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The map on the following page shows the relationship between Government outcomes and the contributing outputs for the Department of the Treasury. Financial details for Outcomes 1, 2 and 3, by output, appear in Tables 2.1.1, 2.1.2 and 2.1.3 respectively, while non-financial information for the three outcomes appears in Tables 2.2.1, 2.2.2 and 2.2.3 respectively.
Chart 6: Outcomes and output groups
There has been no change to the Department of the Treasury's outcomes and outputs structure since the 2000-01 Budget.
A sound macroeconomic environment is an essential foundation for strong sustainable economic growth and the improved wellbeing of Australians. The Department of the Treasury provides ongoing policy advice to Treasury portfolio Ministers to assist them in developing and implementing policies to achieve this outcome.
A sound macroeconomic environment is characterised by stable prices, low interest rates, healthy economic and employment growth and a sustainable external position. As there are many influences on macroeconomic outcomes beyond the control of the Government, policy is aimed at improving the prospects for the Australian economy, rather than targeting specific outcomes for major economic indicators. Success is judged more by medium-term to long-term performance relative to Australia's past and to other countries, than by particular results in any year.
There are no Budget measures affecting Outcome 1.
Table 2.1.1 shows how the 2001-02 appropriations translate to total resourcing for Outcome 1, including administered appropriations, revenue from government (appropriation), revenue from other sources, and the total price of outputs.
Table 2.1.1: Total resources for Outcome 1
(1) C1, E1, I1 and K4 - see Table 1.1.
The Department of the Treasury aims to contribute to a sound macroeconomic environment by monitoring and assessing economic conditions and prospects, both in Australia and overseas, and by providing advice on the formulation and implementation of effective macroeconomic policy, including monetary and fiscal policy, and labour market issues.
The Department of the Treasury provides advice on advancing Australia's interests at international fora such as the International Monetary Fund, the World Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the Group of Twenty, the Organisation for Economic Cooperation and Development, Asia-Pacific Economic Cooperation, the Financial Stability Forum, the Manila Framework Group, and the Pacific Forum Economic Ministers' Meeting. Australia is making a significant contribution to international efforts to sustain international economic stability and growth through these fora. The Department of the Treasury also provides bilateral financial and technical assistance in support of economic reform and strengthened economic governance, in particular to Papua New Guinea.
The effectiveness of the Department of the Treasury's contribution to a sound macroeconomic environment is judged primarily by feedback from Treasury portfolio Ministers on the quality and relevance of advice.
Table 2.2.1: Performance information for Outcome 1
Performance information for administered items (including third party outputs) | |
Subscriptions to international financial institutions |
Facilitation of achievement of government objectives in international fora, including strengthening the international financial system, multilateral debt relief and institutional reform in the multilateral development banks. |
Performance information for departmental outputs | |
Output Group 1.1 - Economic | |
Output 1.1.1 - Domestic economic policy advice |
Advice on economic policy and the economic outlook meets Treasury portfolio Ministers' needs in administering their responsibilities and implementing government decisions that contribute to a sound domestic economy. Effective presentation of budget documents and other publications to adequately inform public debate. |
Output 1.1.2 - International economic policy |
Advice meets Treasury portfolio Ministers' needs in administering their responsibilities and implementing government decisions relating to international economic and financial issues. |
Feedback will be sought from key clients on a regular basis on the effectiveness of policy advice.
Following the government's acceptance of the recommendations of the Review of the Whole of Government Information Technology Outsourcing initiative, the Department of the Treasury withdrew from the Group 11 Information Technology Outsourcing Project managed by the Office of Asset Sales and Information Technology Outsourcing.
In accordance with Government policy, the Department of the Treasury will continue to market test a range of corporate services, including Information Technology services and agency banking arrangements, during 2001. This relates to all three outcomes.
Individual government spending and taxation arrangements contribute to the overall fiscal outcome but also have their own influence on the goal of strong sustainable economic growth and the improved wellbeing of Australians.
Individual spending measures should be effective in meeting their stated objectives, minimise other behavioural distortions and deliver value for money. Taxation measures should meet revenue objectives (or other objectives if taken for public policy reasons) and have regard to the principles of economic efficiency, horizontal and vertical equity, certainty and transparency whilst minimising compliance and administrative costs. By meeting these aims, taxation measures contribute to the wellbeing of Australians, either directly or by providing the revenue base to finance government services.
Policy advice to Treasury portfolio Ministers promotes Government decisions which further these objectives and thereby contribute to this outcome.
The Government is providing an estimated $150 million, $60 million of which has already been paid to the States and Territories, to increase the First Home Owners Scheme grant from $7,000 to $14,000 for eligible first home owners contracting between 9 March 2001 and 31 December 2001 to buy or build a new home. The grant will remain at $7,000 for the first home owners who purchase existing homes.
The Government will provide funding of $4 million in 2001-02 for secretariat support to the Inquiry into the total structure of fuel taxation in Australia announced by the Prime Minister on 1 March 2001. The funding will provide for salary and administrative expenses of the Inquiry Secretariat to be located in Treasury.
Entities using substituted accounting periods will be able to lodge GST returns on a quarterly basis subject to the existing $20 million annual turnover threshold and election rules, from the first quarterly period of the 2001-02 income year. Previously, entities using substituted accounting periods were required to submit their GST returns monthly. The measure was introduced into Parliament on 5 April 2001 and will take effect on 1 July 2001.
While all GST revenue is paid to the States and Territories, the cost of this measure is effectively borne by the Commonwealth through transitional funding guarantee arrangements. (See Budget Paper No. 3 for further information).
GST registered businesses will be entitled to full input tax credits for motor vehicles, including trucks, acquired after midnight Budget night, 22 May 2001.
Since GST revenue is paid to the States and Territories and this will diminish such revenue the Commonwealth will be obliged to pay this sum to the States under transitional funding guarantee arrangements. (See Budget Paper No. 3 for further information).
This measure ensures that the Commissioner of Taxation has the discretion to provide taxpayers with simpler ways to correct errors in GST returns. It reinforces existing practice whereby taxpayers have been remedying GST errors made in a Business Activity Statement (BAS) by making a compensating change in the next BAS. This avoids the need for taxpayers to submit an amended BAS for an earlier period. The measure was announced on 5 April 2001 and has effect from 1 July 2000.
While all GST revenue is paid to the States and Territories, the cost of this measure is effectively borne by the Commonwealth through transitional funding guarantee arrangements. (See Budget Paper No. 3 for further information).
GST-registered taxpayers with turnover of $2 million or less generally have the option to pay quarterly GST instalments worked out for them by the Australian Taxation Office (ATO) using the GDP-adjusted method. Furthermore, certain primary producers and special professionals (such as authors, entertainers and sportspersons) who opt for the GDP-adjusted method pay two GST instalments in respect of each income year, with the instalments corresponding with the third and fourth quarters of the income tax year.
This measure was announced on 22 February 2001 and applies to tax periods ending on or after 22 February 2001.
While all GST revenue is paid to the States and Territories, the cost of this measure is effectively borne by the Commonwealth through transitional funding guarantee arrangements. (See Budget Paper No. 3 for further information).
The Government will provide funding of $5 million in 2001-02 for communication to inform the public of the significant changes in the tax system so as to make taxpayers aware of benefits they can claim, in particular, eligibility to claim excess imputation credits paid to resident individuals, certain charitable and gift deductible organisations and complying superannuation funds, and entitlement to the removal of fees on financial transactions.
Table 2.1.2 shows how the 2001-02 appropriations translate to total resourcing for Outcome 2, including administered appropriations, revenue from government (appropriation), revenue from other sources, and the total price of outputs.
Table 2.1.2: Total resources for Outcome 2
(1) C1, E1 and I1 - see Table 1.1.
Effective government spending and taxation arrangements are crucial to achieving the Government's objectives for the economy and the wellbeing of Australians. Ongoing advice to the portfolio Ministers from the Department of the Treasury assists in formulating, implementing and explaining government spending and taxation decisions which meet this objective.
More specifically, in the coming year the Department of the Treasury will provide advice on:
The Australian Government Actuary (AGA) will provide services relating to financial matters: for example, benefits depending on contingencies such as injury, death or retirement. The AGA also aids departments and agencies on policy development in areas where it has specialist expertise.
At present, the Department of the Treasury is devoting significant resources to the implementation of the Government's taxation reform agenda, which encompasses significant reforms to income tax, indirect tax, business tax, family payments and Commonwealth/State financial relations.
The outcome of the taxation reform process is a taxation system, which provides a stable and equitable revenue source to fund government services essential to the wellbeing of Australians. Taxation reform is an important element of an integrated economic policy framework necessary to ensure stronger economic and employment growth and thereby improve living standards.
The effectiveness of the contribution of these outputs to the outcome will be gauged primarily in terms of feedback from Treasury portfolio Ministers as to whether advice meets their needs in formulating, implementing and explaining government spending and taxation decisions.
Table 2.2.2: Performance information for Outcome 2
Performance information for administered items (including third party outputs) | |
Payments to State and Territory Governments |
Accurate calculation of amounts payable according to agreed formulae. Payments made according to agreed schedules. |
Performance information for departmental outputs | |
Output Group 2.1 - Budget | |
Output 2.1.1 - Budget policy advice and coordination |
Advice meets Treasury portfolio Ministers' needs in administering their responsibilities and implementing Government decisions as they relate to assessments of the budget position and outlook, and budget strategy. Effective presentation of budget documents for which Treasury has responsibility and other publications to adequately inform public debate. |
Output 2.1.2 - Commonwealth-State financial policy advice |
Advice meets Treasury portfolio Ministers' needs in administering their responsibilities and implementing Government decisions as they relate to Commonwealth-State financial relations. Effective presentation of relevant information, including in the budget documentation and other publications to adequately inform public debate. |
Output 2.1.3 - Industry policy advice |
Advice meets Treasury portfolio Ministers' needs in administering their responsibilities and implementing Government decisions as they relate to industry policy. Effective presentation of relevant information to adequately inform public debate. |
Output 2.1.4 - Taxation and income support policy advice |
Advice meets Treasury portfolio Ministers' needs in administering their responsibilities and implementing Government decisions relating to taxation and income support policy. Effective presentation of relevant information, including in the budget documentation and other publications to adequately inform public debate. |
Output 2.1.5 - Actuarial services |
Efficient provision of high quality professional services, with income from consultancy fees relative to total costs meeting specified quantitative criteria. |
Feedback will be sought from key clients on a regular basis on the effectiveness of policy advice and payments to State and Territory Governments. Results of evaluations will be presented, as appropriate, in the Department of the Treasury's Annual Report.
See information provided under Outcome 1.
Well functioning markets contribute to the achievement of high sustainable economic and employment growth and the wellbeing of Australians, by enabling resources to flow to those parts of the economy where they can be used most productively. Well functioning markets operate when investors and consumers have confidence and certainty about the regulatory framework and are able to make decisions that are well informed and free of market distortions and impediments.
The Department of the Treasury provides advice on policy processes and reforms that promote a secure financial system and sound corporate practices, remove impediments to competition in product and services markets and safeguard the public interest in matters such as consumer protection and foreign investment.
The Government will allocate $1.9 million over four years to extend the Consumer Information Programme. The measure will provide consumer information by building on the `one-stop-shop' approach of http://www.consumersonline.gov.au. It will also fund the provision of targeted information in areas such as disadvantaged consumers and product safety.
The Department of the Treasury will absorb the cost of this measure.
The Government will provide financial assistance to certain policyholders and beneficiaries with claims referable to the provisional liquidation of the HIH Insurance Group. Such assistance will be limited to those in genuine financial hardship in certain policy classes. The assistance will exclude those policies covered by State and Territory administered schemes. A provision for cash expenditure in excess of $0.5 billion over the next four years has been made.
The Government will renew funding, of $11.4 million over the next three years, for Axiss Australia. Axiss Australia is a division within the Department of the Treasury that promotes Australia as a Centre for Global Financial Services. The funding will enable Axiss to continue to promote Australia's advantages, through marketing and facilitation, as a location to conduct financial services business.
Table 2.1.3 shows how the 2001-02 appropriations translate to total resourcing for Outcome 3, including administered appropriations, revenue from government (appropriation), revenue from other sources, and the total price of outputs.
Table 2.1.3: Total resources for Outcome 3
(1) C1, E1 and I1 - see Table 1.1.
The Department of the Treasury provides advice to portfolio Ministers to assist them in carrying out their responsibilities in formulating, implementing and explaining the policies needed to achieve well functioning markets - markets that are competitive, efficient, informed, fair and transparent.
Advice is provided to the Government on foreign investment proposals and on general foreign investment policy matters, including Australia's participation in multilateral and bilateral agreements on investment. In addition, awareness and understanding of the Government's foreign investment policy is fostered in the community and in the business sector, both in Australia and overseas, and compliance with policy is monitored.
In relation to the financial system, the Department of the Treasury provides policy advice on the legislative framework for prudential supervision of financial institutions (including in the areas of banking, insurance and superannuation) by the Australian Prudential Regulation Authority and other regulation of those institutions. It monitors developments in the financial sector and provides advice on their policy implications.
The Department of the Treasury is responsible for administering the Government's programme to promote Australia as a financial centre, through Axiss Australia located in Sydney. Funding for this initiative has been renewed by three years in this year's Budget.
The Department of the Treasury participates with other government departments and agencies in formulating policy for the progress of structural reform in key sectors of the economy, including energy, transport and communications. The Department of the Treasury is responsible for providing advice on competition policy matters, monitoring the effectiveness of the competition, consumer protection and pricing provisions in the Trade Practices Act 1974 and the Prices Surveillance Act 1983, and advising on legislative amendments.
In the coming year, the Government will implement the package of reforms contained in the Financial Services Reform Bill and present legislation to enable transactions in Commonwealth Government securities to be settled electronically. Legislation will also be developed to reform the legal frameworks governing Bills of Exchange and the registration and regulation of auditors.
The Department of the Treasury will progress reforms to reduce the paper compliance burden on Australian companies and enable the Australian Securities and Investments Commission to make greater use of communications technology. It is proposed that fees currently levied under the Corporations Law will be altered as part of this process.
The Department of the Treasury provides secretariat services to the Financial Reporting Council, which is responsible for overseeing Australia's accounting standard setting arrangements. Advice will be provided on the legislation governing directors' duties and corporate governance as well as general company law issues. Advice will also be provided to Government on possible reforms to Australia's corporate insolvency system.
There will be ongoing involvement in progressing international cooperation - particularly in the Asian region - in financial market regulation, corporate governance, financial reporting, and corporate insolvency. A priority in this regard will be bilateral efforts to promote the harmonisation of national regulatory frameworks covering financial products and service providers.
Consumer affairs policy advice will be directed to the continuing implementation of Government commitments on consumer affairs. This includes promoting effective self-regulation, particularly in the context of electronic commerce. Consumer protection interests will also be promoted through the Trade Practices Act 1974, dissemination of consumer information and advice and actions to ensure the safety of consumer products.
The Royal Australian Mint (RAM) is a semi-autonomous body responsible for the production of coinage. The Department of the Treasury will continue to chair the RAM Advisory Board and also provide advice relating to the currency system.
Table 2.2.3: Performance information for Outcome 3
Performance information for administered items (including third party outputs) | |
Compensation - companies regulation payments to the States and the Northern Territory |
Amounts payable, according to agreed formulae, are accurately calculated. Payments are made according to agreed schedules. |
Performance information for departmental outputs | |
Output Group 3.1 - Markets |
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Output 3.1.1 - Foreign investment policy |
Treasury advice meets portfolio Ministers' needs in fulfilling their responsibilities. Government policy is appropriately represented and Australia's negotiating position is pursued effectively in international fora. Proposals are processed efficiently to meet the needs of Ministers, the Foreign Investment Review Board, foreign investors and their agents. Performance is currently regarded as satisfactory if:
Treasury effectively disseminates and explains the foreign investment policy to improve the standard of applications and compliance with policy requirements so as to continue to reduce the proportion of foreign investment proposals requiring Interim or Final Orders. |
Table 2.2.3: Performance information for Outcome 3 (continued)
Output 3.1.1 - Foreign investment policy Output 3.1.2 - Financial system and |
Treasury undertakes a programme of compliance checks on previous proposals subject to conditions - possible leading to prosecutions, but aimed at an overall reduction in non-compliance with policy. Advice meets Treasury portfolio Ministers' needs in administering their responsibilities and implementing Government decisions as they relate to financial system and markets issues. Effective presentation of relevant information to adequately inform public debate. Statutory and other procedural requirements are met. Secretariat services provided to advisory bodies are effective. Representation and/or liaison by Treasury officers with other agencies, private sector organisations and international bodies, is assessed by participants as effective. |
Output 3.1.3 - Business and consumer |
Advice meets Treasury portfolio Ministers' needs in administering their responsibilities and implementing Government decisions as they relate to business and consumer affairs policy. Implementation of Axiss Australia programme achieves intended results. Effective presentation of relevant information to adequately inform public debate. Statutory and other procedural requirements are met. Secretariat services provided to advisory bodies are effective. Representation and/or liaison by Treasury officers with other agencies, private sector organisations and international bodies, is assessed by participants as effective. The extent of progress towards improving self-regulatory mechanisms in the marketplace and introducing enhancements of the consumer protection and unconscionable conduct provisions of the Trade Practices Act. |
Output 3.1.4 - Circulating coin and like |
Advice meets Treasury portfolio Ministers' needs in administering their responsibilities and implementing Government decisions as they relate to coinage and Royal Australian Mint operations. Effective presentation of relevant information to adequately inform public debate. Statutory and other procedural requirements are met. The Royal Australian Mint meets targets for operational efficiency and rate of return. |
Feedback will be sought from key clients on a regular basis on the effectiveness of policy advice.
In relation to companies regulation compensation payments to the States and the Northern Territory, there will be an evaluation of the accuracy of calculation and the timeliness of payments.
There is ongoing evaluation of foreign investment policy administration in the context of statutory deadlines and target response rates.
Results of evaluations will be presented, as appropriate, in The Department of the Treasury's Annual Report.
See information provided under Outcome 1.