Part C

Agency Additional Estimates Statements

 

Department of the Treasury

Section 1: Overview, variations and measures

Overview

There has been no change to the overview included in the 2002-03 Portfolio Budget Statements (page 9).

Map 2: Outcomes and output groups

Additional estimates and variations to outcomes

The Department of the Treasury is seeking $5.677 million in departmental outputs for the Principles Based Review of the Law of Negligence ($0.4 million), the Review of competition provisions of the Trade Practices Act ($0.65 million), initial establishment costs for temporary terrorism risk insurance cover ($2 million), revised parameters ($0.096 million), and Capital Use Charge (CUC) ($2.531 million) in Appropriation Bill (No. 3) 2002-03.

The Department of the Treasury is also seeking $29.998 million in administered expenses for the additional $7,000 First Home Owners Scheme in Appropriation Bill (No. 4) 2002-03.

Explanations for these and other variations are detailed below.

Measures

Outcome 2 - Effective government spending and taxation arrangements

Note: These variations are funded through Special Approriations.

Variation in Budget Balancing Assistance - application of GST to Compulsory Third Party insurance

The Government will amend the GST law to ensure that the original policy intent, in respect of Compulsory Third Party (CTP) insurance, is met by:

• ensuring that GST registered taxpayers are able to claim input tax credits on CTP insurance policies that commence on or after 1 July 2003, including those paid before 1 July 2003;
• allowing CTP insurers, making payments under a settlement sharing arrangement, the ability to claim a decreasing adjustment on payment of settlement amounts; and
• allowing CTP insurers operating no-fault and nominal defendant schemes access to a decreasing adjustment on payment of settlement amounts to people injured as a result of a motor vehicle accident.

Variation in Budget Balancing Assistance - Government response to the Report of the Inquiry into the Definition of Charities and Related Organisations

On 29 August 2002, the Government announced its response to the Report of the Inquiry into the Definition of Charities and Related Organisations. As part of that response, the Government has decided to enact a definition of a charity for the purpose of administration of Commonwealth laws, expected to take effect from 1 July 2004.

The administration of the reforms is estimated to cost $4.4 million in 2002-03 and $1.3 million ongoing for the administration of the reforms. These costs will be absorbed within the existing resources of the Australian Taxation Office. This measure is estimated to have a small impact on GST revenue.

Outcome 3 - Well functioning markets

Additional funding for the Review of the Trade Practices Act 1974

The Government will provide additional funding to cover costs relating to the Review of the Trade Practices Act 1974. The Review is undertaking a comprehensive investigation of the competition provisions (Part IV) of the Trade Practices Act 1974, and their administration. This measure is an extension of the funding of $0.6 million provided for the Review in the 2002-03 Budget.

Funding for Principles Based Review of the Law of Negligence

The Government has provided funding of $0.4 million to meet the costs of the Principles Based Review of the Law of Negligence. The Review was jointly established by the Commonwealth, State and Territory governments to provide a platform for governments to reform the law of negligence relating to personal injury or death. The Review was completed on 30 September 2002.

Terrorism insurance - commercial cover

The Government has announced a scheme for temporary terrorism risk insurance cover until market coverage resumes. The scheme will commence on 1 July 2003 and will be managed by the statutory authority to be established for that purpose. The costs to the authority will be met by the scheme once it has commenced operation. Funding will be provided to the Department of the Treasury in 2002-03 to meet up to $2 million in establishment costs prior to that date. Establishment costs are expected to include legal and other specialist advice, as well as possibly some preliminary staffing and Board costs.

Further details may be found in the Treasurer's Press Release No. 064 of 25 October 2002.

Other variations to appropriations

Departmental

Treasury is seeking an additional $0.096 million in departmental outputs as a result of revised parameters. This, along with a reallocation of corporate cost distribution, has an impact on Treasury's three outcomes.

A CUC of eleven per cent is imposed by the Government on net departmental assets. Treasury is seeking the adjusted CUC for 2001-02 of $1.281 million and $1.25 million for 2002-03.

Administered

Treasury is seeking an additional $29.998 million for the Additional First Home Owners Scheme (FHOS). The Government agreed to fund all expenditure on the additional FHOS incurred by the States and Territories as a result of the Government's decision to increase the FHOS 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 new homes. This was originally estimated to cost $30.002 million in 2002-03.

As a result of greater than anticipated demand for the programme and the Government's decision to extend the additional grant to contracts made between 1 January 2002 and 30 June 2002 (at a reduced rate of $3,000), additional funds of $29.998 million are required under Appropriation Bill (No. 4) 2002-03.

Measures: Agency summary

Table 1.1: Summary of measures since the 2002-03 Budget

Note: These variations are funded through Special Approriations.

Table 1.1: Summary of measures since the 2002-03 Budget (continued)

Breakdown of additional estimates by appropriation bill

Table 1.2: Appropriation Bill (No. 3) 2002-03

Note: Variations of additional estimates between outcomes are a result of internal reallocations.

Table 1.3: Appropriation Bill (No. 4) 2002-03

Summary of staffing changes

Table 1.4: Average staffing level (ASL)

Variations to revenue from other sources through net annotated (Section 31) receipts

Table 1.5: Changes to net annotated appropriations (Section 31) receipts

Note: Variations of non-government revenue between outcomes are a result of revised estimates and internal reallocations.

Section 2: Revisions to outcomes and outputs

Outcomes and output groups

There has been no change to Treasury's outcomes since the 2002-03 Portfolio Budget Statements, however there have been changes to Treasury's outputs and output groups.

Treasury implemented a new output structure from 1 July 2002 to reflect a better alignment of its capabilities with the Government's strategic policy objects. As a result of these changes Treasury now has four output groups (previously three) and some minor name and function changes to reflect the rearrangement.

A map detailing the changes is shown on the following page.

Revised performance information and level of achievement - 2002-03

The variation in funding for Treasury's three outcomes will not effect the performance information since the 2002-03 Portfolio Budget Statements (pages 18, 24 and 30).

Map 3: Outcomes and output groups

Section 3: Budgeted Financial Statements

Budgeted departmental statement of financial performance

This statement provides a picture of the expected financial results for the Department of the Treasury by identifying full accrual expenses, revenues and Capital Use Charge, which highlights whether the Department is operating at a sustainable level.

Budgeted departmental statement of financial position

This statement shows the financial position of the Department of the Treasury. It enables decision makers to track the management of assets and liabilities.

Budgeted departmental statement of cash flows

Budgeted cash flows, as reflected in the statement of cash flows, provide important information on the extent and nature of cash flows by categorising them into expected cash flows from operating activities, investing activities and financing activities.

Departmental capital budget statement

Shows all planned departmental capital expenditure (capital expenditure on non-financial assets), whether funded either through capital appropriations for additional equity or borrowings, of from funds from internal sources.

Departmental non financial assets - summary of movement

Shows budgeted acquisitions and disposals of non-financial assets during the Budget year.

Notes of Administered Activity

Details of transactions administered by the Department of the Treasury on behalf of the Commonwealth are shown in the following notes.

Note of budgeted administered financial performance

This note identifies revenues and expenses administered on behalf of the Government. It also discloses administered revenues from government and transfers to the Public Account.

Note of budgeted administered financial position

This note shows the assets and liabilities administered on behalf of the Government.

Note of budgeted administered cash flows

This note shows cash flows administered on behalf of the Government.

Note of administered capital budget

This note shows details of planned administered capital expenditure.

Table 3.1: Budgeted departmental statement of financial performance (for the period ended 30 June)

Table 3.2: Budget departmental statement of financial position (as at 30 June)

Table 3.3: Budgeted departmental statement of cash flows (for the period ended 30 June)

Table 3.4: Departmental capital budget statement

Table 3.5: Departmental non-financial assets - summary of movement (Budget year 2002-03)

Table 3.6: Note of budgeted administered financial performance (for the period ended 30 June)

Table 3.7: Note of budgeted administered financial position (as at 30 June)

Table 3.8: Note of budgeted administered cash flows (for the period ended 30 June)

Table 3.9: Note of administered capital budget

Notes to the Financial Statements

Basis of accounting

The Department of the Treasury's budget statements are prepared in compliance with Australian Accounting Standards, Accounting Guidance Releases and having regard to Statements of Accounting Concepts.

Under the Commonwealth's accrual budgeting framework, and consistent with Australian Accounting Standards, transactions that agencies control (departmental transactions) are separately budgeted for and reported on from transactions agencies do not have control over (administered transactions). This ensures that agencies are only held accountable for the transactions over which they have control.

Departmental

Departmental assets, liabilities, revenues and expenses in relation to an agency are those which are controlled by the agency. Departmental expenses include employee and supplier expenses and other administrative costs that are incurred by the agency in providing its goods and services.

There are no substantial variations to the notes outlined in the 2002-03 Portfolio Budget Statements and The Treasury Annual Report 2001-02.

Administered

Administered items are revenues, expenses, assets or liabilities which are managed by an agency on behalf of the Government according to set Government directions. Administered expenses include subsidies, grants, and personal benefit payments and administered revenues include taxes, fees, fines and excises.

There are no substantial variations to the notes outlined in the 2002-03 Portfolio Budget Statements and The Treasury Annual Report 2001-02.

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Appendices 1 and 2

Appendix 1

Departmental and administered revenue

Appendix 2

Estimates of expenses from special appropriations