122 404 365

Other liabilities 1.11(e), 7.4 208 261 248 2 583 2 471

Total Liabilities 5 496 6 081 5 966 15 724 13 312

Net Assets 14 211 12 492 13 065 12 492 13 065

Equity

Accumulated funds 9 271 8 791 8 557 8 103 8 002

Asset revaluation reserve 11.1 4 940 3 701 4 508 4 400 5 078

Other reserves .... .... …. (11) (15)

Total Equity 14 211 12 492 13 065 12 492 13 065


Statement of Financial Position as at 30 June 2011 (continued)


Notes

2011

Original

Budget

2011

Actual

2010

Actual

2011

Actual

2010

Actual

$m $m $m $m $m

KEY FISCAL AGGREGATES 1.19

NET WORTH 14 211 12 492 13 065 12 492 13 065

NET FINANCIAL WORTH 2 777 2 032 2 135 (8 866) (8 276)

NET FINANCIAL LIABILITIES 3 487 4 146 3 814 8 866 8 276

NET DEBT (309) (416) (748) 1 309 962

This Statement of Financial Position should be read in conjunction with the accompanying notes. Budget information refers to original estimates and has not been subject to audit.


Statement of Cash Flows for the year ended 30 June 2011


Notes

2010-11

Original

Budget

2010-11

Actual

2009-10

Actual

2010-11

Actual

2009-10

Actual

$m $m $m $m $m

Cash flows from operating activities

Cash inflows

Grants received 2 911 3 184 3 130 3 183 3 151

Taxation 876 847 867 805 825

Sales of goods and services 368 311 291 3 671 3 305

Fines and regulatory fees 83 86 86 85 86

Interest received 47 41 44 270 140

Dividend, tax and rate equivalents 149 126 106 64 31

Other receipts 288 383 291 594 456

4 721 4 977 4 817 8 672 7 995

Cash outflows

Employee entitlements (1 977) (2 046) (1 958) (2 352) (2 321)

Superannuation (290) (305) (304) (367) (355)

Supplies and consumables (995) (1 016) (933) (3 383) (3 034)

Borrowing costs (16) (15) (17) (289) (301)

Grants and subsidies paid (880) (931) (929) (819) (812)

Other payments (200) (269) (256) (420) (394)

(4 357) (4 581) (4 397) (7 629) (7 217)

Net cash flows from operating activities 10.1 364 395 420 1 043 778

Cash flows from investing activities

Net cash flows from non-financial assets

Purchases of non-financial assets (772) (720) (607) (1 318) (1 324)

Sale of non-financial assets 59 62 69 77 109

(713) (658) (538) (1 241) (1 215)

Net cash flows from financial assets

(policy purposes)

Equity injections (106) (58) (111) .... ....

Net advances paid (15) (9) (11) (9) (12)

(120) (67) (122) (9) (12)

Net cash flows from financial assets

(liquidity purposes)

Net purchase of investments .... (1) 1 (1 183) 151

.... (1) 1 (1 183) 151

Net Cash flows from investing activities (834) (726) (659) (2 433) (1 077)


Statement of Cash Flows for the year ended 30 June 2011 (continued)


Notes

2010-11

Original

Budget

2010-11

Actual

2009-10

Actual

2010-11

Actual

2009-10

Actual

$m $m $m $m $m

Cash flows from financing activities

Net borrowing 11 (4) (22) 2 079 (833)

Dividends, tax and rate equivalents paid .... .... .... (21) (16)

Other financing .... (1) .... (1) 32

11 (5) (22) 2 057 (817)

Net increase in cash held (459) (338) (261) 667 (1 115)

Cash at the beginning of the year 1 010 966 1 227 1 574 2 689

Cash at the end of the year 552 628 966 2 241 1 574

KEY FISCAL AGGREGATES

Net cash from operating activities 364 395 420 1 043 778

Plus Dividends, tax and rate equivalents paid …. …. …. (21) (16)

Plus Net cash flows from non-financial assets (713) (658) (538) (1 241) (1 215)

Equals CASH SURPLUS/(DEFICIT) 1.19 (349) (263) (118) (219) (453)

This Statement of Cash Flows should be read in conjunction with the accompanying notes. Budget information refers to original estimates and has not been subject to audit.


Statement of Changes in Equity for the year ended 30 June 2011

General Government

Notes

Asset Revaluation

Reserve

Accumulated

Funds Total

$m $m $m

Balance as at 1 July 2009 4 448 7 201 11 650

Comprehensive Result 2009-10 387 1 140 1 527

Transactions as owners:

Administrative Restructures (327) 327 ....

Equity Transfers:

to Aurora Energy Pty Ltd .... (5) (5)

to Hydro Tasmania .... (1) (1)

to Rivers and Water Supply Commission .... (21) (21)

to Tasmanian Railway Pty Ltd .... (82) (82)

to Tasracing Pty Ltd .... (1) (1)

(327) 217 (110)

Balance as at 30 June 2010 4 508 8 557 13 065

Comprehensive Result 2010-11 (807) 292 (515)

Transactions as owners:

Equity Transfers:

to Aurora Energy Pty Ltd .... (5) (5)

to Rivers and Water Supply Commission .... (15) (15)

to Tasmanian Ports Corporation Pty Ltd .... (1) (1)

to Tasmanian Railway Pty Ltd .... (38) (38)

.... (58) (58)

Balance as at 30 June 2011 3 701 8 791 12 492


Statement of Changes in Equity for the year ended 30 June 2011

Total State

Asset

Revaluation

Reserve

Accumulated

Funds

Other

Reserves Total

$m $m $m $m

Balance as at 1 July 2009 5 290 6 382 (22) 11 650

Comprehensive Result 2009-10 116 1 294 7 1 416

Transfer from Revaluation Reserve to Accumulated

Funds (327) 327 …. ….

Balance as at 30 June 2010 5 078 8 002 (15) 13 065

Comprehensive Result 2010-11 (678) 101 4 (574)

Balance as at 30 June 2011 4 400 8 103 (11) 12 492


NOTES TO THE TREASURER’S ANNUAL

FINANCIAL STATEMENTS Note 1 Significant Accounting Policies 35

1.1 Compliance framework 35

1.2 Basis of consolidation 36

1.3 Changes in accounting policies 36

1.4 Disaggregated information 37

1.5 Reporting period 37

1.6 Transactions and other economic flows 38

1.7 Revenue from transactions 38

1.8 Expenses from transactions 39

1.9 Other economic flows 40

1.10 Assets 42

1.11 Liabilities 47

1.12 Leases 48

1.13 Foreign currency balances/transactions 48

1.14 Comparative figures 48

1.15 Budget information 48

1.16 Rounding 48

1.17 Accounting judgments, estimates and assumptions 49

1.18 Goods and Services Tax 50

1.19 Key Fiscal Aggregates 50

Note 2 Disaggregated information 53

Note 3 Revenue from transactions 61

3.1 Grants 61

3.2 Taxation revenue 62

3.3 Sales of goods and services 62

3.4 Fines and regulatory fees 63

3.5 Dividend, tax and rate equivalent revenue 63

3.6 Other revenue 64

Note 4 Expenses from transactions 65

4.1 Employee expenses 65

4.2 Depreciation 65

4.3 Grant and subsidy expenses 66

4.4 Supplies and consumables 67

4.5 Dividend, tax and rate equivalent expenses 67

Note 5 Other economic flows 68

5.1 Gain/(loss) on sale of non-financial assets 68

5.2 Other gains/(losses) included in Operating Result 68

Note 6 Assets 69

6.1 Investments 69

6.2 Equity investments 69

6.3 Receivables 71

6.4 Other financial assets 71

6.5 Land and buildings 72


6.6 Infrastructure 72

6.7 Plant and equipment 72

6.8 Heritage and cultural assets 73

6.9 Biological assets 73

6.10 Reconciliation of non-current assets 74

6.11 Investment property 75

6.12 Intangible Assets 76

6.13 Assets held for sale 76

6.14 Other non-financial assets 77

Note 7 Liabilities 78

7.1 Borrowings 78

7.2 Employee entitlements 78

7.3 Payables 79

7.4 Other liabilities 79

7.5 Superannuation 80

Note 8 Commitments and Contingencies 87

8.1 Schedule of commitments 87

8.2 Contingent assets and liabilities 89

Note 9 Financial instruments 92

Note 10 Cash Flow Reconciliation 102

10.1 Reconciliation of Net cash flows from operating activities to Operating Result 102

10.2 Cash and cash equivalents 103

Note 11 Reserves 104

11.1 Asset revaluation reserve 104

Note 12 Explanations of major variances between General Government Budget & actual outcome 105

12.1 Statement of Comprehensive Income – General Government Sector 105

12.2 Statement of Financial Position – General Government Sector 106

12.3 Statement of Cash Flows – General Government Sector 107

Note 13 Reconciliation to ABS GFS Measures 108

Note 14 Details of Controlled Entities 109

Note 15 Events Occurring after Balance Date 111

Note 16 Functional Information 113

16.1 Expenses from transactions 113

16.2 Assets by Function 115


Note 1 Significant accounting policies

The following summary sets out the significant accounting policies adopted in the Treasurer’s Annual

Financial Report.

1.1 Compliance framework

The Treasurer’s Annual Financial Report is a general purpose financial report and has been prepared in

accordance with Australian Accounting Standards, including AASB 1049 Whole-of-Government and

General Government Sector Financial Reporting, which requires compliance with all Australian Accounting

Standards except those identified below.

The purpose of this financial report is to provide users with information about the Government’s

stewardship of, and accountability for, resources in both the General Government and Total State Sectors,

and information about its financial position, performance and cash flows. The Total State reporting entity

includes GGS, Public Non-Financial Corporation and Public Financial Corporation entities. Disaggregated

information is presented in Note 2. Specific details of the entities consolidated by the State are shown in

Note 14.

The GGS is determined in accordance with the principles and rules contained in the Australian Bureau of

Statistics Australian System of Government Finance Statistics: Concepts, Sources and Methods 2005.

The GGS consists of all government departments and non-profit state entities controlled and mainly

financed by government. Government departments are legal entities established by executive government

processes that have legislative, judicial, or executive authority over other units and which provide goods

and services to the community or to individuals on a non-market basis; and make transfer payments to

redistribute income and wealth. Non-profit state entities are created for the purpose of producing or

distributing goods and services but are not a source of income, profit or other financial gain for the

Government.

The PNFC Sector comprises those entities that aim to cover the majority of their expenses by revenue from

the sales of goods and services and which are commercially focused and non-financial in nature. Generally,

this Sector covers the State-owned Companies and Government Business Enterprises. These entities have

a variety of functions and responsibilities (and are not regulatory authorities in nature), are established in

varying ways and also have different relationships with the Budget.

The PFC Sector comprises those entities that perform central bank functions or have the authority to incur

financial liabilities and acquire financial assets in the market on their own account. In Tasmania, there are

two organisations in this Sector, the Tasmanian Public Finance Corporation and the Motor Accidents

Insurance Board.

AASB 1049 does not require full application of AASB 127 Consolidated and Separate Financial Statements

and AASB 139 Financial Instruments: Recognition and Measurement. Assets, liabilities, income, expenses

and cash flows of government controlled entities that are in the PNFC Sector and the PFC Sector are not

separately recognised in the GGS financial report. Instead, the GGS financial report recognises an asset,

being the controlling equity investment in those entities, and recognises a gain or loss relating to changes in

the carrying amount of that asset, measured in accordance with AASB 1049.

The ABS GFS Manual also provides the basis upon which Government Finance Statistics information that

is contained in the financial report is prepared. In particular, notes disclosing Key Fiscal Aggregates of

Net Worth, Net Operating Balance, Total Change in Net Worth, Fiscal Surplus/(Deficit) and

Cash Surplus/(Deficit) determined using the principles and rules in the ABS GFS Manual are included in the


financial report, together with a reconciliation of those ABS Key Fiscal Aggregates to the corresponding Key

Fiscal Aggregates recognised in the financial report.

Compliance with the Australian Accounting Standards may not result in compliance with International

Financial Reporting Standards, as the AAS include requirements and options available to not-for-profit

organisations that are inconsistent with IFRS. The General Government Sector is considered to be

not-for-profit and has adopted some accounting policies that do not comply with IFRS.

The financial reports have been prepared on an accrual basis and, except where stated, are in accordance

with the historical cost convention.

Compliance with AASB 1049 will mean that these statements are also consistent with the reporting

requirements of the Uniform Presentation Framework.

1.2 Basis of consolidation

Reporting entities controlled by the State are consolidated within this financial report. As part of the process

of reporting the State as a single economic entity, all material transactions and balances between

government controlled entities are eliminated.

1.3 Changes in accounting policies

(a) Impact of new and revised Accounting Standards

In the current year, all of the new and revised Standards and Interpretations issued by the AASB that are

relevant to the State’s financial reporting and effective for the current annual reporting period have been

adopted. This has not brought about the need for any change in current accounting policy. The new and

revised standards include:

AASB 2008-3 Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127 –

This Standard introduces some minor terminology changes. There is no expected financial impact of

applying these changes.

AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual

Improvements Project – This Standard introduces small disclosure and classification changes. There is

no expected financial impact of applying these changes.

(b) Impact of new and revised Accounting Standards yet to be applied

The following applicable Standards have been issued by the AASB and are yet to be applied:

AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 – The

amendments require modification to the disclosure of categories of financial assets. It is not anticipated

that there will be any financial impact.

AASB 1053 Application of Tiers of Australian Accounting Standards – This Standard establishes a

differential financial reporting framework consisting of two tiers of reporting requirements for preparing

general purpose financial statements. The Standard does not have any financial impact. However, it

may affect disclosures if reduced disclosure requirements apply.

AASB 1054 Australian Additional Disclosures – This Standard sets out the specific disclosures for

entities that have adopted Australian Accounting Standards that are additional to the requirements under

International Financial Reporting Standards, including disclosures relating to the nature of the financial


report, audit fees and the reconciliation of net operating cash flows to net result. It is not expected to

have a financial impact.

AASB 2010-2 Amendments to Australian Accounting Standards arising from Reduced Disclosure

Requirements – This Standard makes amendments to introduce reduced disclosure requirements for

certain types of entities. There is no expected financial impact of applying these changes, as the State

will be considered a Tier 1 entity.

AASB 2010-6 Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial

Assets – This Standard includes additional presentation and disclosure requirements for financial

assets. It is not expected to have a financial impact.

AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 – This Standard

makes minor revisions, however it is not expected to have a financial impact.

AASB 2009-12 Amendments to Australian Accounting Standards – This Standard introduces a number

of terminology changes. There is no expected financial impact.

AASB 2010-5 Amendments to Australian Accounting Standards – This Standard introduces terminology

changes as well as presentation changes, however, there is no financial impact from these revisions.

(c) Voluntary changes in accounting policy

During 2010-11, the accounting policy with respect to the measurement of port infrastructure assets

changed from the cost model to the fair value model. It is believed that the fair value model provides more

relevant information about the financial performance of these assets and assists users to better understand

the risks associated with these assets and is consistent with industry practice in relation to these types of

assets. As required by AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, this

initial change in accounting policy has been implemented as a revaluation in accordance with AASB 116

Property, Plant and Equipment on the basis that it represents the initial application of a policy to revalue

assets in accordance with AASB 116. The impact is recognised in the current period and comparative

information has not been adjusted.

1.4 Disaggregated information

The State’s consolidated financial information has been disaggregated between the following Sectors:

General Government;

Public Non-Financial Corporations; and

Public Financial Corporations.

This information is provided as there is dissimilarity between General Government activities and those of

entities in the PNFC and the PFC Sectors. Disclosure of this information will assist users of this financial

report in determining the effects of differing activities on the financial position of the State. It will also assist

users in identifying the resources used in the provision of a range of goods and services and the extent to

which the State has recovered the costs of those resources from revenues attributable to those activities.

For the purposes of presenting disaggregated financial information, the expected future income tax

equivalents receivable from the PNFC and PFC Sectors has been recognised in the statements for the

GGS.

1.5 Reporting period

The reporting period for all consolidated entities is the year or period ended 30 June.


1.6 Transactions and other economic flows

The Statement of Comprehensive Income distinguishes between “transactions” and “other economic flows”

in a manner that is consistent with the principles in the ABS GFS Manual. Transaction flows result directly

from a mutually agreed interaction between two parties, for example, the sale of a good or service. The

definition of a “transaction flow” also includes depreciation. This recognises that, in the case of

depreciation, one party is acting in two roles, as owner of the asset and consumer of the services provided

by the asset.

An “other economic flow” is a change in the volume or value of an asset, or a liability that does not result

from a transaction. This includes a wide variety of events such as the revaluation of assets (holding gains

or losses) arising from a change in market prices and changes in the volume of assets that result from

discoveries, depletion and destruction of assets.

1.7 Revenue from transactions

Revenue is recognised in the Statement of Comprehensive Income when an increase in future economic

benefits related to an increase in an asset or a decrease in a liability has arisen from a mutually agreed

interaction between two parties and can be measured reliably.

(a) Grants

Grants payable by the Australian Government are recognised as revenue when control of the underlying

assets is gained. Where grants are reciprocal, revenue is recognised as performance occurs under the

grant. Non-reciprocal grants are recognised as revenue when the grant is received or receivable.

Conditional grants may be reciprocal or non-reciprocal depending on the terms of the grant.

(b) Taxation

Revenue from State taxation is recognised upon the first occurrence of either:

receipt by the State of a taxpayer’s self-assessed taxes and fees; or

the time the obligation to pay arises, pursuant to the issue of an assessment.

(c) Sales of goods and services

Amounts earned in exchange for the provision of goods are recognised when the significant risks and

rewards of ownership have been transferred to the buyer. Revenue from the provision of services is

recognised in proportion to the stage of completion of the transaction at the reporting date. The stage of

completion is assessed by reference to surveys of work performed.

(d) Fines and regulatory fees

Revenue from fines and regulatory fees is recognised in the period to which it relates. Where a licence year

intersects two financial years (for example 1 October to 30 September) the licence fee is not recognised as

revenue on a pro-rata basis unless this is material, rather it is recognised in the financial year in which it is

received and the licence issued.

(e) Interest income

Interest on funds invested is recognised as it accrues using the effective interest rate method.


(f) Dividend, tax and rate equivalent income

The GGS receives a return from the State’s PNFCs and PFCs in the form of dividends, tax equivalent

payments and rate equivalent payments. Income tax and rate equivalent payments are received in

accordance with the National Taxation Equivalence Regime. Revenue is recognised in the period it is

earned. This revenue is eliminated at the Total State Sector level.

1.8 Expenses from transactions

Expenses are recognised in the Statement of Comprehensive Income when a decrease in future economic

benefits related to a decrease in an asset or an increase in a liability has arisen from a mutually agreed

interaction between two parties and can be measured reliably.

(a) Employee Entitlements

Employee entitlements include entitlements to wages and salaries, annual leave, sick leave, long service

leave and other post-employment benefits.

(b) Superannuation

This includes all superannuation expenses from transactions except the nominal superannuation interest

cost. It generally includes current service cost, which is the increase in entitlements associated with the

employment services provided by employees in the current period. Superannuation actuarial gains/losses

are excluded as they are considered to be Other economic flows.

(c) Depreciation

All non-current assets having a limited useful life are systematically depreciated over their useful lives in a

manner which reflects the consumption of their service potential. Land and biological assets, being assets

with an unlimited useful life, are not depreciated. Depreciation is not recognised in respect of heritage

assets and collections as their service potential has not, in any material sense, been consumed during the

reporting period.

Depreciation of buildings, plant and equipment is generally calculated on a straight line basis. Leasehold

improvements are depreciated over the estimated useful lives of the improvements or the unexpired period

of the lease, whichever is the shorter. Road infrastructure is depreciated on a straight line basis over its

estimated useful life.

The following are typical estimated useful lives for the different asset classes in 2010-11:

Asset Class Useful Life (years)

Buildings 30 - 120

Computer equipment 3 - 7

Motor vehicles 2 - 33

Office equipment 2 - 15

Plant and equipment 2 - 20

Infrastructure assets 20 - 50

Generation assets 3 - 150

Wharves 1 - 80

Harbour improvements 5 - 99

Roads 15 - 100


(d) Nominal superannuation interest expense

Nominal interest on the unfunded superannuation liability is based on the interest cost on the gross

superannuation liability, less expected return on plan assets.

(e) Borrowing costs

Interest on outstanding borrowings and other finance costs directly related to borrowings are recognised

when incurred. Borrowing costs include:

interest on bank overdrafts and short-term and long-term borrowings;

unwinding of discounting of provisions;

amortisation of discounts or premiums related to borrowings;

amortisation of ancillary costs incurred in connection with the arrangement of borrowings; and

finance lease charges.

(f) Grant and subsidy expenses

Grant and subsidy expenses are recognised to the extent that:

the services required to be performed by the grantee have been performed; or

the grant eligibility criteria have been satisfied.

A liability is recorded when the State has a binding agreement to make the grant but services have not

been performed or criteria satisfied. Where grant monies are paid in advance of performance or eligibility, a

prepayment is recognised.

1.9 Other economic flows

Other economic flows are changes in the volume or value of an asset or liability that do not result from

transactions. Other economic flows are classified according to those flows that are included in the

Operating Result or Other Movements in Equity.

(a) Gain/(loss) on non-financial assets

Gains or losses from the sale of non-financial assets are recognised when control of the asset has passed

to the buyer.

(b) Change in equity investment in PNFC and PFC Sectors

Equity investments are initially recorded at fair value based on the net assets of State-owned Companies

and Government Business Enterprises. Changes in the value of equity investments are accounted for as

Other economic flows - Included in the Operating Result.

(c) Movements in superannuation liability

All gains or losses arising from the actuarial revaluation of superannuation are classified as Other economic

flows - Included in the Operating Result.


(d) Other gains/losses

Other gains/(Iosses) will include the impairment and write-down of assets.

(i) Impairment – financial assets

Financial assets are assessed at each reporting date to determine whether there is any objective evidence

that any financial assets are impaired. A financial asset is considered to be impaired if objective evidence

indicates that one or more events have had a negative effect on the estimated future cash flows of that

asset.

An impairment loss, in respect of a financial asset measured at amortised cost, is calculated as the

difference between its carrying amount, and the present value of the estimated future cash flows

discounted at the original effective interest rate.

All impairment losses are recognised in the Operating Result.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the

impairment loss was recognised. For financial assets measured at amortised cost and available-for-sale

financial assets that are debt securities, the reversal is recognised in the Operating Result. For

available-for-sale financial assets that are equity securities, the reversal is recognised as Other economic

flows – Other movements in equity.

(ii) Impairment – non-financial assets

All non-financial assets are assessed to determine whether any impairment exists. Impairment exists when

the recoverable amount of an asset is less than its carrying amount. The recoverable amount is the higher

of fair value less costs to sell and its value in use. GGS assets are not used for the purpose of generating

cash flows; therefore an asset’s value in use is based on depreciated replacement cost where the asset

would be replaced if deprived of it.

All impairment losses are recognised in the Operating Result.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses

recognised in prior periods are assessed at each reporting date for any indications that the loss has

decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates

used to determine the recoverable amount. An impairment loss is reversed only to the extent that the

asset’s carrying amount does not exceed the carrying amount that would have been determined, net of

depreciation or amortisation, if no impairment loss had been recognised.

(iii) Write down of assets

A revaluation is recognised as an expense in the Operating Result to the extent that it reverses a

revaluation increment previously credited to, and still included in the balance of, an Asset revaluation

reserve in respect of the same class of asset. In this case, it is debited direct to that Revaluation reserve

and recognised within Other economic flows – Other movements in equity.

Where an increment reverses a revaluation decrement previously recognised in the Operating Result, in

respect of that same class of non-current assets, the revaluation increment is recognised in the Operating

Result.


1.10 Assets

Assets are recognised in the Statement of Financial Position when it is probable that the future economic

benefits will flow to the State and the asset has a cost or other value that can be measured reliably.

(a) Cash and deposits

For the purpose of the Statement of Cash Flows, cash and cash equivalents includes “at call” deposits with

banks net of bank overdrafts, highly liquid investments with short periods to maturity, advances at call

which are subject to insignificant risk of changes in value and borrowings and deposits held by the

Tasmanian Public Finance Corporation from external clients at call.

(b) Investments

Financial assets in the scope of AASB 139 are classified as financial assets initially recorded at fair value

through the Statement of Comprehensive Income, loans and receivables, held-to-maturity investments; or

as available-for-sale investments, as appropriate. When financial assets are initially recognised they are

measured at fair value plus, in the case of investments not at fair value through profit or loss, directly

attributable transactions costs. All routine purchases and sales of financial assets are recognised on the

trade date, i.e. the date that the State commits to purchase the asset.

(i) Financial assets held for trading

Financial assets classified as held for trading are stated at fair value through the Statement of

Comprehensive Income. Financial assets are classified as held for trading if they are acquired for the

purpose of selling in the near term. Derivatives are also classified as held for trading unless they are

designated as effective hedging instruments. Gains or losses on investments held for trading are

recognised in the Statement of Comprehensive Income within Other economic flows.

(ii) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as

held-to-maturity when the State has the intention and ability to hold them to maturity. Investments intended

to be held for an undefined period are not included in this classification. Investments that are intended to be

held to maturity are subsequently measured at amortised cost. For investments carried at amortised cost,

gains and losses are recognised in the Statement of Comprehensive Income, within Other economic flows,

when the investments are derecognised or impaired, as well as through the amortisation process.

(iii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not

quoted in an active market. Such assets are carried at amortised cost using the effective interest method.

Gains and losses are recognised in the Statement of Comprehensive Income, within Other economic flows,

when the loans and receivables cease to be recognised, or are impaired, as well as through the

amortisation process.

(iv) Available-for-sale investments

Available-for-sale investments are those non-derivative financial assets that are designated as

available-for-sale, or are not classified as any of the preceding categories. After initial recognition,

available-for-sale investments are measured at fair value with gains or losses being recognised as a

separate component of equity until the investment is derecognised or until the investment is determined to

be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in the

Statement of Comprehensive Income within Other economic flows.


The fair value of investments that are actively traded in organised financial markets is determined by

reference to quoted market bid prices at the close of business on balance date. For investments with no

active market, fair value is determined using valuation techniques. Such techniques include using recent

arm’s length market transactions; reference to the current market value of another instrument that is

substantially the same; discounted cash flow analysis and option pricing models.

Entities required to report under Australian Accounting Standard AASB 1023 General Insurance Contracts

have valued their investments at net market value. Any movements in the value of investments between

reporting dates are recognised as gains or losses in the Statement of Comprehensive Income within Other

economic flows.

(v) Other investments

The investments in respect of cash held in the Public Account are primarily undertaken through Tascorp.

Short term investments with Tascorp (deposits for more than five days but less than one year) are carried

at their face value and are not adjusted for fluctuations in market interest rates. Interest is brought to

account on an accrual basis.

(c) Equity investments

(i) Equity investments in PNFC and PFC Sectors

Full application of AASB 127 Consolidated and Separate Financial Statements and AASB 139 Financial

Instruments: Recognition and Measurement is not required for GGS financial reporting in accordance with

AASB 1049. Accordingly, the assets, liabilities, income, expenses and cash flows of government controlled

entities that are in the Public Non-Financial Corporations Sector and the Public Financial Corporations

Sector are not separately recognised in the GGS financial statements. Instead, the GGS financial

statements recognise an asset, being the controlling equity investment in those entities.

Equity investments are initially recorded at a fair value based on the net assets of State-owned Companies

and Government Business Enterprises. Changes in the value of equity investments are accounted for as

revenue, or as expenses in the GGS Statement of Comprehensive Income.

(ii) Other equity investments

Other equity investments which are primarily held by the Motor Accidents Insurance Board, are initially

recorded at cost in the Statement of Financial Position. Subsequent measurement is at fair value with any

resultant fair value gains or losses recognised as Other economic flows – Included in the Operating Result.

(d) Receivables

Receivables are recognised at the amounts receivable as they are due for settlement. Impairment of

receivables is reviewed on an annual basis. Impairment losses are recognised when there is an indication

that there is a measurable decrease in the collectability of receivables.

During 2010-11, the receivables classification was amended to include accrued revenue and GST

receivable. These items were previously classified as an Other financial asset. Comparative information

has been amended accordingly.

(e) Other financial assets

Other financial assets are initially recorded at fair value. Other financial assets consist primarily of derivative

transactions that were entered into as designated hedges of underlying physical positions or as designated

hedges of portfolio interest rate risk. Derivative financial instruments are recorded in the Statement of

Financial Positions as payables where the gross amount payable is in excess of the gross amount


receivable and there is an intention by both parties to settle the transaction on a net basis. Derivative

financial instrument receivables are the opposite of this.

(f) Assets held for sale

Assets held for sale (or disposal groups comprising assets and liabilities) that are expected to be recovered

primarily through sale rather than continuing use are classified as held for sale. Immediately before

classification as held for sale, the assets (or components of a disposal group) are remeasured in

accordance with accounting policies. Thereafter, the assets (or disposal group) are measured at the lower

of carrying amount and fair value less costs to sell.

(g) Property, plant, equipment and infrastructure

(i) Valuation basis

Land, buildings, infrastructure, long-lived plant and equipment and heritage and cultural assets are, unless

specified, recorded at fair value less accumulated depreciation. All other non-current physical assets,

including work in progress, are recorded at historic cost less accumulated depreciation and accumulated

impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The costs of

self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable

to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing

the items and restoring the site on which they are located. Purchased software that is integral to the

functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant, equipment and infrastructure have different useful lives, they are

accounted for as separate items (major components) of property, plant, equipment and infrastructure.

Infrastructure assets include such items as road, bridge, rail and water and sewerage infrastructure assets:

Road infrastructure valuation is based on depreciated replacement cost, calculated on a base unit

construction cost rate per square metre of given road carriageway area. The rate is then adjusted to

reflect the additional factors that contribute significantly to the replacement cost. Full valuation occurs

every five years, with the last valuation conducted in 2008. Values are indexed annually using the ABS

Current Road and Bridge Construction Index Number (ABS 6427.0 Table 16).

During 2010-11, an external consultant was engaged to review the road valuation methodology,

including the stratification of the components that form a road (earthworks, pavement and surface) and

the useful lives of each component based on experience and data gathered in Tasmania and interstate.

The methodology recommended by the consultants has resulted in an increase in the depreciated

proportion of the asset, thereby decreasing the overall valuation of the asset based on its age. The

methodology adopted is considered more accurate in terms of the estimation of the useful lives of the

asset components and reflects best practice. The adoption of this changed methodology in 2010-11 has

resulted in a one-off increase to accumulated depreciation by $570 million, which is in effect a write-

down of the net value of the road network by the same amount, applied to asset revaluation reserve.

The road replacement valuation is not affected by the changed methodology

Land under roads and within road reserves value is determined by the Valuer-General from the most

recent valuations of land titles adjoining and within a 200 metre corridor of the State road network. The

methodology utilised by the Valuer-General in providing the average rateable values per hectare or

square metre according to land use in each Municipality has been reviewed by the Valuer-General

resulting in the adoption of a more accurate methodology, employing GIS data, that has become


available in recent years. The new methodology determines average values from the most recent

valuations of land titles adjoining and within a 200 metre corridor of the State road network.

Bridge infrastructure valuation is based on depreciated replacement cost, calculated from base unit

rates for construction of different bridge types. Full valuation occurs every five years, with the last

valuation completed in 2007. Values are indexed annually using the ABS Current Road and Bridge

Construction Index Number (ABS 6427.0 Table 16).

Water and sewerage infrastructure assets are carried at fair value.

Electricity generation assets recorded at fair value are based on a Tasmanian energy price curve

derived by Hydro Tasmania from the published three-year Victorian energy price curve. For further

information regarding valuation of these assets refer to the Annual Report of Hydro Tasmania.

The valuation methodology for electricity distribution assets reflects the Tasmanian Electricity Market

Code rules (as per the Tasmanian Electricity Code) which regulate the revenue from these assets.

Aurora Energy Pty Ltd values the grid assets using the income approach, based on the revenue

generation capacity of the assets, as determined by the Economic Regulator. Valuations are conducted

annually.

Electricity network assets are measured at fair value based on the depreciated optimised replacement

cost methodology. For further information on the valuation of these assets refer to the Annual Report for

Transend Networks Pty Ltd.

Port infrastructure assets held by the Tasmanian Ports Corporation Pty Ltd were revalued at

30 June 2011 and in future years will be reported at fair value less accumulated depreciation and

impairment.

Heritage assets and collections are defined as those non-current physical assets that the State intends to

preserve because of their unique historical, cultural or environmental attributes. This category primarily

consists of the Tasmanian Museum and Art Gallery collections and the State Library’s Tasmanian

collection. The Tasmanian Museum and Art Gallery collections are recognised at fair value. The collection

was last valued as at 30 June 2011. The State Library’s Tasmanian collection is recognised at fair value.

These items are not depreciated as they do not have a limited useful life as appropriate curatorial practices

are in place.

Biological assets comprise the forest crop of Forestry Tasmania. During 2011, Forestry Tasmania engaged

James W Sewall Company to establish a valuation for its entire forest estate, inclusive of land and roads.

The methodology used to estimate the value for biological assets involves an income capitalisation

approach. Due to the continued uncertainty surrounding the Tasmanian Forests Intergovernmental

Agreement and Statement of Principles process in Tasmania, whereby it is uncertain as to what area may

remain available from which Forestry Tasmania can source forest products, the valuation approach

included a number of scenarios, to which probabilities were attached in arriving at a valuation. The resulting

downward revaluation was half due to adverse market conditions, and half due to factoring in the likely

impact of the Tasmanian Forests Intergovernmental Agreement and Statement of Principles.

The forest under management is divided into three areas:

general forest zone;

special timbers zone; and

formal forest reserves.


Due to the different uses and restrictions on these areas, separate valuations, utilising the income

capitalisation approach are derived. Further, given that the valuations for the special timbers zone and

formal forest reserves result in negative valuations, these have been recognised separately as a liability in

the Statement of Financial Position, refer to Note 7.4.

For further information regarding valuation of forest assets, refer to the Annual Report of Forestry

Tasmania.

National Parks, Reserves and Conservation Areas which are held by the Department of Primary Industries,

Parks, Water and the Environment have all been valued at fair (market) value for their existing use with no

consideration of a higher, better or more economic use of the land than the current use. The amount of

discounting or adjustment made to market sales evidence for valuation purposes depends on a variety of

factors including type of land, access, area and reservation status.

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount

of the item if it is probable that the future economic benefits will arise and its costs can be measured

reliably. The carrying amount of the replaced part is derecognised. The costs of day-to-day servicing of

property, plant and equipment are recognised in profit or loss as incurred.

(iii) Asset recognition threshold

The asset capitalisation threshold adopted by the General Government and State Sectors is between

$5 000 and $10 000. Assets valued at less than $5 000 are charged to the Statement of Comprehensive

Income in the year of purchase (other than where they form part of a group of similar items which are

material in total).

(iv) Revaluations

The asset revaluation threshold is in the order of $50 000, above which assets are revalued with sufficient

regularity to ensure they reflect fair value at balance date. In accordance with AASB 116 Property Plant and

Equipment, in years between valuations, indices are supplied by qualified valuers to index valuations to fair

value.

Assets are grouped on the basis of having a similar nature or function.

(h) Investment property

Investment property is property held to earn rental income, for capital appreciation, or for both. Investment

property is recorded at fair value. Property interests held under operating leases are not classified and

accounted for as investment property. Changes in the fair value of investment property are recorded as

Other economic flows within the Statement of Comprehensive Income. Investment property is not

depreciated.

(i) Intangible assets

An intangible asset is recognised where:

it is probable that an expected future benefit attributable to the asset will flow to the entity; and

the cost of the asset can be reliably measured.

Intangible assets are valued at fair value where an active market exists and are amortised on a straight line

basis over their estimated useful life. Where no active market exists, intangibles are recorded at cost less

amortisation and impairment losses.


(j) Inventories

Inventories held for distribution are valued at cost adjusted, when applicable, for any loss of service

potential. Inventories acquired for no cost or nominal consideration are valued at current replacement cost.

(k) Goodwill

Goodwill represents the excess of the cost of the acquisition over the net fair value of the identifiable

assets, liabilities and contingent liabilities of the subsidiary. Goodwill is measured at cost less accumulated

impairment losses. Goodwill is held by Hydro Tasmania, TOTE Tasmania Pty Ltd and the Tasmanian Ports

Corporation Pty Ltd.

1.11 Liabilities

Liabilities are recognised in the Statement of Financial Position when it is probable that an outflow of

resources embodying economic benefits will result from the settlement of a present obligation and the

amount at which the settlement will take place can be measured reliably.

(a) Borrowings

Bank loans and other loans are initially measured at fair value, net of transaction costs. Bank loans and

other loans are subsequently measured at amortised cost using the effective interest rate method, with

interest expense recognised on an effective yield basis.

The effective interest rate method is a method of calculating the amortised cost of a financial liability and

allocating interest expense over the relevant period. The effective interest rate is the rate that exactly

discounts estimated future cash payments through the expected life of the financial liability, or where

appropriate, a shorter period.

(b) Superannuation

(i) Defined contribution plans

A defined contribution plan is a post employment benefit plan under which an entity pays fixed contributions

into a separate entity and where there is no legal or constructive obligation to pay further amounts.

Obligations for contributions to defined contribution plans are recognised as an expense when they fall due.

(ii) Defined benefit plans

A defined benefit plan is a post employment benefit plan other than a defined contribution plan.

Superannuation obligations, in respect of the contributory service of current and past government

employees, are recognised at the latest actuarial assessment of the members’ entitlements, net of scheme

assets. The valuation is determined by discounting to present value, the gross benefit payments at a

current, market-determined, risk-adjusted discount rate appropriate to the respective plan.

All gains or losses arising from the actuarial revaluation of superannuation liabilities are recognised as

Other economic flows – Included in the Operating Result.

(c) Employee entitlements

Liabilities for wages and salaries and annual leave are recognised when an employee becomes entitled to

receive a benefit. Those liabilities expected to be realised within 12 months are measured as the amount

expected to be paid. Other employee entitlements are measured as the present value of the benefit at

30 June 2011, where the impact of discounting is material, and at the amount expected to be paid if

discounting is not material.


A liability for long service leave is recognised, and is measured as the present value of expected future

payments to be made in respect of services provided by employees up to the reporting date.

(d) Payables

Payables, including goods received and services incurred but not yet invoiced, are recognised at amortised

cost, which due to the short settlement period, equates to face value, when there is an obligation to make

future payments as a result of a purchase of assets or services.

During 2010-11, the payables classification was amended to include accrued expenses. These items were

previously classified as Other liabilities. Comparative information has been amended accordingly.

(e) Other liabilities

Other liabilities are recognised in the Statement of Financial Position when it is probable that an outflow of

resources embodying economic benefits will result from the settlement of a present obligation and the

amount at which the settlement will take place can be measured reliably.

(f) Financial guarantee liabilities

Financial guarantee contract liabilities are measured initially at their fair values and subsequently at the

higher of the amount determined in accordance with AASB 137 Provisions, Contingent Liabilities and

Contingent Assets.

1.12 Leases

Operating lease agreements exist for property, plant and equipment, where the lessors effectively retain all

the risks and benefits incidental to ownership of the items leased. Equal instalments of lease payments are

charged to the Statement of Comprehensive Income over the lease term, as this is representative of the

pattern of benefits to be derived from the leased property.

1.13 Foreign currency balances/transactions

Transactions denominated in a foreign currency are converted at the exchange rate at the date of the

transaction. Foreign currency receivables and payables are translated at the exchange rates current at

balance date.

1.14 Comparative figures

Comparative figures have been adjusted to reflect any changes in accounting policy or the adoption of new

standards.

1.15 Budget Information

Budget information refers to original estimates as disclosed in the 2010-11 Budget Papers and is not

subject to audit. Explanation of major variances between budget and actual outcomes is provided in

Note 12.

1.16 Rounding

Amounts in the Financial Statements and Notes to the Financial Statements are rounded to the nearest

million dollars, unless otherwise stated. As a consequence, rounded figures may not add to totals. Amounts

less than $500 000 are rounded to zero and are indicated by the symbol “….”.


1.17 Accounting judgments, estimates and assumptions

In the preparation of the General Government and Total State Sector Financial Statements, entities are

required to make judgements, estimates and assumptions that affect the reported amounts of assets and

liabilities and the disclosure of contingent liabilities at the date of the Statements and the reported revenue

and costs during the reported period.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting

estimates are recognised in the period in which the estimate is revised, if the revision affects only that

period; or in the period of the revision and future periods if the revision affects both current and future

periods.

Judgements that have significant effects on the financial statements are discussed below:

(i) Assessment of impairment of non-regulated electricity assets

Tests are undertaken on an annual basis to determine whether assets have suffered any impairment, in

accordance with the accounting policy. The recoverable amounts of cash-generating units have been

determined based on value-in-use calculations. These calculations require the use of the following key

assumptions:

forecast electricity pool and contract prices and regulated pricing for non-contestable customers;

forecast fuel prices;

forecast maintenance and capital expenditure; and

discount rates.

(ii) Fair value of financial instruments

The fair value of financial instruments that are not traded in an active market (for example, certain types of

electricity derivatives) is determined by using valuation techniques. Judgement has been applied to select a

variety of methods and makes assumptions that are mainly based on market conditions existing at each

statement of financial position date.

(iii) RBF liability

The Retirement Benefits Fund defined benefits provision has been assessed by the State Actuary and

various actuarial assumptions have been applied to arrive at the carrying value reported.

No assumptions have been made concerning the future that may cause a material adjustment to the

carrying amounts of assets and liabilities within the next reporting period.

(iv) Provision for outstanding and unreported claims in MAIB

This provision is made at the Statement of Financial Position date for the estimated cost of claims incurred

but not settled, including the cost of claims incurred but not yet reported.

The expected future payments are calculated based on the ultimate cost of settling claims, which includes

the anticipated effects of inflation, the goods and services tax and other factors. The expected future

payments are then discounted to a present value at the balance date using market determined risk free

discount rates. Claims handling expenses include the cost of managing claims such as administration

expenses and professional fees that are not otherwise directly allocated to individual claims.

In determining the provision for outstanding claims, a risk margin is added to the total of the net central

estimate of the discounted future claim payments plus the estimated claims handling expenses. The


addition of a risk margin recognises the inherent uncertainties contained within the actuarial valuation and

provides a probability not less than 75 per cent (2010: not less than 75 per cent) that the provision is

sufficient to meet the cost of the claims incurred. The allowances for claims handling expenses and the risk

margin have been determined for the scheme as a whole. For reporting purposes they have been applied

uniformly to each benefit type. For further detail, refer to the Annual Report of MAIB.

(v) Forest estate valuation methodology

The valuation of the forest estate assets involves a number of assumptions which are summarised below.

For further detail, refer to the Annual Report of Forestry Tasmania.

Existing practices with regard to forest management and silviculture are assumed to continue;

A pre-tax discount rate of 9.0 per cent (8.1 per cent as at 30 June 2010) is used to value the three forest

zones;

Forest yields/volumes – Native forest volume assessments were reviewed in 2007 as part of the

Regional Forest Agreement review process and have been updated to take into account the volume

losses associated with the change in silviculture alternatives. Hardwood and softwood plantation

volumes are based on inventory data collected from 1998 to 2007;

Future rotations – Only the current standing timber crop is valued according to AASB 141 Agriculture.

No recognition is made of the costs and returns related to future tree crops, or of the harvest and

delivery of logs;

Costs – Costs directly attributable to the management of the forest estate are included in the discounted

cash flow model; and

Prices – Stumpage rates are used to determine the revenues. The prices are based on current and

historical prices and pricing trends over the full range of products.

1.18 Goods and Services Tax

Revenue, expenses and assets are recognised net of the amount of Goods and Services Tax, except

where the GST incurred is not recoverable from the Australian Taxation Office. Receivables and payables

are stated inclusive of GST. The net amount recoverable, or payable, to the ATO is recognised as an asset

or liability within the Statement of Financial Position.

In the Statement of Cash Flows, the GST component of cash flows arising from operating, investing or

financing activities which is recoverable from, or payable to, the Australian Taxation Office is, in accordance

with the Australian Accounting Standards, classified as operating cash flows

1.19 Key Fiscal Aggregates

The financial report presents a number of Key Fiscal Aggregates that are presented on the face of the

statements, as a requirement of the UPF and AASB 1049. A description of the Key Fiscal Aggregates is

provided below:

Net Operating Balance

The Net Operating Balance is a measure of the on-going sustainability of the operations of government. It

indicates whether a government is generating enough revenue to cover the cost of its operations. A Net

Operating Surplus indicates that a government has sufficient revenue to fund its operations and contribute

to an increase in its asset base.


Operating Result

The Operating Result is similar to the Net Operating Balance in that it is a measure of the sustainability of

the operations of government. However, this measure includes movements in asset and liability balances

that result from movements in market values rather than as a result of government operations. These gains

or losses on assets or liabilities are “unrealised” and are not available to fund government operations.

Comprehensive Result

The Comprehensive Result represents the total change in value of the Net Worth during a year arising from

revenues, expenses and movements in the valuation of assets and liabilities. As such, the Comprehensive

Result is equivalent to the total increase or decrease in Net Assets during the year. The Comprehensive

Result is similar to the Operating Result in that it includes unrealised movements in the value of assets and

liabilities that impact on net assets. These movements are not available to fund operations and do not arise

as a result of government decisions.

Fiscal Balance

The Fiscal Balance indicates whether a sufficient surplus is being generated by the operations of

government to fund its capital expenditure needs. It is determined as the difference between revenue from

transactions over expenses from transactions, after allowing for the net addition to non-financial assets

such as buildings and infrastructure.

Net Debt

Net Debt is a measure used to help assess the overall strength of a Government’s fiscal position. Net Debt

comprises borrowings less the sum of cash and deposits and investments.

Net Financial Liabilities

Net Financial Liabilities comprises total liabilities less financial assets, excluding equity investments in

Government Businesses. This is a broader measure than Net Debt, as it incorporates other liabilities such

as superannuation.

Net Financial Worth

Net Financial Worth is calculated as financial assets less liabilities. This measure is broader than Net Debt,

as it incorporates provisions made (such as superannuation, but not depreciation and bad debts) as well as

ownership of equity.

Net Worth

Net Worth is calculated as total assets (both financial and non-financial) minus total liabilities. Net Worth

incorporates non-financial assets such as land and other infrastructure assets, which may be sold and used

to repay debt. It also incorporates certain financial assets and liabilities not captured by the Net Debt

measure, most notably, accrued employee superannuation liabilities, ownership of equities, debtors and

creditors.

GFS includes shares and contributed capital in the calculation of Net Worth, which for the PNFC and PFC

Sectors is equivalent to the carrying amount of net assets. As a result, GFS Net Worth for the PNFC and

PFC sectors will always be nil. This difference has no impact on GGS or Total State Sector Net Worth.


Net Increase in Cash Held

Net Increase in Cash Held is the sum of net cash flows from all operating, investing and financing activities.

This measure is consistent with the movement in cash and deposits reported in the Statement of Financial

Position, providing a mechanism for managing the cash position to ensure that sufficient cash is available

to fund Government policy decisions.

Cash Surplus/(Deficit)

The Cash Surplus/(Deficit) comprises cash received from operating activities, and from sales and

purchases of non-financial assets less finance leases and similar arrangements.

The Cash Surplus/(Deficit) is important for cash management purposes. It is important to note that a Cash

Surplus does not necessarily imply that there is cash available for spending. This is because the Cash

Surplus/(Deficit) includes funds allocated to provisions such as the Superannuation Provision Account.

It should be noted that the Australian Bureau of Statistics does not include equity injections/withdrawals and

the repayment of advances in the calculation of the surplus/(deficit). However, these items can have a

major impact in any given year.


Note 2 Disaggregated Information

The following tables present the Statement of Comprehensive Income, Statement of Financial Position and

Statement of Cash Flows for the GGS, PNFC and PFC Sectors.

The Total Non-Financial Public Sector represents the consolidated total of the GGS and PNFC Sectors.

The Total State Sector represents the consolidation of GGS, PNFC and PFC Sectors. Total State

Inter-Sector Eliminations are presented to allow reconciliation between the individual Sectors and the Total

State Sector financial statements.


Note 2 Disaggregated Information – Statement of Comprehensive Income by Sector General Government

Sector Public Non-Financial Corporations Sector

Public Financial Corporations Sector

Inter-sector Eliminations

Total Non-Financial Public Sector

Total State Sector

2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 $m $m $m $m $m $m $m $m $m $m $m $m

Revenue from transactions Grants 3 191 3 110 152 144 .... .... 154 125 3 192 3 131 3 190 3 129 Taxation 860 872 .... .... .... .... 52 43 809 829 808 829 Sales of goods and services 303 289 2 941 2 643 137 131 36 42 3 212 2 893 3 345 3 021 Fines and regulatory fees 84 97 .... .... .... .... 1 .... 84 97 84 97 Interest income 40 45 13 11 349 286 201 195 53 56 201 147 Dividend, tax and rate equivalent income 159 79 .... .... 64 31 159 79 59 60 64 31 Other revenue 129 109 33 45 2 .... 1 2 160 153 163 153

4 767 4 602 3 140 2 843 552 449 603 486 7 569 7 218 7 856 7 408 Expenses from transactions

Employee expenses 2 070 1 957 437 396 6 5 .... .... 2 507 2 353 2 513 2 358 Superannuation 271 233 42 35 1 1 .... .... 312 268 313 269 Depreciation 236 229 335 311 1 .... .... .... 571 539 572 540 Supplies and consumables 991 973 1 800 1 679 141 114 40 34 2 754 2 620 2 893 2 731 Nominal superannuation interest expense 232 208 32 25 .... .... .... .... 264 232 264 233 Borrowing costs 14 18 182 172 320 236 225 214 173 172 291 212 Grant and subsidy expenses 952 935 35 23 2 1 149 134 841 826 841 826 Dividend, tax and rate equivalent expense .... .... 114 33 59 59 159 79 14 14 14 14 Other expenses 23 31 31 29 .... .... 31 25 23 34 23 34

4 790 4 584 3 008 2 702 529 416 604 486 7 460 7 059 7 724 7 216

equals NET OPERATING BALANCE (23) 18 132 141 23 33 .... .... 109 158 132 192

plus Other economic flows – Included in Operating Result Gain/(loss) on sale of non-financial assets 6 (24) 2 (2) .... .... .... .... 8 (26) 8 (26) Change in equity investment in PNFC/PFC sectors 228 1 893 .... .... .... .... 228 1 893 20 59 .... .... Movements in superannuation liability 85 (692) 16 (63) .... .... .... .... 101 (755) 101 (755) Other gains/(losses) (124) (41) (152) (91) (3) 26 .... .... (276) (133) (279) (107)

195 1 136 (134) (157) (3) 26 228 1 893 (147) (855) (170) (888)

equals Operating Result 172 1 153 (2) (16) 20 59 228 1 893 (38) (697) (38) (697)

plus Other economic flows – Other movements in equity Revaluations of non-financial assets (807) 387 129 (272) .... .... .... .... (678) 116 (678) 116 Other non-owner movements in equity 120 (14) 22 1 963 .... .... .... (48) 142 1 997 142 1 997

(688) 373 152 1 691 .... .... .... (48) (536) 2 112 (536) 2 112

equals Comprehensive Result (515) 1 527 149 1 675 20 59 228 1 845 (574) 1 416 (574) 1 416


Note 2 Disaggregated Information (continued) – Statement of Comprehensive Income by Sector General Government





Total State Sector

2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 $m $m $m $m $m $m $m $m $m $m $m $m

KEY FISCAL AGGREGATES NET OPERATING BALANCE (23) 18 132 141 23 33 .... .... 109 158 132 192 less Net acquisition of non-financial assets

Purchase of non-financial assets 721 607 598 716 .... 1 .... .... 1 319 1 323 1 319 1 324 less Sale of non-financial assets 62 69 15 40 .... .... .... .... 77 109 77 109 less Depreciation 236 229 335 311 1 .... .... .... 571 539 572 540

423 309 247 365 .... 1 .... .... 670 675 670 675

Equals FISCAL BALANCE – SURPLUS/(DEFICIT) (446) (291) (115) (224) 24 32 .... .... (561) (517) (538) (483)


Note 2 Disaggregated Information (continued) – Statement of Financial Position as at 30 June by Sector General Government





Total State Sector

2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 $m $m $m $m $m $m $m $m $m $m $m $m

Assets Financial Assets

Cash and deposits 628 966 203 200 1 2 693 1 020 831 1 166 139 147 Investments 56 56 18 43 7 862 6 070 2 840 2 866 74 97 5 096 3 303 Equity investments: PNFC and PFC sectors 6 178 5 950 .... .... .... .... 6 178 5 950 330 310 .... .... Other equity investments 4 3 18 138 114 102 .... .... 21 141 136 243 Receivables 216 214 454 351 27 13 6 2 665 563 691 576 Other financial assets 1 031 913 975 953 87 170 1 298 1 270 708 602 795 767

8 113 8 102 1 668 1 685 8 092 6 357 11 015 11 108 2 629 2 879 6 858 5 036

Non-financial assets Land and buildings 5 897 5 219 351 282 .... .... .... .... 6 248 5 501 6 248 5 501 Infrastructure 3 787 4 837 9 786 9 331 .... .... .... .... 13 573 14 168 13 573 14 168 Plant and equipment 224 216 228 213 1 1 .... .... 452 429 453 430 Heritage and cultural assets 442 553 .... .... .... .... .... .... 442 553 442 553 Biological assets .... .... 232 319 .... .... .... .... 232 319 232 319 Investment property 12 13 .... .... 15 16 .... .... 12 13 28 29 Goodwill .... .... 55 55 .... .... .... .... 55 55 55 55 Intangible assets 34 34 93 72 1 .... .... .... 127 106 128 106 Assets held for sale 28 21 5 11 .... .... .... .... 33 32 33 32 Other non-financial assets 35 37 133 112 .... .... .... .... 168 149 168 149

10 459 10 930 10 882 10 394 17 17 .... .... 21 341 21 324 21 358 21 341

Total Assets 18 573 19 031 12 550 12 079 8 109 6 374 11 015 11 108 23 970 24 203 28 216 26 377 Liabilities

Borrowings 269 274 2 946 2 764 6 819 5 218 3 490 3 844 3 214 3 037 6 544 4 411 Superannuation 4 966 4 860 631 633 3 3 .... .... 5 597 5 493 5 600 5 497 Employee entitlements 488 461 104 104 1 1 1 .... 592 566 593 567 Payables 97 122 310 241 2 3 6 2 401 362 404 365 Other liabilities 261 248 2 710 2 696 952 840 1 341 1 313 1 674 1 680 2 583 2 471

Total Liabilities 6 081 5 966 6 702 6 439 7 778 6 065 4 837 5 158 11 478 11 137 15 724 13 312

Net Assets 12 492 13 065 5 848 5 640 330 310 6 178 5 950 12 492 13 065 12 492 13 065

Equity

Accumulated funds 8 791 8 557 1 949 1 837 320 300 2 957 2 692 8 113 8 012 8 103 8 002 Asset revaluation reserve 3 701 4 508 699 570 .... .... .... .... 4 400 5 078 4 400 5 078 Equity transfers .... .... 3 221 3 258 .... .... 3 221 3 258 …. …. .... .... Other reserves .... .... (21) (25) 10 10 .... .... (21) (25) (11) (15)

Total Equity 12 492 13 065 5 848 5 640 330 310 6 178 5 950 12 492 13 065 12 492 13 065


Note 2 Disaggregated Information (continued) – Statement of Financial Position as at 30 June by Sector General Government





Total State Sector

2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 $m $m $m $m $m $m $m $m $m $m $m $m

KEY FISCAL AGGREGATES

NET WORTH 12 492 13 065 5 848 5 640 330 310 6 178 5 950 12 492 13 065 12 492 13 065

NET FINANCIAL WORTH 2 032 2 135 (5 034) (4 754) 313 293 6 178 5 950 (8 849) (8 259) (8 866) (8 276) NET FINANCIAL LIABILITIES 4 146 3 814 5 034 4 754 (313) (293) .... .... 9 180 8 569 8 866 8 276 NET DEBT (416) (748) 2 725 2 522 (1 044) (854) (44) (43) 2 310 1 774 1 309 962


Note 2 Disaggregated Information (continued) – Statement of Cash Flows by Sector General Government





Total State Sector

2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 $m $m $m $m $m $m $m $m $m $m $m $m

Cash flows from operating activities Cash infow

Taxation 847 867 .... .... .... .... 42 42 805 825 805 825 Sales of goods and services 311 291 3 241 2 913 152 147 33 47 3 521 3 160 3 671 3 305 Grants received 3 184 3 130 150 150 .... .... 150 129 3 185 3 152 3 183 3 151 Dividend, tax and rate equivalent income 126 106 .... .... 64 31 126 106 43 55 64 31 Fines and regulatory fees 86 86 .... .... .... .... 1 .... 85 86 85 86 Interest received 41 44 13 10 415 280 199 194 55 54 270 140 Other receipts 383 291 205 162 8 3 1 .... 586 453 594 456

4 977 4 817 3 609 3 236 639 460 552 518 8 281 7 786 8 672 7 995 Cash outflow

Employee entitlements (2 046) (1 958) (304) (360) (3) (3) .... .... (2 349) (2 318) (2 352) (2 321) Superannuation (305) (304) (62) (51) .... .... .... .... (366) (355) (367) (355) Supplies and consumables (1 016) (933) (2 298) (2 033) (101) (100) (31) (31) (3 284) (2 937) (3 383) (3 034) Grant and subsidy paid (931) (929) (35) (23) (2) (1) (679) (141) (819) (812) (819) (812) Borrowing costs (15) (17) (187) (160) (310) (335) 308 (212) (179) (159) (289) (301) Other payments (269) (256) (166) (158) (8) (7) (23) (28) (412) (387) (420) (394)

(4 581) (4 397) (3 050) (2 786) (423) (446) (426) (412) (7 409) (6 968) (7 629) (7 217)

Net cash flows from operating activities 395 420 558 450 216 15 126 106 871 818 1 043 778

Cash flows from investing activities Non-financial assets

Purchases of non-financial assets (720) (607) (598) (716) .... (1) .... .... (1 318) (1 323) (1 318) (1 324) Sales of non-financial assets 62 69 15 40 .... .... .... .... 77 109 77 109

(658) (538) (582) (676) .... (1) .... .... (1 241) (1 214) (1 241) (1 215) Financial assets (policy purposes)

Equity injections (58) (111) 59 111 .... .... .... .... .... .... .... .... Net advances paid (9) (11) .... .... .... .... .... 1 (9) (12) (9) (12)

(67) (122) 59 111 .... .... .... 1 (9) (12) (9) (12) Financial assets (liquidity management purposes)

Net purchase/(sale) of investments (1) 1 11 (20) (1 232) 104 (39) (66) 10 (19) (1 183) 151

(1) 1 11 (20) (1 232) 104 (39) (66) 10 (19) (1 183) 151

Net cash flows from investing activities (726) (659) (513) (586) (1 233) 103 (39) (65) (1 239) (1 246) (2 433) (1 077) Cash flows from financing activities

Net borrowing (4) (22) 40 81 2 081 (826) 37 66 36 60 2 079 (833) Dividend, tax and rate equivalent payments .... .... (103) (68) (43) (54) (126) (106) (21) (16) (21) (16) Other financing (1) .... .... 32 .... .... .... (1) (1) 32 (1) 32

(5) (22) (63) 45 2 037 (880) (88) (42) 14 76 2 057 (817)


Note 2 Disaggregated Information (continued) – Statement of Cash Flows by Sector General Government





Total State Sector

2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 $m $m $m $m $m $m $m $m $m $m $m $m

Net Increase/(decrease) in cash held (338) (261) (18) (92) 1 020 (763) (1) .... (354) (352) 667 (1 115) Cash and cash equivalents at beginning of the year 966 1 227 234 326 373 1 136 .... .... 1 201 1 553 1 574 2 689 Cash and cash equivalents at end of the year 628 966 216 234 1 393 373 .... .... 847 1 201 2 241 1 574 KEY FISCAL AGGREGATES Net cash from operating activities 395 420 558 450 216 15 126 106 871 818 1 043 778 plus Dividend, income tax and rate equivalent payments .... .... (103) (68) (43) (54) (126) (106) (21) (16) (21) (16) plus Net cash flows from non-financial assets (658) (538) (582) (676) .... (1) .... .... (1 241) (1 214) (1 241) (1 215)

Equals CASH SURPLUS/(DEFICIT) (263) (118) (127) (294) 172 (41) 1 .... (390) (412) (219) (453)



Note 3 Revenue from transactions

3.1 Grants


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Australian Government sources:

General purpose payments 1 761 1 653 1 639 1 653 1 639

Specific purpose payments 609 618 580 618 580

National partnership payments 501 791 769 791 769

Other grants and subsidies 40 129 122 128 141

2 911 3 191 3 110 3 190 3 129


3.2 Taxation revenue


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Payroll tax 281 286 271 258 247

Taxes on property

Land tax 77 75 91 75 91

Fire service levies

Fire service contribution 31 31 30 31 30

Insurance levy 16 16 17 16 17

Government guarantee fees 24 24 18 …. ….

Taxes on financial and capital transactions 170 145 163 145 163

Taxes on the provision of goods and services

Gambling taxes

Casino tax and licence fees 59 59 59 59 59

Betting exchange taxes and levies 2 4 7 4 7

Lottery tax 25 25 27 25 27

Totalizator wagering levy 6 6 6 6 6

Insurance duty 49 49 47 49 47

Taxes on the use of goods and services

Vehicle registration fees 30 33 31 33 31

Motor vehicle fees and taxes

Motor vehicle duty 39 38 39 38 39

Motor tax 60 62 59 62 59

Motor vehicle fire levy 6 6 6 6 6

876 860 872 808 829

3.3 Sales of goods and services


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Sales of goods 37 39 38 468 431

Sales of services 259 186 178 2 784 2 508

Rental income 74 78 73 94 83

370 303 289 3 345 3 021


3.4 Fines and regulatory fees


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Fines 33 26 36 26 36

Fees

Abalone licences 7 7 7 7 7

Environment fees 3 4 4 4 4

Drivers’ licences 8 6 9 6 9

Photo licence fees 2 1 …. 1 ….

Road safety levy 9 10 10 10 10

Quarantine fees 2 2 2 2 2

Other fees 25 29 30 28 30

89 84 97 84 97

3.5 Dividend, tax and rate equivalent revenue


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Returns from the PNFC and PFC sectors

Dividend revenue 68 82 53 …. ….

Income tax equivalents 78 74 23 …. ….

Rates equivalents 3 3 3 …. ….

Other dividend revenue …. …. …. 64 31

149 159 79 64 31


3.6 Other revenue


2010-11 2010-11 2009-101 2010-11 2009-101

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Royalty income 39 49 39 49 39

Other revenue by entity 2

Health and Human Services 31 29 33 29 33

Police 6 13 14 13 14

Justice 8 11 11 11 11

Finance-General 1 10 3 10 3

Primary Industries, Parks, Water and Environment 8 6 3 6 3

Infrastructure, Energy and Resources 1 5 4 5 4

Water and sewerage corporations .... .... .... 11 2

Aurora Energy Pty Ltd .... .... .... 9 9

Other 26 5 3 19 36

121 129 109 163 153

Notes: 1. The 2009-10 comparatives have been reclassified. This amendment has had no impact on the financial results. 2. Information in this section may differ from Other Revenue disclosed in individual entity financial statements due to

elimination and classification differences.


Note 4 Expenses from transactions

4.1 Employee expenses


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Salaries and wages 1 976 1 896 1 784 2 304 2 155

Annual leave n/a 106 99 128 117

Long service leave 14 41 39 48 46

Fringe benefits tax 4 6 5 10 8

Other 13 22 30 22 31

2 007 2 070 1 957 2 513 2 358

4.2 Depreciation


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Depreciation in respect of:

Buildings 91 93 87 98 91

Plant and equipment 60 47 45 85 82

Infrastructure 97 93 93 370 349

Other .... 3 4 19 18

249 236 229 572 540


4.3 Grant and subsidy expenses


2010-11 2010-11 2009-101 2010-11 2009-101

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Grants to local government sector 87 88 91 88 91

Payments to School bus operators 44 40 41 40 41

Grants to non-government schools

Australian Government funded 191 203 226 203 226

State Government funded 49 52 49 52 49

Capital assistance 1 1 1 1 1

241 256 277 256 277

Grants to PNFC Sector entities

Tasracing Pty Ltd 26 27 27 …. ….

Tasmanian Railway Pty Ltd 19 15 …. …. ….

Aurora Energy Pty Ltd 33 33 23 …. ….

Metro Tasmania Pty Ltd 35 33 32 …. ….

Forestry Tasmania 2 …. 20 …. ….

Water and sewerage corporations 26 19 16 …. ….

Other payments 21 19 13 …. ….

160 146 131 …. ….

Department of Health and Human Services grants

Disability services n/a 103 92 103 92

Home and community care n/a 36 33 36 33

Community support n/a 24 10 24 10

Supported accommodation assistance n/a 17 16 17 16

Other grants n/a 59 41 59 41

237 239 192 239 192

Other grants by agency

Economic Development 58 54 50 54 50

Finance-General 24 25 53 25 53

Infrastructure 22 22 20 22 20

Aurora Energy Pty Ltd …. …. …. 33 23

Other agencies 7 83 81 83 81

112 184 204 217 227

880 952 935 841 826

Note: 1. The 2009-10 comparatives have been reclassified. This amendment has had no impact on the financial results.


4.4 Supplies and consumables


2010-11 2010-11 2009-101 2010-11 2009-101

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Consultants 21 37 39 76 81

Property services 145 153 148 144 138

Maintenance 126 142 140 243 198

Communications 53 38 40 54 53

Information technology 69 52 62 69 80

Travel and transport 40 34 27 51 49

Medical, surgical and pharmacy supplies 164 182 174 182 174

Advertising and promotion 21 18 19 38 36

Operating lease costs 12 34 31 54 41

Other supplies and consumables 277 265 254 647 652

Cost of sales …. 2 …. 1 301 1 192

Tasmanian Risk Management Fund 64 35 38 35 38

992 991 973 2 893 2 731


4.5 Dividend, tax and rate equivalent expenses1


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Water and Sewerage Corporations

dividend payment to Local Councils …. …. …. 14 14

…. …. …. 14 14

Note: 1. In accordance with section 32 of the Water and Sewerage Corporations Act 2008, dividends are to be determined

by the Board of each water and sewerage entity during the financial year and payments are made, following the Treasurer’s allocation order, to the stakeholders.


Note 5 Other economic flows

5.1 Gain/(loss) on sale of non-financial assets


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Proceeds on disposal 59 62 69 77 109

Written down value of assets sold (42) (56) (93) (69) (135)

17 6 (24) 8 (26)

5.2 Other gains/(losses) included in Operating Result


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Assets acquired below fair value …. 10 21 8 31

Non-financial asset revaluation movements 12 (118) (23) (199) (153)

Other revaluation movements …. (79) …. (79) 103

Amortisation (5) (5) (3) (23) (19)

Bad debt written off …. (1) (1) (2) (2)

Movement in deferred tax assets …. 69 (36) …. ….

Forestry Tasmania establishment of obligations for

non-commercial zones …. …. …. 9 (66)

Other gains/(losses) …. …. …. 7 (1)

7 (124) (41) (279) (107)


Note 6 Assets

6.1 Investments


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Loan advances 73 54 50 199 141

Government and institutional securities 7 3 6 4 897 3 162

80 56 56 5 096 3 303

Settled within 12 months 30 17 16 3 982 2 156

Settled in more than 12 months 50 39 39 1 115 1 147

80 56 56 5 096 3 303

6.2 Equity investments


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Equity investment in PNFC and PFC sectors 6 265 6 178 5 950 …. ….

MAIB equity investments …. …. …. 114 102

Hydro investment in joint venture …. …. …. …. 122

Other equity investments 6 4 3 21 19

6 270 6 182 5 953 136 243

During 2010-11, the Government provided equity contributions to the following Government businesses:

Tasmanian Railway Pty Ltd $38 million;

Rivers and Water Supply Commission $15 million;

Aurora Energy Pty Ltd $5 million; and

Tasmanian Ports Corporation Pty Ltd $1 million.


The equity investment in the PNFC and PFC Sectors is comprised of the following values at 30 June 2010

and 30 June 2011. Note original Budget information is not presented:

General Government

2011

Actual

2010

Actual

$m $m

Public Non-Financial Corporations Sector

State-owned Companies

Aurora Energy Pty Ltd 561 496

Metro Tasmania Pty Ltd 33 33

Tasmanian Ports Corporation Pty Ltd 181 123

Tasmanian Railway Pty Ltd 82 72

Tasracing Pty Ltd 50 53

TOTE Tasmania Pty Ltd 9 9

Transend Networks Pty Ltd 623 564

TT-Line Company Pty Ltd 256 249

Government Business Enterprises

Forestry Tasmania 1 187 327

Hydro Tasmania 2 013 1 882

Port Arthur Historic Site Management Authority 15 14

Private Forests Tasmania 1 1

Public Trustee 5 4

Rivers and Water Supply Commission 65 63

Water and Sewerage Corporations 2

Tasmanian Water and Sewerage Corporation (Northern-Region) Pty Ltd 1 495 489

Tasmanian Water and Sewerage Corporation (North-Western-Region) Pty Ltd 1 328 327

Tasmanian Water and Sewerage Corporation (Southern-Region) Pty Ltd 1 944 933


Government Business Enterprises

Motor Accidents Insurance Board 289 271

Tasmanian Public Finance Corporation 41 38

6 178 5 950

Notes: 1. As part of the consolidation process, Government grants received in advance liabilities have been removed. As a

result, the value of net assets will be different to that disclosed in the individual entity financial statements. 2. The three regional water and sewerage corporations hold an equity investment in the Tasmanian Water and

Sewerage Corporation (Common Services) Pty Ltd. As a result of the consolidation process, this entity is not included in the above table.


6.3 Receivables


2010-11 2010-11 2009-101 2010-11 2009-101

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Trade receivables 213 214 209 515 460

Less Provision for impairment (38) (14) (24) (58) (31)

Less Provision for fine remissions …. (8) …. (8) ….

175 192 185 449 429

Accrued revenue 16 11 12 223 124

GST receivable 13 12 17 20 22

29 24 29 242 146

204 216 214 691 576

Settled within 12 months 203 189 187 666 537

Settled in more than 12 months 1 27 27 26 39

204 216 214 691 576


6.4 Other financial assets


2010-11 2010-11 2009-101 2010-11 2009-101

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Basslink financial asset …. …. …. 483 426

Basslink security deposit …. …. …. 50 50

Deferred tax assets to mirror PNFC/PFC sectors 1 154 1 013 898 37 33

Derivative financial instruments receivable …. …. …. 154 170

Gas supply contracts …. …. …. 31 33

Prepayments 12 17 14 26 41

Other 1 1 1 14 13

1 167 1 031 913 795 767



1 167 1 031 913 795 767



6.5 Land and buildings


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Land

Land at fair value 1 804 2 060 1 889 2 164 1 964

Land at cost …. …. …. 2 16

1 804 2 060 1 889 2 166 1 980

Buildings

Buildings at fair value 3 812 3 402 3 144 3 541 3 236

Buildings at cost …. 489 268 626 402

Less Accumulated depreciation …. (53) (80) (83) (116)

3 812 3 837 3 331 4 078 3 522

5 616 5 897 5 219 6 248 5 501

6.6 Infrastructure


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Infrastructure at fair value 5 041 5 515 4 737 17 187 15 898

Infrastructure at cost …. 205 186 1 372 1 159

Less Accumulated depreciation …. (1 932) (86) (4 986) (2 889)

5 041 3 787 4 837 13 573 14 168

6.7 Plant and equipment


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Plant and equipment at fair value …. 13 …. 45 36

Plant and equipment at cost 220 441 434 805 749

Less Accumulated depreciation …. (231) (218) (398) (355)

220 224 216 453 430


6.8 Heritage and cultural assets


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Tasmanian Museum and Art Gallery collection at

fair value 413 371 487 371 487

Other heritage and cultural assets at fair value 56 70 66 70 66

468 442 553 442 553

6.9 Biological assets


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Standing timber at valuation .... .... .... 146 248

Joint venture timber resource at valuation .... .... .... 86 71

.... .... .... 232 319


6.10 Reconciliation of non-current assets


Land and

buildings

Infra-

structure

Plant and

equipment

Heritage

and

cultural Total

$m $m $m $m $m

2011

Carrying amount at 1 July 2010 5 219 4 837 216 553 10 826

Additions 528 192 86 1 806

Disposals (35) (61) (26) …. (123)

Revaluation increments/(decrements) 294 (1 090) …. (112) (908)

Transfers in/(out) 7 …. (1) …. 6

Depreciation (96) (93) (45) …. (234)

Impairment losses (3) (30) …. …. (33)

Other (16) 30 (6) …. 8

Carrying amount at 30 June 2011 5 897 3 787 224 442 10 350

2010

Carrying amount at 1 July 2009 4 807 4 641 213 447 10 108

Additions 399 223 78 1 701

Disposals (80) (30) (23) …. (133)

Revaluation increments/(decrements) 169 96 …. 106 370

Transfers in/(out) (18) …. …. …. (19)

Depreciation (88) (93) (44) …. (225)

Impairment losses (8) …. …. …. (8)

Other 39 …. (6) …. 33

Carrying amount at 30 June 2010 5 219 4 837 216 553 10 826


6.10 Reconciliation of non-current assets (continued)

Total State Sector

Land and

buildings

Infra-

structure

Plant and

equipment

Heritage

and

cultural

Biological

assets Total

$m $m $m $m $m $m

2011

Carrying amount at 1 July 2010 5 501 14 168 430 553 319 20 971

Additions 590 894 136 1 8 1 629

Disposals (36) (67) (30) …. …. (134)

Revaluation

increments/(decrements) 313 (968) …. (112) (95) (862)

Transfers in/(out) 10 (4) (1) …. …. 6

Depreciation (105) (381) (85) …. …. (571)

Impairment losses (2) (100) …. …. …. (101)

Other (23) 30 2 …. …. 10

Carrying amount at 30 June 2011 6 248 13 573 453 442 232 20 947

2010

Carrying amount at 1 July 2009 5 302 11 849 381 447 385 18 363

Transfers to water and sewerage

corporations

52 1 853 12 …. …. 1 917

Additions 425 869 171 .... 8 1 474

Disposals (83) (37) (34) .... .... (154)

Revaluation

increments/(decrements) 111 61 2 106 (74) 206

Transfers in/(out) (97) (363) (79) .... .... (539)

Depreciation (225) 22 (2) .... .... (205)

Impairment losses (24) (2) (4) .... .... (29)

Other 39 (85) (16) .... .... (62)

Carrying amount at 30 June 2010 5 501 14 168 430 553 319 20 971

6.11 Investment property


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Land 11 5 7 5 7

Buildings …. 8 6 23 22

11 12 13 28 29


6.12 Intangible assets


2010-11 2010-11 2009-101 2010-11 2009-101

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Carrying amount

Intangible assets 32 51 46 235 192

Less Accumulated amortisation (5) (17) (12) (108) (86)

27 34 34 128 106

Reconciliation of movements

Carrying amount 1 July 29 34 29 106 90

Additions 3 5 9 45 36

Disposals …. …. …. (1) (1)

Amortisation expense (5) (5) (5) (23) (19)

Carrying amount 30 June 27 34 34 128 106


6.13 Assets held for sale


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Land 5 21 15 21 16

Buildings 6 6 5 9 9

Plant and equipment 1 1 1 3 2

Infrastructure .... …. .... .... 5

12 28 21 33 32


12 28 21 33 32


6.14 Other non-financial assets


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Inventory 17 16 16 148 129

Library book stock …. 19 20 19 20

Other 21 …. …. …. ....

39 35 37 168 149



39 35 37 168 149


Note 7 Liabilities

7.1 Borrowings


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Domestic and foreign borrowings 105 52 50 6 321 4 188

Australian Government debt 217 218 223 218 223

Finance leases …. …. …. 6 1

323 269 274 6 545 4 411

Settled within 12 months 54 27 16 3 812 1 200


323 269 274 6 545 4 411

7.2 Employee entitlements


2010-11 2010-11 2009-10 2010-11 2009-10

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Accrued salaries and wages 43 40 34 44 39

Annual leave 136 129 120 172 161

Long service leave 300 306 294 360 347

Other employee entitlements 12 13 13 17 19

491 488 461 593 567



491 488 461 593 567


7.3 Payables


2010-11 2010-11 2009-101 2010-11 2009-101

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Trade creditors 78 46 75 265 263

Accrued expenses 27 43 37 124 83

Other 13 9 11 15 19

118 97 122 404 365


118 97 122 404 365


7.4 Other liabilities


2010-11 2010-11 2009-101 2010-11 2009-101

Original

Budget

Actual

Actual

Actual

Actual

$m $m $m $m $m

Basslink facility swap fee …. …. …. 187 215

Basslink services agreement …. …. …. 851 841

Deferred tax liabilities …. …. …. 66 62

Derivatives …. …. …. 168 124

Obligation for non-commercial forest zones …. …. …. 57 66

Provision for outstanding and unreported claims in MAIB …. …. …. 766 707

Revenue received in advance 6 7 13 112 140

Risk management 145 166 162 166 161

Other 57 88 73 210 157

208 261 248 2 583 2 472



208 261 248 2 583 2 472



7.5 Superannuation

(a) Type of Plan

The major schemes currently operating in the Tasmanian public sector that have an unfunded liability, are

those established under the Retirement Benefits Act 1993, the former Parliamentary

Superannuation Act 1973; the former Parliamentary Retiring Benefits Act 1985; and the Judges’

Contributory Pensions Act 1968.

In November 2002, Parliament approved legislation that repealed the Parliamentary Superannuation

Act 1973 and the Parliamentary Retiring Benefits Act 1985, with effect from 31 December 2002. The

scheme details have been reproduced as regulations made under the Retirement Benefits Act 1993,

namely the Retirement Benefits (Parliamentary Superannuation) Regulations 2002. This legislation made

the Parliamentary Superannuation Fund and the Parliamentary Retiring Benefits Fund sub-funds of the

Retirement Benefits Fund. As a consequence, the RBF Board became the trustee of these funds and the

Parliamentary Superannuation and Retiring Benefits Trust ceased to exist. This decision, which followed a

recommendation from the PSRBT, has not altered the benefits payable to PSF or PRBF members, but

provides administrative efficiencies and reduces costs.

These schemes, which are now all closed to new entrants, provide superannuation arrangements for public

sector employees generally, Members of Parliament, the judiciary and statutory legal officers.

Retirement Benefits Fund Scheme

The RBF Scheme was established under the Retirement Benefits Act 1970, but was continued under the

Retirement Benefits Act 1982 and the Retirement Benefits Act 1993. Scheme details are contained in the

Retirement Benefits Regulations 2005.

The RBF contributory scheme is an unfunded defined benefits scheme. Members contribute between

five per cent and 15 per cent of salary, and voluntary contributions and salary sacrifice may be made. This

scheme was closed to new entrants from 15 May 1999, with new employees appointed on or after that date

initially becoming members of the RBF non-contributory scheme.

The RBF non-contributory scheme was an unfunded accumulation (or defined contribution) scheme for

those employees not eligible to join the contributory scheme. The employer contributions in respect of

non-contributory employees were at the rate required by the Australian Government’s Superannuation

Guarantee (Administration) Act 1992. The scheme was closed on 25 April 2000 with the establishment of

the fully funded Tasmanian Accumulation Scheme to replace it.

Simultaneous with the introduction of the Retirement Benefits Regulations in 1994, the Superannuation

Provision Account was established in the Special Deposits and Trust Fund. Contributions by agencies and

certain statutory authorities in respect of the accruing liability in relation to current employees (12.3 per cent

of salary for contributory members and, until 25 April 2000, the appropriate Superannuation Guarantee rate

for non-contributory scheme members) have been credited to the Account, as have interest and

supplementary contributions from the Consolidated Fund to assist in meeting the unfunded liability.

Agencies have also been required to make a “gap” payment for all permanent employees appointed on or

after 15 May 1999. Employer contributions in respect of TAS members or members of other complying

superannuation schemes are paid directly to the RBF Board or the complying superannuation scheme.

Payments to the RBF to cover the employer liability component for pensioners and lump sum benefits with

respect to retiring employees are met from the SPA.


An independent actuarial assessment is undertaken into the RBF Scheme as at 30 June each financial

year. In the valuation, the actuary includes liabilities of Government Business Enterprises, State-owned

Companies and other statutory authorities, as part of the overall RBF Scheme valuation.

The net liability as at 30 June 2011 is based upon the latest available actuarial assessment, which was

undertaken as at that date. The net liability takes into account funds under management with the RBF but

does not take into account the SPA balance.

The division between the current and non-current liability as at 30 June each year is based upon

anticipated superannuation expenditure during the ensuing financial year.

As a consequence of the Public Sector Superannuation Reform Act 1999, the RBF defined benefit scheme

was closed to new entrants with effect from 15 May 1999. New public sector employees appointed after

that date are now members of the fully funded TAS or an alternative complying superannuation scheme of

their choice. Thus, there are no liabilities pertaining to employees covered by these arrangements.

The following properties, controlled by the RBF, are included within the fair value of plan assets:

39 Sandy Bay Road, Hobart;

104 Hampton Road, Hobart;

21 Kirksway Place, Hobart; and

Stoney Rise, Devonport.

The RBF Board also administers three separate funds, Housing Tasmania’s Superannuation Scheme, the

Tasmanian Ambulance Service Superannuation Scheme and the State Fire Commission Superannuation

Scheme.

Parliamentary Superannuation Fund

The PSF is a defined benefit pension scheme established under the provisions of the former Parliamentary

Superannuation Act 1973, and continued under the Retirement Benefits (Parliamentary Superannuation)

Regulations 2002, and is the older of the two Parliamentary schemes in operation. The scheme was closed

to new members in 1985, but was maintained for parliamentarians who, having been first elected before

that date, were subsequently re-elected to Parliament after a period out of office. The 1999 reforms closed

this scheme to parliamentarians re-elected as described above and therefore no parliamentarians can

re-enter the scheme.

The PSF is a partially funded scheme, with the employer share of the benefits being met by the

Government on an emerging cost basis.

An actuarial valuation of the scheme was undertaken as at 30 June 2011.

Parliamentary Retiring Benefits Fund

The PRBF is a closed defined benefit lump sum scheme established under the provisions of the former

Parliamentary Retiring Benefits Act 1985 and continued under the Retirement Benefits (Parliamentary

Superannuation) Regulations 2002. The scheme covers those members of Parliament first elected after

12 November 1985 and before 1 July 1999. New parliamentarians elected after 1 July 1999 automatically

become members of TAS unless they elect to join a private complying superannuation scheme of their

choice.

The Government currently funds this scheme at the rate of 23.4 per cent of salary for each member of the

scheme, together with administration expenses. This is above the scheme design level of 22.5 per cent of


salary, and arises from the recommendation of the actuary that the Government’s contribution be equal to

2.6 times member contributions.

An actuarial valuation of the scheme was undertaken as at 30 June 2011.

Judges’ Scheme

Superannuation arrangements for judges are specified in the Judges' Contributory Pensions Act 1968.

There is no Judges’ Superannuation Fund as such, with the contributions made by judges (at the rate of

five per cent of salary) being deposited into, and all benefits being met from, the Consolidated Fund.

The Judges’ Scheme is a defined benefit scheme that was closed to new entrants with effect from

1 July 1999. Prior to that date, the Solicitor-General, the Director of Public Prosecutions and the Master of

the Supreme Court were also members of this scheme. Judges and statutory legal officers appointed after

that date become members of TAS unless they elect to join a private complying superannuation scheme.

The Judges’ Scheme is an unfunded scheme in respect of employer contributions, with all the benefits

being met by the Government as liabilities on an emerging cost basis.

Housing Tasmania and Tasmanian Ambulance Service Superannuation Schemes

These two liabilities are recognised by the Department of Health and Human Services. Housing Tasmania

is required to meet the emerging cost of pension payments paid in respect of retired employees, where

those employees had a superannuation entitlement that accrued before 1 July 1994. The TASSS balances

reported are provided in respect of those employees who are defined benefit members.

State Fire Commission Superannuation Scheme

The State Fire Commission Superannuation Scheme is a defined benefit scheme held by the State Fire

Commission. It was established for permanent uniformed employees of the Tasmanian Fire Service. The

scheme was closed to new members on 30 June 2005 and amounts transferred to the RBF Board on

1 May 2006. Under the new arrangement, the trustee, fund administration and investment functions were

transferred. In the following tables, details regarding this scheme are presented as part of the total RBF

Scheme.

(b) Superannuation liability


2011 2010 2011 2010

Actual

Actual

Actual

Actual

$m $m $m $m

Settled within 12 months 192 181 222 210

Settled in more than 12 months 4 774 4 679 5 378 5 287

4 966 4 860 5 600 5 497


General Government

2011 Actual 2010 Actual

Present value

of liability

Fair value of

plan assets Total

Present value

of liability

Fair value of

plan assets Total

$m $m $m $m $m $m

Retirement Benefits Fund

Scheme 6 265 (1 370) 4 895 6 122 (1 330) 4 792

Tasmanian Ambulance Scheme 41 (37) 3 35 (33) 1

Housing Tasmania Scheme 12 .... 12 14 .... 14

Judges’ Contributory Scheme 35 .... 35 34 .... 34

Parliamentary Schemes 27 (8) 19 27 (7) 20

6 381 (1 415) 4 966 6 231 (1 371) 4 860

Total State


Present value

of liability

Fair value of

plan assets Total

Present value

of liability

Fair value of

plan assets Total

$m $m $m $m $m $m


Scheme 7 048 (1 520) 5 528 6 915 (1 489) 5 426

Tasmanian Ambulance Scheme 41 (37) 3 35 (33) 1

Housing Tasmania Scheme 12 .... 12 14 .... 14

Judges’ Contributory Scheme 35 .... 35 34 .... 34

Parliamentary Schemes 27 (8) 19 27 (7) 20

Other Schemes 13 (11) 1 12 (10) 2

7 177 (1 576) 5 600 7 036 (1 539) 5 497

(c) Key actuarial assumptions


Discount

rate

Expected

return on

plan assets

Expected

rate of salary

increases

Discount

rate

Expected

return on

plan assets

Expected

rate of salary

increases

% % % % % %


Scheme 5.5 7.5 4.5 5.4 7.0 4.5

Tasmanian Ambulance

Scheme 4.8 7.5 4.5 4.9 7.0 4.5

Housing Tasmania Scheme 5.3 7.0 4.5 5.4 7.0 4.5

Judges’ Contributory Scheme 5.6 .... 4.0 5.5 .... 4.0

Parliamentary Schemes 5.5 7.5 4.0 5.4 7.0 4.0


(d) Reconciliation of movements in present value of superannuation liability

2010-11


RBF

Parliament

Schemes Judges

Tas

Ambulance

Housing

Tas Total

PNFC/PFC

Sectors Total

$m $m $m $m $m $m $m $m

Balance as at 1 July 6 122 27 34 35 14 6 231 810 7 036

Current service cost 144 .... .... 2 .... 146 15 161

Interest cost 321 1 2 2 1 326 42 368

Contributions by plan

participants 50 .... .... 1 .... 52 5 57

Actuarial losses/(gains) (86) .... 2 3 (1) (83) (14) (97)

Benefits paid (272) (1) (2) (1) (1) (277) (40) (317)

Other (13) .... .... (1) .... (13) (21) (35)

Balance as at 30 June 6 265 27 35 41 12 6 381 796 7 176

2009-10


RBF

Parliament

Schemes Judges

Tas

Ambulance

Housing

Tas Total

PNFC/PFC

Sectors Total

$m $m $m $m $m $m $m $m

Balance as at 1 July 5 218 28 31 33 14 5 323 706 6 028

Current service cost 114 .... .... 2 .... 116 14 130

Interest cost 289 2 2 2 1 295 40 335


participants 45 .... .... 1 .... 46 5 51

Actuarial losses/(gains) 752 2 3 (2) .... 755 50 805

Benefits paid (250) (5) (2) (1) (1) (258) (29) (287)

Other (46) .... .... .... .... (47) 24 (26)

Balance as at 30 June 6 122 27 34 35 14 6 231 810 7 036


(e) Reconciliation of movements in plan assets

2010-11


RBF

Parliament

Schemes Judges

Tas

Ambulance

Housing

Tas Total

PNFC/PFC

Sectors Total

$m $m $m $m $m $m $m $m

Balance as at 1 July 1 330 7 .... 33 .... 1 371 169 1 539

Expected return on plan

assets 92 .... .... 2 .... 94 11 106

Actuarial (losses)/gains 1 .... .... 1 .... 2 (4) (2)

Employer contributions 182 1 2 1 1 187 32 219


participants 50 .... (2) 1 .... 50 5 55

Benefits paid (272) (1) .... (1) (1) (275) (50) (325)

Other (13) .... .... (1) .... (13) (2) (15)

Balance as at 30 June 1 370 8 .... 37 .... 1 415 162 1 577

2009-10


RBF

Parliament

Schemes Judges

Tas

Ambulance

Housing

Tas Total

PNFC/PFC

Sectors Total

$m $m $m $m $m $m $m $m

Balance as at 1 July 1 250 9 .... 30 .... 1 289 153 1 442

Expected return on plan

assets 83 1 .... 2 .... 86 11 97

Actuarial (losses)/gains 60 1 .... 1 .... 62 1 63

Employer contributions 185 1 .... 1 1 188 30 218


participants 45 .... .... 1 .... 46 5 51

Benefits paid (250) (5) .... (1) (1) (257) (40) (297)

Other (43) .... .... .... .... (44) 8 (36)

Balance as at 30 June 1 330 7 .... 33 .... 1 371 169 1 539


(f) Return on plan assets

The estimated actual return on plan assets was $94 million for the General Government Sector and

$106 million for the Total State Sector. The difference between the expected return on plan assets and the

actual return on plan assets is recognised as an actuarial gain or loss.

The expected rate of return on plan assets is determined by weighting the expected long-term return for

each asset class by the target allocation of assets to each asset’s class and allowing for correlations of the

investment returns between asset classes. The returns used for each asset class are net of estimated

investment tax and investment fees. The allocation of assets is the same for both General Government and

Total State Sectors and is shown below

2010-11

Actual

2009-10

Actual

% %

Australian equities 25 26

Overseas equities 22 22

Fixed interest securities 13 12

Property, infrastructure and alternative assets 19 20

Other 21 20

100 100

(g) Funding arrangements

Employer contributions to the RBF in respect of defined benefit schemes are made on an emerging cost

basis. The General Government Sector expects to make a contribution to the defined benefit plans for the

next financial year of $188 million ($179 million for 2010). The Total State Sector expects to make a

contribution to the defined benefit plans for the next financial year of $218 million ($209 million for 2010).

(h) Amounts recognised in profit or loss


2011 2010 2011 2010

Actual

Actual

Actual

Actual

$m $m $m $m

Expenses from transactions

Employer service cost 146 116 162 130

Nominal superannuation interest expense

Interest cost 326 295 368 335

Expected return on plan assets (94) (85) (106) (97)

232 208 262 238

Other Economic flows- Included in Operating Result

Actuarial (gains)/losses (85) 692 (95) 742

293 1 015 329 1 110


Note 8 Commitments and contingencies

8.1 Schedule of commitments

By type


2011 2010 2011 2010

Actual Actual Actual Actual

$m $m $m $m

Capital

Property, plant and equipment 172 225 337 421

Infrastructure 177 281 228 346

Other …. …. 35 43

349 505 600 810

Operating lease 365 433 786 799

Other commitments 515 605 907 999

1 229 1 543 2 293 2 608

Details of operating leases are provided in entity financial statements. A number of State Sector entities

lease property under operating leases. Lease rentals are generally based on negotiated agreements that

reflect the current market rent rates paid for comparable buildings. Entities also lease office equipment,

information technology and medical equipment.

Other commitments for the General Government Sector primarily relate to the miscellaneous grant

commitments for the Department of Health and Human Services of $383 million as at 30 June 2011.

Other Commitments for the Total State Sector also include $222 million for Aurora Energy Pty Ltd for

information technology services, water supply and maintenance agreements and purchases of renewable

energy certificates, and $120 million for Hydro Tasmania relating to pass through costs, energy

transmission charges and supply of goods and services.


By maturity


2011 2010 2011 2010

Actual Actual Actual Actual

$m $m $m $m

Capital

Not later than 1 year 291 434 478 629

Later than 1 year and no later than 5 years 58 71 122 175

Later than 5 years …. …. …. 5

349 505 600 810

Operating lease



Later than 5 years 77 85 247 216

365 433 786 799

Other commitments



Later than 5 years 11 15 108 133

515 605 907 999


8.2 Contingent assets and liabilities

Contingent assets and liabilities are not recognised in the Statement of Financial Position due to uncertainty

regarding the amount or timing of the underlying claim or obligation.

Quantifiable contingencies

A quantifiable contingent asset is a possible asset that arises from past events and whose existence will be

confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly

within the control of the entity.

A quantifiable contingent liability is a possible obligation that arises from past events and the existence of

which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events

not wholly within the control of the entity; or a present obligation that arises from past events but is not

recognised because it is not probable that an outflow of resources embodying economic benefits will be

required to settle the obligation. Contingent liabilities represent items that, at 30 June 2011, are not

recognised in the Statement of Financial Position because there is significant uncertainty at that date as to

the necessity for the State to receive or make payments in respect of them. Following are details of the

more significant of these contingent liabilities. Reference should be made to individual entity financial

statements for additional information.

2011 2010

GGS PNFC PFC Total1 GGS PNFC PFC Total1

$m $m $m $m $m $m $m $m

Assets

Community Housing 53 .... .... 53 23 .... .... 23

Contribution from Insurance

industries .... .... .... .... 2 .... .... 2

53 .... .... 53 25 .... .... 25

Liabilities

Agency litigation 28 1 .... 29 35 .... .... 35

28 1 .... 29 35 .... .... 35



Unquantifiable Contingencies

A number of contingent liabilities exist that are not quantifiable, including legal actions that have been

brought against the State and its agencies. Notification has also been received of a number of other cases

that are not yet subject to Court action but which may result in subsequent litigation.

Other than where the likelihood of an outflow of resources is regarded as remote, at the General

Government Sector level, contingent liabilities that are not quantifiable include:

Claims against the Department of Health and Human Services relating to public liability claims by former

patients. The liabilities are managed through the Tasmanian Risk Management Fund. The Department

also has 842 open workers’ compensation claims (2010 – 504 open claims).

Claims against the Department of Economic Development, Tourism and the Arts relating to a number of

legal claims. It is not possible at reporting date to accurately estimate the amount of eventual payments

or receipts, if any, that may be required in relation to the claims below:

a landowner dispute regarding the ownership of a strip of foreshore land at Tinderbox currently

valued at $100 000. The matter has been adjourned to a date to be fixed by the Court;

an indemnity was provided to the Crown in order to secure a loan. The Crown is seeking repayment

of the loan amount of $2 million plus an interest component; and

the Department is disputing a workers’ compensation claim lodged by an employee. A hearing date

is yet to be set by the Tribunal.

Claims against the Department of Education relating to:

personal injuries arising from accidents on departmental premises. Eventual payments cannot be

estimated; and

a number of leases on property it occupies. Some of these leases contain a “make good provision”.

The majority of leases cover a five to 10 year period and are generally renewed, hence deferring any

make good liability.

Claims against Finance-General relating to:

superannuation obligations of Government Business Enterprises and Statutory authorities; and

a number of warranties under various sale agreements relating to the divestment of Government

businesses. Treasury is of the opinion that these warranties are unlikely to arise and the amounts are

not quantifiable.

Claims against the Department of Infrastructure, Energy and Resources relating to:

limited access compensation;

a number of acquisitions for current road projects which are at various stages of settlement;

contractual disputes which are not sufficiently clear or advanced to quantify;

a number of claims relating to personal injury or damage caused to property (including vehicles)

allegedly due to road works or road condition; and

asbestos removal from up to 1 000 traffic signal sites in Tasmania.


Claims against the Department of Primary Industries, Parks, Water and the Environment as follows:

there are possible future payments through compensation claims from land owners under the

affected owner’s provisions of the Nature Conservation Act 2002. Compensation claims will be

assessed on a case-by-case basis;

as part of the Meander Dam Project, the Tasmanian Government prepared a Management Plan for

the Spotted-tailed Quoll on State Forest and rehabilitated land adjoining the proposed Dam. Under

the Plan, there is a provision that Forestry Tasmania be compensated for the value of the

commercial timber and land assets affected by both the inundated area and the enlarged wildlife

habitat strip. During 2010-11, it is necessary to finalise the amendment to the Public Authorities

Management Agreement with Forestry Tasmania to satisfy requirements of the Environment

Protection and Biodiversity Conservation Acts;

the Department is responsible for the management of Crown land. A number of these sites may be

contaminated and require restoration;

maintaining Tasmania’s relative freedom from disease, pests and weeds. Threats of possible

outbreaks represents a future liability to manage and contain these risks; and

a total of 56 legal proceedings in which the Department was exposed to an estimated liability of

$1.3 million. The claims will be met by the Tasmanian Risk Management Fund.

Claims against the Skills Institute relating to a dispute with a number of employees with respect to

aspects of the Tasmanian State Service Award. One possible outcome of these disputes is that some

additional payments may be made to some employees.

Other than where the likelihood of an outflow of resources is regarded as remote, at the Total State level,

the unquantifiable contingent assets and liabilities include those relating to government businesses and

state-owned companies:

A number of Government businesses have provided indemnities to directors and senior management in

respect of liabilities to third parties arising from their positions, except where the liability arises out of

conduct involving a lack of good faith. No monetary limit applies to these agreements and there are no

known obligations outstanding at 30 June 2011.

Claims against Hydro Tasmania relating to an agreement for the sale of the assets of subsidiaries Bell

Bay Power Pty Ltd and Bell Bay Three Pty Ltd during 2007. Included in the sale agreement is a regime

for the indemnification of the purchaser in respect of contamination of the Bell Bay Power Station site,

particularly in respect of personal injury and latent contamination on the site. Hydro Tasmania has

capped certain indemnities and continues to seek to mitigate any potential contingent liability by

committing to sound environmental and safety practices on the site.

The Tasmanian Water and Sewerage Corporation (Northern Region) Pty Ltd has agreed to an

arbitration conference with a contractor that was dismissed by an owner Council prior to 30 June 2009.

The contractor was engaged to design and construct a waste water treatment plant and took action

against the Council seeking redress. This action was not successful so the contractor agreed to

arbitration on a date yet to be set. Based on legal advice, the Directors are of the opinion that no

provision is required for 30 June 2011.

Claim against the Port Arthur Historic Site Management Authority relating to Supreme Court writs issued

against the Authority in relation to the April 1996 tragedy. The actions are currently being processed and

any future liability will be covered by insurance.


Note 9 Financial instruments

9.1 Risk exposures

Risk management objectives and policies

Exposure to credit risk, liquidity risk, market risk and other financial risks arise in the normal course of

government activity. State Sector entities implement various risk management policies to identify, analyse

and manage these various types of risk, including the use of derivative financial instruments. The two main

sources of market risk are fluctuations in interest and foreign exchange rates. Derivatives in use include

interest rate swaps, interest rate futures, cross-currency swaps and forward foreign exchange contracts.

Whenever derivative positions are created, cash or an underlying physical security is held to cover any

potential liability.

Credit risk

Credit risk is the risk of financial loss to the State if a customer or counterparty to a financial instrument fails

to meet its contractual obligations. Details of specific credit risks and the risk management policies are set

out in the financial statements of each State Sector entity.

Receivables are recognised at the nominal amounts due, less any provision for bad and doubtful debts.

Collectability of debts is reviewed on a monthly basis. Provisions are made when collection of the debt is

judged to be less, rather than more likely. Credit terms are generally 30 days.

Financial guarantee contract liabilities are measured initially at fair value and subsequently at the higher of

fair value or the amount determined in accordance with AASB 137 Provisions, Contingent Liabilities and

Contingent Assets. Guarantees primarily relate to financing obligations of Government businesses and

Statutory authorities.

Cash and deposits are recognised at face value. Cash means notes, coins and any deposits held at call

with a bank or financial institution.

The State is exposed to credit-related losses in the event of non-performance by counterparties to financial

instruments. Any such exposure is governed by an International Swap Dealers Association Agreement

between Tasmanian Public Finance Corporation and the counterparty concerned including, where possible,

netting agreements. Derivative financial instruments include currency swaps, interest rate swaps and

forward foreign exchange contracts. The carrying amount of financial assets recorded in the Financial

Statements, net of any allowances for losses, represents the maximum exposure of the State to credit risk,

with the exception of guarantees, which consist of the following as at 30 June 2011:

$28 million held by Finance-General ($28 million as at 30 June 2010) relating to financing obligations of

government businesses and statutory authorities; and

$1 million held by the Department of Economic Development, Tourism and the Arts ($1 million as at

30 June 2010).


The following table analyses financial assets that are past due but not impaired:


2011

Actual

2010

Actual

2011

Actual

2010

Actual

$m $m $m $m

Receivables

Past due:

30 days 11 9 24 25

60 days 6 5 15 9

90 days 11 10 38 19

1 year 17 17 17 17

5 years 10 9 10 9

Total Past Due 55 50 104 80

Liquidity risk

Liquidity risk is the risk that an individual entity will not be able to meet its financial obligations as they fall

due. The State’s approach to managing liquidity is to ensure that entities will always have sufficient liquidity

to meet their liabilities when they fall due. Details of specific liquidity risks and risk management policies are

set out in the financial statements of each State Sector entity.

Payables, including goods received and services incurred but not yet invoiced, are recognised at amortised

cost. Settlement is usually made within 30 days.

Loans are initially measured at fair value, net of transaction costs and are measured at amortised cost,

using the effective interest rate method. Interest expense is recognised on an effective yield basis.

Contractual payments are made on a regular basis.

GGS and State entities regularly review budgeted cash movements to ensure that there is sufficient cash to

meet obligations.

The following tables detail the undiscounted cash flows payable by the GGS and Total State Sector by

remaining contractual maturity for its financial liabilities. It should be noted that, as the maturity analysis is

calculated using undiscounted cash flows, the total may not reconcile to the carrying amounts.


General Government Sector Maturity Analysis for financial liabilities

1 Year

2 Years

3 Years

4 Years

5 Years

More than

5 Years

Undiscounted

Total

Carrying

Amount

$m $m $m $m $m $m $m $m

2011 Financial liabilities

Payables 97 .... .... .... .... .... 97 97

Borrowings 46 19 7 8 8 181 269 269

Total 143 19 7 8 8 181 366 366


Payables 122 .... .... .... .... .... 122 122

Borrowings 33 16 19 8 8 189 274 274

Total 155 16 19 8 8 189 396 396

Total State Sector Maturity Analysis for financial liabilities

1 Year 2 Years 3 Years 4 Years 5 Years

More than

5 Years

Undiscounted

Total

Carrying

Amount

$m $m $m $m $m $m $m $m


Payables 404 …. …. …. …. …. 404 404

Borrowings 2 959 1 407 507 507 497 666 6 544 6 544

Other 278 231 231 231 231 3 044 4 246 1 339

Total 3 641 1 638 738 738 728 3 711 11 193 8 287


Payables 365 …. …. …. …. …. 365 365

Borrowings 1 918 456 480 472 480 605 4 411 4 411

Other 207 112 112 112 112 1 803 2 460 948

Total 2 490 568 592 584 592 2 408 7 236 5 724

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because

of changes in market prices. The primary market risk that State entities are exposed to is pricing risk and

interest rate risk.

Pricing Risk

The State is exposed to fluctuations in market prices, particularly in relation to electricity prices in

Tasmania. In addition, the State is exposed to fluctuations in the Victorian market price for electricity to the

extent of electricity flows over Basslink and through the variable portion of the Basslink facility fee.


Exposure to these fluctuations in market price is managed through the use of derivative contracts executed

in the Tasmanian and Victorian regions of the National Electricity Market. Contract volumes for many of the

current Tasmanian forward contracts are determined by the actual load consumed in the contract period.

The management of electricity trading risk is in line with an asset backed trading model.

The following table illustrates the effect of the State’s exposure to electricity price fluctuations on the

Statement of Comprehensive Income as a result of changes in the fair value of energy price derivatives

held by the State. For further details please refer to the Annual Reports of Hydro Tasmania and

Aurora Energy Pty Ltd.

Sensitivity Analysis to 10 Per Cent Movement in Electricity Forward Prices

Total State

Profit or Loss

2011

Actual

2010

Actual

+10 per cent -10 per cent +10 per cent - 10 per cent

$m $m $m $m

Net Energy derivative asset (138) 169 (51) 49

Net Basslink liability (25) 15 (25) 13

Net sensitivity (163) 184 (76) 62

Interest rate risk

The State is exposed to interest rate risk as it borrows funds at both fixed and floating interest rates. The

risk is managed by maintaining an appropriate mix between fixed and floating rate borrowings, by entering

into forward start borrowing agreements and by the use of interest rate swap contracts.

At the reporting date, the interest rate profile of the interest bearing financial instruments held by the State

was as follows:


2011

Actual

2010

Actual

2011

Actual

2010

Actual

$m $m $m $m

Fixed rate instruments

Financial assets 6 4 4 210 2 628

Financial liabilities (237) (242) (5 405) (3 073)

(231) (238) (1 195) (445)

Variable rate instruments

Financial assets 678 1 020 1 025 824

Financial liabilities (34) (31) (1 139) (1 338)

644 989 (114) (514)


The Tasmanian Public Finance Corporation measures interest rate risk using a Value at Risk measure.

This VaR estimates the potential loss in profit due to a change in benchmark interest rates and liability risk

margins over a given holding period for a specified confidence level. Risk can be measured consistently

across Tascorp’s portfolio to arrive at a single risk number. The one day VaR number reflects the

99 per cent probability that the daily interest rate and liability margin risk loss will not exceed the reported

VaR. Tascorp recorded an average of $633 000 exposure risk ($400 000 for 2010). Further details are

available from Tascorp’s financial statements.

For all other entities, risk is calculated with reference to the impact of 100 basis point movement in interest

rates at reporting date. This analysis assumes all other variables remain constant. The analysis was

performed on the same basis for 2010. The State generally does not hold any financial instruments

available for sale which would directly affect profit or loss as a result of changes in interest rates.

Sensitivity Analysis to 100 Basis Point Movement in Interest Rates


Profit or Loss Profit or Loss

2011

Actual

2010

Actual

2011

Actual

2010

Actual

+ve -ve +ve -ve +ve -ve +ve -ve

$m $m $m $m $m $m $m $m

Financial assets 7 (7) 12 (12) 12 (12) 22 (22)

Financial liabilities .... .... …. …. (1) 1 (1) 1

Net sensitivity 7 (7) 12 (12) 11 (11) 21 (21)

Comparison between carrying amount and net fair value of financial assets and liabilities

There are no material differences between net fair values for financial assets and financial liabilities and

their carrying amounts for the General Government Sector.

The net fair values of cash and deposits are recognised at amortised cost, being their face value.

The value of equity investments have been measured at the Government’s share (100 per cent) of the

carrying amount of net assets because fair value is not reliably measurable. A description of these

investments can be found in the notes to the accounts under Equity investments. There is no market for

these instruments consistent with the principles of AASB 1049.

Other equity investments are revalued from time to time, as considered appropriate, and are not stated at

values in excess of their recoverable amounts.

The net fair values of interest bearing liabilities are measured at fair value in accordance with the quoted

liability as provided by Tascorp. Other borrowings consist primarily of Australian Government borrowings

incurred under various Commonwealth-State Housing Agreements. These borrowings are measured in

accordance with a valuation technique based upon interest rate and repayment schedule confirmation

provided by the Australian Government.

The fair value of the Basslink financial instruments has been calculated using a valuation model based on

the present value of expected contractual cash flows. The fair value of expected receipts of inter-regional


revenues under the Basslink Service Agreement has been separately calculated based on experience to

date and projected operating conditions and reported as a financial asset. Expected contractual payments

have been reported as financial liabilities. The fair value of the Basslink Service Agreement has been

calculated using the pre-tax weighted average cost of capital as the nominal discount rate. The fair values

of the other instruments have been calculated using a 20 year forward market interest rate. These are not

readily tradeable financial instruments.

Energy trading derivatives are to manage exposure to market price risks. Many of these contracts have

been transacted since Tasmania entered the National Electricity Market, a number were in place prior to

that date and reflect the vesting of contracts with retail and major industrial clients in place at the time of

entry to the NEM. Modelling is used to value the Tasmanian energy contracts. In recognition of the term,

load and other features of each contract, the contract price agreed at commencement represented a

discount from the spot price at that time. Fair value at balance date has been calculated as the present

value of the difference between the projected market price for each contract and the undiscounted contract

price. Projected market price is based on an estimated long term Tasmanian energy price curve.

Financial instruments measured at fair value

The tables below analyses financial instruments carried at fair value using a hierarchy of levels:

Level 1 – the fair value is calculated using quoted prices in active markets;

Level 2 – the fair value is estimated using the inputs other than quoted prices included in Level 1 that are

observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and

Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable

market data.


Financial instruments measured at fair value (continued)

General Government

2011 Net Fair Value

Level 1

Net Fair Value

Level 2

Net Fair Value

Level 3

Net Fair Value

Total

Carrying

Amount Total

$m $m $m $m $m

Financial assets

Cash and Deposits …. …. 628 628 628

Loans and receivables:

Loan advances 32 …. …. 32 32

Receivables .... …. 216 216 216

Financial assets at fair value through profit and

loss

Held-to-maturity investments 24 …. …. 24 24

Equity investments …. …. 6 178 6 178 6 178

Total 56 …. 7 022 7 078 7 078

Financial liabilities

Financial liabilities at fair

value through profit and

loss 26 …. …. 26 26

Financial liabilities measured

at amortised cost 97 …. 242 340 340

Total 124 …. 242 366 366

General Government

2010 Net Fair Value

Level 1

Net Fair Value

Level 2

Net Fair Value

Level 3

Net Fair Value

Total

Carrying

Amount Total

$m $m $m $m $m

Financial assets




Receivables .... …. 185 185 185


loss

Held-to-maturity investments 26 …. …. 26 26

Equity investments …. …. 5 950 5 950 5 950

Total 58 …. 7 100 7 160 7 160


Financial liabilities at fair

value through profit and

loss 28 …. …. 28 28

Financial liabilities measured

at amortised cost 122 …. 247 369 369

Total 150 …. 247 397 397



Total State

2011 Net Fair Value

Level 1

Net Fair Value

Level 2

Net Fair Value

Level 3

Net Fair Value

Total

Carrying

Amount Total

$m $m $m $m $m

Financial assets




Receivables …. …. 691 691 691


loss - designated on initial recognition

Held-to-maturity investments …. 5 064 …. 5 064 5 064

Equity investments …. …. 136 136 136

Basslink financial assets …. …. 533 533 533

Derivative financial

instrument receivable 102 52 …. 154 154

Gas supply contract …. …. 31 31 31

Total 134 5 117 1 531 6 781 6 781


Financial liabilities at fair value through profit and

loss

Borrowings …. …. 6 544 6 544 6 544

Basslink services agreement …. …. 851 851 851

Basslink facility swap fee …. …. 187 187 187

Energy trading derivatives 55 113 …. 168 168

Financial liabilities measured at amortised costs

Borrowings …. …. 249 249 249

Payables 404 …. …. 404 404

Total financial liabilities 459 113 7 831 8 402 8 402



Total State

2010 Net Fair Value

Level 1

Net Fair Value

Level 2

Net Fair Value

Level 3

Net Fair Value

Total

Carrying

Amount Total

$m $m $m $m $m

Financial assets




Receivables …. …. 516 516 516


loss - designated on initial recognition

Held-to-maturity investments …. 3 270 …. 3 270 3 270

Equity investments …. …. 243 243 243

Basslink financial assets …. …. 476 476 476

Derivative financial

instrument receivable 64 106 …. 170 170

Gas supply contract …. …. 15 15 15

Total 96 3 376 1 398 4 870 4 870


Financial liabilities at fair value through profit and

loss

Borrowings …. …. 4 411 4 411 4 411

Basslink services agreement …. …. 841 841 841

Basslink facility swap fee …. …. 215 215 215

Energy trading derivatives 41 83 …. 124 124

Financial liabilities measured at amortised costs

Borrowings …. …. 251 251 251

Payables 282 …. …. 282 282

Total financial liabilities 323 83 5 719 6 125 6 125


Foreign Exchange Risk

The State has some borrowings and assets denominated in foreign currencies. Currency exposures are

generally offset immediately on undertaking such transactions by entering into cross currency swaps and

forward foreign exchange contracts. The objective of these contracts is to neutralise the impact of any

foreign exchange rate fluctuation on future obligations to make interest and principal repayments in

accordance with established contractual obligations. There were no cross currency swaps at balance date

in 2010-11 or 2009-10.

The remaining terms and notional principal amounts of the State’s outstanding foreign exchange rate

contracts at balance date are:

Total State

Swiss

Franc

Canadian

Dollars

New

Zealand

Dollars

Great

British

Pounds Euros

Singapore

Dollars

US

Dollars

$m $m $m $m $m $m

2011

Liabilities less than 12 months (131) (17) (141) (244) (138) (15) (834)

Forward Forex contracts 131 17 141 244 138 15 834

Total net position .... .... .... .... .... .... ....

2010

Liabilities less than 12 months .... (5) .... (61) (52) (25) (267)

Forward Forex contracts .... 5 .... 61 52 25 267

Total net position .... .... .... .... .... .... ....

Reclassifications of financial assets

The GGS and the Total State Sector have not reclassified any financial assets.


Note 10 Cash flow reconciliation

10.1 Reconciliation of Net cash flows from operating activities to Operating Result


2010-11

Actual

2009-10

Actual

2010-11

Actual

2009-10

Actual

$m $m $m $m

Operating Result 172 1 153 (38) (697)

Add Economic Flows - Included in Statement of

Comprehensive Income

(Gain)/loss on sale of non-financial assets (6) 24 (8) 26

Change in equity investment in PNFC and PFC Sectors (228) (1 893) …. ….

Movement in Superannuation liability (85) 692 (101) 755

Other (Gains)/losses 124 41 279 107

(195) (1 135) 170 888

Equals NET OPERATING BALANCE (23) 18 132 192

Add Other Non-cash movements

Depreciation 236 229 572 540

Borrowing and payroll costs capitalised .... …. .... (10)

Non-cash income tax equivalence revenue (34) 27 .... ….

Decrease/(increase) in receivables (2) (2) (116) 74

Decrease/(increase) in inventory …. …. (20) (22)

Decrease/(increase) in other financial assets (3) (19) (28) (51)

Increase/(decrease) in employee entitlements 27 2 25 23

Increase/(decrease) in payables (26) 13 39 (142)

Increase/(decrease) in accrued expenses .... …. .... (3)

Increase/(decrease) in other liabilities (12) 13 110 25

Increase/(decrease) in tax liabilities .... …. 1 31

Non-cash movement in superannuation 198 136 211 146

Adjustment for other non-cash items 34 3 116 (25)

419 402 910 586

Net cash from operating activities 395 420 1 043 778


10.2 Cash and cash equivalents

For the purpose of the Statement of Cash Flows, cash includes cash on hand, cash at bank and

investments in highly liquid money market instruments. The definition of cash for the purposes of the

Statement of Cash Flows is defined differently to cash reported in the Statement of Financial Position.


2010-11

Actual

2009-10

Actual

2010-11

Actual

2009-10

Actual

$m $m $m $m

Cash as per Statement of Financial Position 628 966 139 147

Cash equivalents as per the Statement of Cash Flows …. …. 2 102 1 427

Cash as per the Statement of Cash Flows 628 966 2 241 1 574


Note 11 Reserves

11.1 Asset revaluation reserve


2011

Actual

2010

Actual

2011

Actual

2010

Actual

$m $m $m $m

Property, plant and equipment

Balance at 1 July 2 317 2 428 2 751 2 899

Transfers from DEPHA which ceased to exist from

1 July 2010 .... (297) …. (297)

Revaluation increments/(decrements) 302 202 327 (73)

Other movements (17) (15) (18) 222

Balance at 30 June 2 602 2 317 3 060 2 751

Infrastructure

Balance at 1 July 2 081 1 992 2 215 2 121


1 July 2010 .... (7) …. (7)

Revaluation increments/(decrements) (1 001) 85 (899) 90

Other movements .... 10 …. 10

Balance at 30 June 1 080 2 081 1 316 2 215

Other assets

Balance at 1 July 111 29 115 270


1 July 2010 .... (23) …. (23)

Revaluation increments/(decrements) (91) 106 (91) (132)

Balance at 30 June 20 111 24 115

3 701 4 508 4 400 5 078


Note 12 Explanations of major variances between General Government Budget and actual outcomes

The following are brief explanations of major variances between General Government Budget estimates

and actual outcomes. Details of material variances between Budget estimates and actual outcomes can

also be found in the financial statements for each departmental entity.

Variances are considered major where the variance exceeds 15 per cent of the Budget estimate and is also

greater than $20 million.

12.1 Statement of Comprehensive Income – General Government Sector

Notes

2010-11

Original

Budget

2010-11

Actual Variance Variance

$m $m $m %

Sales of goods and services (a) 370 303 (66) (18)

Superannuation (b) 229 271 42 18

Change in equity investment in PNFC

and PFC Sectors

(c) 239 228 (11) (5)

Movements in Superannuation Liability (d) …. 85 85 100

Other gains/(losses) (e) 7 (124) (131) (1 871)

(a) The decrease was primarily due to the Department of Health and Human Services reclassifying $60 million of

Mersey Community Hospital Australian Government revenue to Grants.

(b) The increase of $42 million relates to the increase in service cost (notional cost of employer-financed benefits

accruing each year) provided by the actuary as at 30 June 2011.

(c) The movement relates to the overall increase in net asset values of Equity investments held as at 30 June 2011.

(d) The movement in the superannuation liability of $85 million reflects the most recent actuarial projections.

(e) Other gains/losses was $131 million below Budget due to the revaluation loss recorded by the Department of

Infrastructure, Energy and Resources for land under roads of $89 million, a revaluation loss of $29 million for

Tasmanian Museum and Art Gallery assets held by the Department of Economic Development, Tourism and the

Arts and an unanticipated net loss of $19 million relating to the Tasmanian Risk Management Fund, due to

changes in actuarial assumptions used to value the liability.


12.2 Statement of Financial Position – General Government Sector

Budget estimates for the 2010-11 Statement of Financial Position were compiled in June 2010 prior to

completion of the actual outcomes for 30 June 2010. As a result, the outcome variance from the original

Budget estimate will be impacted by the difference between the estimated and actual opening balances for

2010-11. The following commentary and table is therefore based on major movements between the

30 June 2010 actual outcome and the 30 June 2011 outcome.

Notes

2011

Original

Budget

2011

Actual

2010

Actual

Variance

Variance

Variance

Variance $m $m $m $m %

Cash and Deposits (a) 551 628 966 (338) (35)

Equity investment in PNFC and

PFC Sectors (b) 6 265 6 178 5 950 228 4

Other financial assets (c) 1 167 1 031 913 118 13

Land and buildings (d) 5 616 5 897 5 219 678 13

Infrastructure (e) 5 041 3 787 4 837 (1 050) (22)

Heritage and cultural assets (f) 468 442 553 (111) (20)

Superannuation (g) 4 356 4 966 4 860 106 2

Employee entitlements (h) 491 488 461 27 6

(a) Cash and deposits is $338 million below the 2010 actual. This reflects a reduction in cash holdings primarily due to

the Consolidated Fund deficit of $540 million. Refer to Statement 2 in Section 5 of this report.

(b) The increase of $228 million in the value of Equity investments reflects an increase in net assets held by the

electricity companies, Tasmanian Ports Corporation Pty Ltd, Tasmanian Railway Pty Ltd, Motor Accidents

Insurance Board and the water and sewerage corporations. This was offset by a decrease in Forestry Tasmania’s

net assets.

(c) Other financial assets are $118 million above the 2010 actual due to an increase in the deferred tax assets

attributed to the PNFC and PFC Sectors.

(d) The increase in the value of Land and buildings of $678 million is primarily due to capital investment by the

Department of Health and Human Services ($218 million) and the Department of Education ($188 million). In

addition, Land and buildings were revalued upwards by the Department of Health and Human Services

($227 million). Land and associated buildings were revalued upwards by the Department of Primary Industries,

Parks, Water and Environment ($11 million).

(e) Infrastructure is $1 050 million below the 2010 actual. This is due to a revaluation of road infrastructure by the

Department of Infrastructure, Energy and Resources.

(f) The decrease of $111 million in Heritage and cultural assets is due the write-down of assets held by the

Tasmanian Museum and Art Gallery.

(g) The increase of $106 million in the Superannuation liability is a result of actuarial reassessment of the liability,

taking into consideration changes in assumptions used to value the defined benefit obligation.

(h) Employee entitlements are $27 million above the 2010 actual primarily due to an increase in long service leave and

annual leave entitlements.


12.3 Statement of Cash Flows– General Government Sector

Notes

2010-11

Original

Budget

2010-11

Actual Variance Variance

$m $m $m %

Sales of goods and services (a) 368 311 (57) (15)

Dividend, tax and rate equivalents (a) 149 126 (23) (15)

Other receipts (a) 288 383 95 33

Other payments (a) (200) (269) (69) 35

Equity injections (b) (106) (58) 48 (45)

(a) The major variances in the Cash flows from operating activities reflect those that have occurred in the Statement of

Comprehensive Income. Refer to Note 12.1 for further information regarding these variances.

(b) The change in Equity injections reflects a decrease of $30 million in payments to Tasmanian Railway Pty Ltd as a

result of State and Australian Government adjustments to funding allocations and a decrease of $18 million for the

Rivers and Water Supply Commission due to delays in projects resulting in lower than expected expenditures.


Note 13 Reconciliations to ABS GFS measures

Where the Key Fiscal Aggregates presented on the face of the financial statements are materially different

to that measured in accordance with the ABS GFS Manual, a reconciliation between the two measures is

required to be provided. The impact of convergence differences on the GGS and Total State Sector Key

Fiscal Aggregates have been reviewed and there are no material differences.


Note 14 Details of controlled entities

As a result of a restructuring of administrative arrangements during 2010-11, the following changes were

made to entities within the General Government Sector:

the Department of Justice relinquished its responsibility for the Office of the Director of Public

Prosecutions and the Integrity Commission, which became separate entities on 1 July 2010; and

the Department of Education assumed responsibility for the assets and liabilities of the Tasmanian

Polytechnic and Tasmanian Academy effective 1 January 2011.

As at 30 June 2011, the following entities are classified within the Total State Sector:

General Government entities

Department of Economic Development, Tourism and the Arts

Department of Education

Department of Health and Human Services

Department of Infrastructure, Energy and Resources

Department of Justice

Department of Police and Emergency Management

Department of Premier and Cabinet

Department of Primary Industries, Parks, Water and Environment

Department of Treasury and Finance (including Finance-General)

House of Assembly

Inland Fisheries Service

Integrity Commission

Legislative Council

Legislature-General

Marine and Safety Tasmania

Office of the Director of Public Prosecutions

Office of the Governor

Office of the Ombudsman

Royal Tasmanian Botanical Gardens

State Fire Commission

Tasmanian Audit Office

Tasmanian Skills Institute


Public Non-Financial Corporations

Aurora Energy Pty Ltd

Forestry Tasmania

Hydro Tasmania

Metro Tasmania Pty Ltd

Port Arthur Historic Site Management Authority

Private Forests Tasmania

Public Trustee

Rivers and Water Supply Commission

Tasmanian Ports Corporation Pty Ltd

TOTE Tasmania Pty Ltd

Tasracing Pty Ltd

Transend Networks Pty Ltd

TT-Line Company Pty Ltd

Tasmanian Railway Pty Ltd

Tasmanian Water and Sewerage Corporation (Common Services) Pty Ltd

Tasmanian Water and Sewerage Corporation (Northern Region) Pty Ltd

Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd

Tasmanian Water and Sewerage Corporation (Southern Region) Pty Ltd

Public Financial Corporations

Motor Accidents Insurance Board

Tasmanian Public Finance Corporation

Entities not consolidated

The Retirement Benefits Fund Board has not been included in this financial report because its assets are

not available for the benefit of the State. Also, the University of Tasmania, certain professional,

occupational and marketing boards and local government authorities are not included in this financial report

because they are not controlled by the State.

Other Government bodies that are controlled but are not considered material, for whole-of-government

purposes, are also excluded from this financial report.


Note 15 Events Occurring After Balance Date

Forestry Tasmania’s operating result together with the ongoing uncertainty around the Tasmanian Forests

Intergovernmental Agreement and the Statement of Principles and their possible impact on the business

have caused the Directors to review the appropriateness of continuing to prepare the accounts on a going

concern basis. The current trading outlook presents significant challenges in terms of sales volume and

pricing and, in these circumstances, there are material uncertainties over future trading results and cash

flows. In addition, the effect on the business of the Agreement and principles is yet to be finalised but it is

possible that they will lead to a significant reduction in the resources available for harvest and sale. Also

relevant is that the State Government has commenced a Strategic Review of Forestry Tasmania. The

outcome of this review may or may not increase the uncertainties surrounding Forestry Tasmania’s

operations.

The Port Arthur Historic Site Management Authority is expected to transfer water and waste treatment

infrastructure assets to the Tasmanian Water and Sewerage Corporation (Southern Region) Pty Ltd under

the Water and Sewerage Corporations Act 2008. Negotiations for the Port Arthur Historic Site Management

Authority are underway, however, the transfer is not expected to happen in the near future. The assets

concerned were valued in June 2011 on a replacement cost basis at $770 000. The impact upon future

financial statements is currently unknown.

The Port Arthur Historic Site Management Authority assumed responsibility for the Cascades Female

Factory Historic Site in December 2010. This will mean that the Authority has full control of the Site and it is

expected that the conservation costs of the Site will be funded by the State Government. It is expected the

proclamation under The Nature Conservation Act 2002 that affects the transfer will occur in 2011-12.

The Government has established an independent Expert Panel under the provisions of the Electricity

Supply Industry Expert Panel Act 2010 to conduct an investigation into, and provide guidance to Parliament

on, the current position and future development of Tasmania’s electricity industry. The Panel is due to

prepare and publish a final report by December 2011. The outcome and possible impacts of the report are

unknown.

The Australian Government’s carbon tax legislation was tabled in Parliament in July 2011. Based on the

legislation, Hydro Tasmania has not changed the fair value of its generation assets and, at the current time,

Aurora expects that the costs of carbon will be passed through to the end consumer, and as such will not

impact on the carrying value of Aurora’s assets.

Aurora has submitted its proposal for electricity distribution revenue for the period 1 July 2012 to

30 June 2017 to the Australian Energy Regulator. The outcome of this submission will not be known until

mid-2012.

As a result of the Irrigation Company Act 2011, on 1 July 2011, the Rivers and Water Supply Commission

and Tasmanian Irrigation Schemes Pty Ltd merged with Tasmanian Irrigation Pty Ltd to become one entity

named Tasmanian Irrigation Pty Ltd. Tasmanian Irrigation Pty Ltd has taken over all assets, contracts,

rights and liabilities of the Rivers and Waters Supply Commission and Tasmanian Irrigation Schemes Pty

Ltd.


A significant portion of the State Government’s investment portfolio is exposed to Australian and

international listed investment markets and consequently it is subject to the associated market risk. From

the balance date up to the date the financial statements were certified and authorised for issue, the

Australian and international markets have experienced a period of significant volatility. Given the ongoing

volatility of the market, it is unknown whether this will have a significant impact on the performance of the

investment fund for the full year to 30 June 2012.

The following Government businesses have declared dividends since 30 June 2011 that were not brought

to account in the 2010-11 financial statements. These have no impact on the Total State Sector but will

affect the PNFC and PFC Sectors.

Transend Networks Pty Ltd ($28.6 million);

Aurora Energy Pty Ltd ($11.9 million);

Hydro Tasmania ($49.0 million); and

Motor Accidents Insurance Board ($20.2 million).

Commencing in 2011-12, the amended dividend payout ratios will apply to the following Government

businesses:

Aurora Energy Pty Ltd has increased from 50 per cent to 60 per cent of underlying profit;

Hydro Tasmania has increased from 50 per cent to 70 per cent of underlying profit;

Transend Networks Pty Ltd will be maintained at 60 per cent of underlying profit plus $20 million in

return of equity, subject to the company’s operating and capital expenditure requirements and borrowing

capacity until 30 June 2014; and.

the Motor Accidents Insurance Board will reduce from 70 per cent to 50 per cent of underlying profit

smoothed over five years.


Note 16 Functional Information

The following tables present Expenses from transactions and Asset balances classified according to the

Government Purpose Classification which is based on the Australian Bureau of Statistics classifications

used as part of the Government Finance Statistics reporting framework. The GPC provides a standard

framework to allocate Government expenditure according to functions. Disclosure of this information can

assist users in identifying the resources committed to particular functions and the costs of service delivery

that are reliably attributable to those functions.

16.1 Expenses from transactions


2010-11 2009-10 2010-11 2009-10

$m $m $m $m

General public services

Other public services 205 179 789 629

205 179 789 629

Public order and safety

Police services 216 208 216 208

Fire protection services 63 66 63 65

Law courts and legal services 87 79 86 79

Prisons and corrective services 70 62 69 61

436 414 435 412

Education

Primary education 552 559 552 559

Secondary education 487 463 487 420

Technical and further education 153 160 153 203

Preschool education 53 45 53 45

Transport of non-urban students 40 42 40 42

1 285 1 271 1 285 1 271

Health

Acute care institutions

Admitted patients 918 867 915 860

Non-admitted patients 22 18 22 18

Mental health institutions 36 32 36 32

Community health services 140 143 140 141

Community mental health 48 39 48 39

Patient transport 59 46 59 46

Public health services 72 67 72 67

1 295 1 212 1 291 1 203

Social security and welfare

Family and children welfare services 143 116 109 94

Welfare services for the aged 49 42 48 42

Welfare services for people with a disability 137 115 137 114

Welfare services not elsewhere classified 44 40 38 34

Social security and welfare not elsewhere classified 5 13 5 13

378 326 338 297


16.1 Expenses from transactions (continued)


2010-11 2009-10 2010-11 2009-10

$m $m $m $m

Housing and community amenities

Housing 157 140 156 141

Community development 15 14 15 14

Water Supply .... .... 213 183

Sanitation and protection of the environment 36 50 36 50

208 204 421 388

Recreation and culture

National parks and wildlife 64 55 63 54

Cultural facilities and services 67 64 67 63

Recreation and culture not elsewhere classified 55 62 68 47

185 180 198 164

Fuel and energy

Electricity and gas 2 3 1 789 1 688

2 3 1 789 1 688

Agriculture, forestry, fishing and hunting

Agriculture 53 75 53 74

Forestry, fishing and hunting 10 32 186 192

63 107 239 266

Mining and mineral resources

Mining and mineral resources 9 7 9 7

9 7 9 7

Transport and communication

Road transport 235 221 244 231

Other water transport services 1 2 160 163

Non-urban rail transport freight services 14 27 52 56

250 251 455 450

Other economic affairs

Tourism and area promotion 41 42 38 40

Other labour and employment 25 27 22 27

Other economic affairs 62 70 60 64

128 139 120 131

Nominal interest on superannuation 232 208 264 233

Other purposes

Public debt transactions 2 4 …. ....

Inter government transactions 78 68 78 68

Other purposes not elsewhere classified 34 12 13 9

115 83 92 77

Total Expenses from transactions 4 790 4 584 7 724 7 216


16.2 Assets by Function


2010-11 2009-101 2010-11 2009-101

$m $m $m $m

General public service 151 148 5 542 3 622

Public order and safety 600 594 596 588

Education 1 802 1 539 1 763 1 479

Health 829 696 829 696

Social security and welfare 38 30 38 30

Housing and community amenities 2 142 1 901 4 257 3 970

Recreation and culture 1 216 1 299 1 339 1 410

Fuel and energy …. …. 8 848 8 273

Agriculture, forestry, fishing and hunting 270 323 814 982

Transport and communication 3 768 4 868 4 135 5 259

Other economic affairs 51 68 51 68

Other purposes 7 704 7 566 3 ....

18 573 19 031 28 216 26 377




5 PUBLIC ACCOUNT

STATEMENTS


CERTIFICATION OF PUBLIC ACCOUNT

STATEMENTS 2010-11 The accompanying special purpose financial report of the Public Account for the year ended 30 June 2011

has been prepared in accordance with the provisions of the Financial Management and Audit Act 1990 and

is in agreement with the relevant accounts and records so as to present fairly the transactions for the year

ended 30 June 2011.


the financial statements misleading or inaccurate.

29 September 2011


OPINION OF THE AUDITOR-GENERAL



Accounting Policies

Cash Basis of Accounting

The Public Account is maintained on a cash basis. That is, revenue is recorded when it is received, and

expenditure recorded when the payment is made, during the financial year. The Public Account, therefore,

does not include revenue due but not collected, and invoices received but not paid for goods and services

supplied during the financial year. The value of assets and liabilities is not included in the Public Account

Statements and no provision is made for depreciation, employee entitlements or creditors.

While cash accounting is adopted for reporting on the Public Account, certain activities undertaken within

the Public Account involve accrual accounting concepts. Such activities mainly relate to the establishment

of “provisions” in accounts in the Special Deposits and Trust Fund to fund the cost of certain transactions

over more than one year. Funds accumulate in those accounts and are used to meet expenditure in future

years. The main provision accounts relate to superannuation, debt management, risk management, special

capital investment funds and the 27th pay.

Unaudited Information

Original Budget information was prepared and presented as part of the 2010-11 State Budget in June 2010.

Budget information is, by its nature, an estimate and as a result, this information has not been subject to an

audit process.

Inter-Fund Transactions

No attempt has been made to adjust for inter-fund or inter-agency transactions within the Public Account.

Certain activities result in funds being transferred between accounts in the Special Deposits and Trust Fund

or between the Consolidated Fund and the Special Deposits and Trust Fund. Consequently, expenditure

and receipts in the Public Account are overstated to the extent of any inter-fund and inter-agency transfers.

Cash in Transit

Consistent with a cash basis of accounting, only cash receipted in the Public Account as at 30 June 2011 is

brought to account and reported as revenue of the Public Account for the year.

Rounding

All amounts in the financial statements have been rounded to the nearest million, unless otherwise stated.

As a consequence, rounded figures may not add to totals. Amounts less than $500 000 are rounded to zero

and are indicated by the symbol “….”.


Statement 1 - Public Account Balance

2010-11

Actual

2009-10

Actual

$m $m

Consolidated Fund .... ....

Special Deposits and Trust Fund 2 598 2 376

Balance 30 June (before Temporary debt repayment account) 2 598 2 376

Less Temporary debt repayment account balance 1 978 1 438

Balance 30 June (after Temporary debt repayment account) 620 938

REPRESENTED BY:

Westpac Banking Corporation (8) (22)

Tascorp Investments 628 960

Balance 30 June 620 938


Statement 2 - Consolidated Fund Outcome

2010-11 2010-11 2009-10

Original

Budget Actual Actual

$m $m $m

Receipts

Australian Government sources

General purpose payments 1 761 1 653 1 639

Specific purpose payments 609 618 580

National partnership payments 501 792 769

Other grants and subsidies 35 50 70

2 906 3 113 3 058

State sources

Taxation 892 874 892

Receipts from government businesses 173 148 124

Departmental fees and recoveries 84 87 82

Sale and rent of government property 29 5 42

Resource rents and royalties 40 49 38

Recoveries of state debt charges …. 1 ….

Other recurrent receipts 150 73 92

1 368 1 237 1 271

Total Receipts 4 274 4 350 4 329

less Expenditure

Recurrent services

Appropriation Act 3 815 4 203 3 867

Reserved by Law 149 137 137

3 964 4 340 4 004

Works and services

Appropriation Act 544 549 572

Economic and Social Infrastructure Fund 1 1 9

Infrastructure Tasmania Fund …. …. 10

545 550 591

Total Expenditure 4 509 4 890 4 595

CONSOLIDATED FUND SURPLUS/(DEFICIT) (235) (540) (266)


Statement 3 - Consolidated Fund Receipts

2010-11 2010-11 2009-10

Original


$m $m $m

Australian Government sources

General purpose payments

GST revenue 1 761 1 653 1 639

Specific purpose payments

Schools 249 259 240

Health services 264 264 246

Skills and workforce development 31 31 31

Disability services 31 31 28

Affordable housing 34 34 34

609 618 580

National partnership payments

Health services 53 307 50

Schools 167 177 309

Community services 48 45 42

Housing 45 36 110

Environmental services 6 8 32

Other services 9 16 14

Grant to the State for local government 50 68 63

World heritage area …. …. 3

Infrastructure services 123 123 137

Skills and workforce development …. 12 10

501 792 769

Other grants and subsidies

Primary and secondary education 1 2 4

Training Infrastructure Investment for Tomorrow .... …. 12

High cost drugs 17 22 ….

Health .... 3 9

Other grants paid to:

Department of Health and Human Services 8 19 33

Department of Primary Industries, Parks, Water

and Environment 8 4 12

35 50 70

Total Australian Government sources 2 905 3 113 3 058


Statement 3 - Consolidated Fund Receipts (continued)

2010-11 2010-11 2009-10

Original


$m $m $m

State sources

Taxation

Stamp duties 258 234 249

Lottery tax 25 25 27

Land tax 77 77 87

Motor taxation 60 62 58

Casino tax and licence fees 59 60 59

Payroll tax 404 405 398

Sundry licences 2 4 7

Totalisator wagering levy 6 6 6

892 874 892

Receipts from Government Business Enterprises

Tasmanian Ports Corporation Pty Ltd 1 2 4

Public Trustee 1 …. 1

TOTE Tasmania Pty Ltd 16 7 7

Aurora Energy Pty Ltd 9 11 24

Hydro Tasmania 67 52 13

Tasmanian Public Finance Corporation 7 9 9

Transend Networks Pty Ltd 32 33 20

Rivers and Water Supply Commission 7 …. ….

Motor Accidents Insurance Board 34 35 45

Forestry Tasmania 1 1 1

173 148 124

Departmental fees and recoveries

Treasury and Finance 1 1 1

Justice 7 7 7

Primary Industries, Parks, Water and Environment 32 34 30

Infrastructure, Energy and Resources 43 44 43

Police and Emergency Management …. 1 1

84 87 82


Statement 3 - Consolidated Fund Receipts (continued)

2010-11 2010-11 2009-10

Original


$m $m $m

Sale and rent of government property

Crown Lands Administration Fund 29 5 42

Resource rents and royalties

Rent and fees from mineral lands 1 2 2

Mineral royalties 36 45 35

Regional water authority licence fees 2 2 2

40 49 38

Recoveries of state debt charges

Interest …. 1 ….

Other recurrent receipts

Fines and fees 25 21 20

Interest on investments - Finance-General 42 35 40

Recoveries from departmental business units 3 3 3

RBF TGIO reserve account surplus transfer …. 10 ….

Miscellaneous 71 4 2

Funding for the 27th Pay 9 …. 28

150 73 92

Total State Sources 1 369 1 237 1 271

TOTAL 4 274 4 350 4 329


Statement 4 - Consolidated Fund Expenditure

2010-11 2010-11 2009-10

Original


$m $m $m

Economic Development, Tourism and the Arts

Recurrent services 116 115 101

116 115 101

Education

Recurrent services 1 128 1 168 1 159

Works and services 213 195 233

1 340 1 363 1 391

Finance-General




409 645 451

Health and Human Services

Recurrent services 1 435 1 558 1 434


1 572 1 686 1 509

House of Assembly



7 7 7

Infrastructure, Energy and Resources



449 441 494


Recurrent services 3 3 ….

3 3 ….

Justice



127 130 132

Legislative Council



6 6 6


Statement 4 - Consolidated Fund Expenditure (continued)

2010-11 2010-11 2009-10

Original


$m $m $m

Legislature-General


5 6 5

Ministerial and Parliamentary Support



20 21 20


Recurrent services 6 6 ….

6 6 ….



3 3 3



2 2 2

Police and Emergency Management



195 198 184

Premier and Cabinet


Reserved by Law …. 6 ….

Works and Services .... …. 1

51 62 67

Primary Industries, Parks, Water and Environment



154 154 179



2 2 2

Treasury and Finance


41 41 41

TOTAL 4 509 4 890 4 595


Statement 5 - Excess Consolidated Fund Recurrent Services Expenditure

Authorised by Section 11 of the Public Account Act 1986 and the Consolidated Fund Appropriation (Supplementary Appropriation for 2010-2011) Act 2011

Existing Items 2010-11

Authorised Expenditure

$m $m

Education 41 40

Finance-General 303 250

Health and Human Services 124 122

Justice 5 5

Ministerial and Parliamentary Support 1 1

Police and Emergency Management 3 3

Premier and Cabinet 6 6

484 429

Statement 6 - Excess Consolidated Fund Works and Services Expenditure

Authorised by Section 12 of the Public Account Act 1986 and the Consolidated Fund Appropriation

(Supplementary Appropriation for 2010-2011) Act 2011.

Existing Items 2010-11

Authorised Expenditure

$m $m

Infrastructure, Energy and Resources 30 30

30 30

Statement 7 - Excess Consolidated Fund Reserved by Law Expenditure

Authorised by Acts of Parliament.

2010-11

Expenditure

Over

Estimate

$m

Payments made by Finance-General under the:

Local Government (Rates and Charges Remissions) Act 1991 1

Governor of Tasmania Act 1982 1

2


Statement 8 - Special Deposits and Trust Fund

Balance Balance

30 June 30 June

2010 Receipts Payments 2011

$m $m $m $m

Economic Development, Tourism and the Arts

Department Operating Account 20 146 150 16

Intelligent Island Project Account 7 …. 4 3

Sports Development Account …. 1 1 ….

28 147 154 20

Education

Department Operating Account 17 1 488 1 496 9

17 1 488 1 496 9

Finance-General

Agency Accommodation Charges Account …. 14 14 ….

Assurance Fund – Land Titles Act 1980 Account 5 …. …. 5

Australian Government Funding Management Account 172 344 92 424

Commonwealth/State Housing Agreement Account …. 9 9 ….

Economic and Social Infrastructure Fund 29 18 22 24

Finance-General Operating Account 6 20 9 17

Government Car Fleet Account 5 52 52 5

Helsham Agreement Grants Account 1 …. 1 1

Hospital Capital Fund 70 …. 21 49

Housing Fund 47 …. 14 33

Infrastructure Tasmania Fund 85 …. 25 61

Payroll Provision Account 12 7 …. 18

Royal Hobart Hospital Redevelopment Fund 1 …. …. 1

State Debt Management Account 13 2 …. 14

State Works and Housing Assistance Acts Account …. 7 7 ….

Superannuation Provision Account 1 364 265 182 1 447

Tasmanian Community Fund Account 1 8 …. 8 ….

Tasmanian State Service Risk Management Account 169 57 50 177

Temporary Debt Repayment Account (1 438) …. 540 (1 978)

The Mount Lyell Closure Trust Fund 1 …. …. 1

Treasurer’s Suspense Account …. 8 8 ….

Unclaimed Moneys Account 12 3 …. 15

Urban Renewal and Heritage Fund 11 12 17 6

574 818 1 072 320


Statement 8 - Special Deposits and Trust Fund (continued)

Balance Balance

30 June 30 June


$m $m $m $m

Health and Human Services

Department Operating Account 43 1 929 1 943 29

Home Ownership Assistance Program Operating Account 11 2 1 12

Housing Services Operating Account 15 229 238 5

Patient Trust and Hospital Bequest Account 16 18 18 16

85 2 178 2 201 62

House of Assembly

House of Assembly Operating Account .... 8 8 ....

Infrastructure, Energy and Resources

Abt Railway Account 1 …. …. 1


East Tamar Highway Redevelopment Account 30 .... 28 1

Mines Deposit Account 5 1 1 5

40 894 914 20


Integrity Commission Operating Account .... 3 3 ....

Justice

Crime (Confiscation of Profits) Account 2 1 …. 1 ….

Criminal Injuries Compensation Act 1976 Victims Fund 1 …. …. 1

Criminal Injuries Compensation Fund 1 1 …. 2

Crown Law Trust Account under Section 101 of the Legal

Profession Act 1993 8 85 89 4


Prisoners Earnings Deposit Account …. 2 2 ….

Rental Deposit Authority Account 18 19 12 25

Supreme Court Suitors Fund Deposit Account 3 1 1 3

Workers’ Compensation Act 1988 Fund Account 2 8 8 2

50 303 301 52

Legislative Council

Legislative Council Operating Account …. 6 6 ….

Legislature-General

Legislature-General Operating Account …. 7 7 ….



Balance Balance

30 June 30 June


$m $m $m $m


Crime (Confiscation of Profits) Account 2 …. 1 1 ….

Director of Public Prosecutions Trust Account …. 2 1 1

Office of the Director of Public Prosecutions Operating Account …. 8 7 1

…. 11 9 2


Office of the Governor Operating Account …. 3 3 ….


Office of the Ombudsman Operating Account …. 3 3 ….

Police and Emergency Management


Premier and Cabinet


Service Tasmania Operating Account 1 12 11 1

Tasmanian Community Fund Account 1 …. 14 6 7

Tasmanian Early Years Foundation Account 2 1 1 1

Telecommunications Management Division Operating Account …. 35 31 5

8 153 142 19

Primary Industries, Parks, Water and Environment

Apple and Pear Industry Research and Development Account 1 …. …. ….

Crown Lands Administration Fund 11 16 12 16

Department of Primary Industries and Water Recreational

Fishing Licences Trust Account 1 1 1 1

Department of Primary Industries and Water Service Tasmania

Account …. 225 226 ….


Parks Development and Maintenance Account 1 4 4 ….

Regional Forest Agreement Account 4 …. …. 4

Valuation Services Operating Account …. 2 1 1

Water Infrastructure Fund 48 1 21 28

124 496 518 101



Balance Balance

30 June 30 June


$m $m $m $m


Tasmanian Audit Office Operating Account …. 8 7 1

Treasury and Finance

Community Support Levy Account 2 5 6 ….

Contract Management Account 1 2 2 1


Tasmanian Economic Regulator Account …. 2 2 ….

5 52 53 4

TOTAL 938 6 808 7 125 620

Notes: 1. During 2010-11, responsibility for the Tasmanian Community Fund Account transferred from Finance-General to the

Department of Premier and Cabinet. 2. During 2010-11, responsibility for the Crime (Confiscation of Profits) Account transferred from the Department of

Justice to the Office of the Director of Public Prosecutions.



6 LOAN COUNCIL OUTCOME

2010-11

Under Loan Council arrangements, every year the Australian Government and each State and Territory

nominate a Loan Council Allocation. A jurisdiction's LCA incorporates:

the estimated Cash Deficit/(Surplus) of the General Government and Public Non-Financial Corporations

sectors;

Net cash flows from investments in financial assets for policy purposes; and

Memorandum items, which are other financing transactions that are treated as borrowing equivalents

for Loan Council purposes.

The Loan Council evaluates LCA nominations by referring to each jurisdiction's fiscal position and the

macro-economic implications of the aggregate figure.

Table 6.1 compares Tasmania's 2010-11 LCA as published in the 2010-11 Budget with the 2010-11

outcome.

Table 6.1: Loan Council Outcome

2010-11 2010-11

Original

Budget Actual

$m $m

General Government Cash Deficit/(Surplus) 349 263

Public Non-Financial Corporations Cash Deficit/(Surplus) 370 127

Total Non-Financial Public Sector underlying Deficit/(Surplus) 719 390

Less Non-Financial Public Sector Net cash flows from investments in financial assets

for policy purposes

(14) (9)

Plus Memorandum items1 23 14

Loan Council Allocation Deficit/(Surplus) 756 413

Notes: 1. Memorandum items include borrowings by local government and the University of Tasmania.

A tolerance band calculated as two per cent of Total Non-Financial Public Sector Cash received from

operating activities (estimated to be $151 million for 2010–11) applies between the budget LCA and the

LCA outcome. Applying this band to Tasmania’s original Budget LCA for 2010–11 gives a tolerance band of

$907 million to $605 million.

If a jurisdiction is likely to exceed its Tolerance Limit, it must provide an explanation to Loan Council and

make that explanation public. The $343 million change in Tasmania’s 2010-11 LCA outcome, to a deficit of

$413 million, exceeds the Tolerance Limit of $151 million estimated at Budget time.


The change of $343 million in the LCA between the 2010-11 Budget and 2010-11 outcome is mainly due to:

a decrease in the General Government Cash Deficit of $86 million. The improvement reflects an

increase in Net cash flows from operating activities of $31 million and a decrease in Net cash flows

from non-financial assets of $55 million. Explanation of major variances between the General

Government Budget and actual outcomes is provided in Note 12 of the Treasurer’s Annual Financial

Statements included in this Report;

a decrease in the Public Non-Financial Corporation Sector Cash Deficit of $243 million primarily due to

a decrease in Purchases of non-financial assets of $235 million; and

a decrease in new cash borrowings for the Local Government Sector of $9 million. This is due to a

number of Local Councils delaying the start of planned projects.

Consistent with the LCA arrangements, Tasmania advises Loan Council of these circumstances through

this publication.

Documents

Treasurer's Annual Financial Report 2010-11 · 2010-11 Treasurer’s Annual Financial Report 5 Expense Variations Expenses from transactions was $4 790 million in 2010-11, which is