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Budget Paper 3: Budget Outlook

Australian Capital Territory

BUDGET 2017-18

For a better Canberra


Australian Capital Territory

BUDGET 2017-18

For a better Canberra

STRUCTURE AND CONTENT OF THE 2017-18 BUDGET PAPERSThe 2017-18 Budget is presented in three papers and a series of agency Budget Statements.

Budget Paper 1: Budget Speech

The Treasurer’s speech to the Legislative Assembly highlights the Government’s Budget strategies and key features of the Budget.

Budget Paper 2: Budget in Brief

Budget Paper 2 presents a summary of the overall budgetary position together with information on the Government’s expenditure priorities in key service delivery areas.


Budget Paper 3 summarises the 2017-18 Budget and forward estimates for the general government sector, the public trading enterprise sector and the total Territory Government.

Details of the projected 2017-18 Budget results are provided, as well as background information on the development of the 2017-18 Budget, including economic conditions and federal financial relations. It also provides an overview of the Territory’s infrastructure investment program and details of the 2017-18 expense, infrastructure and capital, and revenue initiatives. Full accrual financial statements and notes are provided for all sectors.

Budget Statements

The Budget Statements contain information on each directorate and agency, including descriptions of functions and roles and responsibilities, together with major strategic priorities.

ISSN 1327-581X

© Australian Capital Territory, Canberra June 2017Publication No 17/0494Material in this publication may be reproduced provided due acknowledgement is made.Produced for the Chief Minister, Treasury and Economic Development Directorate by Publishing Services.Enquiries about this publication should be directed to the Chief Minister, Treasury and Economic Development Directorate.GPO Box 158, Canberra City 2601http://www.act.gov.au/budgetTelephone: Canberra 13ACT1 or 13 22 81

2017-18 Budget Paper No.3 iii Table of Contents

TABLE OF CONTENTS Empty cell

Page No.

Introduction 1

Chapter 1 Economic performance, outlook and strategy 5 Empty cell

1.1 Overview 7 Empty cell

1.2 National and global economic outlook 9 Empty cell

1.3 ACT economic outlook 11 Empty cell

1.4 Economic strategy 21 Empty cell

1.5 Risks to the economic outlook 25 Empty cell

Chapter 2 Fiscal strategy 27 Empty cell


2.2 Budget outlook 31 Empty cell

2.3 Fiscal strategy 39

2.4 Cost of living statement 49 Empty cell Empty cell

Chapter 3 New initiatives 63 Empty cell


3.2 Expense initiatives 67 Empty cell

3.3 Infrastructure and capital initiatives 125 Empty cell

3.4 Revenue initiatives 157 Empty cell

Chapter 4 Expenses 169 Empty cell


4.2 Expenses and forward estimates 173

4.3 Savings 183

Empty cell Empty cell

2017-18 Budget Paper No.3 iv Table of Contents


Page No.

Chapter 5 Infrastructure and capital 185 Empty cell


5.2 The 2017-18 Infrastructure Investment Program 191 Empty cell

5.3 Public Trading Enterprises capital works program 205 Empty cell

5.4 Supply and release of land 209 Empty cell

5.5 The Territory’s assets 213

5.6 Asset recycling 217

Chapter 6 Revenue 219 Empty cell


6.2 Revenue and forward estimates 223

Chapter 7 Federal financial relations 247 Empty cell

7.1 Overview 249

7.2 Federal financial relations 251

Chapter 8 Asset and liability management 275 Empty cell


8.2 Net debt and net financial liabilities 279 Empty cell

8.3 Unfunded superannuation liability 283

8.4 Management of financial assets and liabilities 291

Chapter 9 GGS harmonised financial statements 301 Empty cell

9.1 GFS/GAAP harmonised financial statements 303

Empty cell Empty cell Empty cell

2017-18 Budget Paper No.3 v Table of Contents


Page No.

Appendices Empty cell Empty cell

325 Empty cell

A ACT Government structure 327 Empty cell

B Accounting treatment for Public Private Partnerships 337 Empty cell

C Budget consultation (submission acknowledgement) 341 Empty cell

D Capital works – Better Infrastructure Fund 347 Empty cell

E Capital works – Works-in-Progress 355 Empty cell

F Consolidated financial statements – Public Trading Enterprises

365

Empty cell

G Consolidated financial statements – Total Territory 375 l

H General Government Sector – Key aggregates history 387 Empty cell

I Loose-fill Asbestos Insulation Eradication Scheme 391

J Safer Families 399

K Statement of risks 407 Empty cell

L Statement of sensitivity of budget estimates 419 Empty cell

M Whole of government staffing 425

2017-18 Budget Paper No.3 vi Table of Contents

2017-18 Budget Paper No.3 1 Introduction

INTRODUCTION

The 2017-18 ACT Budget is delivering a better Canberra.

Just as the ACT Government promised at the 2016 Legislative Assembly election, this Budget starts renewing Canberra with investment in our schools, hospitals, infrastructure and public places.

The ACT Government is delivering better care when Canberrans need it by kicking off a 10-Year Health Plan. We are also investing in better schools and support for teachers, and better transport with investment in Stage 2 of Canberra’s light rail network.

Since 2014, when the ACT Government stood up to address the Mr Fluffy crisis, we have improved the budget by $400 million. Canberra now has one of the fastest growing economies in the country with one of the lowest unemployment rates, and we are continuing on a clear path back to Budget balance in 2018-19.

Overview of the 2017-18 Budget

The ACT economy

The ACT economy is now on a strong growth footing. Gross State Product is expected to grow by 3¼ per cent in 2016-17, consistent with the 3.4 per cent recorded in 2015-16. Above trend growth is also forecast to continue into 2017-18 at 2¾ per cent, with growth then returning to its long-term trend rate of 2½ per cent.

Construction, service exports, government consumption and household consumption are all contributing to the positive economic outlook.

Importantly, this growth is supporting new jobs. Around 3,000 jobs are expected to be created on average each year over the forward estimates across a wide range of industries – further evidence of the diversification of the Territory’s economy.

The ACT’s population also continues to grow, with around 6,000 more people living in Canberra each year. By 2020-21, the Territory’s population is expected to reach over 428,000.

Wages growth is expected to continue to be moderate over the short term before returning to trend in the medium term, due to the impact of Australian Public Service wage bargaining outcomes. Importantly, however, private sector wages growth in the ACT has recently shown signs of gathering pace.

Consumer prices are forecast to remain at or below the mid-range of the Reserve Bank of Australia’s target over the forward estimates.


The key economic aggregates are set out in Table 1 below:

Table 1: 2017-18 Budget economic forecasts, percentage change

Empty Cell Actual Estimate Forecasts Projections 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

ACT Empty Cell Empty Cell Empty Cell Empty Cell

Gross State Product1 3.4 3¼ (+1) 2¾ (+¼) 2½ 2½ 2½ State Final Demand1,2 2.9 5 (+2) 3¼ (+¼) 3½ (-½) 4 4 Employment3 1.8 1¼ 1½ 1½ 1½ 1½ Wage Price Index3,4 1.9 1¾ (-¼) 2 2½ (-1) 3 (-½) 3 Consumer Price Index3 0.8 2½ (+½) 2 (+¼) 2¼ (-¼) 2½ 2½ Population3 1.3 1½ 1½ 1½ 1½ 1½ Australia Empty Cell Empty Cell Empty Cell Empty Cell

Gross Domestic Product1,2,5 2.6 (-0.1) 1¾ (-¼) 2¾ 3 3 3

Sources: ABS Cat. No. 5220.0, 5206.0, 6202.0, 6345.0, 6401.0 and 3101.0; Chief Minister, Treasury and Economic Development Directorate; 2017-18 Commonwealth Budget. Notes: Forecasts and projections are rounded to a ¼ of a percentage point, reflecting an appropriate level of accuracy in forecasting economic parameters. Projections are based on long-run trend assumptions. 1. Real values. 2. Year average basis. 3. Through the year basis. 4. Total hourly rates of pay excluding bonuses. 5. These are the 2017-18 Commonwealth Budget forecasts. Comparisons are to the Commonwealth’s Mid-Year

Economic and Fiscal Outlook 2016-17.

This economic outlook is not without risk. There is the potential for a negative impact from the Commonwealth Government’s decentralisation agenda, or decisions to reduce the number of Australian Public Service staff currently based in Canberra. However, on the upside, the relatively weak dollar may provide a stronger than expected boost to ACT service exports such as education and tourism.

The 2017-18 Budget

The ACT Government went to the last election with clear plans to invest in the infrastructure and services that make Canberra such a great place to live – excellent hospitals and healthcare, modern schools, and a transport system that gets you where you need to go quickly and safely. The Government understands the importance of investing in these important services now so that we are ready as more people come to call Canberra home.

In this year’s Budget, the Government is delivering on our election commitments, investing to ensure that Canberra keeps getting better as it grows.

The Government is ensuring that Canberrans have access to care when they need it by delivering our 10-Year Health Plan. This plan includes new hospitals and Walk in Centres, more graduate nurses and patient care coordinators, and a significant boost to mental health services.

The Government is providing better schools for our kids. We are expanding and upgrading schools, making sure students have access to electronic devices, and hiring more school psychologists to support student wellbeing.


We are building a better city. The Government has already commenced early planning work for bringing light rail to Woden, and is undertaking substantial new investment in roads, public transport, footpaths and cycleways.

With this Budget, the Government is continuing to boost the Territory’s economy and jobs. Building on our success in bringing international flights to Canberra, the Government is supporting business and tourism through more major events and sport.

The Government is providing better services in the community. The budget invests in cleaning up our suburbs and city centre, continuing and expanding environmental programs, and delivering free off-peak bus trips for pensioners and concession card holders. Our police and emergency services are also being improved with additional crews, facilities and equipment.

Importantly, this Budget will invest in more support for the most vulnerable in our community. We are further progressing the Public Housing Renewal program and strengthening the out of home care and child protection systems to better protect Canberra’s children and young people.

The ACT Government’s ability to meet the community’s needs today while investing more for our city’s future reflects our sound budget management.

The Government’s fiscal strategy remains on track, with the budget forecast to return to balance from 2018-19. This is the fifth consecutive budget update in which the Government has forecast the return to balance in that year, demonstrating our steady progress towards this target.

Following the economic and fiscal shocks caused by the global financial crisis, cuts to Commonwealth Government funding and jobs, and the implementation of the Loose-fill Asbestos Insulation Eradication Scheme, the Government ran temporary deficits to invest in Canberra.

The Government has consistently indicated we would return the budget to balance as the impact of these shocks dissipated. This Budget continues that objective. The headline net operating balance in 2017-18 has improved to a deficit of $83.4 million, before returning to balance from 2018-19 onwards. The Government is forecasting an improvement to the headline net operating balance in all years compared to the forecast at the time of the 2016-17 Budget Review.

The ACT is currently rated AAA with a negative outlook by Standard & Poor’s – the highest rating possible following the revision of the credit rating outlook of the Commonwealth Government to negative in July 2016. The AAA credit rating reflects the Territory’s strong economy and financial management, as well as budgetary flexibility.

The Government is ensuring that debt remains at sustainable levels that are consistent with other AAA-rated jurisdictions. Net debt is forecast to peak in 2018-19 and 2019-20 at 6.5 per cent of GSP, consistent with the Government’s investment program.


The 2017-18 Budget once again demonstrates the Government’s sound budget management, our commitment to the efficient and effective delivery of services, and the desire to build a better Canberra for all of us.

An overview of the General Government Sector headline net operating balance is presented in Table 2 below.

Table 2: General Government Sector headline net operating balance

Empty Cell 2016-17 Est.

Outcome

2017-18 Budget

2018-19 Estimate

2019-20 Estimate

2020-21 Estimate

Empty Cell $’000 $’000 $’000 $’000 $’000 Revenue 5,165,836 5,341,439 5,538,705 5,800,362 6,040,337 Expenses -5,410,579 -5,596,370 -5,709,181 -5,965,018 -6,183,579 Superannuation return adjustment 170,812 171,522 180,269 192,584 206,514 HEADLINE NET OPERATING

BALANCE -73,931 -83,409 9,793 27,928 63,272

Net Cash from Operating Activities

382,981 311,606 495,841 366,297 564,446

Net Debt (excluding superannuation)

1,746,497 2,001,138 2,746,905 2,866,140 2,826,928

Net Financial Liabilities 4,768,731 5,107,111 5,879,594 6,057,437 6,092,293

2017-18 Budget Paper No.3 5 Economic performance, outlook and strategy

CHAPTER 1

ECONOMIC PERFORMANCE, OUTLOOK AND STRATEGY

Chapter Page

1.1 Overview 7

1.2 National and global economic outlook 9

1.3 ACT economic outlook 11

1.4 Economic strategy 21

1.5 Risks to the economic outlook 25

2017-18 Budget Paper No.3 6 Economic performance, outlook and strategy

2017-18 Budget Paper No.3 7 Overview

1.1 OVERVIEW

The ACT economy is now on a strong growth footing. Growth in Gross State Product is expected to be 3¼ per cent in 2016-17, consistent with the 3.4 per cent recorded in 2015-16. Above trend growth is also forecast to continue into 2017-18 at 2¾ per cent, with growth then returning to its long-term trend rate of 2½ per cent.

This compares to national growth which was 2.6 per cent in 2015-16 and is forecast to be only 1¾ per cent in 2016-17. Growth is then forecast to pick up to 2¾ per cent in 2017-18 before returning to its long-term trend growth rate of 3 per cent over 2018-19 to 2020-21.

The Territory’s growth is broad based, with construction, service exports, government consumption and household consumption contributing to the positive economic outlook.

The strong outlook for growth is being accompanied by solid employment growth. Around 3,000 jobs are expected to be created on average each year over the forward estimates, a growth rate of 1½ per cent a year.

Jobs growth is expected in a range of industries including construction, education and research, defence and intelligence, tourism, and sectors associated with household consumption. This is further evidence of the progress being made through the ACT Government’s efforts to diversify the Territory’s economy. This jobs growth is also paired with an ongoing low unemployment rate and high participation rate in the ACT.

The ACT’s population is also increasing, rising by 5,778 people over the 12 months to September 2016. This growth is forecast to continue, with around 6,000 more people living in Canberra each year.

Wages growth is expected to continue to be moderate over the short term before returning to trend in the medium term, due to the impact of Australian Public Service wage bargaining outcomes. Importantly, however, private sector wages growth in the ACT has recently shown signs of gathering pace. Despite subdued wages outcomes, an expanding population and employment base is expected to lead to steady household consumption growth.

Consumer prices are forecast to remain at or below the mid-range of the Reserve Bank of Australia’s target over the forward estimates.

Overall, the ACT economy is being supported by strong fundamentals, including population growth, a solid public and private sector investment pipeline and historically low interest rates.


Downside risks to the ACT economy centre on any potential impact of the Commonwealth Government’s de-centralisation agenda or other adverse policy decisions which reduced the 57,549 Australian Public Service staff currently based in Canberra. In addition, any negative national housing shock at the national level, while not expected, would likely have flow-on effects on the ACT. On the upside, the relatively weak dollar may provide a stronger than expected boost to ACT service exports, such as education and tourism, which are already growing strongly.

2017-18 Budget Paper No.3 9 National and global economic outlook

1.2 NATIONAL AND GLOBAL ECONOMIC OUTLOOK

National economy

The Australian economy expanded at a solid pace in 2016, recording growth of 2.4 per cent over the calendar year. Looking ahead, the Commonwealth’s 2017-18 Budget forecasts the Australian economy to strengthen, with growth of 2¾ per cent in 2017-18 and 3 per cent in 2018-19.

The prevailing low interest rate environment is expected to support this growth, aided by a smaller negative impact from falling mining investment, which had previously acted as a drag on national economic growth. Resource exports are expected to contribute significantly to growth over the forward years. However, the broader economy continues to transition away from mining investment-led growth, with dwelling investment expected to remain a source of strength in the near term.

The Commonwealth’s 2017-18 Budget forecasts subdued real wages growth that is expected to persist until at least 2018-19. This is likely to flow through to subdued growth in household income and consumption growth.

In part, this subdued wages outlook is being driven by excess capacity in the labour market. While labour market conditions have shown general improvement, the employment growth in 2016 was largely part-time in nature. This move toward part-time employment growth is contributing to the relatively low and stable unemployment rate at the national level, but suggests that the labour market has significantly more capacity than the headline unemployment rate alone suggests.

The weak Australian dollar and historically low interest rates are expected to continue to support the Australian economy over the medium term. This has driven small, but significant upward revisions to the inflation outlook for Australia, as a result of stronger domestic activity, coupled with a more robust global economic outlook.

Global economy

The International Monetary Fund (IMF) is forecasting global growth to continue to pick up over the next two years. The April 2017 World Economic Outlook reports improved forecasts for world economic growth in 2017, led by an improved outlook for advanced economies.

Growth among advanced economies was weak in 2016, primarily due to the protracted recovery in the United States. However, going forward, growth in the United States is forecast to accelerate in 2017, based partly on the Trump Government’s assumed fiscal expansion. Yet, over the longer term, the IMF has estimated US potential growth to be only 1.8 per cent – lowered by an ageing population and flagging productivity growth.

2017-18 Budget Paper No.3 10 National and global economic outlook

The outlook for the Euro area is for an expansionary fiscal policy, a relatively weak euro and accommodative financial conditions.

The overall profile for growth in the United Kingdom has become biased toward nearer term growth, with stronger than expected economic activity ahead of the UK’s exit from the European Union. Economic activity in the UK is expected to slow somewhat in 2018, as a result of this bring forward in activity.

The growth outlook for Australia’s major trading partners remains robust, with steady growth projected for China, Japan and, notwithstanding slight downgrades to its outlook, South Korea.

Japan’s economic growth has been revised up since the 2016-17 Budget Review, although this is on the basis of revisions to Japanese national accounts data. While near-term export performance has been stronger than anticipated, it remains the case that Japan’s demographics will curtail its longer-term growth prospects.

While Chinese growth rates remain at solid levels, there are risks associated with the transition from an export-led growth model to a more balanced, consumption-orientated economy. Lately, economic activity in China has slowed due to the combination of relatively modest domestic demand growth and reduced global demand for Chinese exports.

Overshadowing this transition period are increasing risks in China’s financial system following years of debt-fuelled stimulus. Over the longer term, however, China’s ambitious infrastructure plans should support growth going forward.

2017-18 Budget Paper No.3 11 ACT economic outlook

1.3 ACT ECONOMIC OUTLOOK

The ACT economy is undergoing a period of expansion, with 3.4 per cent growth in 2015-16 and 3¼ per cent expected in 2016-17. Growth of 2¾ per cent is forecast in 2017-18, before a return to longer term trend growth rates of 2½ per cent over the remainder of the forward estimates period.

This growth is expected to be broad based, with continued expansion of dwelling construction and service exports such as education, business services and tourism. Household consumption expenditure, including on consumer durables associated with new household formation, is also anticipated to contribute to the positive economic outlook.

Australian Government consumption and investment spending in the ACT, which represents 60 per cent of State Final Demand, has also supported growth since the lifting of the Australian Public Service (APS) hiring freeze on 1 July 2015. It is expected to continue to do so over the forward estimates. The 2017-18 Commonwealth Budget forecasts Australian Government general government sector total expenses to increase by around 3.5 per cent on average per annum from 2016-17 to 2020-21.1 Overall, the 2017-18 Commonwealth Budget forecasts an average annual pace of fiscal consolidation of 0.6 per cent of GDP, broadly in line with that at the time of the Commonwealth’s Mid-Year Economic and Fiscal Outlook 2016-17 (MYEFO).

The coming year will see significant increases in the APS efficiency dividend begin, and continue over the medium term. In addition, the recent announcement of possible decentralisation of the Australian Public Service would have negative impacts on Commonwealth Government expenditure in the ACT if it involved agencies moving out of Canberra.

Overall, economic growth in the ACT is being underpinned by strong population growth, low interest rates and a relatively weak dollar.

Forecasts of key economic aggregates are summarised in Table 1.3.1.

1 Current prices.


Table 1.3.1: 2017-18 Budget economic forecasts, percentage change

Actual Estimate Forecasts Projections 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

ACT

Gross State Product1 3.4 3¼ (+1) 2¾ (+¼) 2½ 2½ 2½ State Final Demand1,2 2.9 5 (+2) 3¼ (+¼) 3½ (-½) 4 4 Employment3 1.8 1¼ 1½ 1½ 1½ 1½ Wage Price Index3,4 1.9 1¾ (-¼) 2 2½ (-1) 3 (-½) 3 Consumer Price Index3 0.8 2½ (+½) 2 (+¼) 2¼ (-¼) 2½ 2½ Population3 1.3 1½ 1½ 1½ 1½ 1½ Australia

Gross Domestic Product1,2,5 2.6 (-0.1) 1¾ (-¼) 2¾ 3 3 3 Sources: ABS Cat. No. 5220.0, 5206.0, 6202.0, 6345.0, 6401.0 and 3101.0; Chief Minister, Treasury and Economic Development Directorate; 2017-18 Commonwealth Budget. Notes: Forecasts and projections are rounded to a ¼ of a percentage point, reflecting an appropriate level of accuracy in forecasting economic parameters. Projections are based on long-run trend assumptions. 1. Real values. 2. Year average basis. 3. Through the year basis. 4. Total hourly rates of pay excluding bonuses. 5. These are the 2017-18 Commonwealth Budget forecasts. Comparisons are to the Commonwealth’s Mid-Year

Economic and Fiscal Outlook 2016-17.

Gross State Product

Gross State Product (GSP) increased by 3.4 per cent in 2015-16, two and a half times the 1.3 per cent growth recorded in 2014-15. This points to a strong recovery and brings the size of the ACT economy to $36.2 billion.2

Public administration and safety grew by 5.6 per cent in 2015-16, contributing half of the growth in the ACT’s real GSP. The remaining growth in real GSP was broad based. The construction sector grew by 5 per cent, contributing 0.2 percentage points to growth; education and training sector grew by 3.4 per cent, contributing 0.2 percentage points to growth; and health care and social assistance grew by 3.5 per cent, also contributing 0.2 percentage points to growth.

The rebound in the public administration and safety sector partially reflects the lifting of the Commonwealth Government’s hiring freeze on 1 July 2015.

The ACT’s total service exports also supported growth, increasing by 13 per cent during 2015-16 to reach $1.7 billion.3 Of this, education exports accounted for $508 million or more than 30 per cent of total service exports. This continues the trend of recent years of sustained service export growth, which has risen by 65 per cent since 2010-11. Education exports increased by 68 per cent over the same period.4

2 Real Gross State Product. 3 In 2015-16, total national service exports grew by 9.0 per cent. 4 Since 2010-11, total national service exports grew by 33.8 per cent, while national education exports grew by 27.6 per cent.


Looking forward, the high rate of economic growth recorded in 2015-16 is expected to continue, moderating slightly to 3¼ per cent in 2016-17. This is driven by growth in public administration and safety, and strong growth in construction, as well as growth in wholesale trade, retail trade, rental, hiring and real estate services, education, and health.

Growth is forecast to moderate in 2017-18 to 2¾ per cent on the back of a slight slowing in the rate of dwelling construction and ongoing broad based growth across the ACT economy.

Overall the ACT economy is being supported by strong fundamentals of high population growth, low interest rates and a weak dollar. In particular, the relative weakness of the Australian dollar following the mining investment boom is expected to continue under continued growth in service exports. Service imports are also forecast to grow, but at a slower pace, in line with recent trends.

State Final Demand

State Final Demand (SFD) is expected to grow by 5 per cent in year average terms in 2016-17, well above the 2.9 per cent recorded in 2015-16.5 Growth in 2016-17 is expected to be driven by National Government Final Consumption Expenditure, household consumption and dwelling construction.

State Final Demand is forecast to grow by 3¼ per cent in 2017-18 as growth in National Government Final Consumption Expenditure and dwelling construction slows off current high levels. However, household consumption is expected to continue to grow on the back of solid population and employment growth.

Household consumption

Household consumption expanded by a strong 3.6 per cent over the course of 2015-16 in year average terms. This pace of growth is expected to continue over the forward estimates on the back of solid population and employment growth. Associated with this population growth is the purchase of consumer durables and other furnishings arising from new household formation.

The ongoing expansion in household consumption is likely to occur despite the downward pressure placed by a moderate wages outlook.

Population

The ACT’s population was estimated at 398,349 persons at 30 September 2016. This represents an increase of 5,778 people at 1.5 per cent growth from 30 September 2015. Natural increase contributed 3,710 people to this outcome, while net overseas migration contributed 1,992 people.

5 State Final Demand Budget forecasts are presented on a year average basis (the total of four quarters divided by the preceding four quarters).


Looking ahead, the ACT’s estimated resident population is forecast to grow by 1½ per cent from 2016-17 onwards and reach 428,000 people by 2020-21.

Population growth from natural increase (births less deaths) will continue to be the largest contributor, supported by growing net overseas migration. Net interstate migration is expected to record net inflows, albeit small, driven by a relatively strong economic outlook and the ongoing development and diversification of Canberra.

Figure 1.3.1: ACT population growth by component

-2,000-1,000

01,0002,0003,0004,0005,0006,0007,0008,000

Pers

ons

Natural Increase Net Overseas Migration Net Interstate Migration

Sources: ABS Cat. No. 3101.0; CMTEDD. Note: (e) denotes estimate, (f) denotes forecast, (p) denotes projection.


Housing market

The ACT’s property market remains robust, with median house prices rising by 6.8 per cent and unit prices by 5.9 per cent over the 12 months to March 2017.6

Figure 1.3.2: Turnover and median price, houses and units, original data

0

100

200

300

400

500

600

700

800

900

1,000

0

100

200

300

400

500

600

700

Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17

Turn

over

(Num

ber)

Pric

e ($

'000

)

Turnover - Houses (RHS) Turnover - Units (RHS)Median House Price (LHS) Median Unit Price (LHS)

Source: ACT Government, Access Canberra.

Other housing sector indicators also show signs of a positive outlook, with dwelling commencements up 109 per cent over 2016, and new investor housing finance up by 22 per cent over the year to March 2017. Dwelling approval numbers have also risen considerably over the past two years.

6 Based on complete unit record data of all transactions.


Figure 1.3.3: Dwelling approvals by type, original data, 12 month rolling total

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17

Num

ber

Houses

Semi-detached, row or terrace houses, townhouses

Flats units or apartments (including those attached to a house)

Total Residential Source: ABS Cat. No. 8731.0.

Looking ahead, housing activity in the ACT is expected to remain buoyant, supported by the ACT Government’s land release program and the release of remediated asbestos affected blocks in established suburbs. Moreover, continued employment growth, solid population growth and a low interest rate environment are expected to further support demand for housing.

However, the strong dwelling construction outlook is expected to moderate toward the end of the forward estimates period as more unit complexes are completed.

Investment

In this Budget, the Government will invest $2.8 billion in infrastructure over the forward estimates.

As part of this investment program the Government will undertake new capital works worth $622 million across urban renewal, health, education, transport and arts. This includes new investment on public housing ($47 million)7, to be undertaken in addition to already planned public housing works ($249 million). The Government will also upgrade infrastructure in public schools ($85 million) and expand schools in Gungahlin ($24 million).

The Government will also undertake the Gundaroo Drive duplication – Stage 2 ($30 million), while building a new health centre for Aboriginal and Torres Strait Islander Canberrans ($12 million).

7 This project is titled Better support when it matters – Public Housing Renewal – New and better properties.


Investment in the ACT is also supported by a significant pipeline of work in the private sector, valued at $624 million8 as of the December quarter 2016. Works include for the new Calvary Bruce Private Hospital ($62 million)9, the Campbell 5 mixed-use precinct ($200 million)10 and several major residential developments in the Belconnen town centre.

Labour market

Labour market conditions in the ACT have continued to improve recently with employment growth of 1.5 per cent through the year to April 2017. The unemployment rate has also declined to 3.6 per cent as at April 2017, the second lowest rate of all jurisdictions (Figure 1.3.4).

Figure 1.3.4: Employment growth, unemployment rate and participation rate

61.5

63.0

64.5

66.0

67.5

69.0

70.5

72.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Per c

ent

Per c

ent

Monthly Employment Growth (LHS) TTY Employment Growth (LHS)

Unemployment Rate (LHS) Participation Rate (RHS)

Source: ABS Cat. No. 6202.0.

Employment is expected to grow at a moderate rate of 1¼ per cent in 2016-17 before expanding further to 1½ per cent in 2017-18. This is consistent with a solid outlook for labour demand indicated by a strong growth in job vacancies in the ACT (Figure 1.3.5).

8 Building Activity (ABS Cat. No. 8752.0), non-residential building work yet to be done. 9 Calvary Hospital media release dated 21 March 2016. 10 See ‘Work starts on apartments at Campbell 5’, 26 September 2015, www.domain.com.au


Figure 1.3.5: Employment and job vacancies

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

200.0

205.0

210.0

215.0

220.0

Num

ber (

000)

Num

ber (

000)

Employment (LHS)

Job Vacancies (Actual 18-month lead, RHS)

Sources: ABS Cat. No. 6202.0 and 6354.0. Note: Employment is monthly trend data; Job vacancies are quarterly original data.

Consumer prices

Inflation in the ACT is expected to increase from 0.8 per cent growth over the course of 2015-16 to 2½ per cent in 2016-17, reflecting a bounce-back of non-tradeable price growth (Figure 1.3.6). Inflation is expected to grow at 2 per cent through the year in 2017-18 and at 2¼ per cent in 2018-19, returning to the mid-point of the Reserve Bank of Australia’s target band thereafter.

There is a short-term upside risk to inflation due to the possible effect of rising fruit and vegetable prices on headline inflation following the impact of Cyclone Debbie in major growing regions in Queensland. These effects may be felt over the June quarter 2017.


Figure 1.3.6: Consumer Price Index growth

-4.0

-2.0

0.0

2.0

4.0

6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21

Per c

ent (

tty)

Per c

ent (

tty)

Non-tradeable inflation

Tradeable inflation

CPI

(e) (f) Projections

Sources: ABS Cat. No. 6401.0; CMTEDD. Note: (e) denotes estimate, (f) denotes forecast.

Wages

The Wage Price Index (WPI) is expected to grow at 1¾ per cent over the course of 2016-17, before gradually rising to 2 per cent in 2017-18, 2½ per cent in 2018-19, and 3 per cent thereafter.

The downwardly revised WPI estimate for 2016-17 from Budget Review reflects weaker than expected public sector wages growth. Thereafter, forecasts for WPI reflect the fact that private sector wages growth has been proceeding as expected, while the protracted bargaining process experienced across some large APS agencies has not yet been resolved (Figure 1.3.7), adding uncertainty to the outlook.


Figure 1.3.7: Wage Price Index growth

0.0

1.0

2.0

3.0

4.0

5.0

6.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21

Per c

ent (

tty)

Per c

ent (

tty)

(e) (f) ProjectionsPublic sector

Private sector

WPI

Sources: ABS Cat. No. 6345.0; CMTEDD. Note: (e) denotes estimate, (f) denotes forecast.

2017-18 Budget Paper No.3 21 Economic strategy

1.4 ECONOMIC STRATEGY

Economic strategy

The ACT Government will continue to invest in the infrastructure that our growing city needs, diversify the economy, improve the regulatory environment for businesses and continue tax reform, while creating a liveable, sustainable and inclusive city.

Infrastructure

Over the four years to 2020-21, the Government will invest $2.8 billion on infrastructure projects that will improve productivity and liveability across Canberra. This includes investing $648 million in urban development, $262 million in hospitals and health infrastructure, and $209 million on schools and education facilities.

The Government will also continue to work with the private sector in delivering Light Rail – Stage 1 ($265 million) and the new ACT Law Courts Facilities ($79 million).

The Government will make a $766 million provision for future capital works, such as the Centenary Hospital for Women and Children and the Surgical Procedures, Interventional Radiology and Emergency Centre (SPIRE) at the Canberra Hospital.

The Government will also allocate $249 million from the Better Infrastructure Fund to improve the service delivery capacity of existing infrastructure assets.

New agencies to deliver urban renewal

The Government will establish the City Renewal Authority (CRA) from 1 July 2017. The new Authority will focus on encouraging and promoting a vibrant city through the delivery of design-led, people-focused urban renewal, and encouraging and promoting social and environmental sustainability.

The Authority will lead the transformation of the City Centre and Dickson, supporting the development of new public spaces and buildings along and around Northbourne Avenue and through to the lakeside precinct in West Basin.

Alongside the CRA, the Government will establish the Suburban Land Agency to deliver new greenfield residential estates and more affordable housing. This new Agency will focus on land release, housing supply, better suburbs and associated suburban renewal projects.

Diversifying the ACT economy

In this Budget, the Government commits an additional $17.7 million over four years to supporting Canberra businesses to diversify, grow and innovate.


In particular, the Government will support collaborative projects with our higher education and research institutions and aligned business partners, to build capability in key and emerging sectors including space, spatial and satellites, cyber security, sports technology, health innovation, information and communication technology, e-government and the agri-tech and environmental sciences.

The Government will support the defence industry advocacy strategy, and continue to make strategic and partnered investments in Canberra’s innovation ecosystem.

The Government will also support our trade and investment facilitation effort through the Office of International Engagement, as well as supporting film making in the ACT through a new four year funding commitment to ScreenACT.

In addition, the commencement of direct international flights in September 2016 is expected to continue to support the expansion of tourism, business travel and international freight exports in Canberra and the region, helping to broaden the ACT’s economic base.

Higher education and research

Education is the ACT’s largest export, worth $508 million in 2015-16. The higher education and research sector contributes $2.6 billion annually to the local economy and supports 16,000 jobs.

The Government is working closely with the higher education institutions and the business community to build a city of knowledge and talent. The Government is also promoting Canberra as Australia’s study destination of choice through programs such as Study Canberra.

As part of our commitment to vocation education and training, the Government will invest an additional $1 million over four years to support women in trades and help mature age workers to improve their skills.

Tourism

In 2016, Canberra attracted 207,900 international visitors and 2.5 million domestic overnight visitors, who contributed $1.9 billion to the local economy.

The Government, in partnership with local industry, is working to grow the value of overnight visitation to $2.5 billion by 2020. The Government is promoting Canberra’s core destination experiences including the outdoors and nature, family fun, food and wine, arts and culture and major events and festivals. We are also facilitating domestic and international business opportunities through growing our strategic partnerships.


Taxation reform

The Government is committed to making the Territory’s taxation system fairer, simpler and more efficient. The ACT is the first jurisdiction to abolish taxes on insurance premiums and we are continuing to reduce conveyance duty each year with the revenue replaced through the general rates system. Conveyance duty for commercial transactions below $1.5 million is being fully phased out by 2018-19.

These changes will ensure a stable revenue base into the future, support the delivery of the services Canberrans expect, and ensure that future generations not to bear the economic costs of an unfair and inefficient tax system.


2017-18 Budget Paper No.3 25 Risks to the economic outlook

1.5 RISKS TO THE ECONOMIC OUTLOOK

While the budget forecasts show ongoing strength in the ACT economy over the forward estimates, there are a number of risks to this growth. The primary risks to the ACT’s economic outlook are centred on Commonwealth Government spending. The commencement of the Commonwealth Government’s increased efficiency dividend in 2017-18 represents a key downside risk to the ACT economy, as do recently announced plans for regional decentralisation of the Australian Public Service.

International and domestic challenges facing the broader Australian economy also represent downside risks that may affect the ACT economy. While the International Monetary Fund’s (IMF’s) forecasts for China’s growth outlook have improved after a period of downgrades it remains the case that risks to the wider Australian economy are linked to the nature of China’s transition from export and investment led growth to a more consumption orientated economy.

Recent commentary has expressed concerns about the viability of sustained property price growth in Australia’s larger capital cities, with key figures in macroeconomic and prudential regulation expressing the view that the Australian property market is experiencing unsustainable price growth. As noted in previous budget documents, a sudden tightening of financial conditions could represent a risk to the pace of dwelling construction, household expenditure and associated economic activity in the ACT.

Nationally, household debt to GDP ratios are among the highest in the developed world – far exceeding those experienced in the US in the lead-up to the sub-prime mortgage crisis. Despite prevailing low interest rates, there are clear risks to households carrying this level of debt.

Compounding this problem is the fact that Australia’s international capital flows are fuelled in large part by a narrow combination of commodity export performance, and the interplay between domestic and international interest rates. While commodity exports are expected to remain reasonably strong, the interplay between interest rates hinges upon a wide range of factors beyond Australia’s control.

Locally, while property prices in Canberra are much more closely aligned to household income growth than in some other capital cities, these conditions also represent a risk to the outlook for the ACT’s economy and public finances. Furthermore, property prices in Canberra are not immune to flow-on effects from the national market.

Offsetting this is the potential upside that exists in relation to new development along the Northbourne Avenue corridor, as investors seek to take advantage of the construction of the new light rail route.

The higher education sector also represents a source of potential upside, due to a favourable exchange rate and ongoing economic growth in Asia, particularly in China.

2017-18 Budget Paper No.3 26 Risks to the economic outlook

2017-18 Budget Paper No.3 27 Fiscal strategy

CHAPTER 2

FISCAL STRATEGY

Chapter Page

2.1 Overview 29

2.2 Budget outlook 31

2.3 Fiscal strategy 39

2.4 Cost of living statement 49



2.1 OVERVIEW

The Government is delivering on our 2016 Election commitments and renewing Canberra while continuing to demonstrate our strong fiscal management through the 2017-18 Budget.

Delivering on our commitments

The Government’s ambitious renewal agenda was clearly endorsed by the Canberra community at the 2016 election. The 2017-18 Budget focuses on delivering the commitments the Government made in that election, to continue building a better Canberra.

The ACT Government’s priorities are meeting the community’s needs today while investing more for our city’s future. Strengthening the Territory’s finances is a means to achieve these goals, it is not an objective we pursue in the absence of considerations about the current state of the local economy, or potential risks on the horizon.

Returning to balance

The Government’s fiscal strategy remains on track, with the budget forecast to return to balance from 2018-19. This is the fifth consecutive budget update in which the Government has forecast the return to balance in that year, and demonstrates our steady work towards this target. The forecast improvement to the headline net operating balance in all years is consistent with the Government’s objective of balancing the budget over the medium term, offsetting temporary deficits with surpluses in other periods.

Following the economic and fiscal shocks caused by the global financial crisis, cuts to Commonwealth Government funding and jobs, and the implementation of the Loose-fill Asbestos Insulation Eradication Scheme, the Government ran temporary deficits to invest in Canberra. This supported the Territory’s economy and protected local employment. The success of this strategy can be seen in both the strong and broad-based economic growth that has been achieved across the Territory in recent years, and through the transformation of the city.

The Government has consistently indicated that we would return the budget to balance as the impact of these shocks dissipated. This Budget continues that objective. The headline net operating balance in 2017-18 is forecast to be $83.4 million in deficit before returning to balance from 2018-19 onwards.

The 2017-18 Budget maintains the high levels of investment announced in previous budgets. These investments in health, education and transport will ensure that we can deliver high quality services, grow productivity, and boost growth in the future.


The Government is ensuring that debt remains at sustainable levels. In 2017-18, net debt is estimated to be 5.0 per cent of Gross State Product, consistent with debt in other AAA-rated jurisdictions. Net debt is forecast to peak in 2019-20 at 6.5 per cent of Gross State Product, consistent with the Government’s investment program.

The 2017-18 Budget once again demonstrates the Government’s sound budget management, our commitment to the efficient and effective delivery of services, and the desire to build a better Canberra for us all.

2017-18 Budget Paper No.3 31 Budget outlook

2.2 BUDGET OUTLOOK

For 2017-18, the headline net operating balance has improved significantly from the deficit position forecast in the 2016-17 Budget Review. The deficit for 2017-18 has reduced to $83.4 million, and the budget is forecast to return to balance, on schedule, from 2018-19. Over the three forward years to 2020-21, the Government is forecasting total surpluses of $101.0 million.

Net debt is forecast to be $2.0 billion as at 30 June 2018 and to peak in 2019-20, consistent with the Government’s planned infrastructure investment to renew Canberra.

The context of the 2017-18 Budget

In recent years, the Government has supported the ACT economy through economic and financial shocks from the global financial crisis, cuts to Commonwealth employment and spending, and the need to address the loose-fill asbestos insulation issue. This support for Canberra’s jobs and economy resulted in the Government running budget deficits, peaking at $479.3 million in 2014-15.

The success of this economic strategy is now becoming clear. The ACT has weathered these shocks and now has one of the strongest economies in the country. The ACT economy is undergoing a period of expansion, with solid growth in the past few years and an expected return to trend in 2018-19. Future growth is expected to be broad based and the economic outlook is positive.

This forecast strong growth in the economy over the next few years means the Government can continue to deliver on our fiscal strategy and return the budget to balance.

In this first budget since the 2016 election, the Government has focused on delivering our commitments. The initiatives in this Budget will start delivering the promised renewal of the city, including through light rail, new health and education infrastructure, support for business and tourism, and better services for all Canberrans.

Headline net operating balance

The Government is forecasting a headline net operating deficit of $83.4 million in 2017-18 with a return to balance in 2018-19. Increasing headline net operating surpluses are forecast in 2019-20 and 2020-21.

Table 2.2.1 provides estimates for the General Government Sector headline net operating balance over the forward estimates.


Table 2.2.1: General Government Sector headline net operating balance

2016-17 Est.

Outcome

2017-18 Budget

2018-19 Estimate

2019-20 Estimate

2020-21 Estimate

$’000 $’000 $’000 $’000 $’000 Revenue 5,165,836 5,341,439 5,538,705 5,800,362 6,040,337 Expenses -5,410,579 -5,596,370 -5,709,181 -5,965,018 -6,183,579 Superannuation return adjustment 170,812 171,522 180,269 192,584 206,514 HEADLINE NET OPERATING

BALANCE -73,931 -83,409 9,793 27,928 63,272

Net Cash from Operating Activities

382,981 311,606 495,841 366,297 564,446

Net Debt (excluding superannuation)

1,746,497 2,001,138 2,746,905 2,866,140 2,826,928

Net Financial Liabilities 4,768,731 5,107,111 5,879,594 6,057,437 6,092,293

Note: Numbers may not add due to rounding.

Tables 2.2.2 and 2.2.3 provide an overview of the major variations in the headline net operating balance since the 2016-17 Budget and the 2016-17 Budget Review, respectively.


Table 2.2.2: Summary of Movements in the General Government Sector headline net operating balance

2016-17 2017-18 2018-19 2019-20 $’000 $’000 $’000 $’000

2016-17 Budget -181,999 -35,035 33,341 66,044

Revenue1 Policy Decisions 391 1,231 1,268 1,293 Technical Adjustments -10,286 -5,276 -239 -228 Expenses2 Policy Decisions -3,900 -24,070 -30,872 -37,876 Technical Adjustments -16,626 -140 5,657 3,538 Superannuation return adjustment 7,246 8,319 7,236 7,705 2016 Pre-Election Budget Update -205,174 -54,971 16,391 40,476

Revenue1

Policy Decisions -279 -18,616 2,038 2,471 Technical Adjustments 87,888 -23,198 -28,876 -39,995 Expenses2 Policy Decisions -7,980 -8 1,025 1,025 Technical Adjustments 6,082 2,512 14,349 9,276

2016-17 Budget Review -119,463 -94,281 4,927 13,253

Revenue1 Commonwealth grants -314 20,084 41,023 19,180 Policy Decisions 0 8,435 11,575 9,667 Technical Adjustments 30,252 254,952 132,666 226,153 Expenses2 Policy Decisions 0 -112,836 -62,786 -46,279 Technical Adjustments 15,594 -149,661 -107,848 -183,143

Superannuation return adjustment 0 -10,102 -9,764 -10,903

2017-18 Budget -73,931 -83,409 9,793 27,928

Notes: Numbers may not add due to rounding. 1. A positive number represents an increase in revenue. 2. A negative number represents an increase in expenses.


Table 2.2.3: Summary of major technical adjustments since the 2016-17 Budget Review

2016-17 2017-18 2018-19 2019-20 $’000 $’000 $’000 $’000

Revenue1

Taxation revenue 35,145 13,627 -1,342 87 Renewable energy certificates 28,959 72,143 127,620 165,110 Territory Banking Account revenue 6,266 13,652 6,984 7,045 Superannuation Provision Account 0 -9,325 -10,520 -11,972 Commonwealth Grants NPPs and SPPs -11,773 22,637 22,525 15,649 Land Development Agency and Icon Water dividend,

income tax and contributed assets -46,792 101,888 -37,735 17,333

Other parameter and technical adjustments 18,447 40,330 25,134 32,901 Total Revenue – Technical Adjustments 30,252 254,952 132,666 226,153 Expenses2 Revised funding profiles and rollovers 56,225 -97,557 555 -1,451 Parameter adjustments 6,359 -6,797 -6,843 -8,197 National Disability Insurance Scheme 2,450 0 0 -33,439 Territory Banking Account expenses 2,201 1,148 3,588 -3,644 Comcare premium reduction 0 15,000 15,000 10,000 Renewable energy certificates 0 -34,400 -72,143 -127,620 School enrolment adjustment 0 -7,706 -7,937 -8,175 Superannuation Provision Account 0 16,766 18,304 19,582 Constitution Avenue -44,800 0 0 0 Other technical adjustments -6,840 -36,115 -58,372 -30,199 Total Expenses – Technical Adjustments 15,594 -149,661 -107,848 -183,143

Notes: Numbers may not add due to rounding. 1. A positive number represents an increase in revenue. 2. A negative number represents an increase in expenses.

Revenue

The Government is forecasting revenue of $5.3 billion in 2017-18, an increase of $283.5 million since the 2016-17 Budget Review. This higher revenue forecast reflects:

updated revenue estimates from the Land Development Agency and Icon Water ($101.9 million) mainly due to revisions in the land sales program;

the market value of Large-Scale Generation Certificates ($72.1 million) – further details about these certificates are provided at the end of this chapter;

higher Commonwealth grant revenue for GST ($32.9 million);

higher Commonwealth payments associated with National Partnership Payments and Specific Purpose Payments ($22.6 million);

higher Territory Banking Account revenue, mainly due to changes in underlying cash flows ($13.7 million); and


increased taxation revenue, mainly due to higher forecast conveyance duty collections in the commercial sector of the market ($13.6 million).

These forecast increases in revenue are partially offset by:

lower payments from the Commonwealth associated with the bring forward of Financial Assistance Grants to 2016-17 ($25.4 million); and

lower earnings from the Superannuation Provision Account ($9.3 million).

Across the forward estimates period, underlying revenues are forecast to grow at an average annual rate of 3.5 per cent.

Figure 2.2.1 depicts a comparison between the underlying revenue in the 2016-17 Budget Review and the 2017-18 Budget.

Figure 2.2.1: Underlying Revenue as at the 2016-17 Budget Review and as at the 2017-18 Budget

4,500

4,700

4,900

5,100

5,300

5,500

5,700

5,900

6,100

6,300

6,500

2016-17 2017-18 2018-19 2019-20 2020-21

$ m

illio

n

2016-17 Budget Review 2017-18 Budget

Expenses

The Government is forecasting expenses of $5.6 billion in 2017-18, an increase of $262.5 million since the 2016-17 Budget Review. This increase largely reflects:

the impact of Government policy decisions to deliver on election commitments and invest in a better Canberra ($112.8 million);

the re-profiling and rollovers of agency expenses, including those associated with capital works ($97.6 million);


the value of the Large-scale Generation Certificates expected to be surrendered to the Clean Energy Regulator ($34.4 million) – further details are provided at the end of this chapter; and

additional expenditure associated with National Partnership Payments and Specific Purpose Payments ($9.6 million).

These increases are partially offset by:

lower expenses incurred in the Superannuation Provision Account ($16.8 million); and

expected reductions in Comcare premiums ($15.0 million).

The most significant policy decisions taken by the ACT Government include:

additional investment in health ($117.7 million over the budget and forward years and associated capital provisions) – for services such as additional nurses and Walk in Centres, a mental health package, including a new Office for Mental Health, and the transitioning and commissioning for the University of Canberra Public Hospital. The majority of these expenses will be offset by the provision for future health expenditure;

further support for vulnerable children, young people and their families by providing increases to funding for child protection and out of home care services ($43.8 million);

increased funding to promote growth in the tourism industry, including major cultural and sporting events ($22.5 million);

additional support for the Territory’s teachers and additional school psychologists ($18.5 million); and

the design and procurement of Stage 2 of the Light Rail from the city to Woden ($17.7 million along with net capital of $35.8 million).

Further information on policy decisions is provided in New initiatives (Chapter 3).

Underlying expenses (which exclude impacts associated with the Large-scale Generation Certificates) are forecast to grow at an annual average rate of 2.7 per cent, consistent with the forecast in the 2016-17 Budget.

Figure 2.2.2 depicts a comparison between the underlying expenses in the 2016-17 Budget Review and the 2017-18 Budget.


Figure 2.2.2: Underlying expenses as at the 2016-17 Budget Review and as at the 2017-18 Budget

4,500

4,700

4,900

5,100

5,300

5,500

5,700

5,900

6,100

6,300

6,500

2016-17 2017-18 2018-19 2019-20 2020-21

$ m

illio

n

2016-17 Budget Review 2017-18 Budget

Renewable energy certificates

The 2017-18 Budget reflects a change in the expense and revenue impacts associated with Large-scale Generation Certificates. These are credits that are received for the generation of renewable electricity under the Commonwealth Government’s Large-scale Renewable Energy Target.

The ACT receives Large-scale Generation Certificates from its investments in renewable electricity generation projects to meet its target of 100 per cent renewable electricity by 2020. One certificate is equal to the generation of one megawatt hour (MWh) of renewable electricity.

Once created and recognised, these certificates can be sold and transferred to other individuals and businesses. The price of certificates is determined through the open Large-scale Generation Certificates market, where these can be traded, bought and sold.

Accounting practice is to record the certificates as revenue at market value upon receipt in the financial year in which they are created and recognised. Government policy is to voluntarily surrender these certificates to the Clean Energy Regulator and, in accordance with current accounting practices, an equivalent expense would be recorded.

Given recent developments in the national electricity market, the Government has decided that, in future, it will consider the appropriate use of its certificates on an annual basis. While it remains Government policy that the default position will see the certificates voluntarily surrendered, this will occur following Government consideration of the circumstances prevailing at that point in time.


The budget therefore assumes that the expense of surrendering the certificates will occur in the year following their receipt. This treatment, while not providing any net revenue over the life of the Large-scale Generation Certificates program, has the effect of recognising additional net revenue in 2017-18, 2018-19 and 2019-20. From 2020-21, this change involves a net cost to the budget.

In addition, it should be noted that the Large-scale Generation Certificates impacts contained in the 2017-18 Budget have been included on the assumption that the original value for the Large-scale Generation Certificates hold and that they are not re-valued between when they are recognised and when they are surrendered.


2.3 FISCAL STRATEGY

The 2016 Legislative Assembly election delivered the ACT Government a clear mandate to implement our election platform – broadening and strengthening the Territory’s economic base, continuing the delivery of world-class services to the Territory, and investing for our city’s growth. A key reason the Government has the capacity to implement this progressive agenda is the strength of our fiscal strategy, which has delivered strong economic growth and sound public finances.

Accordingly, the Government will maintain a continued focus on a fiscal strategy that includes:

supporting and boosting the ACT economy as needed, with particular focus on creating jobs and continuing to deliver high quality services to the community;

sustaining a strong operating balance over the medium term; and

continuing the investment in infrastructure projects and assets that generate economic growth, and allows the Canberra community to enjoy the benefits of these assets in the longer term.

This fiscal strategy further seeks to achieve an operating balance over time, offsetting temporary deficits with surpluses in other periods. Our responsible and prudent management of the Territory’s finances has been acknowledged by Standard & Poor’s, with the Territory’s credit rating currently assessed as AAA with a negative outlook. This rating is currently the highest possible following the ratings downgrade applied to the Commonwealth Government in July 2016. The Territory remains one of only three Australian states or territories to hold this rating.

As in previous years, the Government’s overarching fiscal strategy can be grouped into five high-level objectives:

sustainable economic growth;

sound public finances;

quality and efficient services;

sustainable taxation revenue; and

a strong balance sheet.


Sustainable economic growth

A key element of the Government’s fiscal strategy is ensuring that investment (particularly capital spending) expands and diversifies the Territory’s economic base. In response to the Commonwealth Government’s fiscal consolidation of recent years, the Government has focussed on providing short to medium-term responses to ensure local jobs are buffered from economic uncertainty, coupled with infrastructure investment to bring longer-term economic benefits. The significant pipeline of capital works projects that form the Territory’s Infrastructure Investment Program (Chapter 5.2) creates jobs, provides investment certainty for local businesses, and creates productive infrastructure that supports growth into the future.

The Government is continuing to build the infrastructure necessary to support growth. The 2017-18 Budget continues the Government’s investment in light rail, with funding provided to assist with the initial planning stages of delivering Stage 2, the extension of the line from Civic to Woden. The 2017-18 Budget also contains $54 million of spending on new roads (taking into account early planning and preliminary design activities), including the Molonglo East-West arterial road, the William Hovell Drive upgrade, and the design and construction of the Canberra Brickworks access road (and associated upgrades to Dudley Street). More broadly, the 2017-18 Budget includes a total of $189 million for road improvement projects, which are designed to improve the traffic capacity of major arterial and connecting networks, and reduce congestion, particularly in the Gungahlin region and in new suburbs.

The Government has connected Canberra to the world with international flights, and this presents significant opportunities for our economy, particularly in the Asia-Pacific region. The Territory’s relationship with Singapore Airlines goes from strength to strength and, in late November 2016, Qatar Airways announced its intention to commence direct services between Canberra and Doha in 2017-18. These outcomes are testament to the Government’s efforts to build awareness of the infrastructure and possibilities that the new international airport terminal offers. We remain fully committed to attracting more air services to Canberra to further expand the opportunities for business, tourism and trade.

The Government’s economic diversification strategy is embodied in this Budget. Programs are being developed to boost the number of women in male-dominated traditional trades, and assist mature-age workers to re-train to improve their employment opportunities. The Government is also implementing innovation programs and promoting key sector development, consistent with the goal of Canberra becoming a true knowledge capital. Additional funding is also being provided to promote the Territory as a study destination of choice for local, interstate and international students.


Sound public finances

Headline net operating balance

The cornerstone of the Government’s fiscal strategy is to achieve a net operating balance over the medium term. This strategy provides the flexibility to support the economy and jobs when necessary, while ensuring underlying financial sustainability by achieving an operating balance over time, offsetting temporary deficits with surpluses in other periods.

In 2017-18, the forecast headline net operating balance has improved since the 2016-17 Budget Review to a deficit of $83.4 million. Importantly, the Government remains on track to return the budget to balance in 2018-19, with forecast improvements over the forward years.

The Government’s fiscal strategy first indicated a return to surplus in 2018-19 in the 2015-16 Budget and, since that time, the Government has adhered to its strategy. The continued strengthening of the ACT economy, supported by Government investment, has created capacity for the Government to retain this strategy in the 2017-18 Budget.

Figure 2.3.1 shows the history of the Territory’s headline net operating balance movements.

Figure 2.3.1: Headline net operating balance

-600

-400

-200

0

200

400

-600

-400

-200

0

200

400

2001

-02

2002

-03

2003

-04

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

$ m

illio

n

$ m

illio

n

EstimateActual

Commonwealth Reduction in Stimulus

2012-14

Asbestos Eradication

Scheme

Cut in Health/GST

Funding

Commonwealth Stimulus 2009-11

Global Financial

Crisis

The Territory’s credit rating

International ratings agency Standard & Poor’s affirmed the ACT’s AAA long-term and A-1+ short-term local currency credit ratings on 26 August 2016.


In line with the Commonwealth Government’s ratings outlook, the outlook for the Territory’s credit rating is negative. Standard & Poor’s does not consider that any state or territory has the ability to maintain stronger credit characteristics than the sovereign in a stress scenario.

The AAA and A-1+ ratings are the highest ratings assigned by Standard & Poor’s. The Territory is one of only three state or territory Governments in Australia and, indeed, remains one of only a small number of Governments in the world to hold this rating. The retention of the AAA credit rating recognises the Government’s prudent responses to the significant external challenges faced in recent years.

Operating cash balance

The operating cash balance measures all operating cash receipts each year – for example taxes, fees and fines, and operating grants from the Commonwealth Government – less all operating cash payments – including wages and salaries, cash superannuation payments and payments for goods and services.

The Government is committed to maintaining operating cash surpluses in the General Government Sector on the basis that a strong operating cash balance ensures there is sufficient cash generated from operating activities to support ongoing investment in key infrastructure to support the city’s growth.

The General Government Sector net operating cash balance is forecast to be in surplus in all years at $311.6 million in 2017-18, increasing to $564.4 million in 2020-21.

Quality and efficient services

The Government remains committed to the delivery of high quality public services, and routinely reviews its practices to ensure that services are delivered efficiently and targeted appropriately to areas of need.

The 2017-18 Budget focuses on delivering the additional services the Government promised in the 2016 election. Accordingly, the budget includes significant additional investment to enhance the delivery of services across the Territory.

Additional health services will be supported by new Walk in Centres, early planning for the new Surgical Procedures, Interventional Radiology and Emergency (SPIRE) Centre, planning for health needs, and the expansion of the Centenary Hospital for Women and Children. This is on top of the Government delivering on our commitments for more graduate nurses and patient care coordinators, and a significant expansion of mental health services.

New schools and school improvements in Gungahlin, Molonglo and Belconnen, in addition to more support for teachers, will enhance the delivery of education services in the Territory.


The renewal of public housing will also continue, ensuring that public housing tenants have access to appropriate, modern and energy efficient housing choices. The Government is also delivering on our commitments to provide more services for the most vulnerable Canberrans. Additional resources are being provided to look after children at risk through the child protection and out of home care systems.

Importantly, the Government continues to seek ways to deliver existing services more efficiently. In the 2017-18 Budget, significant efficiencies have been identified across a range of directorates, including Health, Transport Canberra and City Services, Justice and Community Safety, and Chief Minister, Treasury and Economic Development. These efficiencies create scope for additional services and investment in the future.

The Government is continuing to identify whole of government savings through better practices. This work includes the Smart Modern Strategic Procurement reform program that has already generated significant savings through better procurement arrangements.

It also includes the targeted reviews of government operations and services, undertaken by the Expenditure Review Division of the Chief Minister, Treasury and Economic Development Directorate. These reviews ensure that service delivery achieves value for money outcomes, and that services are delivered in a sustainable manner. In 2017-18, specific expenditure reviews will be undertaken on care and protection services, and libraries. The Expenditure Review Division will also undertake a range of other projects and analytical work as priority areas are identified through the year.

Sustainable taxation revenue

The Government is committed to making the Territory’s taxation system fairer, simpler and more efficient. Importantly, the Government’s fiscal strategy also depends on ensuring taxation revenue remains at sustainable levels.

In the 2017-18 Budget, the Government continues the process it started in 2012-13 to reform the Territory’s taxation system. Changing the tax mix away from narrowly-based transaction taxes to a broad land tax base will ensure a stable and efficient revenue base to fund the provision of high-quality government services into the future.

Commencing in 2017-18, residential and commercial conveyance duty rates will be separated. This will allow levels of taxation to be adjusted to better reflect the differences in each sector as the process of phasing out conveyance duty continues. Conveyance duty for commercial transactions below $1.5 million will be halved in 2017-18, before being fully phased out by 2018-19.

The Government has also introduced changes to the methodology for determining general rates and land tax, to establish a more equitable treatment between houses and units, and to preserve this important revenue base as the distribution of properties between houses and units shifts with the evolving urban densification in the Territory.

The ACT remains a relatively low taxing jurisdiction. Our own-source tax revenue as a share of Gross State Product remains the second lowest in Australia.


Figure 2.3.2: Comparison of own-source tax revenue as a share of Gross State Product, total state and local government, 2015-16

6.3%6.6%

5.1%

5.8%

4.6%

5.5%

3.2%

4.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

NSW VIC QLD SA WA TAS NT ACT

Ow

n-So

urce

Tax

Rev

enue

as a

shar

e of

Nom

inal

GS

P

Sources: ABS 5506.0, 5220.0.

Notes: 1. Gross State Product is in nominal terms. 2. This comparison is made on the basis of total state and local government own-source tax revenue. The ACT

undertakes both state and local functions.

Details of the revenue initiatives announced in the 2017-18 Budget can be found in Revenue initiatives (Chapter 3.4).

Strong balance sheet

The ACT’s balance sheet continues to perform relatively well compared to other jurisdictions, and provides the Government with flexibility to support high priority investments.

Net debt

Net debt is a key balance sheet measure of financial sustainability in the Government Finance Statistics framework. It takes into account gross debt liabilities as well as financial assets such as cash reserves and investments.


General Government Sector net debt is estimated to be $2.0 billion, or 5.0 per cent of Gross State Product, in 2017-18, compared to the 2016-17 estimated outcome of $1.7 billion, or 4.6 per cent of Gross State Product. The decrease in net debt as a percentage of Gross State Product in 2017-18 is influenced by the higher distributions from the land rent scheme. Over the forward estimates, net debt is expected to decrease in 2018-19 compared with the levels forecast in the 2016-17 Budget Review. This decrease is also reflective of the higher distributions from the land rent scheme, due to a larger number of participants exiting the scheme and converting to crown leases.

Net debt in 2019-20 is forecast to increase compared to the 2016-17 Budget Review, largely due to the inclusion of capital provisions in the outyears.

Net financial liabilities

Net financial liabilities are calculated as total liabilities less financial assets such as cash reserves and investments. They take into account all non-equity financial assets, but exclude the value of equity held by the General Government Sector in public corporations. The net financial liabilities to Gross State Product ratio in 2016-17 has decreased from 14.9 per cent to 12.4 per cent compared to the 2016-17 Budget.

This decrease is mainly due to the variation in net debt described above, revised provision estimates in relation to the Loose-fill Asbestos Eradication Scheme, and an improvement in the superannuation liability based on the latest Commonwealth Superannuation Scheme and Public Superannuation Scheme defined benefit actuarial review. The improvement is due to a reduction in the long-term salary growth assumption as well as salary growth and pension indexation being lower than assumed over 2015-16.

In 2017-18, net financial liabilities are forecast to increase by $338.4 million to $5.1 billion, largely reflective of forecast growth in the superannuation liability, and the inclusion of lease liabilities associated with Public Private Partnerships.

Figure 2.3.3 below compares the ACT’s net financial liabilities as a proportion of Gross State Product with other jurisdictions. The ACT remains broadly in line with the other AAA-rated jurisdictions, New South Wales and Victoria.


Figure 2.3.3: General Government Sector net financial liabilities as a percentage of Gross State Product – 2017-18 State and Territory comparison

13.7 13.911.5

21.4

13.3

21.1

31.6

12.7

0

5

10

15

20

25

30

35

New SouthWales

2016-17Half-Yearly

Review

AAA

Victoria2017-18Budget

AAA

Queensland2016-17Mid-YearFiscal andEconomic

Review

AA+

SouthAustralia2016-17Mid-YearBudgetReview

AA

WesternAustralia2016-17Mid-YearFinancial

Projections

AA+

Tasmania2017-18

Budget andForward

Estimates

AA+

NorthernTerritory2017-18Budget

Strategyand

OutlookAA

ACT2017-18Budget

AAA

Per c

ent

There is general acceptance of the proposition that governments with strong balance sheets can responsibly incur some debt – provided it is used to finance high quality assets in areas of community need. Assets such as public transport, new roads, schools and hospital facilities generate benefits to the community over a long period of time. It is important, however, that the level of debt remains sustainable.

An indicator of that assessment is the ratio of net financial liabilities to Gross State Product. While this ratio is subject to volatility, it is desirable that it remains broadly stable over time.

The continued investment in infrastructure, funded by debt as required, will strengthen the ACT economy and enhance service delivery for ACT residents. This trend in debt is a major driver in the level of net financial liabilities as displayed below at Figure 2.3.4.


Figure 2.3.4: General Government Sector net financial liabilities

0

5

10

15

20

25

30

35

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2016-17 2017-18 2018-19 2019-20 2020-21

Per c

ent

$ m

illio

n

Net financial liabilities Net financial liabilities to GSP ratio (RHS)

Net worth

The broadest measure of a jurisdiction’s balance sheet is net worth, which measures the total value of all assets less all liabilities. The ACT has strong positive net worth and, as a proportion of Gross State Product, continues to be one of the strongest of all Australian jurisdictions.

Net worth is forecast to be $18.0 billion at the end of 2017-18, broadly in line with the 2016-17 estimated outcome of $17.7 billion.


2017-18 Budget Paper No.3 49 Cost of living statement

2.4 COST OF LIVING STATEMENT

The ACT Government is committed to building a city with better healthcare, improved education facilities and outcomes, secure and well paid jobs, and good transport infrastructure. At the same time, we will support the vulnerable and disadvantaged in our community, promote social inclusion, and ease the cost of living pressures for those on low and good incomes.

This Cost of Living Statement provides five case studies of Canberra households. It outlines the effect of the ACT Government’s taxes and charges, and the various concessions available in 2017-18.1 The impact of Commonwealth Government taxes, fees and concessions are not taken into account. The Government continues to monitor the impact of these other costs of living and concessions when setting out our policies.

While the Government is committed to supporting families and individuals through targeted assistance and concessions, there are a range of cost of living pressures that the ACT Government does not control. Examples include changes to interest rates, petrol prices, and decisions of independent pricing authorities on the price of utilities such as electricity, water and sewerage.

ACT Households

ACT residents are younger on average than is the case nationally. As at September 2016, 57 per cent of the ACT’s population were under 40, compared with 53 per cent nationally. At the 2011 Census, local families had an average of 1.8 children and 47 per cent of Canberrans were married.2

Canberrans are more engaged with the labour market than average Australians – our workforce participation rate is 69.8 per cent compared with 64.8 per cent nationally. Of those employed, 71 per cent are working full time and 29 per cent are working part time.3

At the 2011 Census, median weekly household income for ACT families with children was $3,060 while, for the rest of Australia, it was $2,310.4 The Wage Price Index in the ACT increased by 1.8 per cent through the year to March 2017. The national change for the same period was 1.9 per cent.5

1 As required under Section 11(1)(f) of the Financial Management Act 1996. 2 2011 Census Australian Capital Territory STE QuickStats. 3 Labour Force - April 2017, Australian Bureau of Statistics Cat. No. 6202.0. 4 2011 Census Australian Capital Territory STE QuickStats. 5 Wage Price Index - March quarter 2017, Australian Bureau of Statistics Cat. No. 6345.0.


The majority of households (67.3 per cent) own their own home, with or without a mortgage, while 30.6 per cent of households rent. The vast majority (91.8 per cent) of households own at least one motor vehicle.6

The release of the 2016 Census data will allow for an updated look at the Canberra community in next year’s budget.

ACT Government

Public services

The ACT Government continues to provide high quality public services across the Territory. Government expenditure on health services has increased by around 8.4 per cent per year over the decade to 2015-16, and spending on education grew by 6.3 per cent per year over the same period.7

The provision of these public services protects households from some cost of living pressures. For example, households with school age children in public education receive its benefit at little cost, and households using public medical services and facilities are significantly shielded from increases in the cost of health care. Table 2.4.1 below shows ACT Government expenditure by area for 2017-18.

Table 2.4.1: What your money delivers

Area of Expenditure 2017-18 $ million % of total $ per household

Health 1,634.4 31 10,300 Education 1,200.5 23 7,600 Justice and safety 541.2 10 3,400 Disability, community services and housing 514.0 10 3,300 City services 355.5 7 2,300 Public transport 197.6 4 1,300 Delivering government services 177.4 3 1,100 Planning and regulation 174.0 3 1,100 Economic and financial stewardship 165.9 3 1,000 Environment, sustainability and land management 165.8 3 1,000 Events, tourism and investment 147.6 3 900 Total 5,274.0 100 33,400

Source: Chief Minister, Treasury and Economic Development Directorate.

Note: Numbers may not add due to rounding. Expenses by key priority area above do not equal total general government sector expenses as they do not include superannuation and other expenses that do not directly correlate to specific functions.

6 2011 Census Australian Capital Territory STE QuickStats. 7 Government Finance Statistics 2015-16, Australian Bureau of Statistics Cat. No. 5512.0.


ACT Government taxes and fees

The ACT Government collects revenue directly via taxes and fees. This revenue is used to support the provision of high quality services and infrastructure to the community as detailed throughout the budget papers. About 33 per cent of ACT Government revenue is derived from own-source taxation, and another 41 per cent is provided by the Commonwealth Government. See Revenue and Forward Estimates (Chapter 6.2) for more information on own-source taxation, and Federal Financial Relations (Chapter 7.2) for more information on Commonwealth grants. The remainder of the ACT Government’s revenue is derived from a range of other income sources, including the sales of goods and services, interest and dividends.

ACT Government taxation forms a small part of overall household costs. The most recent Australian Bureau of Statistics data show average taxation per capita in the ACT is on par with the national average and below that of New South Wales, Victoria and Western Australia.

The 2017-18 Budget marks the start of stage two of the ACT Government’s taxation reforms, first announced in the 2012-13 Budget. The reforms improve the fairness of the taxation system and set it on a more sustainable footing.

Utilities

The cost of providing gas, electricity and other utilities is largely outside the direct control of the ACT Government. These are determined by the decisions of independent pricing tribunals and market forces. Utility charges incorporate the costs of production, the impact of various Commonwealth, State and Territory energy and environmental programs, taxes and charges, and international and domestic markets.

The cost of electricity is expected to increase significantly in 2017-18. The key contributing factor to this increase in retail electricity prices is substantial increases in wholesale electricity costs paid by all retailers in the National Electricity Market (NEM).

Water and sewerage charges are determined by the Independent Competition and Regulatory Commission (ICRC). The ICRC also regulates the price for the supply of electricity to small customers in the ACT purchased from ActewAGL Retail on certain contracts. Natural gas prices are not regulated in the ACT.

Assistance to households through concessions

The ACT Government provides a wide range of concessions to households and individuals to assist with living expenses such as general rates, utility bills, driver licence fees, motor vehicle registration fees, and public transport fares. In the 2016-17 Budget, the ACT Government committed to invest an extra $35 million over four years in the concessions program.


The ACT Government recognises that utility bills are a significant cost of living for many households, and from 2017-18 will provide a combined Utilities Concession to allocate assistance more equitably across all eligible households. The concession will combine the energy and utility concession with the water and sewerage rebate and appear on eligible households’ electricity statements. From 2017-18, eligible households will receive $604.

Further information is available at www.assistance.act.gov.au.

A range of Commonwealth concessions and assistance programs are also available to offset eligible households’ living costs. However, these payments have not been included in the tables that follow.

Insurance duties

Insurance duties were eliminated as a source of Territory revenue in the 2016-17 Budget. As insurance premiums increase, the savings to households will continue to increase as well. However, the savings from this taxation reform have been removed from this year’s cost of living statement.

Cost of living Statement

Under Section 11(1)(f) of the Financial Management Act 1996, the Territory is required to provide a statement on the effect of Territory taxes and fees on households and the concessions that offset these taxes and fees.

The Government is mindful that, in calculating the impact of taxes, fees and utility charges on a hypothetical household, it is not possible to capture the full range of household types, financial circumstances or specific usage patterns of government services. Five household scenarios are presented as a basis for highlighting the differential impact for various household types and circumstances.

ACT household scenarios

The scenarios below show the estimated impact of Territory taxes, fees and utility charges and the concessions which offset them, on five households. Some other potential savings, which can reduce cost of living pressures, are also outlined. Further details on the costs and assumptions are provided in the notes later in this chapter.

Ibrahim and Sadaf

Ibrahim and Sadaf are a single income family renting in Monash. They have a household income of $65,000 a year and access to Centrelink Health Care cards. Their daughter, Sareh, has a disability and the family currently receives support through the Community Services Directorate, their local school and other community organisations. Sareh has joined the National Disability Insurance Scheme (NDIS), which commenced in the ACT on 1 July 2014. The NDIS funds reasonable and necessary supports including therapies, equipment and home modifications, through a tailored plan of support.


Table 2.4.2 below shows the costs of taxes, fees and charges, net of concessions, and the change from 2016-17 to 2017-18 for Ibrahim, Sadaf and Sareh.

Table 2.4.2 Estimated impact of territory taxes and fees, and utility charges in 2017-18 on Ibrahim and Sadaf

Government Taxes, Fees and Utility Charges

Cost net of concessions

Savings Cost Value of concessions


2016-17 to 2017-18

Savings

2016-17 2016-17 2017-18 2017-18 2017-18 change 2017-18 $ $ $ $ $ $ $

Transport

Fees

Driver licence fee, vehicle registration, road rescue fee, road safety contribution, CTP insurance, CTP regulator levy, lifetime care and support levy and ACTION fares

1,697.49 2,435.48 1,729.23 31.74

Concessions

ACTION fares -706.25

Savings

Reduction from Rewards for Safe Driving

-9.00 -9.17

Utilities

Fees

Electricity, natural gas 3,117.39 3,817.96 3,213.96 96.57

Concessions

Utilities Concession -604.00


Samantha and Kelly

Samantha and Kelly are currently renting in Gungahlin and will buy their first home in Bonner in 2017-18. They will become liable for general rates and other property taxes when they purchase a house, as shown in the table below. Their household income is $120,000.

Samantha and Kelly will have access to the First Home Owners Grant, which is valued at $7,000 for the purchase of a new home. They will also be eligible for the Home Buyer Concession Scheme, saving them $9,380 on conveyance duty, based on a purchase price of $410,000.

Samantha works full-time and Kelly works part-time while studying. Samantha catches the bus to work to save on parking costs. Kelly cycles to work and university most days. Table 2.4.3 below shows the costs of taxes, fees and charges, net of concessions, and the change from 2016-17 to 2017-18 for Samantha and Kelly. For comparison purposes, general rates for the house they will buy are included for 2016-17.


Table 2.4.3 Estimated impact of territory taxes and fees, and utility charges in 2017-18 on Samantha and Kelly





2016-17 to 2017-18

Savings

2016-17 2016-17 2017-18 2017-18 2017-18 change 2017-18 $ $ $ $ $ $ $

Property

Taxes

General Rates 1,394.00 1,511.00 1,511.00 117.00 Fire and Emergency

Services Levy 252.00 294.00 294.00 42.00

Safer Families Levy 30.00 30.00 30.00 0.00 Savings

Home Buyer Concession Scheme

-9,380.00

First Home Owner Grant -7,000.00

Transport

Fees


2,422.78 2,472.16 2,472.16 49.38

Savings

Rewards for Safe Driving

-18.00 -18.34

Utilities

Fees

Electricity, natural gas, water and sewerage

4,080.18 4,330.07 4,330.07 249.89


Carol and Warren

Carol and Warren live in their own home in Waramanga and both receive a full pension. Both are over 70 years old and are eligible for free travel on ACTION buses. Carol catches the bus to Woden most weekdays to volunteer, and twice a week they drive to local community-run seniors’ groups.

Carol and Warren are avid travellers, spending time on the road with their caravan. In 2017-18, their caravan registration fee will be reduced to align with New South Wales fees, saving them around $128.


If they downsize their home in 2017-18, they can access the Pensioner Duty Concession Scheme, saving $8,240 in conveyance duty, based on a purchase price of $380,000. Table 2.4.4 below shows the costs of taxes, fees and charges net of concessions and the change from 2016-17 to 2017-18 for Carol and Warren.

Table 2.4.4 Estimated impact of territory taxes and fees, and utility charges in 2017-18 on Carol and Warren





2016-17 to 2017-18

Savings

2016-17 2016-17 2017-18 2017-18 2017-18 change 2017-18 $ $ $ $ $ $ $

Property

Taxes

General Rates 1,308.00 2,146.00 1,446.00 138.00

Fire and Emergency Services Levy

154.00 294.00 196.00 42.00

Safer Families Levy 30.00 30.00 30.00 0.00

Concessions

General Rates, Fire and Emergency Services Levy

-798.00

Transport

Fees


625.18 2,435.48 620.10 -5.08

Concessions

Driver licence fees, vehicle registration and ACTION fares

-1,815.38

Savings

Caravan registration 531 413 413 -128.10 Utilities

Fees

Electricity, water and sewerage

1,807.21 2,849.26 2,245.26 438.05

Concessions


Other concessions potentially available

Spectacles Subsidy Scheme -200.00 -200.00 Pensioner duty concession

scheme -8,240.00 0.00



Helen and Samuel

Helen and Samuel live in Kaleen. They have an annual household income of $156,000, own their own home and both work full time. They have two children, Rohan in primary school and Nina in high school. They share school drop offs for Rohan, and Nina catches the bus to school. Most days, one of them catches the bus to work and the other drives their family sedan.

Helen and Samuel have been planning on purchasing a new house. Based on a purchase price of $650,000, they would have paid $20,960 in conveyance duty in 2016-17 but will pay $990 less in 2017-18. Conveyance duty at pre-tax reform rates would have been $29,125, $9,155 more than in 2017-18.

Table 2.4.5 below shows the costs of taxes, fees and charges net of concessions and the change from 2016-17 to 2017-18 for Helen, Samuel and their family.

Table 2.4.5 Estimated impact of territory taxes and fees, and utility charges in 2017-18 on Helen and Samuel





2016-17 to 2017-18

Savings

2016-17 2016-17 2017-18 2017-18 2017-18 change 2017-18 $ $ $ $ $ $ $

Property

Taxes

General Rates 1,983.00 2,137.00 2,137.00 154.00


252.00 294.00 294.00 42.00

Safer Families Levy 30.00 30.00 30.00 0.00

Transport

Fees

Driver licence fee, vehicle registration, road rescue fee, road safety contribution, CTP insurance, CTP regulator levy, lifetime care and support levy, ACTION fares and parking

5,253.50 5,450.76 5,450.76 197.26

Savings

Rewards for Safe Driving

-18.00 -18.34

Utilities

Fees

Electricity, natural gas, water and sewerage

5,366.03 5,699.29 5,699.29 333.26

Other Savings Potentially Available

Conveyance Duty 19,970.00 -990.00



Mary

Mary is an aged pensioner living in public housing in Narrabundah, who pays 25 per cent of her income in rent. The indicative market rent for a one bedroom unit in this area is around $19,200 a year.

She uses the bus at a full concessional rate and participates in a range of community programs to interact with other members of the community.

Table 2.4.6 below shows the costs of taxes, fees and charges net of concessions and the change from 2016-17 to 2017-18 for Mary.

Table 2.4.6 Estimated impact of territory taxes and fees, and utility charges in 2017-18 on Mary





2016-17 to 2017-18

Savings

2016-17 2016-17 2017-18 2017-18 2017-18 change 2017-18 $ $ $ $ $ $ $

Property

Rent

25% of pension 5,680.35 5,773.95 93.60

Savings

Difference to market rent

-13,519.65 -13,426.05

Transport

Fees

ACTION fares 192.56 1,412.50 195.33 2.77

Concessions

ACTION fares -1,217.16

Utilities

Fees

Electricity 909.11 1,481.15 877.15 -31.96

Concessions



TABLE NOTES

ACT household scenarios

Property

Consistent with the 2016-17 Budget, general rates have been calculated as the average general rates bill in the relevant suburb for each household, rather than based on a fixed Average Unimproved Value (AUV).


Transport

Driver licence fees have been calculated by dividing the cost of a five year driver licence ($183.40) by five to determine the annual cost. For 2017-18, drivers are assumed to receive the 25 per cent Rewards for Safe Driving discount. This discount is available to drivers who have no relevant traffic offences recorded for the previous five years.

For Compulsory Third Party (CTP) insurance, an average of the four providers in the market (NRMA, APIA, GIO and AAMI) has been used ($556.20).

The calculations for ACTION bus fares assume passengers are using a MyWay card. Further discounts are available for passengers who top up their MyWay card using autoload (direct debit) or BPAY.

Utilities

2017-18 electricity prices are assumed to increase by 10.9 per cent, consistent with the Independent Competition and Regulatory Commission’s (ICRC) draft decision for regulated ActewAGL Retail electricity prices. 2017-18 water and sewerage prices are assumed to increase by the Consumer Price Index of 1.48 per cent, consistent with the ICRC Industry Panel Substituted Price Direction of April 2015 (which covers the period from 2013 to 2018).

The method for estimating electricity prices differs from the 2016-17 Budget. As the ICRC has produced a draft report for its investigation into electricity prices, this is a better estimate to use for electricity prices in 2017-18 (noting that the ICRC decision may change in its final report).

2017-18 gas prices are assumed to increase by 4.1 per cent, consistent with the Australian Energy Market Operator’s 2016 National Gas Forecasting Report.

Estimates for costs of utilities in 2016-17 have been updated to reflect actual costs.

Ibrahim and Sadaf

Property

As the family is renting, they do not pay general rates, the Fire and Emergency Services Levy or the Safer Families Levy.

Transport

For 2017-18, transport fees comprise: driver licence fee ($36.68); vehicle registration ($366.20); Road Rescue Fee ($25.40); Road Safety Contribution ($2.50); CTP insurance ($556.20); the CTP Regulator Levy ($1.00); the Lifetime Care and Support Levy ($35.00); and ACTION fares ($1,412.50).

For 2017-18, concessions comprise ACTION’s concession fare ($706.25). The driver is eligible for a discount on the cost of their driver licence under the Rewards for Safe Driving Program ($9.17).


Assumptions

Fees are calculated on a vehicle with a tare weight of 1,155kg to 1,504kg. The Centrelink Healthcare Card provides access to ACTION’s concession fare, with travel twice a day at peak time five days a week, reaching the monthly travelling cap of 40 trips. Once the monthly cap is reached, passengers’ remaining travel will be free of charge provided they continue to tag on and off with each journey.

Utilities

For 2017-18, utility charges comprise: electricity ($2,089.39) and natural gas ($1,728.57). Concessions comprise of the combined Utilities Concession ($604). They received the energy and utility concessions ($426.26) in 2016-17.

Assumptions

Consumption per year: electricity (8,700 kWh) and natural gas (51 GJ). No water or sewerage charges have been included as the family is renting and it is assumed that the lease specifies that these charges are paid by the landlord.

Samantha and Kelly

Property

For 2017-18, property fees comprise: general rates ($1,511.00); the Fire and Emergency Services Levy ($294.00); and the Safer Families Levy ($30.00). They receive the First Home Owners Grant ($7,000); and the Home Buyer Concession Scheme (valued at $9,380).

Transport

For 2017-18, transport fees comprise: driver licence fee ($73.36); vehicle registration ($366.20); the Road Rescue Fee ($25.40); the Road Safety Contribution ($2.50); CTP insurance ($556.20); the CTP Regulator Levy ($1.00); the Lifetime Care and Support Levy ($35.00); and ACTION fares ($1,412.50).

For 2017-18, both drivers are eligible for a discount on the cost of their driver licences under the Rewards for Safe Driving Program ($18.34).

Assumptions

Fees are calculated based on two drivers and one car with a vehicle tare weight of 1,155kg to 1,504kg. ACTION fares are calculated as travel twice a day at peak time five days a week, reaching the monthly travelling cap of 40 trips. Once the monthly cap is reached, passengers’ remaining travel will be free of charge provided they continue to tag on and off with each journey.

Utilities

For 2017-18, utility charges comprise: electricity ($1,785.27); natural gas ($1,480.82); water ($526.77); and sewerage ($537.22).


Assumptions

Consumption per year: electricity (7,200 kWh); natural gas (42 GJ); and water (160 kL).

Carol and Warren

Property

For 2017-18, property fees comprise: general rates ($2,146.00); the Fire and Emergency Services Levy ($294.00); and the Safer Families Levy ($30.00). Concessions consist of the rates rebate ($700.00) and the Fire and Emergency Services Levy rebate ($98.00).

Transport

For 2017-18, transport fees comprise: driver licence fee ($36.68); vehicle registration ($366.20); the Road Rescue Fee ($25.40); the Road Safety Contribution ($2.50); CTP insurance ($556.20); the CTP Regulator Levy ($1.00); the Lifetime Care and Support Levy ($35.00); and ACTION fares ($1,412.50).

Carol and Warren’s caravan is in tare weight category 1,505 to 2,504 kg, with a registration fee in the ACT of $531.00 in 2016-17 (which would have risen to $541.10 in 2017-18), and $413.00 in New South Wales until 1 January 2018. Registration fees for caravans will align with New South Wales charges from 2017-18.

For 2017-18, concessions comprise: driver licence ($36.68); vehicle registration ($366.20); and ACTION bus fares ($1,412.50).

Assumptions

Fees are calculated based on one driver and one car with a vehicle tare weight of 1,155kg to 1,504kg. ACTION fares are calculated as peak single trips five days a week, reaching the monthly travelling cap of 40 trips, and an entitlement to free travel for people aged over 70.

Utilities

For 2017-18, utility charges comprise: electricity ($1,785.27); water ($526.77); and sewerage ($537.22). Concessions include the combined Utilities Concession ($604). In 2016-17, Carol and Warren received the energy, utility and water and sewerage concessions ($851.05).

Assumptions

Consumption per year: electricity (7,200 kWh); and water (160 kL).

Other Concessions

They are both eligible to access the Spectacles Subsidy Scheme, which provides a $200 rebate every two years on the purchase of glasses. They are also eligible to access the Pensioner Duty Concession Scheme, which charges conveyance duty at a concessional rate, to downsize to a home worth up to $860,000. Property price thresholds under the scheme are updated in line with property price movements.


Helen and Samuel

Property

For 2017-18, property fees comprise: general rates ($2,137.00); the Fire and Emergency Services Levy ($294.00); and the Safer Families Levy ($30.00).

Transport

For 2017-18, transport fees comprise: driver licence fee ($73.36); vehicle registration ($366.20); the Road Rescue Fee ($25.40); the Road Safety Contribution ($2.50); CTP insurance ($556.20); the CTP Regulator Levy ($1.00); the Lifetime Care and Support Levy ($35.00); school student ACTION fare ($368.30); adult ACTION fare ($1,412.50) and parking ($2,610.30).

For 2017-18, both drivers are eligible for a discount on the cost of their driver licences under the Rewards for Safe Driving Program ($18.34).

Assumptions

Fees are calculated based on two drivers and one car with a vehicle tare weight of 1,155kg to 1,504kg. A 30 ride paid cap for students is reached taking rides to and from school. The monthly travelling cap of 40 trips applies to the adult fare calculation. Once the monthly cap is reached, passengers’ remaining travel will be free of charge provided they continue to tag on and off with each journey. Parking fees have been calculated using the non-premium, all day City car park rate, which has been assumed to increase by 6 per cent from 2016-17 to 2017-18.

Utilities

For 2017-18, utility charges comprise: electricity ($2,393.51); natural gas ($1,976.32); water ($792.24); and sewerage ($537.22).

Assumptions

Consumption per year: electricity (10,200 kWh); natural gas (60 GJ); and water (230 kL).

Other Savings

If the household purchases a new house for $650,000, conveyance duty would have been $20,960 in 2016-17 and is $19,970 in 2017-18.

Mary

Property

For 2017-18, rent comprises 25 per cent of the full annual age pension of $23,095.80, with rent payable of $5,773.95. Market rent for a one bedroom unit in the area is around $19,200.00 per year.


Transport

For 2017-18, transport fees comprises the adult five days a week ACTION fare ($1,412.50). Concessions comprise ACTION’s concession fare ($1,217.16), assuming the 12 month trial of free off peak MyWay concession travel ends in January 2018.

Assumptions

The Centrelink concession card provides access to ACTION’s off-peak concession fare. ACTION fares are calculated as off-peak single trips five days a week, reaching the monthly travelling cap of 40 trips. Once the monthly cap is reached passengers’ remaining travel will be free of charge provided they continue to tag on and off with each journey.

Utilities

For 2017-18, utility charges comprise: electricity ($1,481.15). Concessions include the combined Utilities Concession ($604), in 2016-17 Mary received the energy and utility concessions ($426.46).

Assumptions

Consumption per year: electricity (5,700 kWh); and water (125 kL). Water and sewerage charges are paid by the Community Services Directorate, and are valued at $434.07 and $537.22 respectively.

2017-18 Budget Paper No.3 63 New initiatives

CHAPTER 3

NEW INITIATIVES

Chapter Page

3.1 Overview 65

3.2 Expense initiatives 67

3.3 Infrastructure and capital initiatives 125

3.4 Revenue initiatives 157

2017-18 Budget Paper No.3 64 New initiatives


3.1 OVERVIEW

The 2017-18 Budget focuses on delivering the ACT Government’s commitments to renew Canberra’s schools, hospitals, infrastructure and public spaces.

In this Budget, the Government is ensuring that Canberrans have access to care when they need it by delivering our 10-Year Health Plan. This includes early planning work for new health facilities such as the new Surgical Procedures, Interventional Radiology and Emergency (SPIRE) Centre at the Canberra Hospital and the expansion of the Centenary Hospital for Women and Children. The Government is also meeting our commitment for more nurses in Canberra’s hospitals and for more Walk in Centres across Canberra. We are also delivering a significant boost to mental health services, with additional support for new parents, children and adolescents, and older Canberrans.

The Government is providing better schools for our kids by expanding and upgrading schools across the Territory. We are meeting our commitment to ensure all public school students have access to appropriate electronic devices, and hiring more school psychologists to support student wellbeing.

We are building a better city, and have already commenced early planning work for bringing light rail to Woden. This transformational project is in addition to our substantial new investment in roads, public transport, footpaths and cycleways. The newly established land entities – the City Renewal Authority and the Suburban Land Agency – will also ensure Canberra continues to get better as our city grows.

The 2017-18 Budget also provides for better services in the community. The Government is cleaning up our suburbs and city centres, continuing and expanding environmental programs, and delivering free off-peak bus trips for pensioners and concession card holders. Our police, fire and rescue services are also being improved with additional crews, facilities and equipment.

Importantly, this Budget will invest in more support for the most vulnerable in our community. The Public Housing Renewal program is being further progressed and the out of home care and child protection systems are being strengthened to better protect our kids. By delivering the renewal we promised, this Budget will ensure Canberra keeps getting better as our city grows.

With this Budget, the Government is continuing to boost the Territory’s economy and jobs. Building on our success in bringing international flights to Canberra, the Government is continuing to support business and tourism through more major events and sport.

The 2017-18 Budget includes a total of $249.5 million over four years for new expense initiatives (net of the health funding envelope), and a total of $867.5 million for new infrastructure and capital initiatives. A total of $38.4 million over four years will be generated by way of revenue initiatives announced since the 2016-17 Budget Review.


The Government has also made provisions of $766.3 million for capital works over the four years to 2020-21. These provisions include amounts for high value and/or commercially sensitive projects.

A summary of the 2017-18 Budget initiatives are set out in Table 3.1.1 below.

Table 3.1.1: Overview of initiatives

2017-18 2018-19 2019-20 2020-21 Total Summary of initiatives Estimate Estimate Estimate Estimate

$’000 $’000 $’000 $’000 $’000 Expense initiatives 124,564 63,184 48,837 36,135 272,720 Health funding envelope offset 23,875 17,590 12,147 11,965 65,576 Net expense initiatives 100,689 45,595 36,691 24,171 207,145 Expenses related to infrastructure and

capital initiatives 6,462 8,272 2,035 -2,327 14,442

Expenses related to revenue initiatives 2,417 2,154 2,193 1,154 7,918 Total unpublished expense provisions 3,268 6,765 5,360 4,614 20,007 Total expense initiatives 112,836 62,786 46,279 27,612 249,512

Infrastructure and capital initiatives 111,340 159,393 175,664 269,528 715,925 Capital related to expense initiatives 6,439 17,210 16,658 0 40,307 Total unpublished capital provisions 14,000 24,225 63,000 10,000 111,225 Total infrastructure and capital initiatives 131,779 200,828 255,322 279,528 867,457 Revenue initiatives 5,449 7,602 7,726 6,764 27,541 Revenue related to expense initiatives 1,476 2,402 1,820 1,828 7,526 Revenue related to infrastructure and

capital initiatives 1,510 1,571 121 121 3,323

Total revenue initiatives 8,435 11,575 9,667 8,713 38,390

Depreciation associated with new initiatives

270 3,333 11,957 17,755 33,315

2017-18 Budget Paper No.3 67 Expense initiatives

3.2 EXPENSE INITIATIVES

The Government is investing in new expense initiatives totalling $112.8 million in 2017-18 and $249.5 million across the budget and forward estimates. This is net of the $65.6 million health funding envelope offset.

A summary of expense initiatives is shown in Table 3.2.1 below.

Table 3.2.1: Summary of expense initiatives

2017-18 2018-19 2019-20 2020-21 Total Summary of initiatives Estimate Estimate Estimate Estimate $’000 $’000 $’000 $’000 $’000 Expense initiatives 124,564 63,184 48,837 36,135 272,720

Health funding envelope offset 23,875 17,590 12,147 11,965 65,576

Net Budget Impact – Initiatives 100,689 45,595 36,691 24,171 207,145

Expense component of infrastructure and capital 6,462 8,272 2,035 -2,327 14,442

Expense component of revenue 2,417 2,154 2,193 1,154 7,918

Total unpublished provisions 3,268 6,765 5,360 4,614 20,007

Total expense initiatives 112,836 62,786 46,279 27,612 249,512

Associated revenue 1,476 2,402 1,820 1,828 7,526

Associated capital 6,439 17,210 16,658 0 40,307

Depreciation 6 106 169 169 450


Initiatives – Summary of expenses by portfolio

Table 3.2.2: Expense initiatives

2017-18 2018-19 2019-20 2020-21 Total Expense initiatives Estimate Estimate Estimate Estimate

$’000 $’000 $’000 $’000 $’000

Chief Minister, Treasury and Economic Development Directorate

Better care when you need it – More support for the Active Living Program

170 0 0 0 170

Better care when you need it – Promoting organ and tissue donation4

145 0 0 0 145

Better services in your community – More transparent government

954 864 NFP NFP 1,818

Better services in your community – Tough on road safety1,2

32 32 32 32 128

Better support when it matters – A Gender Agenda 167 167 166 0 500 Better support when it matters – Helping injured

employees back into work3 0 0 0 0 0

Better support when it matters – Office for LGBTIQ Affairs

340 345 350 354 1,389

Better support when it matters – Protecting vulnerable Canberrans1

1,651 0 0 0 1,651

Building a better city – Canberra Brickworks – Access road and Dudley Street upgrade

0 0 0 80 80

Building a better city – Civic and Dickson office accommodation

0 0 -1,915 -7,246 -9,161

Building a better city – Delivering light rail safely 353 240 122 0 715 Building a better city – Indoor sports centres – Early

planning 160 0 0 0 160

Building a better city – Macarthur House Data Centre decommissioning program3

0 0 0 0 0

Building a better city – Strengthening oversight of land development4

178 181 183 186 728

More and better jobs – Autonomous Vehicle trial 750 600 0 0 1,350 More and better jobs – Canberra Theatre Complex

community consultation 100 0 0 0 100

More and better jobs – Ensuring continuity of the Human Resources Information Management System

0 -110 -718 -1,196 -2,024

More and better jobs – Ensuring your views are heard – Deliberative democracy

2,111 665 0 0 2,776

More and better jobs – Growing our creative capital 1,126 1,435 1,435 1,400 5,396 More and better jobs – Growing the tourism industry 1,275 1,300 1,250 275 4,100 More and better jobs – Improving infrastructure

planning and delivery 1,588 1,627 1,666 0 4,881

More and better jobs – Improving Manuka Oval broadcast and media facilities

0 -700 100 200 -400

More and better jobs – Improving safety and integrity in combat sports

150 154 158 162 624

More and better jobs – Improving services through better data analytics2

633 0 0 0 633



$’000 $’000 $’000 $’000 $’000 More and better jobs – Improving the efficiency of

government 350 358 366 0 1,074

More and better jobs – Making Canberra an even better place to study

750 750 750 750 3,000

More and better jobs – Reshaping Canberra’s events calendar

1,935 1,865 1,865 1,865 7,530

More and better jobs – Sporting capital2 1,850 1,710 1,610 350 5,520 More and better jobs – Supporting Canberra

businesses to diversify, grow and innovate 4,850 3,409 3,418 3,050 14,727

More and better jobs – Supporting civics education 31 24 17 0 72 More and better jobs – Supporting major venues1 2,010 700 700 700 4,110 More and better jobs – Supporting more women into

trades 250 250 250 250 1,000

Smarter government spending – Centralising property custodianship

2,616 484 -2,236 -4,639 -3,775

Smarter government spending – Reducing expenditure on excess staff

0 -3,134 -3,211 -3,277 -9,622

Smarter government spending – Smart Modern Strategic Procurement Reform extension

1,000 -3,500 -6,000 -6,000 -14,500

Total 27,525 9,716 358 -12,704 24,895

City Renewal Authority Building a better city – City Renewal Authority – City

to the Lake 0 0 0 350 350

Building a better city – City Renewal Authority – Initial works package

400 200 200 200 1,000

Total 400 200 200 550 1,350 Community Services Directorate Better support when it matters – Caring for our

children and young people 10,513 10,832 11,156 11,295 43,796

Better support when it matters – Children and Young People Death Review Committee

211 231 219 222 883

Better support when it matters – Disability Access Grants

50 50 50 50 200

Better support when it matters – Disability Justice Strategy3

0 0 0 0 0

Better support when it matters – Growing healthy families

502 0 0 0 502

Better support when it matters – More support for refugees and new migrants

334 343 353 362 1,392

Better support when it matters – More support for SHOUT

70 0 0 0 70

Better support when it matters – Office of the Senior Practitioner

334 521 478 488 1,821

Better support when it matters – Recognising Canberra’s carers

56 56 38 0 150



$’000 $’000 $’000 $’000 $’000 Better support when it matters – Strengthening the

Bimberi Youth Justice Centre 525 526 528 530 2,109

Better support when it matters – Support for new and emerging Aboriginal and Torres Strait Islander organisations3

0 0 0 0 0

Better support when it matters – Supporting the NDIS in the ACT

536 546 557 568 2,207

Total 13,131 13,105 13,379 13,515 53,130 Education Directorate Better schools for our kids – Expanding schools in

Gungahlin 27 239 673 948 1,887

Better schools for our kids – Future of education community conversation

335 211 0 0 546

Better schools for our kids – Investing in our teachers – STEM and language scholarships3

0 0 0 0 0

Better schools for our kids – More support for teachers

1,929 3,953 4,083 4,216 14,181

Better schools for our kids – New school facilities in East Gungahlin – Early planning

250 0 0 0 250

Better schools for our kids – Safe Schools program 50 50 50 50 200 Better schools for our kids – Safe workplaces for

teachers, educators and support staff3 0 0 0 0 0

Better schools for our kids – School psychologists 327 663 677 692 2,359 Better schools for our kids – Supporting students

with disability 3,000 0 0 0 3,000

Total 5,918 5,116 5,483 5,906 22,423 Environment, Planning and Sustainable

Development Directorate

Better services in your community – Achieving net zero emissions by 2050 – Blueprint development

322 254 269 0 845

Better services in your community – Community participation in net zero emissions

150 150 150 100 550

Better services in your community – Enhancing environmental stewardship3

0 0 0 0 0

Better services in your community – Implementation of ACT Climate Change Adaptation Strategy

758 577 593 0 1,928

Better services in your community – Improving sustainability through innovative financing

75 62 51 0 188

Better services in your community – Managing native wildlife

821 565 579 594 2,559

Better services in your community – More support for Actsmart

865 0 0 0 865

Better services in your community – Planning for Canberra’s future transport needs

750 0 0 0 750

Better services in your community – Protecting our native species and environment

670 670 0 0 1,340

Better services in your community – Reviewing the ACT energy rating disclosure scheme

300 0 0 0 300



$’000 $’000 $’000 $’000 $’000 Better services in your community – Supporting

endangered woodlands 162 0 0 0 162

Better services in your community – Supporting the national eradication of exotic pests and diseases

180 180 180 180 720

Better support when it matters – Public Housing Renewal – New and better properties

600 1,908 0 0 2,508

Better support when it matters – Public Housing Renewal – Taskforce operations2

2,250 1,895 619 0 4,764

Building a better city – Bindubi Street extension – Early planning

300 0 0 0 300

Building a better city – Building audits4 1,200 1,100 1,150 0 3,450 Building a better city – Building certification reform4 407 362 368 473 1,610 Building a better city – Building regulation reform4 610 692 675 681 2,658 Building a better city – Molonglo East-West arterial

road – Early planning 200 100 0 0 300

Building a better city – Staff funded through the Renewable Energy Innovation Fund

-565 -730 -770 -775 -2,840

Building a better city – Strengthening oversight of land development4

820 834 846 854 3,354

Building a better city – William Hovell Drive upgrade – Early planning

200 100 0 0 300

More and better jobs – 3D Canberra Planning Tool – Supporting urban renewal3

0 0 0 0 0

More and better jobs – Canberra International Airport – Guarding against the spread of pests and diseases

137 144 146 149 576

More and better jobs – Ensuring continuity of the Spatial Data Management System

0 -72 -75 -79 -226

More and better jobs – Ensuring sustainable commercial development

425 25 100 25 575

More and better jobs – Sustainably managing our forests

-500 -500 -500 -500 -2,000

Smarter government spending – Googong Foreshore access gate upgrade

-76 -81 -85 -91 -333

Smarter government spending – Improving efficiency in biodiversity management

-250 -253 -257 -260 -1,020

Smarter government spending – Streamlining customer service delivery

-152 -154 -156 -158 -620

Smarter government spending – Streamlining master planning processes

-125 -127 -128 -130 -510

Total 10,534 7,701 3,755 1,063 23,053 Health Directorate Better care when you need it – Expanding Centenary

Hospital – More services for women and children 300 225 0 0 525

Better care when you need it – Expanding Hospital in the Home3

0 0 0 0 0

Better care when you need it – Healthy and active living

1,000 1,000 1,000 1,000 4,000



$’000 $’000 $’000 $’000 $’000 Better care when you need it – Helping patients

navigate the health system3 0 0 0 0 0

Better care when you need it – Improving health facilities3

0 0 0 0 0

Better care when you need it – More mobile dental clinics2

0 643 757 773 2,173

Better care when you need it – More nurse-led Walk in Centres

428 2,748 2,907 2,995 9,078

Better care when you need it – More nurses for Canberra3

0 0 0 0 0

Better care when you need it – New health centre for Aboriginal and Torres Strait Islander Canberrans

0 0 0 120 120

Better care when you need it – Office for Mental Health

507 782 798 814 2,901

Better care when you need it – Pathology services 1,400 0 0 0 1,400 Better care when you need it – Planning for

healthcare in Canberra’s north 1,500 1,750 0 0 3,250

Better care when you need it – Promoting organ and tissue donation4

50 50 50 0 150

Better care when you need it – Rehabilitation beds for Dhulwa Mental Health Unit

2,960 3,543 3,614 3,686 13,803

Better care when you need it – Suicide prevention 250 500 515 530 1,795 Better care when you need it – Support for bulk

billing GPs 350 350 350 0 1,050

Better care when you need it – Supporting mental health for vulnerable Canberrans

2,634 879 897 915 5,325

Better care when you need it – Surgical Procedures, Interventional Radiology and Emergency Centre (SPIRE) – Major expansion of services at Canberra Hospital

3,000 3,000 0 0 6,000

Better care when you need it – Training our future health workforce2

250 353 256 159 1,018

Better care when you need it – University of Canberra Public Hospital operational readiness2

14,866 833 0 0 15,699

Better care when you need it – Whooping cough vaccinations for pregnant mums

182 183 183 184 732

Better care when you need it – Year 7 health checks 323 750 820 789 2,682 Better support when it matters – Drug and Alcohol

Court4 75 0 0 0 75

Total 30,075 17,589 12,147 11,965 71,776 Housing ACT Better support when it matters – Aboriginal and

Torres Strait Islander people older persons housing and Common Ground

350 0 0 0 350

Better support when it matters – Planning for social housing

350 0 0 0 350

Better support when it matters – Strengthening homelessness services

1,554 1,573 1,597 1,621 6,345



$’000 $’000 $’000 $’000 $’000 Better support when it matters – Strengthening

specialist homelessness and housing support services

525 225 125 125 1,000

Total 2,779 1,798 1,722 1,746 8,045 Justice and Community Safety Directorate Better support when it matters – Better mental

health services for emergency services personnel3 0 0 0 0 0

Better support when it matters – Community Legal Centres

666 300 318 335 1,619

Better support when it matters – Diverting offenders from the justice system

160 0 0 0 160

Better support when it matters – Drug and Alcohol Court4

402 0 0 0 402

Better support when it matters – Employment opportunities at the Alexander Maconochie Centre

545 634 645 657 2,481

Better support when it matters – Enhanced security for ACT Policing

116 165 116 116 513

Better support when it matters – Equipping more ACT Police with TASERs

626 1,154 344 352 2,476

Better support when it matters – Family Safety Hub 97 466 40 -63 540 Better support when it matters – Health and fitness

for volunteer firefighters 55 55 55 55 220

Better support when it matters – Implementing Moss Review recommendations

1,140 451 772 788 3,151

Better support when it matters – More frontline firefighters – Modernising emergency services call-taking

1,269 1,749 1,782 1,816 6,616

Better support when it matters – More frontline firefighters – Recruiting with the aim of 50:50 gender balance

147 0 0 0 147

Better support when it matters – Planning for the future of policing in the ACT

504 677 0 0 1,181

Better support when it matters – Public Advocate – Children and Young People’s Advocacy and Oversight

173 150 153 155 631

Better support when it matters – Reducing alcohol-fuelled violence

1,259 1,176 1,202 1,229 4,866

Better support when it matters – Reducing prisoner reoffending

1,288 1,320 1,353 1,386 5,347

Better support when it matters – Retrial of Mr David Eastman4

3,155 0 0 0 3,155

Better support when it matters – Strengthening the Office of the Director of Public Prosecutions

2,446 191 194 197 3,028

Better support when it matters – Supporting careers in ACT Policing5

NFP NFP NFP NFP NFP

Better support when it matters – Upgrading ACT Policing’s water and rescue response capability5

NFP NFP NFP NFP NFP



$’000 $’000 $’000 $’000 $’000 More and better jobs – Supporting Canberra’s small

and medium clubs 200 0 0 0 200

Smarter government spending – Portfolio efficiencies -748 -1,236 -1,455 -1,451 -4,890 Total 13,500 7,252 5,519 5,572 31,843

Legal Aid Commission (ACT) Better support when it matters – Funding for the

retrial of Mr David Eastman4 1,948 0 0 0 1,948

Better support when it matters – Stronger Legal Aid1 290 303 316 330 1,239 Total 2,238 303 316 330 3,187

Office of the Legislative Assembly Better services in your community – Stronger

scrutiny through legislative committees 113 298 306 315 1,032

Better support when it matters – Security resources for the ACT Legislative Assembly

99 101 103 104 407

Total 212 399 409 419 1,439 Transport Canberra and City Services Directorate Better schools for our kids – Safer walking and cycling

around schools2 530 543 562 586 2,221

Better services in your community – Boosting Libraries ACT

375 0 0 0 375

Better services in your community – City services for new communities2

1,803 1,123 1,151 1,180 5,257

Better services in your community – Cleaning up our suburbs

1,600 340 0 0 1,940

Better services in your community – Container Deposit Scheme1

809 356 364 372 1,901

Better services in your community – Expanding the Domestic Animal Shelter

0 0 4 8 12

Better services in your community – Essential Waste Management Infrastructure

0 0 0 300 300

Better services in your community – Faster bus travel 0 0 7 19 26 Better services in your community – Improving waste

management 1,749 1,818 1,863 1,910 7,340

Better services in your community – Increasing recycling and reducing waste1

955 582 593 602 2,732

Better services in your community – Investing in community transport

650 558 421 334 1,963

Better services in your community – Kerbside bulky waste collection

1,044 0 0 0 1,044

Better services in your community – Maintaining quality sportsgrounds

1,500 1,400 1,250 1,250 5,400

Better services in your community – More local parks 0 0 1 2 3 Better services in your community – Revitalising

Woden Library 283 291 303 312 1,189

Better services in your community – School transport for children with a disability

1,100 1,128 1,156 1,185 4,569



$’000 $’000 $’000 $’000 $’000 Better services in your community – Supporting

animal welfare5 308 NFP NFP NFP 308

Building a better city – Active Travel – Footpath and cycleway and upgrades

0 0 10 30 40

Building a better city – Bus service improvements3 0 0 0 0 0 Building a better city – Federal Highway and

Old Well Station Road Intersection upgrade 0 0 12 24 36

Building a better city – Fixing local roads 1,500 1,500 1,500 0 4,500 Building a better city – Gundaroo Drive duplication –

Stage 2 0 0 0 28 28

Building a better city – Improving Tharwa Village fire fighting water supply

0 0 14 28 42

Building a better city – Light Rail Stage 2 – City to Woden – Design and procurement2

13,233 2,104 2,342 0 17,679

Building a better city – Rehabilitating landfill sites 0 0 0 120 120 Building a better city – Revitalising local town centres 0 0 40 120 160 Building a better city – Upgrading stormwater

infrastructure on Flemington Road 0 0 0 10 10

Smarter government spending – Portfolio efficiencies -308 -1,312 -1,816 -1,820 -5,256 Total 27,131 10,431 9,777 6,600 53,939

Total unpublished provisions 3,268 6,765 5,360 4,614 20,007 TOTAL EXPENSE INITIATIVES 136,711 80,375 58,425 39,576 315,087 Associated Revenue 1,476 2,402 1,820 1,828 7,526 Associated Capital 6,439 17,210 16,658 0 40,307 Depreciation 6 106 169 169 450 Health Funding Envelope Offset 23,875 17,590 12,147 11,965 65,576

Notes: 1. This initiative has a revenue component; this is listed in the summary table in Revenue initiatives (Chapter 3.4). 2. This initiative has a capital component; this component (and depreciation if applicable) is listed in the summary table

in Infrastructure and capital initiatives (Chapter 3.3). 3. The funding of this initiative is to be absorbed by the agency. 4. This is a joint initiative, ie delivered by more than one agency. 5. NFP indicates not for publication. A provision has been included in the budget for the estimated cost of this initiative.


CHIEF MINISTER, TREASURY AND ECONOMIC DEVELOPMENT DIRECTORATE

Better care when you need it – More support for the Active Living Program 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 170 0 0 0 170

The Government will provide a one-off grant to the Heart Foundation ACT for the Active Living Program in 2017-18. The Active Living Program assists in providing better connections, and a safer, smarter, more attractive and sustainable city, which supports Canberrans to move more and prevent overweight and obesity and the associated risk of chronic diseases.

Better care when you need it – Promoting organ and tissue donation 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Chief Minister, Treasury and Economic Development Directorate – Expenses

145 0 0 0 145

Health Directorate – Expenses 50 50 50 0 150 Net Expenses 195 50 50 0 295

The Government will encourage more organ and tissue donation by making it easier for Canberrans to register to become organ donors and raising awareness of the life-saving contribution donors can make. The Government will also establish a memorial garden at the National Arboretum Canberra in partnership with Gift of Life. The expenses for the Health Directorate component will be offset by the Central Health Provision.

Better services in your community – More transparent government 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 954 864 0 0 1,818 Provision – Expenses 0 0 NFP NFP NFP Net Expenses 954 864 NFP NFP 1,818

The Government will increase the funding provided to the ACT Ombudsman to support reforms stemming from recent legislative changes to the Freedom of Information Act 2016. A provision will be established for funding in 2019-20 and 2020-21, with a review in 2018-19 to determine the ongoing funding requirements for this service.


Better services in your community – Tough on road safety 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 32 32 32 32 128 Associated Depreciation 0 35 35 35 105 Net Expenses 32 67 67 67 233 Associated Revenue 800 1,100 1,100 1,100 4,100 Associated Capital 176 0 0 0 176

The Government will purchase two additional Pinforce Licence Plate Recognition cameras to ensure better compliance with road rules, keeping Canberrans safer on our roads.

Better support when it matters – A Gender Agenda 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 167 167 166 0 500

The Government will provide additional service funding to ‘A Gender Agenda’ to improve the intersex, transgender and gender diverse community’s access to services and address barriers to participation in the broader community.

Better support when it matters – Helping injured employees back into work 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 150 350 450 450 1,400 Offset – Expenses -150 -350 -450 -450 -1,400 Net Expenses 0 0 0 0 0

The Government will provide a return to work and retraining program aimed at reducing work absences from injury and illness. The cost of this program will be met by reprioritising existing resources.

Better support when it matters – Office for LGBTIQ Affairs 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 340 345 350 354 1,389

The Government will provide additional funding for the Office for LGBTIQ Affairs to ensure that Canberra is the most LGBTIQ-friendly city in Australia. The Office will promote inclusive events and work across government to ensure that services meet the needs of LGBTIQ people in the community, as well as providing secretariat support for the LGBTIQ Ministerial Advisory Council.


Better support when it matters – Protecting vulnerable Canberrans 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 1,651 0 0 0 1,651 Associated Revenue 81 0 0 0 81

The Government will provide additional support for the Working with Vulnerable People Scheme to ensure that background checks continue to be undertaken in a timely manner. A review of the Scheme will be finalised in 2017-18. The associated revenue relates to increased fee revenue as more Working with Vulnerable People checks are undertaken.

Building a better city – Delivering light rail safely 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 353 240 122 0 715

The Government will employ additional WorkSafe ACT Inspectors to ensure that the first stage of the light rail project is delivered safely and on schedule. This investment builds on the ACT Government’s commitment to protecting worker safety on projects across the Territory.

Building a better city – Indoor sports centres – Early planning 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 160 0 0 0 160

The Government will examine options for the construction of multi-purpose indoor sports centres in Woden, Gungahlin and Belconnen.

Building a better city – Strengthening oversight of land development

See the Environment, Planning and Sustainable Development Directorate expense initiative Building a better city – Strengthening oversight of land development for further details.

More and better jobs – Autonomous Vehicle trial 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 750 600 0 0 1,350

The Government will partner with the private and university sectors to build expertise in autonomous and semi-autonomous vehicle technology in the Territory.


More and better jobs – Canberra Theatre Complex community consultation 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 100 0 0 0 100

The Government will consult the community on future needs and development of the Canberra Theatre Complex.

More and better jobs – Ensuring your views are heard – Deliberative democracy

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 2,111 665 0 0 2,776

The Government will improve the community’s involvement in decision-making across government through reforms to consultation and communication channels. This will include a pilot deliberative democracy project which will pursue policy reform opportunities through a citizens’ jury.

More and better jobs – Growing our creative capital

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 1,126 1,435 1,435 1,400 5,396

The Government will invest significant new resources in the arts across the Territory. This will include additional funding for community arts projects and Aboriginal and Torres Strait Islander arts initiatives, as well as new funding for Kulture Break and the Australian National University’s School of Music.


More and better jobs – Growing the tourism industry

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 1,325 1,300 1,250 275 4,150 Offset – Expenses -50 0 0 0 -50 Net Expenses 1,275 1,300 1,250 275 4,100

The Government will provide additional funding to promote Canberra as a holiday and business tourism destination. This initiative will include: supporting future partnership opportunities with domestic and international airlines; a new Major Events Fund to attract and acquire major events and shows to the Territory; the development of a cycling tourism strategy; and an increase in grant funding to the Canberra Convention Bureau, which will be invested in activities to promote Canberra as a business tourism destination. Existing unallocated program funding in 2017-18 will be reallocated to this initiative.

More and better jobs – Improving infrastructure planning and delivery 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 1,862 1,627 1,666 0 5,155 Offset – Expenses -274 0 0 0 -274 Net Expenses 1,588 1,627 1,666 0 4,881

The Government will continue to support the cost-effective and innovative delivery of major infrastructure projects through continued funding for the Infrastructure Finance and Advisory Division within the Chief Minister, Treasury and Economic Development Directorate. This Division has responsibility for providing advice on complex infrastructure procurements.

The Division will also undertake an asset management and optimisation scoping exercise in 2017-18 to assess the Territory’s future infrastructure needs, with costs to be partly offset by reprioritising existing resources.

More and better jobs – Improving safety and integrity in combat sports 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 150 154 158 162 624

The Government will develop systems to manage compliance requirements following the introduction of new legislation for combat sports to improve the safety of participants in the Territory.


More and better jobs – Improving the efficiency of government 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 350 358 366 0 1,074

The Government will continue to conduct targeted reviews of its operations and services to ensure these are delivered efficiently and sustainably. The reviews will be undertaken by the Expenditure Review Division within the Chief Minister, Treasury and Economic Development Directorate.

More and better jobs – Making Canberra an even better place to study 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 750 750 750 750 3,000

The Government, in partnership with Canberra’s education sector, will continue to promote Canberra as Australia’s study destination of choice for local, interstate and international students, and help drive continuous improvement in Canberra’s student experience.

More and better jobs – Reshaping Canberra’s events calendar

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 1,935 0 0 0 1,935 Provision – Expenses 0 1,865 1,865 1,865 5,595 Total Expenses 1,935 1,865 1,865 1,865 7,530

The Government will continue to support significant events in the Territory. A range of events will be supported in 2017-18 such as Enlighten, Canberra Day celebrations, SpringOUT, the Canberra Writers Festival and the opening leg of the Queen’s Baton Relay in the lead up to the 2018 Commonwealth Games. Funding from 2018-19 onwards will be allocated to specific events in future budgets.


More and better jobs – Sporting capital 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 2,657 1,800 1,700 440 6,597 Offset – Expenses -807 -90 -90 -90 -1,077 Net Expenses 1,850 1,710 1,610 350 5,520 Associated Capital 125 0 0 0 125 Offset – Capital -125 0 0 0 -125 Net Capital 0 0 0 0 0

The Government will increase funding for sports to bring national competitions to Canberra and encourage people to lead more active lifestyles.

In particular, the Government will increase its support for women’s sport. This includes extending the Performance Agreement with the Canberra Capitals basketball team with $250,000 a year over four years, and increasing support for the Canberra United women’s football team to $125,000 a year. The Government will also install a permanent basketball court for use by the Capitals in the National Convention Centre, which will be funded by reprioritising existing resources.

The Government will continue to support the Strategic Partnership Agreement with Cricket Australia. This agreement will deliver ongoing world-class cricket content in Canberra. The cost of this initiative will be offset by reprioritising existing resources.

This initiative also includes funding for an annual grant for motorsport training and development, and additional support for aquatic facilities in the Territory.

More and better jobs – Supporting Canberra businesses to diversify, grow and innovate

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 4,850 3,409 3,418 3,050 14,727

The Government will continue to advance its business development strategy Confident & Business Ready: Building on Our Strengths to grow and diversify Canberra’s economy. This initiative includes funding for a range of high impact innovation programs, key industry sector development, Canberra brand marketing and outreach, trade and investment facilitation, and the Office for International Engagement.


More and better jobs – Supporting civics education 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 31 24 17 0 72

The Government will provide additional funding for the National Capital Educational Tourism Project (NCETP), which is a joint venture with the National Capital Attractions Association, to undertake targeted marketing to continue growing the number of domestic and international school students visiting Canberra. This will supplement existing available funding to bring total government support for the NCETP to $300,000 per annum from 2017-18 to 2019-20.

More and better jobs – Supporting major venues 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 2,010 700 700 700 4,110 Associated Revenue 350 350 350 350 1,400 Net Expenses 1,660 350 350 350 2,710

The Government will provide additional support for major sporting venues in Canberra. The additional revenue includes increased sponsorship at GIO Stadium and an increase in non-game day functions.

More and better jobs – Supporting more women into trades 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 250 250 250 250 1,000

The Government will develop and deliver a dedicated strategy to address the low proportion of females in male-dominated traditional trades and assist mature-age workers to up-skill and re-skill, so they can take advantage of new employment opportunities.


Smarter government spending – Centralising property custodianship 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 2,633 1,499 0 0 4,132 Savings – Expenses -17 -1,015 -2,236 -4,639 -7,907 Net Expenses 2,616 484 -2,236 -4,639 -3,775 Sale Proceeds 2,841 4,813 7,036 7,489 22,179

The Government will consolidate the management of non-specialised property assets into a single property management division. The sale proceeds relate to the sale of surplus and underutilised properties. This initiative is expected to generate savings over time through the efficiencies created by centralised contracts, including for cleaning, security, maintenance, and utilities. Further savings are expected through reduced costs for operating and maintaining properties that are sold. These savings will be allocated to individual directorates in the 2017-18 Budget Review.

Smarter government spending – Reducing expenditure on excess staff 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 0 -3,134 -3,211 -3,277 -9,622

The Government will focus on better aligning the skills base of back office staff with current and future service delivery needs by actively managing the redeployment, or other options, of excess staff. Excess staff are those whose previous positions no longer exist, such as through the expiration of programs or technology change.

Smarter government spending – Smart Modern Strategic Procurement Reform extension

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 1,000 1,000 0 0 2,000 Savings – Expenses 0 -4,500 -6,000 -6,000 -16,500 Net Expenses 1,000 -3,500 -6,000 -6,000 -14,500

The Government will extend the Smart Modern Strategic Procurement reform program into other areas of government expenditure, including property maintenance, medical goods and services, and ICT systems. The savings relate to more efficient spending on goods and services by directorates, and will be allocated in the 2017-18 Budget Review.


Expenses associated with infrastructure and capital initiatives 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000


0 0 0 80 80

Building a better city – Civic and Dickson office accommodation

0 0 -1,915 -7,246 -9,161

Building a better city – Macarthur House Data Centre decommissioning program

0 0 0 0 0


0 -700 100 200 -400

More and better jobs – Improving services through better data analytics

633 0 0 0 633


0 -110 -718 -1,196 -2,024

Refer to Infrastructure and capital initiatives (Chapter 3.3) for more information.


CITY RENEWAL AUTHORITY


$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Building a better city – City Renewal Authority – City to the Lake

0 0 0 350 350

Building a better city – City Renewal Authority – Initial works package

400 200 200 200 1,000



COMMUNITY SERVICES DIRECTORATE

Better support when it matters – Caring for our children and young people 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses – Out of Home Care 8,062 8,336 8,615 8,717 33,730 Expenses – Child Protection

System 2,451 2,496 2,541 2,578 10,066

Net Expenses 10,513 10,832 11,156 11,295 43,796

The Government will strengthen support for vulnerable children and young people by providing increases to funding for child protection and out of home care services. The Government will also support a taskforce for one year to monitor the impact of reforms and will review interstate arrangements and policy settings to optimise outcomes for children, young people and their families.

Better support when it matters – Children and Young People Death Review Committee

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 211 231 219 222 883

The Government will continue to support the Children and Young People Death Review Committee. The Committee reviews all child deaths in the ACT, identifies emerging patterns and trends, and undertakes research and makes recommendations aimed at preventing child deaths.

Better support when it matters – Disability Access Grants 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 50 50 50 50 200

The Government will support greater social inclusion of people with disability by providing grants to fund training, increased awareness, and infrastructure modifications for community organisations.


Better support when it matters – Disability Justice Strategy 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 150 152 0 0 302 Offset – Expenses -150 -152 0 0 -302 Net Expenses 0 0 0 0 0

The Government will develop a Disability Justice Strategy to ensure that people with disability are treated equally before the law and in the justice system. This initiative will be funded from within existing resources in the Community Services and Justice and Community Safety Directorates.

Better support when it matters – Growing healthy families 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 502 0 0 0 502

The Government will continue to support Aboriginal and Torres Strait Islander children, families and communities with a range of culturally specific, safe and informed services in the areas of health, early childhood development and parenting.

Better support when it matters – More support for refugees and new migrants

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 334 343 353 362 1,392

The Government will help new migrants looking to enter the workforce by expanding english language programs and providing a job brokering service for refugees and asylum seekers.

Better support when it matters – More support for SHOUT 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 70 0 0 0 70

The Government will support Self Help Organisations United Together Inc (SHOUT) to establish a sustainable model for its services, allowing it to continue to support community organisations. Future funding will be determined once SHOUT has finalised its work to develop a sustainable service delivery model.


Better support when it matters – Office of the Senior Practitioner 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 334 521 478 488 1,821

The Government will establish the position of the ACT Senior Practitioner to provide oversight of the use of restrictive practices and work towards reducing and eliminating their use in the disability services sector.

Better support when it matters – Recognising Canberra’s carers 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 106 56 38 0 200 Offset – Expenses -50 0 0 0 -50 Net Expenses 56 56 38 0 150

The Government will provide administrative and financial support to develop and implement an ACT Carers’ Strategy in partnership with Carers ACT, to recognise the valuable contribution carers make to the community. The strategy will guide policy development and delivery of Government and community-led programs and activities. This initiative will be partially funded by reprioritising existing resources.

Better support when it matters – Strengthening the Bimberi Youth Justice Centre

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 525 526 528 530 2,109

The Government will support the Bimberi Youth Justice Centre to meet capacity requirements and ensure the continued safety and wellbeing of children and young people who are on remand or have been sentenced to detention.


Better support when it matters – Support for new and emerging Aboriginal and Torres Strait Islander organisations

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 25 25 25 25 100 Offset – Expenses -25 -25 -25 -25 -100 Net Expenses 0 0 0 0 0

The Government will support new and emerging Aboriginal and Torres Strait Islander controlled organisations through the provision of seed funding grants in recognition of the important role they play in delivering positive outcomes for Aboriginal and Torres Strait Islander people. This initiative will be offset from within the Community Services Directorate’s existing resources.

Better support when it matters – Supporting the NDIS in the ACT 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 536 546 557 568 2,207

The Government will support ongoing policy and oversight responsibilities related to the implementation of the National Disability Insurance Scheme within the Office for Disability.


EDUCATION DIRECTORATE

As well as the new initiatives listed below, the Government is also matching the increase in enrolments with an increase in funding. Specifically, in 2017-18, ACT schools will be provided with an additional $8 million to reflect increased enrolments. These funds support the education needs of the additional students, including employing more teachers.

Better schools for our kids – Future of education community conversation 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 335 211 0 0 546

The Government will facilitate a community conversation to explore how education can be best delivered to meet the needs of the next generation of students and better prepare them for the workforce. This initiative will also consider how we can best prepare children to learn through their early years.

Better schools for our kids – Investing in our teachers – STEM and language scholarships

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000


The Government will provide scholarships for teachers to support a high quality Science, Technology, Engineering and Maths (STEM) and languages teaching workforce. This initiative will be funded from within existing resources.

Better schools for our kids – More support for teachers 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 3,857 3,953 4,083 4,216 16,109 Offset – Expenses -1,928 0 0 0 -1,928 Net Expenses 1,929 3,953 4,083 4,216 14,181

The Government will provide increased support to teachers in public schools to reduce administrative workload and enable a stronger focus on students and teaching. This initiative provides for increased school assistants in public schools and is partially funded from within existing resources.


Better schools for our kids – New school facilities in East Gungahlin – Early planning

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 250 0 0 0 250

The Government will explore options for a new school in East Gungahlin to continue to deliver social public benefits to the growing population in the area.

Better schools for our kids – Safe Schools program 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000


The Government will support all ACT schools to actively include same sex attracted, intersex and gender diverse students, staff and families. The program will improve the capacity of schools to provide advice and support to students and their families and will be partially funded from within existing resources.

Better schools for our kids – Safe workplaces for teachers, educators and support staff

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 310 317 324 0 951 Offset – Expenses -310 -317 -324 0 -951 Net Expenses 0 0 0 0 0

The Government will continue to support inclusive and safe educational environments by employing three additional staff to develop policy and provide consultation and support in relation to occupational violence. This initiative offers a risk assessment, problem-solving and preventative approach to ensuring safe environments within the educational setting. This initiative will be funded from within existing resources.


Better schools for our kids – School psychologists 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 327 663 677 692 2,359

The Government will employ five full-time school psychologists in 2018 as the first step in delivering its commitment of 20 additional school psychologists. These staff will support student wellbeing and mental health outcomes for students, parents and carers, within schools and the community.

Better schools for our kids – Supporting students with disability 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 3,000 0 0 0 3,000

The Government will continue to support students with disability in ACT public schools by ensuring equitable access to education for these students both now and in the future. This initiative will address new growth in enrolments and complexity to ensure the needs of students with disability are met. Future funding decisions will be considered in the context of the 2018-19 Budget.


$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Better schools for our kids – Expanding schools in Gungahlin

27 239 673 948 1,887



ENVIRONMENT, PLANNING AND SUSTAINABLE DEVELOPMENT DIRECTORATE

Better services in your community – Achieving net zero emissions by 2050 – Blueprint development

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 322 254 269 0 845

The Government will identify and analyse policy actions to help to achieve its zero net emissions target by 2050. The Government will also undertake community consultation, economic modelling and regulatory impact statements of the policy actions identified in the first stage of the program.

Better services in your community – Community participation in net zero emissions

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 150 150 150 100 550

The Government will undertake a four-year Zero Emissions Community Grants program, which will provide resourcing to community groups, not-for-profit organisations and small enterprises to deliver projects and initiatives that support the ACT’s target of zero net emissions.

Better services in your community – Enhancing environmental stewardship 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000


The Government will coordinate, consolidate and provide compliance monitoring reports for the Gungahlin and Molonglo Valley strategic assessments, and report to the Commonwealth Government as required under the Environment Protection and Biodiversity Conservation Act 1999. The total cost of the initiative will be met from existing resources.


Better services in your community – Implementation of ACT Climate Change Adaptation Strategy

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 758 577 593 0 1,928

The Government will continue to deliver priority actions through the ACT Climate Change Adaptation Strategy. Climate change adaptation actions are expected to achieve both direct and indirect carbon emission savings by improving overall resilience to extreme weather and climate-induced events.

Better services in your community – Improving sustainability through innovative financing

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 75 62 51 0 188

The Government will investigate proven smart and innovative financing opportunities to undertake sustainability upgrades. The Government will also expand and improve on existing programs such as Carbon Neutral Government, the Actsmart business energy and water program, and cross government initiatives such as the Public Housing Asset Management Strategy and Digital Canberra Action Plan, incorporating the Smart City initiative.

Better services in your community – Managing native wildlife 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 821 565 579 594 2,559

The Government will provide additional resources to manage native wildlife. The Government will focus on kangaroo population management activities over the next four years. It will also research and monitor non-lethal kangaroo population control measures during 2017-18.


Better services in your community – More support for Actsmart 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 865 0 0 0 865

The Government will deliver programs to reduce waste and increase recycling in businesses, schools and at public events, promote environmentally sustainable choices in the community, and continue the wood heater replacement program.

Better services in your community – Planning for Canberra’s future transport needs

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 750 0 0 0 750

The Government will undertake a comprehensive review of Transport for Canberra to guide future transport planning, infrastructure and services. This work will support the development of new policy to keep Canberra moving as the city grows.

Better services in your community – Protecting our native species and environment

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 670 670 0 0 1,340

The Government is protecting our native species and their habitat through environmental improvement work, with the current focus on high-risk weed control measures. This work will improve the capacity of nature parks and reserves to withstand the impact of pest plant infestation. Funding from 2019-20 onwards will be considered in future budgets in the context of ongoing environmental needs.

Better services in your community – Reviewing the ACT energy rating disclosure scheme

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 300 0 0 0 300

The Government will review the ACT Energy Rating Scheme, which requires residential building owners to disclose an energy efficiency rating at the time of advertising properties for sale or lease. The Government will undertake a series of regulatory impact assessments for options to improve the energy efficiency of residential rental properties.


Better services in your community – Supporting endangered woodlands 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 162 0 0 0 162

The Government will provide a grant to the Woodland and Wetlands Trust to prepare the design of the Mulligans Flat Eco-Tourism Visitor Centre. The centre will become the gateway to one of Australia’s unique woodlands and provide a focal point for tourists, the local community, land managers and scientists across multiple organisations to work together to learn about and restore endangered woodlands.

Better services in your community – Supporting the national eradication of exotic pests and diseases

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 180 180 180 180 720

The Government will support the national cost-sharing agreement under the Agriculture Ministers’ Forum for national eradication programs for exotic pest and disease incursions.

Better support when it matters – Public Housing Renewal – Taskforce operations

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 2,250 1,895 619 0 4,764 Associated Capital 1,122 1,314 0 0 2,436

The Government will continue to support the Public Housing Renewal Taskforce to oversee the development of properties along the Northbourne corridor and other sites under the Public Housing Renewal Program.

Building a better city – Bindubi Street extension – Early planning 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 300 0 0 0 300

The Government will commence planning for the extension of Bindubi Street from William Hovell Drive to John Gorton Drive in Molonglo to facilitate future land releases.

Building a better city – Building Audits

See the Chief Minister, Treasury and Economic Development Directorate revenue initiative Building a better city – Building Levy – Improving building quality for further details.


Building a better city – Building certification reform


Building a better city – Building regulation reform


Building a better city – Molonglo East-West arterial road – Early planning 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 200 100 0 0 300

The Government will investigate the realignment of the East-West arterial road at Molonglo from John Gorton Drive to the Tuggeranong Parkway, including a bridge crossing of the Molonglo River, a grade-separated interchange at the Parkway, and a trunk cyclepath.

Building a better city – Staff funded through the Renewable Energy Innovation Fund

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses -565 -730 -770 -775 -2,840

The Government will continue to provide dedicated staffing resources in support of innovation activities provided from the Renewable Energy Innovation Fund for a period of four years.

Building a better city – Strengthening oversight of land development 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Environment, Planning and Sustainable Development Directorate – Expenses

820 834 846 854 3,354

Chief Minister, Treasury and Economic Development Directorate – Expenses

178 181 183 186 728

Total Expenses 998 1,015 1,029 1,040 4,082

The Government will employ additional staff to provide stronger governance, financial and non-financial performance advice to the Suburban Land Agency and City Renewal Authority. This will ensure rigour and accountability in the decision-making processes of the two new land development agencies.


Building a better city – William Hovell Drive upgrade – Early planning 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 200 100 0 0 300

The Government will commission a transport network feasibility study on improvements for West Belconnen and Molonglo, including an options assessment of upgrading William Hovell Drive between Drake Brockman Drive and Coulter Drive.

More and better jobs – 3D Canberra Planning Tool – Supporting urban renewal

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 200 200 200 0 600 Offset – Expenses -200 -200 -200 0 -600 Net Expenses 0 0 0 0 0

The Government will expand the current 3D Canberra planning tool platform to allow planners and designers to undertake interactive, live and visual analysis in an accurate 3D city environment. This initiative will particularly support light rail and urban renewal. The cost of the initiative will be covered by contributions from relevant government agencies.

More and better jobs – Canberra International Airport – Guarding against the spread of pests and diseases

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000


The Government will improve biosecurity control at the Canberra International Airport by developing capacity and capability to respond to the higher risk of exotic pest and disease incursion following the introduction of international flights. A grant from the Department of Agriculture and Water Resources through the National Plant Health Surveillance Program will partially offset the cost of this initiative.

More and better jobs – Sustainably managing our forests 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses -500 -500 -500 -500 -2,000

The Government will increase harvesting and re-planting of softwood in the ACT Forest Estate, by using more efficient and sustainable management practices.


Smarter government spending – Googong Foreshore access gate upgrade 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses -76 -81 -85 -91 -333

The Government will improve the efficiency of access to Googong Foreshores by implementing an automated gate system and reducing the drive-in public access points from two to one.

Smarter government spending – Improving efficiency in biodiversity management

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses -250 -253 -257 -260 -1,020

The Government will achieve savings through prioritising work directly relevant to the ACT and introducing more efficient engagement on biosecurity matters.

Smarter government spending – Streamlining customer service delivery 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses -152 -154 -156 -158 -620

The Government will increase the efficiency of its planning and delivery functions by streamlining customer service delivery, consolidating functional areas and improving planning and leasing services to the community.

Smarter government spending – Streamlining master planning processes 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses -125 -127 -128 -130 -510

The Government will streamline and modernise the strategic planning function within the directorate and reduce duplication in its land use planning work.



$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000


600 1,908 0 0 2,508


0 -72 -75 -79 -226

More and better jobs – Ensuring sustainable commercial development

425 25 100 25 575


Expenses associated with revenue initiatives 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Building a better city – Building audits

1,200 1,100 1,150 0 3,450

Building a better city – Building certification reform

407 362 368 473 1,610

Building a better city – Building regulation reform

610 692 675 681 2,658

Refer to Revenue initiatives (Chapter 3.4) for more information.


HEALTH DIRECTORATE

A Health Funding Envelope is used to provide funding certainty for the Health Directorate and the Local Hospital Network (collectively referred to as ACT Health) regardless of changes in Commonwealth funding contributions and other sources of income. The operating costs associated with new capital initiatives are also funded from the envelope. The envelope includes annual funding for price growth (indexation) and for growth in activity.

Better care when you need it – Expanding Hospital in the Home 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000


The Government will undertake an assessment of the current Hospital in the Home Program to inform future service design and increase the program’s capacity. This will be funded from within existing resources.

Better care when you need it – Healthy and active living 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 1,000 1,000 1,000 1,000 4,000

The Government is establishing a funding pool to invest in key initiatives and innovation in preventative health to address the highest risk factors driving poor health outcomes and contributing to the burden of chronic disease in our community. It will be informed by the Government’s priority to invest in preventative health and will assist in developing the Preventative Health Strategy.

Better care when you need it – Helping patients navigate the health system 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000


The Government will provide funding to the Health Care Consumers Association to develop a framework for patient care navigators in the ACT. Patient care navigators assist patients with chronic diseases or other complex conditions to access the care they need. The framework will focus on new and innovative models of care for patients. This will be funded from within existing resources.


Better care when you need it – More mobile dental clinics 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 0 643 757 773 2,173 Associated Depreciation 0 49 99 99 247 Net Expenses 0 692 856 872 2,420 Associated Capital 985 0 0 0 985

The Government will purchase and operate two mobile dental clinics. A new dental van will operate through community centres and provide service to vulnerable, hard to reach population groups. A new dental truck will also serve ACT schools.

Better care when you need it – More nurses for Canberra 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 4,492 7,977 10,894 12,638 36,001 Offset – Expenses -4,492 -7,977 -10,894 -12,638 -36,001 Net Expenses 0 0 0 0 0

The Government will employ more graduate nurses and nurse navigators to help patients better understand and access services available through the health system. The Government will also increase the Nursing and Midwifery Scholarship Fund. This will be funded from within existing resources.

Better care when you need it – Office for Mental Health 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 507 782 798 814 2,901

The Government will enhance the coordination of mental health services in the ACT by establishing an Office for Mental Health. The Office will support the coordination of services and work towards closing gaps in the ACT mental health system.

Better care when you need it – Pathology services 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 1,400 0 0 0 1,400

The Government will undertake a study into a replacement of the ACT Pathology Laboratory Information System.


Better care when you need it – Planning for healthcare in Canberra’s north 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 1,500 1,750 0 0 3,250

The Government will undertake a scoping study for expanded Northside hospital facilities, including a clinical feasibility and service planning assessment to consider how best to provide outpatient and general hospital facilities in Canberra’s northern suburbs.

Better care when you need it – Promoting organ and tissue donation

See the Chief Minister, Treasury and Economic Development Directorate expense initiative Better Care When You Need It – Promoting Organ and Tissue Donation for further details.

Better care when you need it – Rehabilitation beds for Dhulwa Mental Health Unit

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 2,960 3,543 3,614 3,686 13,803

The Government will enhance support for people with complex mental health needs by expanding services at the Dhulwa Mental Health Unit. This investment reflects the Government’s commitment to commission seven rehabilitation beds in the secure mental health unit.

Better care when you need it – Suicide prevention 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 250 500 515 530 1,795

The Government will invest in suicide prevention support services, including through the Way Back support program and the Black Dog Institute’s Lifespan Suicide Prevention Program.

Better care when you need it – Support for bulk billing GPs 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 350 350 350 0 1,050

The Government will provide grants to medical practices to support new or expanded bulk billing services in Tuggeranong and the Molonglo Valley, to encourage better access to affordable services from general practitioners.


Better care when you need it – Supporting mental health for vulnerable Canberrans

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 2,634 879 897 915 5,325

The Government will support activities that improve the mental health of Canberrans with a particular focus on perinatal mental health services as well as those for children and young people. The Government will support the important mental health services provided by headspace and the Detention Exit Outreach program as well as undertake minor upgrades at the Brian Hennessey Rehabilitation Centre.

Better care when you need it – University of Canberra Public Hospital operational readiness

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 14,866 833 0 0 15,699 Associated Depreciation 6 9 9 9 33 Net Expenses 14,872 842 9 9 15,732 Associated Capital 376 0 0 0 376

The Government will invest in operational commissioning of the University of Canberra Public Hospital ahead of its opening in 2018. The Government will train clinical and non-clinical support staff in implementing planned models of care, clinical policies and procedures.

Better care when you need it – Whooping cough vaccinations for pregnant mums

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 182 183 183 184 732

The Government will continue the supply of free antenatal whooping cough (pertussis) vaccinations to pregnant women.


Better care when you need it – Year 7 health checks 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 323 750 820 789 2,682

The Government will implement health checks for Year 7 school students from 2018-19. The new health checks will help identify students at risk of developing mental health issues or chronic diseases.

Better support when it matters – Drug and Alcohol Court

See the Justice and Community Safety Directorate expense initiative Better support when it matters – Drug and Alcohol Court for further details.


$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Better care when you need it – Expanding Centenary Hospital – More services for women and children

300 225 0 0 525

Better care when you need it – Improving health facilities

0 0 0 0 0

Better care when you need it – More nurse-led Walk in Centres

428 2,748 2,907 2,995 9,078


0 0 0 120 120


3,000 3,000 0 0 6,000

Better care when you need it – Training our future health workforce

250 353 256 159 1,018



HOUSING ACT

Better support when it matters – Aboriginal and Torres Strait Islander people older persons housing and Common Ground

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 350 0 0 0 350

The Government will undertake early planning to identify options for the design, location, and construction of a second Aboriginal and Torres Strait Islander older persons housing facility and an additional Common Ground facility. These initiatives will consider the supply of supportive and affordable housing options.

Better support when it matters – Planning for social housing

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 350 0 0 0 350

The Government will undertake planning to inform the future design of accommodation and support requirements for clients with high and complex needs. This will focus on social inclusion, life outcomes and wellbeing for vulnerable individuals who are at significant risk of homelessness.

Better support when it matters – Strengthening homelessness services

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 1,554 1,573 1,597 1,621 6,345

The Government is continuing to support homelessness services under the National Housing and Homelessness Agreement to enhance social inclusion and improve the life outcomes and wellbeing of people experiencing homelessness, or at risk of doing so.


Better support when it matters – Strengthening specialist homelessness and housing support services

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 525 225 125 125 1,000

The Government will strengthen specialist homelessness and housing support services to improve the support provided to vulnerable groups in the community. This will be achieved through a homelessness summit, investing in professional development and training for the specialist homelessness sector, providing further support to the Uniting Care Early Morning Centre, and developing a system-wide, trauma informed approach to homelessness support services.


JUSTICE AND COMMUNITY SAFETY DIRECTORATE

Better support when it matters – Better mental health services for emergency services personnel

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000


The Government will provide improved mental health services for frontline Emergency Services Agency (ESA) staff, to better protect the wellbeing of our first responders. This initiative will be offset by the benefits flowing to the ESA from these services in the form of lower absenteeism, lower workers' compensation costs, and a more productive workforce.

Better support when it matters – Community Legal Centres 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 666 583 604 624 2,477 Offset – Expenses 0 -283 -286 -289 -858 Net Expenses 666 300 318 335 1,619

The Government will continue to support Canberra Community Law and the Women’s Legal Centre to provide legal services to disadvantaged groups within the ACT community, and fund the Street Law early intervention legal outreach service. The Government will also provide support to the Environmental Defender’s Office for two years. This initiative is partially offset by savings associated with administrative changes in the justice system.

Better support when it matters – Diverting offenders from the justice system 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000


The Government will continue the High Density Housing Safety and Security Project, which facilitates programs to prevent and reduce crime and antisocial behaviour through community building in high density housing on Ainslie Avenue. The Government will also provide additional support to the Yarrabi Bamirr cross-government trial supporting Aboriginal and Torres Strait Islander families to prevent contact with the justice system and improve life outcomes. In partnership with Winnunga Nimmityjah, this initiative will facilitate improved access to justice, health, education and employment services.


Better support when it matters – Drug and Alcohol Court 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Justice and Community Safety Directorate – Expenses

402 0 0 0 402

Health Directorate – Expenses 75 0 0 0 75 Net Expenses 477 0 0 0 477

The Government will undertake scoping and design of a Drug and Alcohol Court in collaboration with the justice, drug and alcohol service sectors.

Better support when it matters – Employment opportunities at the Alexander Maconochie Centre

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 545 634 645 657 2,481

The Government will expand employment opportunities for detainees at the Alexander Maconochie Centre through the establishment of a bakery industry. The Government will employ additional staff to support the operation of this facility.

Better support when it matters – Equipping more ACT Police with TASERs 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 845 1,154 344 352 2,695 Offset – Expenses -219 0 0 0 -219 Net Expenses 626 1,154 344 352 2,476

The Government will equip more ACT Policing officers with TASERs. This will provide an additional option for police officers to respond to imminent threats. The cost of training officers in 2017-18 is partially offset by the use of existing ACT Policing resources.


Better support when it matters – Family Safety Hub 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 455 466 627 638 2,186 Offset – Expenses -358 0 -587 -701 -1,646 Net Expenses 97 466 40 -63 540

The Government will develop, pilot, refine, implement and evaluate a Family Safety Hub within the Office of the Coordinator-General for Family Safety. The Family Safety Hub will link existing support and services in the ACT for matters around family violence to ensure that clients receive seamless, integrated and holistic support from the Government and community services. This initiative is partially offset by Safer Families initiatives that did not fully utilise the available budget in 2016-17 and reprioritising available funds following the completion of initiatives in future years.

Better support when it matters – Health and fitness for volunteer firefighters 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 55 55 55 55 220

The Government will support better fitness and wellbeing among ACT Rural Fire Service volunteers by providing a $100 annual subsidy for fitness programs and gym memberships.

Better support when it matters – Implementing Moss Review recommendations

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 1,140 451 772 788 3,151

In response to the Independent Inquiry into the Treatment in Custody of Detainee Steven Freeman (the Moss Review), the Government will establish an Inspectorate of Custodial Services to improve oversight, and fund the development of a plan for the future of the Alexander Maconochie Centre.


Better support when it matters – More frontline firefighters – Modernising emergency services call-taking

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 1,269 1,749 1,782 1,816 6,616

The Government will employ professional call-takers and dispatchers, trained to national accreditation standards, and a quality assurance officer to work in the Emergency 000 Communications Centre. This will allow ACT Fire & Rescue to return firefighters to frontline roles.

Better support when it matters – More frontline firefighters – Recruiting with the aim of 50:50 gender balance

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 147 0 0 0 147

The Government will continue to support the Emergency Services Agency by providing funding for ACT Fire & Rescue to undertake a recruit college for 16 firefighters. This recruitment will maintain operational capability in firefighting and emergency rescue, and actively encourage female participation in line with the Women in Emergency Services Strategy. The full cost of the college is $455,000, with this initiative to be partly funded by reprioritising internal resources.

Better support when it matters – Planning for the future of policing in the ACT

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 965 1,145 0 0 2,110 Offset – Expenses -461 -468 0 0 -929 Net Expenses 504 677 0 0 1,181

The Government will support ACT Policing to undertake a review of its current operating model and infrastructure to define a service delivery model and accommodation requirements for the future. The cost of this initiative will be partly offset by redirecting existing resources.


Better support when it matters – Public Advocate – Children and Young People’s Advocacy and Oversight

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 173 150 153 155 631

The Government will provide funding to increase the capacity of the Public Advocate’s Office to better protect children and young people, and deliver enhanced monitoring of the provision of statutory services.

Better support when it matters – Reducing alcohol-fuelled violence 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 1,259 1,176 1,202 1,229 4,866

The Government will provide funding for ACT Policing to employ an additional six police officers for extra patrols to support safer nightlife precincts in the city.

Better support when it matters – Reducing prisoner reoffending 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 1,288 1,320 1,353 1,386 5,347

The Government will continue to support the Extended Throughcare Program, which assists the transition of offenders to the community and reduces recidivism.

Better support when it matters – Retrial of Mr David Eastman 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Justice and Community Safety Directorate – Expenses

3,155 0 0 0 3,155

Legal Aid Commission – Expenses 1,948 0 0 0 1,948 Net Expenses 5,103 0 0 0 5,103

The Government will contribute to the cost of the retrial of Mr David Harold Eastman and other related proceedings. This funding will provide resources for ACT Policing, the ACT Legal Aid Commission, and the ACT Law Courts and Tribunal. The Director of Public Prosecutions will also receive funding for the retrial (refer to the initiative Better support when it matters – Strengthening the Office of the Director of Public Prosecutions).


Better support when it matters – Strengthening the Office of the Director of Public Prosecutions

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 2,446 191 194 197 3,028

The Government will provide funding to increase the capacity of the Office of the Director of Public Prosecutions to better support prosecutions in the Territory. The funding in the 2017-18 financial year includes additional resourcing for the retrial of Mr David Eastman and other related proceedings.

Better support when it matters – Supporting careers in ACT Policing 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses NFP NFP NFP NFP NFP

The Government is supporting a safe and secure community through an increase in funding for the Australian Federal Police Enterprise Agreement.

Better support when it matters – Upgrading ACT Policing’s water and rescue response capability

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses NFP NFP NFP NFP NFP

The Government will contribute to the fit-out of a modern maritime facility for ACT Policing to support water operations. Negotiations regarding the facility are ongoing and so the funding cannot be disclosed at the time of publication.

More and better jobs – Supporting Canberra’s small and medium clubs

See the Chief Minister, Treasury and Economic Development Directorate revenue initiative More and better jobs – Supporting Canberra’s small and medium clubs for further details.


Smarter government spending – Portfolio efficiencies 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses -748 -1,236 -1,455 -1,451 -4,890

The Government will implement a number of administrative improvements within the Justice and Community Safety Directorate to deliver more efficient services to the community.


$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Better support when it matters – Enhanced security for ACT Policing

116 165 116 116 513


Expenses associated with revenue initiatives 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

More and better jobs – Supporting Canberra’s small and medium clubs

200 0 0 0 200

Refer to Revenue initiatives (Chapter 3.4) Chief Minister, Treasury and Economic Development Directorate for more information.


LEGAL AID COMMISSION (ACT)

Better support when it matters – Funding for the retrial of Mr David Eastman

See the Justice and Community Safety Directorate expense initiative Better support when it matters – Retrial of Mr David Eastman for further details.

Better support when it matters – Stronger Legal Aid 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 290 303 316 330 1,239 Associated Revenue 6 6 6 6 24 Net Expenses 284 297 310 324 1,215

The Government will provide additional legal assistance to the ACT community. This initiative will enhance the Legal Aid Commission’s capacity to grant legal assistance to vulnerable people who cannot afford the cost of private legal representation.


OFFICE OF THE LEGISLATIVE ASSEMBLY

Better services in your community – Stronger scrutiny through legislative committees

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 113 298 306 315 1,032

The Government will provide funding for secretariat support for two additional standing committees in the expanded Assembly.

Better support when it matters – Security resources for the ACT Legislative Assembly

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 99 101 103 104 407

The Government will provide additional security resources at the ACT Legislative Assembly to enhance the safety and security of public visitors, members and staff.


TRANSPORT CANBERRA AND CITY SERVICES DIRECTORATE

Better schools for our kids – Safer walking and cycling around schools 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 530 543 562 586 2,221 Associated Depreciation 0 13 26 26 65 Net Expenses 530 556 588 612 2,286 Associated Capital 525 525 0 0 1,050 Offset – Capital -525 -525 0 0 -1,050 Net Capital 0 0 0 0 0

The Government will provide a range of safety measures at 20 schools across the Territory to improve road safety and encourage walking and cycling to school. The program will include school crossing supervisors and physical improvements to school crossings, including line marking and additional signage. The capital component will be funded from the Better Infrastructure Fund.

Better services in your community – Boosting Libraries ACT 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 375 0 0 0 375

The Government will ensure Canberrans continue to have access to high quality library services through the allocation of additional funding to address rising costs. The Government will undertake a review in 2017 to consider service provision in Libraries ACT.

Better services in your community – City services for new communities 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 1,803 0 0 0 1,803 Provision – Expenses 0 1,123 1,151 1,180 3,454 Net Expenses 1,803 1,123 1,151 1,180 5,257 Associated Capital 513 0 0 0 513

The Government will provide municipal services to new residences across Canberra, including infill developments and greenfield housing estates. The services provided will maintain the public realm and help meet the needs of a growing population, including the supply of garbage and recycling bins to new homes. The funding from 2018-19 will be held in a central provision, subject to a review of the methodology to fund services associated with city growth. The review will consider the change in the mix of urban growth that has occurred in recent years.


Better services in your community – Cleaning up our suburbs 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 1,600 340 0 0 1,940

The Government will undertake additional work to improve the appearance of the city. Programs to be undertaken include weed control, removal of obsolete assets, graffiti prevention, maintenance works at major road entry points to the ACT and the airport, and tree clearing under powerlines.

Better services in your community – Container Deposit Scheme 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 809 356 364 372 1,901 Offset – Revenue 219 946 364 372 1,901 Net Expenses 590 -590 0 0 0

The Government will adopt a Container Deposit Scheme based on the NSW Government’s scheme, to increase recycling rates of approved containers, reduce litter and encourage community participation in recycling. The cost of this service will be met through revenue from approved containers extracted from the waste stream.

Better services in your community – Improving waste management 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 1,749 1,818 1,863 1,910 7,340

The Government will renew waste management service contracts for the delivery of core municipal waste management services to the community. This includes collection of recyclables from the recycling drop-off centres, hazardous waste management, landfill operations at the Mugga Lane Resource Management Centre, mobile bin maintenance, site services at the Mitchell Resource Management Centre, and weighbridge services.


Better services in your community – Increasing recycling and reducing waste 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 955 582 593 602 2,732 Offset – Revenue -20 0 0 0 -20 Net Expenses 935 582 593 602 2,712

The Government will implement the Waste Recovery and Resource Management Act 2016, which comes into effect on 1 July 2017. This initiative will support the effective management of waste in the Territory through requiring waste collection and treatment businesses to be registered or licensed to record the types and amounts of waste they deal with, and to share this information with Government agencies. The initiative will also fund the waste regulatory policy development required to support improved resource recovery in future years.

Better services in your community – Investing in community transport 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 1,074 0 0 0 1,074 Provision – Expenses 0 993 866 791 2,650 Offset – Expenses -424 -435 -445 -457 -1,761 Net Expenses 650 558 421 334 1,963

The Government will begin a six month trial of a flexible bus service to residents of the Inner North, and continue the work of the Community Transport Coordination Centre for a further year. The Government will progress work to fully realise the potential of the service.

Better services in your community – Kerbside bulky waste collection 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 1,044 0 0 0 1,044

The Government will undertake early planning for the rollout of a Territory wide bulky waste collection service. The current bulky waste service provided to eligible concession card holders will continue in 2017-18 as an interim measure.


Better services in your community – Maintaining quality sportsgrounds 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 1,500 1,400 1,250 1,250 5,400

The Government will continue to ensure that the quality of sportsgrounds in the ACT is maintained at a high standard through additional irrigation and mowing.

Better services in your community – School transport for children with a disability

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 1,100 1,128 1,156 1,185 4,569

The Government will continue to provide transport to and from ACT public schools for students with a disability, through the Special Needs Transport fleet. The Government has fully funded this service in anticipation of the handover of this program to the National Disability Insurance Scheme.

Better services in your community – Supporting animal welfare 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 308 0 0 0 308 Provision – Expenses 0 NFP NFP NFP NFP Net Expenses 308 NFP NFP NFP 308

The Government will continue to fund animal welfare services in the ACT in partnership with the RSPCA, providing for the care of stray, seized, neglected and other vulnerable animals. A central provision will be established for funding in the outyears, pending finalisation of current policy work.


Building a better city – Bus service improvements 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 3,800 1,025 1,050 1,077 6,952 Offset – Expenses -3,800 -1,025 -1,050 -1,077 -6,952 Net Expenses 0 0 0 0 0

The Government will continue a range of public transport initiatives including the Free City Loop service and the airport bus service. The Government will also deliver additional routes, including continuing the Weston City Bus service; and relaunching the Xpresso Routes. The offset will be funded from within existing resources.

Building a better city – Fixing local roads 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses 1,500 1,500 1,500 0 4,500

The Government will conduct additional road resealing to maintain high quality roads within the ACT, and improve road safety and ride quality.

Building a better city – Light Rail Stage 2 – City to Woden – Design and procurement

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 13,233 0 0 0 13,233 Provision – Expenses 0 2,104 2,342 0 4,446 Net Expenses 13,233 2,104 2,342 0 17,679 Associated Capital 3,267 0 0 0 3,267 Provision – Capital 0 15,896 16,658 0 32,554 Net Capital 3,267 15,896 16,658 0 35,821

The Government will further advance the second stage of light rail between the City and Woden by developing a business case that would be prepared following investigations into route selection, design and procurement methodology, along with an urban renewal strategy. Construction costs of the project will be formally considered by the Government following completion of the business case.


Smarter government spending – Portfolio efficiencies 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Expenses -308 -1,312 -1,816 -1,820 -5,256

The Government will create efficiencies through adjusting service levels, streamlining delivery of services, and realigning the Transport Canberra and City Services Directorate’s workforce capabilities.


$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Better services in your community – Expanding the Domestic Animal Shelter

0 0 4 8 12


0 0 0 300 300

Better services in your community – Faster bus travel

0 0 7 19 26

Better services in your community – More local parks

0 0 1 2 3

Better services in your community – Revitalising Woden Library

283 291 303 312 1,189

Building a better city – Active Travel – Footpath and cycleway upgrades

0 0 10 30 40

Building a better city – Federal Highway and Old Well Station Road Intersection upgrade

0 0 12 24 36

Building a better city – Gundaroo Drive duplication – Stage 2

0 0 0 28 28

Building a better city – Improving Tharwa Village fire fighting water supply

0 0 14 28 42

Building a better city – Rehabilitating landfill sites

0 0 0 120 120

Building a better city – Revitalising local town centres

0 0 40 120 160

Building a better city – Upgrading stormwater infrastructure on Flemington Road

0 0 0 10 10



2017-18 Budget Paper No.3 125 Infrastructure and capital initiatives

3.3 INFRASTRUCTURE AND CAPITAL INITIATIVES

The total value of 2017-18 new infrastructure and capital initiatives is $867.5 million over four years. This includes new capital works ($621.8 million), information and communication technology projects ($54.5 million), and plant and equipment ($39.5 million). The 2017-18 Budget also includes $40.3 million across the budget and forward estimates in infrastructure and capital associated with expense initiatives.

In addition to these new initiatives, the Government has provisioned $766.3 million for future capital works, including $111.2 million of commercially sensitive works. Consistent with common practice for such projects, the provisions have not been identified for each specific project.

Table 3.3.1: Summary of infrastructure and capital initiatives

Summary of initiatives

2017-18 Estimate

2018-19 Estimate

2019-20 Estimate

2020-21 Estimate

Total

$’000 $’000 $’000 $’000 $’000 Capital works 106,723 149,086 125,965 240,062 621,836 Information and communication

technology 3,572 7,580 26,654 16,739 54,545

Plant and equipment 1,045 2,727 23,045 12,727 39,544 Total unpublished provisions 14,000 24,225 63,000 10,000 111,225 New infrastructure and capital

initiatives 125,340 183,618 238,664 279,528 827,150

Capital associated with expense initiatives

6,439 17,210 16,658 0 40,307

Total new infrastructure and capital initiatives

131,779 200,828 255,322 279,528 867,457

Associated expenses (new capital works)

6,462 8,272 2,035 -2,327 14,442

Associated revenue (new capital works)

1,510 1,571 121 121 3,323

Depreciation 264 3,227 11,788 17,586 32,865 Total operating impact 8,236 13,070 13,944 15,380 50,630


Table 3.3.2: Infrastructure and capital initiatives

2017-18 2018-19 2019-20 2020-21 Total Infrastructure and capital initiatives Estimate Estimate Estimate Estimate $’000 $’000 $’000 $’000 $’000

Canberra Institute of Technology

Better facilities for our students – Improving vocational training facilities3

0 0 0 0 0

Total 0 0 0 0 0


Better services in your community – Tough on road safety

176 0 0 0 176

Building a better city – Canberra Brickworks – Access road and Dudley Street upgrade2

4,000 4,000 0 0 8,000

Building a better city – Improving major venues 0 0 0 0 0 More and better jobs – Expanding Belconnen Arts

Centre 1,282 7,417 6,301 0 15,000

More and better jobs – Improving Manuka Oval broadcast and media facilities1,2

7,700 3,900 0 0 11,600

More and better jobs – Sporting capital 0 0 0 0 0 Information and Communication Technology Building a better city – Macarthur House Data Centre

decommissioning program2 3,200 0 0 0 3,200

More and better jobs – Ensuring continuity of the Human Resources Information Management System2

2,750 5,500 2,750 0 11,000

More and better jobs – Improving services through better data analytics2

0 0 0 0 0

More and better jobs – Modernising government ICT infrastructure

2,527 4,853 3,609 4,012 15,001

Plant and Equipment Building a better city – Civic and Dickson office

accommodation2 1,045 2,727 23,045 12,727 39,544

More and better jobs – Improving arts facilities3 0 0 0 0 0 Total 22,680 28,397 35,705 16,739 103,521

City Renewal Authority Building a better city – City Renewal Authority – City

to the Lake2 7,500 15,000 14,888 0 37,388

Building a better city – City Renewal Authority – Initial works package2

2,000 12,000 6,000 0 20,000

Total 9,500 27,000 20,888 0 57,388 Community Services Directorate Better support when it matters – Bimberi Youth

Justice Centre communications 326 0 0 0 326

Better support when it matters – Child Youth Protection System Critical Information Migration

700 0 0 0 700

Better support when it matters – Improving community facilities3

0 0 0 0 0

Total 1,026 0 0 0 1,026


2017-18 2018-19 2019-20 2020-21 Total Infrastructure and capital initiatives Estimate Estimate Estimate Estimate $’000 $’000 $’000 $’000 $’000 Cultural Facilities Corporation Building a better city – Upgrading lighting at the

Canberra Museum and Gallery 280 0 0 0 280

Total 280 0 0 0 280 Education Directorate Better schools for our kids – Belconnen High School 1,628 4,272 0 0 5,900 Better schools for our kids – Expanding schools in

Gungahlin2 6,972 7,300 6,200 3,600 24,072

Better schools for our kids – Narrabundah College and Campbell Primary School5

1,200 NFP NFP NFP 1,200

Better schools for our kids – New school facilities in Molonglo – Early planning

500 0 0 0 500

Better school for our kids – Non-government school infrastructure upgrades3

0 0 0 0 0

Better schools for our kids – Public school infrastructure upgrades

5,766 5,792 5,710 5,717 22,985

Better schools for our kids – Technology-enabled learning

4,033 4,053 4,428 4,652 17,166

Total 20,099 21,417 16,338 13,969 71,823 Environment, Planning and Sustainable Development

Directorate

Better services in your community – Improving our capacity to fight bushfires

1,267 1,489 430 0 3,186

Better services in your community – Improving our parks and nature reserves3

0 0 0 0 0

Better services in your community – Jarramlee Nature Reserve – Protecting our nature reserves

112 200 0 0 312

Better support when it matters – Public Housing Renewal – New and better properties2

27,295 20,124 0 0 47,419


1,122 1,314 0 0 2,436

Information and Communication Technology More and better jobs – Ensuring continuity of the

Spatial Data Management System2 869 232 0 0 1,101

More and better jobs – Ensuring sustainable commercial development2

0 0 0 0 0

Total 30,665 23,359 430 0 54,454 Health Directorate Better care when you need it – Expanding Centenary

Hospital – More services for women and children2 0 10,000 30,000 28,075 68,075

Better care when you need it – Improved infrastructure for acute aged care and cancer inpatients1

0 0 0 0 0

Better care when you need it – Improving health facilities2

0 0 0 0 0

Better care when you need it – More mobile dental clinics

985 0 0 0 985


2017-18 2018-19 2019-20 2020-21 Total Infrastructure and capital initiatives Estimate Estimate Estimate Estimate $’000 $’000 $’000 $’000 $’000 Better care when you need it – More nurse-led Walk

in Centres2 3,425 0 0 0 3,425

Better care when you need it – New health centre for Aboriginal and Torres Strait Islander Canberrans2

1,000 5,000 5,600 400 12,000

Better care when you need it – Protecting Canberrans from infectious diseases

398 0 0 0 398

Better care when you need it – Surgical Procedures, Interventional Radiology and Emergency Centre (SPIRE) – Major expansion of services at Canberra Hospital2

0 0 30,000 200,000 230,000

Better care when you need it – Training our future health workforce2

700 700 300 0 1,700

Better care when you need it – University of Canberra Public Hospital operational readiness2

376 0 0 0 376

Total 6,884 15,700 65,900 228,475 316,959 Justice and Community Safety Directorate Better support when it matters – Enhanced security

for ACT Policing2 1,006 983 0 0 1,989

Better support when it matters – More frontline firefighters – Second crew at Ainslie Station

576 0 0 0 576

Better support when it matters – Upgrading ESA communications centre and Non-Emergency Patient Transport facilities

1,449 1,450 0 0 2,899

Total 3,031 2,433 0 0 5,464 Transport Canberra and City Services Directorate Better schools for our kids – Safer walking and cycling

around schools2 0 0 0 0 0

Better services in your community – City services for new communities2

513 0 0 0 513

Better services in your community – Expanding the Domestic Animal Shelter2

400 150 0 0 550

Better services in your community – Essential Waste Management Infrastructure2

6,070 14,922 2,276 2,023 25,291

Better services in your community – Faster bus travel2 750 500 500 0 1,750 Better services in your community – Integrated bus

and light rail ticketing5 2,100 NFP NFP 0 2,100

Better services in your community – More local parks2 100 0 0 0 100 Better services in your community – Revitalising

Woden Library1,2 0 0 0 0 0

Building a better city – Active Travel – Belconnen bikeway

250 1,250 3,200 0 4,700

Building a better city – Active Travel – Footpath and cycleway and upgrades2

0 0 0 0 0

Building a better city – Active Travel – Secure bike parking

20 0 0 0 20

Building a better city – Dickson Bus Station – Land acquisition5

NFP 0 0 0 NFP

Building a better city – Federal Highway and Old Well Station Road Intersection upgrade2

1,200 0 0 0 1,200


2017-18 2018-19 2019-20 2020-21 Total Infrastructure and capital initiatives Estimate Estimate Estimate Estimate $’000 $’000 $’000 $’000 $’000 Building a better city – Gundaroo Drive duplication –

Stage 22 5,000 15,000 10,000 0 30,000

Building a better city – Improving Tharwa Village fire fighting water supply2

250 1,177 0 0 1,427


3,267 15,896 16,658 0 35,821

Building a better city – Monaro Highway upgrade early planning1

0 1,000 1,000 0 2,000

Building a better city – New Bus Depot Woden5 NFP NFP 0 0 NFP Building a better city – Pialligo Avenue duplication

early planning1 0 2,000 2,000 0 4,000

Building a better city – Rehabilitating landfill sites2 3,544 5,552 17,427 8,322 34,845 Building a better city – Revitalising local town centres2 0 0 0 0 0 Building a better city – Upgrading stormwater

infrastructure on Flemington Road2 150 850 0 0 1,000

Total 23,614 58,297 53,061 10,345 145,317 Total unpublished provisions 14,000 24,225 63,000 10,000 111,225 TOTAL INFRASTRUCTURE AND CAPITAL INITIATIVES 131,779 200,828 255,322 279,528 867,457

Associated Revenue 1,510 1,571 121 121 3,323 Associated Expenses 6,462 8,272 2,035 -2,327 14,442 Depreciation 264 3,227 11,788 17,586 32,865

Notes: 1. This initiative has a revenue component; this is listed in the summary table in Revenue initiatives (Chapter 3.4). 2. This initiative has an expense component; this is listed in the summary table in Expense initiatives (Chapter 3.2). 3. The funding for this initiative is to be absorbed by the agency. 4. This is a joint initiative, ie delivered by more than one agency. 5. NFP indicates not for publication. A provision has been included in the budget for the estimated cost of this initiative.


CANBERRA INSTITUTE OF TECHNOLOGY

Better facilities for our students – Improving vocational training facilities

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 2,642 0 0 0 2,642 Offset – Capital -2,642 0 0 0 -2,642 Net Capital 0 0 0 0 0

The Government is upgrading classroom, library and workshop facilities to ensure vocational students have access to high quality facilities. This initiative is funded through the Better Infrastructure Fund.




2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 4,000 4,000 0 0 8,000 Depreciation 0 0 160 160 320 Associated Expenses 0 0 0 80 80 Net Expenses 0 0 160 240 400

The Government will design and construct an access road into the new Canberra Brickworks Precinct, including an intersection north from Dudley Street, Yarralumla. The Government will also extend and widen Dudley Street, with on-road cycle lanes in each direction and an off-road shared path on the northern side, new street lighting and landscaping.

Building a better city – Improving major venues 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 2,815 0 0 0 2,815 Offset – Capital -2,815 0 0 0 -2,815 Net Capital 0 0 0 0 0 Depreciation 0 140 140 140 420

The Government will undertake a range of improvements to major venues in the Territory, including Exhibition Park, GIO Stadium, Manuka Oval, Stromlo Forest Park and the National Arboretum. These works will be undertaken through the Chief Minister, Treasury and Economic Development Directorate’s Better Infrastructure Fund allocation and from savings on other capital projects.

More and better jobs – Expanding Belconnen Arts Centre 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 1,282 7,417 6,301 0 15,000 Depreciation 0 0 0 375 375

The Government will design and construct Stage 2 of the Belconnen Arts Centre. The Stage 2 works will include: a multi-use town hall and performance space; improvements to workshop spaces; new dance studios and an expanded exhibition space.



2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 7,700 3,900 0 0 11,600 Depreciation 0 229 291 291 811 Associated Expenses 0 0 100 200 300 Offset – Associated Expenses 0 -700 0 0 -700 Net Expenses 0 -471 391 491 411 Associated Revenue 0 50 100 100 250

The Government will construct permanent cricket broadcast and media facilities to support international cricket matches, including the 2018-19 test match. These facilities will also be used for AFL games and provide venue hire opportunities throughout the year. The associated revenue is from an anticipated increase in venue hire due to the facilities being available for hire all year round. The cost of this initiative is partially offset by no longer having to hire temporary infrastructure for these events.

Information and Communication Technology

Building a better city – Macarthur House Data Centre decommissioning program

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 7,477 0 0 0 7,477 Offset – Capital -4,277 0 0 0 -4,277 Net Capital 3,200 0 0 0 3,200 Associated Expenses 2,097 3,996 1,063 1,115 8,271 Offset – Associated Expenses -2,097 -3,996 -1,063 -1,115 -8,271 Net Expenses 0 0 0 0 0

The Government will decommission the data centre housed in Macarthur House and relocate all of its services to a new data centre. Macarthur House will subsequently be demolished and the site sold as part of the Commonwealth Government’s Asset Recycling Initiative. The costs of relocating the data centre will be largely met from within the existing resources of the Chief Minister, Treasury and Economic Development Directorate.



2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 2,750 5,500 2,750 0 11,000 Depreciation 0 550 1,650 2,200 4,400 Associated Expenses 0 500 1,500 2,000 4,000 Offset – Associated Expenses 0 -610 -2,218 -3,196 -6,024 Net Expenses 0 440 932 1,004 2,376

The Government will replace its current Human Resources Information Management System, Chris21, with a new Payroll and Human Capital Management solution for the whole of government. The initiative is expected to generate efficiencies through additional functionality and increased automation of the new system.

More and better jobs – Improving services through better data analytics 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Associated Expenses 633 0 0 0 633

The Government will maintain its whole of government data storage and analytics capability with the aim of improving services by better linking, sharing and managing data.

More and better jobs – Modernising government ICT infrastructure 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 2,527 4,853 3,609 4,012 15,001 Depreciation 253 991 1,837 2,599 5,680

The Government will replace and modernise business critical information and communication technology network infrastructure systems.


Plant and Equipment

Building a better city – Civic and Dickson office accommodation 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 1,045 2,727 23,045 12,727 39,544 Capital Provision NFP NFP NFP NFP NFP Total Capital 1,045 2,727 23,045 12,727 39,544 Depreciation 0 0 0 1,500 1,500 Associated Expenses 0 0 -1,915 -7,246 -9,161 Net Expenses 0 0 -1,915 -5,746 -7,661

The Government will provide funding for the fit-out of two new government office buildings located in Civic and Dickson. The capital funding associated with the Dickson Office Building fit-out has been provisioned until the tender process has been finalised. The move to the new, more efficient office buildings will generate savings in rental expenses and other operating costs. The development of the Civic Government Office Block is part of the broader revitalisation of the Constitution Avenue precinct.

More and better jobs – Improving arts facilities 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 145 245 245 245 880 Offset – Capital -145 -245 -245 -245 -880 Net Capital 0 0 0 0 0

The Government will undertake building upgrades to five arts centres across the Territory over the next four years. The facilities to be upgraded are: Ainslie Arts Centre; Gorman House Arts Centre; Strathnairn; Tuggeranong Arts Centre; and Watson Arts Centre. These works will be undertaken through the Chief Minister, Treasury and Economic Development Directorate’s Better Infrastructure Fund allocation.

Expense initiatives with associated capital 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000


176 0 0 0 176

More and better jobs – Sporting capital

0 0 0 0 0

Refer to Expense initiatives (Chapter 3.2) for more information.


CITY RENEWAL AUTHORITY

Building a better city – City Renewal Authority – City to the Lake 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 7,500 15,000 14,888 0 37,388 Depreciation 0 0 0 560 560 Associated Expenses 0 0 0 350 350 Total Expenses 0 0 0 910 910

The Government will commence the second stage of infrastructure works at West Basin for the City to the Lake activation project. These works will include finalising the construction of the lake wall and boardwalk, land reclamation and associated infrastructure works, including demolition of existing structures, service relocations and lighting.

Building a better city – City Renewal Authority – Initial works package 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 2,000 0 0 0 2,000 Provision – Capital 0 12,000 6,000 0 18,000 Net Capital 2,000 12,000 6,000 0 20,000 Depreciation 0 9 9 9 27 Associated Expenses 400 200 200 200 1,000 Total Expenses 400 209 209 209 1,027

The Government will fund a package of works to be delivered by the City Renewal Authority, including implementation of the Haig Park Master Plan and land sale preparation work for City to the Lake. Funding in the outyears has been provisioned to allow the City Renewal Authority Board to explore and advise on innovative projects that can improve the city’s infrastructure and public spaces. This initiative also includes funding in 2017-18 for the delivery of city activation events in partnership with the private sector. The amounts included from 2018-19 to 2020-21 will be held in a central provision.



Better support when it matters – Bimberi Youth Justice Centre communications

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 326 0 0 0 326 Depreciation 0 39 39 39 117

The Government will replace the existing Bimberi Youth Justice Centre analogue radio system with a digital radio network.

Better support when it matters – Child Youth Protection System Critical Information Migration

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000


The Government will transfer critical child protection information to a new Client Management System to improve integration and coordination of client data to support decision making.

Better support when it matters – Improving community facilities

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 395 405 415 426 1,641 Offset – Capital -395 -405 -415 -426 -1,641 Net Capital 0 0 0 0 0

The Government will undertake external area upgrades and facilities improvement works at Bimberi Youth Justice Centre, the Child Development service in Holder, and Child and Family Centres in Gungahlin, Tuggeranong and West Belconnen. This initiative will be funded through the Better Infrastructure Fund.


CULTURAL FACILITIES CORPORATION

Building a better city – Upgrading lighting at the Canberra Museum and Gallery

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 330 0 0 0 330 Offset – Capital -50 0 0 0 -50 Net Capital 280 0 0 0 280 Depreciation 11 22 22 22 77

The Government is undertaking a major upgrade of the lighting system at the Canberra Museum and Gallery (CMAG). This will allow CMAG to install new LED lighting to achieve state-of-the-art standards of lighting in its gallery spaces, while also achieving improvements in safety, energy efficiency and conditions for the conservation of collection items.



Better schools for our kids – Belconnen High School

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 1,628 4,272 0 0 5,900 Depreciation 0 0 118 118 236

The Government is continuing to work to create a contemporary learning and teaching environment at Belconnen High School. This funding is in addition to the $17.6 million previously announced for the Belconnen High School modernisation project, and will fund further works including upgrades to technology areas, roof replacement and the development of a contemporary learning space.

Better schools for our kids – Expanding schools in Gungahlin

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 6,972 7,300 6,200 3,600 24,072 Depreciation 0 199 345 469 1,013 Associated Expenses 27 239 673 948 1,887 Net Expenses 27 438 1,018 1,417 2,900

The Government will increase student capacity at Harrison, Gold Creek, Neville Bonner and Palmerston Schools. The Government will also provide playing fields and increase the capacity of the new North Gungahlin Primary School, which is due to open in 2019. This initiative will provide an additional 800 student places by 2021 and will assist in ensuring our school facilities support high quality local education.

Better schools for our kids – Narrabundah College and Campbell Primary School

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 1,200 0 0 0 1,200 Provision – Capital 0 NFP NFP NFP NFP Net Capital 1,200 NFP NFP NFP 1,200 Depreciation 0 0 24 24 48

The Government will upgrade facilities and remove hazardous materials to ensure these two local schools continue to meet the current and future needs of students, teachers and the community.


Better schools for our kids – New school facilities in Molonglo – Early planning

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000


The Government is undertaking planning activities for a new school in the Molonglo Valley to continue to deliver good and local schooling to the growing population in the area.

Better schools for our kids – Non-government school infrastructure upgrades

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Expenses 3,750 3,750 3,750 3,750 15,000 Offset – Expenses -3,750 -3,750 -3,750 -3,750 -15,000 Net Capital Grant 0 0 0 0 0

The Government is making provisions for capital grant funding for infrastructure upgrades in non-government schools of up to $15 million over four years. Delivery of this initiative is contingent on the final form of the proposed new Commonwealth funding model for education, passage of associated legislation and implementation of the model. The initiative will be funded from within existing resources.

Better schools for our kids – Public school infrastructure upgrades

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 20,700 21,100 21,400 21,800 85,000 Offset – Capital -14,934 -15,308 -15,690 -16,083 -62,015 Net Capital 5,766 5,792 5,710 5,717 22,985 Depreciation 0 115 231 345 691

The Government will invest in the renewal of our public school facilities, including upgrades and extensions to existing classrooms, new classrooms, refurbished toilets and change rooms, garden and horticultural facilities, heating and cooling upgrades, and energy efficiency improvements. This initiative will ensure our facilities support high quality education.


Better schools for our kids – Technology-enabled learning

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Provision – Capital 4,033 4,053 4,428 4,652 17,166

The Government is supporting technology-enabled learning by seeking best practice advice on the most effective way to ensure that all public school students in Years 7 and 10 have access to a device to enhance and further their learning. These amounts will be reviewed in the 2017-18 Budget Review, and have therefore been provisioned.



Better services in your community – Improving our capacity to fight bushfires 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000


The Government will widen the existing fire trail network to provide access for heavy tankers and earthmoving machinery required for fire suppression and fire hazard reduction. This initiative includes construction to expand the Northern Clear Range fire trail and the Naas Valley fire trail within Namadgi National Park. This initiative also includes early planning and construction on the East/West Strategic Break fire trail and the Booth Range to Naas link fire trail within the Cotter Catchment.

Better services in your community – Improving our parks and nature reserves 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 530 0 0 0 530 Offset – Capital -530 0 0 0 -530 Net Capital 0 0 0 0 0

The Government will deliver a series of works including improvements to access roads, water infrastructure and fencing at various land tenures such as rural land, protected areas and horse paddocks. The Government will also improve a number of facilities in Tidbinbilla Nature Reserve including access and parking at Gibraltar falls, upgrading Sheedy’s playground, and building a new walking trail linking the falls with Woods Reserve and Tidbinbilla. This initiative is funded from the Better Infrastructure Fund.

Better services in your community – Jarramlee Nature Reserve – Protecting our nature reserves

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 112 200 0 0 312

The Government will assess the extent of remaining sub-surface infrastructure associated with the former Belconnen Sewerage Treatment Plant, and establish the status of the Jarramlee subsidence area and adjoining Ginninderra Creek.



2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 27,295 20,124 0 0 47,419 Associated Expenses 600 1,908 0 0 2,508

The Government will continue to renew public housing and construct modern public housing to enhance community and planning outcomes.

Information and Communication Technology


2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 869 232 0 0 1,101 Depreciation 0 0 110 110 220 Offset – Associated Expenses 0 -72 -75 -79 -226 Net Expenses 0 -72 35 31 -6

The Government will upgrade the current Spatial Data Management System, which supports a number of the Government’s programs and services like ACTmapi, land development, the Territory Plan, and services provided by the Emergency Services Agency. The initiative includes data transfer and conversion required to transition to the new Australian standard for positioning and spatial information.

The offsets of this initiative are related to a software licence, which is no longer required under the new system.

More and better jobs – Ensuring sustainable commercial development 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Associated Expenses 425 25 100 25 575

The Government will replace and update the current ACT Retail Model, which is an econometric model used to analyse and assess the feasibility of commercial development applications by analysing the demand and supply for retail floor space. The Government will also carry out a survey of commercial floor space every two years.



$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000


1,122 1,314 0 0 2,436



HEALTH DIRECTORATE

Better care when you need it – Expanding Centenary Hospital – More services for women and children

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Provision – Capital 0 10,000 30,000 28,075 68,075 Associated Expenses 300 225 0 0 525

The Government will undertake early planning work for expansion of the Centenary Hospital for Women and Children. This expansion will improve the services and support for patients of maternity and paediatric services and provide new services, including a high dependency unit and adolescent mental health unit.

Better care when you need it – Improved infrastructure for acute aged care and cancer inpatients

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 10,000 7,310 0 0 17,310 Offset – Capital -10,000 -7,310 0 0 -17,310 Net Capital 0 0 0 0 0

The Government will refurbish and upgrade the Acute Aged Care and Oncology wards at the Canberra Hospital to enhance patient safety and care, as well as to improve the quality of inpatient services.

Better care when you need it – Improving health facilities

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 4,245 0 0 0 4,245 Offset – Capital -4,245 0 0 0 -4,245 Net Capital 0 0 0 0 0 Associated Expenses 844 0 0 0 844 Offset – Expenses -844 0 0 0 -844 Net Expenses 0 0 0 0 0

The Government will undertake upgrade works to a range of ACT Health facilities. Works will include building maintenance to electrical infrastructure, fire detection and monitoring systems, general safety and security improvements, Plant and Equipment and road works. This initiative is funded through the Better Infrastructure Fund.


Better care when you need it – More nurse-led Walk in Centres 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 3,425 0 0 0 3,425 Depreciation 0 86 86 86 258 Associated Expenses 428 2,748 2,907 2,995 9,078 Net Expenses 428 2,834 2,993 3,081 9,336

The Government will establish a nurse-led Walk in Centre for the Gungahlin community, commence planning for a Walk in Centre in the Weston Creek region, and undertake scoping work for a Walk in Centre in the Inner North.


2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 1,000 5,000 5,600 400 12,000 Depreciation 0 0 0 290 290 Associated Expenses 0 0 0 120 120 Net Expenses 0 0 0 410 410

The Government will invest in a new health facility for Aboriginal and Torres Strait Islander peoples of the ACT in partnership with Winnunga Nimmityjah Aboriginal Health which provides culturally appropriate primary health services.

Better care when you need it – Protecting Canberrans from infectious diseases

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000


The Government will enhance its ability to monitor, respond to and report on notifiable diseases by investing in the replacement of the ACT Notifiable Diseases Database.



2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Provision – Capital 0 0 30,000 200,000 230,000 Associated Expenses 3,000 3,000 0 0 6,000

The Government will undertake early planning and forward design for the Surgical Procedures, Interventional Radiology and Emergency Centre (SPIRE) to be built at the Canberra Hospital. This centre will improve and support the continued delivery of timely and high quality services at the Canberra Hospital as well as cater for the ACT’s growing population.

Better care when you need it – Training our future health workforce 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 700 700 300 0 1,700 Depreciation 0 55 109 133 297 Associated Expenses 250 353 256 159 1,018 Net Expenses 250 408 365 292 1,315

The Government will establish a new clinical school for nursing, midwifery and allied health staff in conjunction with the Faculty of Health at the University of Canberra.


$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Better care when you need it – More mobile dental clinics

985 0 0 0 985

Better care when you need it – University of Canberra Public Hospital operational readiness

376 0 0 0 376




Better support when it matters – Enhanced security for ACT Policing 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 1,006 983 0 0 1,989 Depreciation 0 276 331 331 938 Associated Expenses 189 239 116 116 660 Offset – Associated Expenses -73 -74 0 0 -147 Net Expenses 116 441 447 447 1,451

The Government will implement a number of security enhancements at ACT Policing facilities to improve safety for its staff. The cost of this initiative is partially offset by ACT Policing redirecting existing resources.

Better support when it matters – More frontline firefighters – Second crew at Ainslie Station

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000


The Government is upgrading the Ainslie Fire and Rescue Station to allow an additional pumper crew to be rostered at the station. This initiative complements Better support when it matters – More frontline firefighters – Modernising emergency services call-taking (refer to Expense initiatives Chapter 3.2).

Better support when it matters – Upgrading ESA communications centre and Non-Emergency Patient Transport facilities

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000


The Government will relocate the existing backup communications centre from Curtin to Hume. The Government will also relocate the ACT Ambulance Service’s Non-Emergency Patient Transport Service from its current location at Curtin to another location.



Better services in your community – Expanding the Domestic Animal Shelter 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 800 150 0 0 950 Offset – Capital -400 0 0 0 -400 Net Capital 400 150 0 0 550 Depreciation 0 20 20 20 60 Associated Expenses 0 0 4 8 12 Net Expenses 0 20 24 28 72

The Government will construct additional facilities at the Domestic Animal Shelter in Symonston to care for stray cats and design further improvements to the Shelter. The capital component of this initiative is partially funded through the Better Infrastructure Fund.


2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 6,070 14,922 2,276 2,023 25,291 Depreciation 0 0 5,058 5,058 10,116 Associated Expenses 0 0 0 300 300 Net Expenses 0 0 5,058 5,358 10,416

The Government will construct additional landfill capacity at the Mugga Lane Resource Management Centre to ensure continued operations beyond 2020, when current capacity is expected to expire.

Better services in your community – Faster bus travel 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 750 500 500 0 1,750 Depreciation 0 0 20 30 50 Associated Expenses 0 0 7 19 26 Net Expenses 0 0 27 49 76

The Government will provide new bus stops in Griffith and along Gundaroo Drive, as well as constructing terminal and driver facilities in Dickson and better facilities in the City, Tuggeranong Valley and Watson.


Better services in your community – Integrated bus and light rail ticketing 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 2,100 0 0 0 2,100 Provision – Capital 0 NFP NFP 0 NFP Net Capital 2,100 NFP NFP 0 NFP Depreciation 0 0 0 1,000 1,000

The Government will replace the existing MyWay ticket system with a new integrated system that will operate on both buses and light rail. Funding in the outyears for this initiative has been placed in a central provision.

Better services in your community – More local parks 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 100 0 0 0 100 Depreciation 0 5 5 5 15 Associated Expenses 0 0 1 2 3 Net Expenses 0 5 6 7 18

The Government will construct a natural playground in Giralang, adjacent to the current shop site. The Government will work with the University of Canberra and its students and Design Faculty to design the space, providing real world experience and collaboration with our university sector.


Better services in your community – Revitalising Woden Library 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 1,000 573 0 0 1,573 Offset – Capital -1,000 -573 0 0 -1,573 Net Capital 0 0 0 0 0 Depreciation 0 162 197 197 556 Associated Expenses 354 364 379 390 1,487 Offset – Associated Expenses -71 -73 -76 -78 -298 Associated Revenue 10 21 21 21 73 Net Expenses 273 432 479 488 1,672

The Government will relocate the Heritage Library from the current location at the Woden Library, to 255 Canberra Avenue, Fyshwick, to provide better facilities for the heritage collection. This initiative includes the fit-out for the new Heritage Library premises, and refurbishment of areas in the Woden Library which will then be available for community use.

The capital component of this initiative will be funded through the Better Infrastructure Fund. The expenses will be partially offset by the increase in the dividend paid by Property Group for additional rent received and fees collected by Libraries ACT from users of the vacated space at the Woden Library.

Building a better city – Active Travel – Belconnen bikeway 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 250 0 0 0 250 Provision – Capital 0 1,250 3,200 0 4,450 Net Capital 250 1,250 3,200 0 4,700

The Government will design and construct a bikeway in Belconnen to link the University of Canberra, Radford College, Canberra Institute of Technology Bruce campus and the GIO Stadium with the Belconnen town centre. This bikeway will connect with existing community paths and the new cycle path established as part of the Aikman Drive duplication, while providing a separated cycle route along Benjamin Way.


Building a better city – Active Travel – Footpath and cycleway upgrades 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 1,220 1,000 1,000 1,000 4,220 Offset – Capital -1,220 -1,000 -1,000 -1,000 -4,220 Net Capital 0 0 0 0 0 Depreciation Associated Expenses

0 0

25 0

50 10

75 30

150 40

Net Expenses 0 25 60 105 190

The Government will enhance community path networks in identified high priority areas across the ACT. This will include pedestrian refuges and crossings, cycleways and age-friendly walking and cycling improvements. Upgrades will also be undertaken on the Stirling Avenue walking trail in Watson. The capital component of this initiative is funded through the Better Infrastructure Fund.

Building a better city – Active Travel – Secure bike parking 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000


The Government will install ten customised bike racks in Braddon. The bike racks have been designed by local artists as part of a competition.

Building a better city – Dickson Bus Station – Land acquisition 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Provision – Capital NFP 0 0 0 NFP

The Government will compensate the private lessee for the compulsory land acquisition by the Government to construct the Dickson Bus Station. The amount to be paid is yet to be determined.


Building a better city – Federal Highway and Old Well Station Road Intersection upgrade

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 1,200 0 0 0 1,200 Depreciation 0 34 34 34 102 Associated Expenses 0 0 12 24 36 Net Expenses 0 34 46 58 138

The Government will upgrade the intersection at Federal Highway and Old Well Station Road, including the installation of four-way traffic signals.

Building a better city – Gundaroo Drive duplication – Stage 2 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 5,000 17,800 10,000 0 32,800 Offset – Capital 0 -2,800 0 0 -2,800 Net Capital 5,000 15,000 10,000 0 30,000 Depreciation 0 0 80 480 560 Associated Expenses 0 0 0 28 28 Net Expenses 0 0 80 508 588

The Government will construct Stage 2 of the Gundaroo Drive duplication, completing the duplication from Gungahlin Drive through to the Barton Highway. This includes signalising the intersection of Gundaroo Drive, Anthony Rolfe Avenue and Mirrabei Drive. The works also include construction of an additional southeast-bound lane along Mirrabei Drive from Paul Coe Crescent to Gundaroo Drive to improve traffic flows. This initiative is partly funded through the Better Infrastructure Fund.


Building a better city – Improving Tharwa Village fire fighting water supply 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 250 1,177 0 0 1,427 Depreciation 0 0 142 142 284 Associated Expenses 0 0 14 28 42 Net Expenses 0 0 156 170 326

The Government will construct a water reticulation system to provide emergency fire fighting water for Tharwa Village. In the event of a bushfire, the system will pump non-potable water from the Murrumbidgee River, helping emergency services to protect the village. The associated offset is from funds provisioned in the 2016-17 Budget towards this project, which was dependent on joint funding from the Commonwealth’s National Stronger Regional Fund. As this application was unsuccessful, the ACT Government is delivering this infrastructure in full.

Building a better city – Monaro Highway upgrade early planning 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 0 1,000 1,000 0 2,000 Associated Revenue 500 500 0 0 1,000

The Government will provide funding to match the Commonwealth’s funding offer to prepare the business case and possible future options to upgrade the Monaro Highway between Calwell and Symonston. Construction of the project would be dependent on the outcome of this work and on the nature and quantum of a financial contribution from the Commonwealth Government.

Building a better city – New Bus Depot Woden 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Provision – Capital NFP NFP 0 0 NFP

The Government will construct a new bus depot in Phillip, providing additional facilities for up to 120 buses to accommodate growth in the bus fleet. The new depot will provide undercover bus parking, administrative facilities and offices, maintenance, refuelling and bus washing facilities.


Building a better city – Pialligo Avenue duplication early planning 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 0 2,000 2,000 0 4,000 Associated Revenue 1,000 1,000 0 0 2,000

The Government will provide funding to match the Commonwealth’s funding offer to prepare the business case and possible future options related to the potential duplication of Pialligo Avenue. Any construction phase of the project would be dependent on the outcome of this work and the nature and quantum of financial contributions from the Commonwealth and/or New South Wales Governments.

Building a better city – Rehabilitating landfill sites 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 3,544 5,552 17,427 8,322 34,845 Associated Expenses 0 0 0 120 120

The Government will rehabilitate the West Belconnen Resource Management Centre before its closure and subsequent transfer to the Ginninderry development in 2020. The Government will also rehabilitate landfill cells at the Mugga Lane Resource Management Centre that have reached maximum capacity. The rehabilitation of ACT landfills is a mandatory requirement under the Environmental Protection Act 1997.

Building a better city – Revitalising local town centres 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Capital 4,000 4,000 0 0 8,000 Offset – Capital -4,000 -4,000 0 0 -8,000 Net Capital 0 0 0 0 0 Depreciation 0 100 200 200 500 Associated Expenses 0 0 40 120 160 Net Expenses 0 100 240 320 660

The Government will design and construct improvements at Gungahlin and Tuggeranong town centres, and Kambah group centre over two years. The capital component of this initiative is funded from the Better Infrastructure Fund.


Building a better city – Upgrading stormwater infrastructure on Flemington Road

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Capital 150 850 0 0 1,000 Depreciation Associated Expenses

0 0

0 0

20 0

20 10

40 10

Net Expenses 0 0 20 30 50

The Government will implement additional flood mitigation control measures for Flemington and Morisset Roads in Mitchell.


$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Better schools for our kids – Safer walking and cycling around schools

0 0 0 0 0

Better services in your community – City services for new communities

513 0 0 0 513


3,267 15,896 16,658 0 35,821



2017-18 Budget Paper No.3 157 Revenue initiatives

3.4 REVENUE INITIATIVES

Revenue initiatives in the 2017-18 Budget total $38.4 million over four years.

A summary of revenue initiatives is shown at Table 3.4.1 below.

Table 3.4.1: Summary of revenue initiatives

2017-18 2018-19 2019-20 2020-21 Total Summary of initiatives Estimate Estimate Estimate Estimate $’000 $’000 $’000 $’000 $’000 Revenue initiatives 5,449 7,602 7,726 6,764 27,541

Revenue component of expense initiatives

1,476 2,402 1,820 1,828 7,526

Revenue component of infrastructure and capital initiatives

1,510 1,571 121 121 3,323

Total revenue initiatives 8,435 11,575 9,667 8,713 38,390

Associated Expense 2,417 2,154 2,193 1,154 7,918


Table 3.4.2: Summary of revenue initiatives by agency

2017-18 2018-19 2019-20 2020-21 Total Revenue initiatives Estimate Estimate Estimate Estimate

$’000 $’000 $’000 $’000 $’000



800 1,100 1,100 1,100 4,100

Better support when it matters – Protecting vulnerable Canberrans

81 0 0 0 81

Building a better city – Building Levy – Improving building quality2

2,217 2,154 2,193 1,154 7,718

Fairer revenue – General rates early payment discount 1,943 2,089 2,228 2,376 8,636

Fairer revenue – Land tax on vacant properties

0 2,000 2,000 2,000 6,000

Fairer revenue – Reducing liquor licence fees for small and low-risk venues

-69 -72 -75 -78 -294

Fairer revenue – Reducing registration fees for caravans

-224 -230 -236 -242 -932

More and better jobs – Encouraging outdoor dining

-43 -44 -46 -48 -181


0 50 100 100 250

More and better jobs – Supporting Canberra’s small and medium clubs2

-1,257 -1,326 -1,370 -1,430 -5,383

More and better jobs – Supporting major venues

350 350 350 350 1,400

Total 3,798 6,071 6,244 5,282 21,395

Environment, Planning and Sustainable Development Directorate

Fairer revenue – Sustainable campground fees

30 31 32 32 125

Fairer revenue – Unit titling variation 3,000 3,000 3,000 3,000 12,000 Total 3,030 3,031 3,032 3,032 12,125

Justice and Community Safety

Directorate

Fairer revenue – Mobility parking integrity1

0 0 0 0 0

Total 0 0 0 0 0

Legal Aid Commission (ACT) Better support when it matters –

Stronger Legal Aid 6 6 6 6 24

Total 6 6 6 6 24


2017-18 2018-19 2019-20 2020-21 Total Revenue initiatives Estimate Estimate Estimate Estimate

$’000 $’000 $’000 $’000 $’000 Transport Canberra and City Services

Directorate

Better services in your community – Container Deposit Scheme2

219 946 364 372 1,901

Better services in your community – Free off-peak travel for seniors and concession card holders

0 0 0 0 0

Better services in your community – Free travel on new Rapids – Trial

-148 0 0 0 -148

Better services in your community – Increasing recycling and reducing waste

20 0 0 0 20


10 21 21 21 73

Building a better city – Monaro Highway upgrade early planning

500 500 0 0 1,000

Building a better city – Pialligo Avenue duplication early planning

1,000 1,000 0 0 2,000

Total 1,601 2,467 385 393 4,846

TOTAL REVENUE INITIATIVES 8,435 11,575 9,667 8,713 38,390 Associated Expenses 2,417 2,154 2,193 1,154 7,918

Notes: 1. The revenue impact is difficult to predict with certainty, as the Lease Variation Charge is a volatile revenue line. 2. This initiative has an expense component; this is listed in the summary table in Expense initiatives (Chapter 3.2).



Building a better city – Building Levy – Improving building quality

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Environment, Planning And Sustainable Development Directorate – Associated Expenses

2,217 2,154 2,193 1,154 7,718

Chief Minister, Treasury and Economic Development Directorate – Revenue

2,217 2,154 2,193 1,154 7,718

Net Impact 0 0 0 0 0

The Government will improve building quality in the ACT through three new initiatives:

Building a better city – Building audits – developing a building audit and inspection program, which aims to reduce financial losses for property owners. Financial losses often occur due to building defects that are the result of non-compliance with the Building Act 2004;

Building a better city – Building certification reform – establishing a panel of independent auditors to conduct mandatory annual audits. An auditing function will be created for licensed building surveyors acting as building certifiers under the Building Act 2004; and

Building a better city – Building regulation reform – improving the ACT Building Regulatory System reform which will establish a more effective and responsive regulatory system and improve industry practices.

These initiatives will be funded by an increase in the Building Levy from 0.9 per cent to 1.08 per cent.

Fairer revenue – General rates early payment discount 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Revenue 1,943 2,089 2,228 2,376 8,636

The Government will reduce the general rates early payment discount to 1 per cent from 1 July 2017. The discount applies to property owners who pay their general rates and Fire and Emergency Services Levy assessments in full by the first due date. The decrease reflects the current environment of low inflation and low interest rates.


Fairer revenue – Land tax on vacant properties 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Revenue 0 2,000 2,000 2,000 6,000

From 1 July 2018 the Government will extend land tax to all residential dwellings that are not the owner’s principal place of residence, whether they are rented or not. Under the current system, land tax is only charged on residential properties that are rented or owned by a company or a trust. This initiative is aimed at increasing the number of residential properties available for rent and therefore helping to put downward pressure on living costs.

Fairer revenue – Reducing liquor licence fees for small and low-risk venues 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Revenue -69 -72 -75 -78 -294

The Government will reduce the liquor licence fees for small and low risk venues to encourage the development of a more diverse range of venues in the Territory. The revenue foregone will be partly offset by an increase in liquor licence fees for off-licensed venues.

Fairer revenue – Reducing registration fees for caravans 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Revenue -224 -230 -236 -242 -932

The Government will reduce the registration fees for caravans in the Territory to align fees more closely with New South Wales.

More and better jobs – Encouraging outdoor dining 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Revenue -43 -44 -46 -48 -181

The Government will provide additional support for Canberra businesses by reducing the outdoor dining permit fees for food businesses with outdoor dining facilities on unleased public land.


More and better jobs – Supporting Canberra's small and medium clubs 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Chief Minister, Treasury and Economic Development Directorate – Revenue

-1,257 -1,326 -1,370 -1,430 -5,383

Justice and Community Safety Directorate – Associated Expenses

200 0 0 0 200

The Government will introduce a gaming tax rebate for small and medium clubs to retain 50 per cent of their gaming taxes up to $4 million of gaming revenue. The Government will also provide support to small and medium clubs (those with gaming revenue of less than $4 million per annum) through a one-off grant of $10,000.

Revenue associated with expense initiatives

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000


800 1,100 1,100 1,100 4,100

Better support when it matters – Protecting vulnerable Canberrans

81 0 0 0 81

More and better jobs – Supporting major venues

350 350 350 350 1,400


Revenue associated with infrastructure and capital initiatives 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000


0 50 100 100 250




Fairer revenue – Sustainable campground fees

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Revenue 30 31 32 32 125

The Government will increase campground fees by 20 per cent across ACT Parks and Conservation campgrounds. The proposed increase in fees will be between $1.60 and $3.00 per person per night, depending on the campground.

Fairer revenue – Unit titling variation 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Revenue 3,000 3,000 3,000 3,000 12,000

The Government will increase the codified Lease Variation Charge required to enable unit titling on certain residential leases to a flat fee of $30,000 per dwelling. This will improve consistency with the ‘per unit’ charges which apply to other types of residential lease variations, and will take effect from 1 July 2017.



Fairer revenue – Mobility parking integrity 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Revenue 0 0 0 0 0

The Government will increase the penalty for the misuse of a mobility parking permit. Incorrect use of these permits is unfair to genuine permit holders, undermines the effective operation of carparks and costs the community revenue. This initiative is a first step in signalling the Government’s intention to tighten compliance by monitoring this concession and reviewing its operation.


LEGAL AID COMMISSION (ACT)

Revenue associated with expense initiatives 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Better support when it matters – Stronger Legal Aid

6 6 6 6 24




Better services in your community – Free off-peak travel for seniors and concession card holders

2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Total $’000

Revenue 0 0 0 0 0

The Government will continue the trial of free travel for seniors and concessional MyWay card holders in all off-peak periods for a further six months.

Better services in your community – Free travel on new Rapids – Trial 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Revenue -148 0 0 0 -148

The Government will provide free travel for two months on the new Green and Black Rapid Routes (operating from Woden to the City via Manuka and Barton, and Belconnen to Gungahlin, respectively). These routes will be established in 2017 to encourage more people to use public transport.

Revenue associated with expense initiatives 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000

Better services in your community – Container Deposit Scheme

219 946 364 372 1,901

Better services in your community – Increasing recycling and reducing waste

20 0 0 0 20



Revenue associated with infrastructure and capital initiatives 2017-18

$’000 2018-19

$’000 2019-20

$’000 2020-21

$’000 Total $’000


10 21 21 21 73

Building a better city – Monaro Highway upgrade early planning

500 500 0 0 1,000

Building a better city – Pialligo Avenue duplication early planning

1,000 1,000 0 0 2,000



2017-18 Budget Paper No.3 169 Expenses

CHAPTER 4

EXPENSES

Chapter Page

4.1 Overview 171

4.2 Expenses and forward estimates 173

4.3 Savings 183

2017-18 Budget Paper No.3 170 Expenses


4.1 OVERVIEW

The Government’s spending makes our priorities clear.

In our first budget since the 2016 election, we are focused on delivering our commitments: better health care, better schools, support for vulnerable Canberrans, and renewal of our city. These have long been important priorities for the Government and so the new spending in this Budget comes on top of the significant investment the Government has delivered since we came to office.

Health remains a key priority, attracting more than one quarter of all Government spending. The Government has strengthened this commitment in the 2017-18 Budget by delivering expanded health services such as more nurses and Walk in Centres, a mental health package, and commissioning for the University of Canberra Public Hospital.

The Government remains committed to giving every Canberra child a quality education, which is why we spend around one fifth of the budget on our schools and teachers. This Budget grows investment by providing for increased public school enrolments, as well as more teacher scholarships, teaching assistants, and school psychologists.

Around one tenth of spending currently goes to supporting the vulnerable through services and housing. The Government is significantly boosting expenditure in these priority areas through increases in funding for child protection and out of home care services.

Other Government priorities are also being expanded, including through:

advancing the second stage of light rail from the city to Woden;

improving waste management, increasing recycling, cleaning up our suburbs, and preparing to expand the kerbside bulky waste collection;

reshaping Canberra’s events calendar and supporting Canberra businesses and tourism; and

further investing in climate change and sustainability projects.

Overall, General Government Sector expenses are forecast to be $5.6 billion in 2017-18, representing 13.8 per cent of Gross State Product. Across the forward estimates, expenses are forecast to grow by a compound annual rate of 2.7 per cent, largely reflecting increases in transport, health and education expenses, and partially offset by a reduction in general public service expenses.


2017-18 Budget Paper No.3 173 Expenses and forward estimates

4.2 EXPENSES AND FORWARD ESTIMATES

General Government Sector expenses are forecast to be $5.6 billion in 2017-18, representing 13.8 per cent of Gross State Product. Health and education continue to be the two most significant areas of government spending.

Across the estimated outcome and forward estimates period, government expenses are forecast to grow by 2.7 per cent. This is 0.7 per cent lower than the four year average from 2012-13 to 2015-16.

Figure 4.2.1 shows General Government Sector expenses (excluding renewable energy certificates) over a 10-year period. The peak in 2014-15 reflects the costs associated with the Loose-fill Asbestos Insulation Eradication Scheme.

Figure 4.2.1: General Government Sector total expenses as a percentage of Gross State Product

11.0

11.5

12.0

12.5

13.0

13.5

14.0

14.5

15.0

Per c

ent o

f GSP

In this chapter, General Government Sector expenses have been categorised and presented in accordance with both Government Purpose Classifications and the consolidated General Government Sector Operating Statement. In the Government Finance Statistics reporting framework, the Government Purpose Classifications is a coding system that is used to classify expense transactions in terms of their functional purposes (for example, health, education, etc). Presenting the government expenses in this format provides information on the proportion of government resources expected to be spent on individual functions. These classifications can differ from the thematic presentation of government spending presented elsewhere in the budget papers.


Estimated expenses by function

Table 4.2.1 sets out the estimates of General Government Sector expenses by function for the period 2016-17 to 2020-21.

Table 4.2.1: General Government Sector expenses by function

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est. Outcome Budget Estimate Estimate Estimate

$’000 $’000 $’000 $’000 $’000 $’000

492,226 General Public Services 603,719 506,887 493,943 504,432 520,467 407,195 Public Order and Safety 431,867 446,898 446,040 452,720 469,374

1,134,063 Education 1,117,912 1,149,346 1,188,366 1,222,526 1,251,383 1,499,974 Health 1,467,927 1,524,492 1,568,197 1,636,815 1,718,233

302,215 Social Security 344,366 319,218 328,974 359,426 372,419 262,089 Housing and Community

Amenities 239,152 285,355 250,013 244,030 230,933

225,579 Recreation and Culture 222,161 231,611 218,912 223,415 229,337 11,223 Fuel and Energy 19,174 65,579 95,227 148,991 190,407

2,718 Agriculture, Forestry, Fishing and Hunting

4,816 3,799 3,421 3,359 3,747

16,344 Mining and Mineral Resources other than Fuels, Manufacturing and Construction

24,939 25,133 26,125 27,088 27,921

337,089 Transport and Communications

347,192 355,350 409,613 428,440 442,556

62,498 Other Economic Affairs 87,130 84,736 80,224 80,751 81,210 562,884 Other Purposes 500,225 597,967 600,126 633,028 645,594

5,316,096 Total Expenses 5,410,579 5,596,370 5,709,181 5,965,018 6,183,579


General Government Sector expenses are strongly influenced by underlying trends in spending in the health and education functions. Together, these functions account for around 48 per cent of all government expenses in 2017-18.

Major expense trends across the budget and forward years include movements in the following functions:

Education – the forecast increase in expenses from 2017-18 is primarily driven by expected growth in the operational costs of schools in line with general wage and price inflation.

Health – expenses are expected to increase as a result of growth in activity and costs.

Fuel and energy – the forecast increase in 2017-18 is largely due to the inclusion of Large-scale Generation Certificates expected to be surrendered to the Clean Energy Regulator (Budget Outlook (Chapter 2.2) presents further information regarding the Certificates).


Transport and Communications – the forecast increase in expenses from 2018-19 is largely due to the investment in Light Rail through a Public Private Partnership.

General public services – the increase in 2016-17 from the original budget is attributed to the re-profiling of spending originally planned for 2015-16.

Other purposes – the increase in expenses over the forward estimates largely reflects the higher interest costs resulting from increased estimated market-financed borrowings, and the interest expense for lease liabilities associated with Public Private Partnerships.

Where will Government spending go in 2017-18?

In 2017-18, the Government will spend $5.6 billion on delivering services to Canberra. The most significant component of government spending relates to health expenses, with more than 25 per cent of total General Government Sector expenses being used to provide health services, such as general hospital activities, community healthcare and health research.

Spending on health is followed closely by spending on education. Approximately 21 per cent of total General Government Sector expenses are dedicated to education services, including schools and in higher education institutions such as the Canberra Institute of Technology.

The remaining government expenses are mainly for public order and safety, general public services, transport and communications, and other purposes, as shown in Figure 4.2.2.


Figure 4.2.2: Components of 2017-18 General Government Sector expenses

General Public Services

9%

Public Order and Safety

8%

Education21%

Health27%

Social Security6%

Housing and Community Amenities

5%

Other Functions

3%

Recreation and Culture

4%

Transport and Communications

6%Other Purposes

11%

Consolidated General Government Sector Expenses

This section provides details of the 2016-17 estimated outcome, the 2017-18 Budget and forward estimates for expense items, including a discussion of the major variances in line with the presentation of the General Government Sector Consolidated Operating Statement.

Total expenses for the General Government Sector are expected to be $5.4 billion in 2016-17, growing to $5.6 billion in 2017-18. As in prior years, almost half of the expenses in 2017-18 relate to employee wages and superannuation.

The estimated outcome for expenses in 2016-17 is $6.8 million higher than the original 2016-17 Budget forecast.


Table 4.2.2: General Government Sector expenses

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est. Outcome Budget Var Estimate Estimate Estimate

$’000 $’000 $’000 % $’000 $’000 $’000 Expenses

1,892,025 Employee Expenses 1,899,771 1,963,198 3 1,983,439 2,017,794 2,051,128 Superannuation

Expenses 315,534 Superannuation

Interest Cost 293,498 367,684 25 381,208 394,123 406,389

417,211 Other Superannuation Expenses

452,855 286,781 -37 281,285 275,815 274,554

372,680 Depreciation and Amortisation

368,160 379,602 3 414,180 434,792 430,502

187,445 Interest Expense 183,499 200,728 9 211,536 234,549 230,082 Other Operating

Expenses 1,028,169 Supplies and

Services 980,371 1,096,814 12 1,103,701 1,159,958 1,268,546

191,697 Other Operating Expenses

174,332 209,355 20 216,962 225,047 239,200

998,988 Grants and Purchased Services

1,058,093 1,092,208 3 1,116,870 1,222,940 1,283,178

5,403,749 Total Expenses 5,410,579 5,596,370 3 5,709,181 5,965,018 6,183,579

Factors affecting expense levels

Employee expenses

In 2016-17, employee expenses are estimated to be $7.7 million higher than the original Budget estimate. This small increase is partially due to the growth in government operating activities which include the development of Light Rail – Stage 2 and the roll out of a green bin pilot program.

Employee expenses are forecast to grow by $63.4 million, or 3.3 per cent, in 2017-18 compared to the 2016-17 estimated outcome. This increase is largely due to new initiatives, an expected increase in school enrolment numbers, as well as growth in wages.

Superannuation interest costs and other superannuation expenses

Superannuation interest costs and other superannuation expenses represent superannuation expenses in relation to the defined benefit Commonwealth Superannuation Scheme and Public Superannuation Scheme superannuation liability, and defined contribution superannuation arrangements including Public Sector Superannuation accumulation plan and fund of choice.


The net increase of $13.6 million in the 2016-17 estimated outcome from the original Budget is mainly due to an increase in Commonwealth Superannuation Scheme and Public Superannuation Scheme superannuation expenses as a result of the defined benefit superannuation liability valuation at 30 June 2016 using a lower discount rate than assumed at the time of the 2016-17 Budget.

The net decrease of $91.9 million in the 2017-18 Budget from the 2016-17 estimated outcome is mainly due to the latest Commonwealth Superannuation Scheme and Public Superannuation Scheme superannuation liability actuarial review and use of a higher discount rate assumption. These factors have increased superannuation interest expense by $74.2 million and decreased other superannuation expenses by $166.1 million.

Depreciation and amortisation

Depreciation and amortisation is estimated to be $4.5 million, or 1.2 per cent, lower than the original budget. This is largely due to the reprofiling of capital works projects from the 2016-17 financial year to 2017-18 and the forward years.

Depreciation and amortisation expenses are estimated to increase in 2017-18 by $11.4 million, or 3.1 per cent. This increase is mainly due to the expected completion of capital works projects, including the University of Canberra Public Hospital, and the impact of asset revaluations for the Education Directorate.

Interest expense (borrowing costs)

The expected decrease of $3.9 million, or 2.1 per cent, in the 2016-17 estimated outcome from the original budget is mainly due to reduced interest payments as a result of lower than estimated CPI on inflation-linked bond borrowings.

An increase in interest costs of $17.2 million, or 9.4 per cent, is expected in 2017-18. This is primarily due to higher interest costs resulting from increased estimated market-financed borrowings for Icon Water and the General Government Sector, and interest costs for lease liabilities associated with Public Private Partnerships.

Supplies and services

Supplies and services expenses comprise supplies, repairs and maintenance, consultants and contractors’ expenses, as well as payments for ACT Policing.

The 2016-17 estimated outcome for supplies and services expenses is expected to be $47.8 million, or 4.6 per cent, lower than the original budget. This decrease is mainly due to the effect of reprofiling from 2016-17 to 2017-18 and the forward years.

Supplies and services expenses are forecast to increase by $116.4 million in 2017-18, or 11.9 per cent from the 2016-17 estimated outcome. This increase is largely due to the reprofiling stated above, new policy initiatives, and increases in expenditure under the Renewable Energy Innovation Fund which reflect ongoing investment in the renewable energy sector resulting from higher contributions from industry.


Other operating expenses

Other operating expenses consist of cost of goods sold, insurance-related costs, concessions, school account expenses, and other miscellaneous expenses.

The 2016-17 estimated outcome for other operating expenses is expected to be $17.4 million, or 9.1 per cent lower than the 2016-17 Budget estimate. This is mainly due to a decrease in insurance claims expenses as a result of continued improvement in claims experience – in particular, large claims in medical malpractice. This decrease is also attributable to a reduction in expenses for the Lifetime Care and Support Fund due to a reduction in motor vehicle injury costs as a result of no new participants entering the scheme in 2016-17.

The increase of $35.0 million, or 20.1 per cent, in the 2017-18 Budget from the 2016-17 estimated outcome is mainly due to insurance claim expenses returning to normal actuarial calculated levels for the cost of future claims, and the one-year impact of the reduction in motor vehicle injury costs for the Lifetime Care and Support Fund described above.

Grants and purchased services

Grants and purchased services expenses are estimated to be $59.1 million, or 5.9 per cent higher than the original budget. This is largely due to the transfer of Constitution Avenue to the National Capital Authority, the redirection of existing funding for the contribution to the National Disability Insurance Scheme, and additional expenditure to strengthen support for vulnerable children and young people by providing an increase in funding for out of home care services.

Grant expenses are expected to grow in 2017-18 by $34.1 million, or 3.2 per cent. This increase is mainly due to higher grants in relation to new initiatives and the National Health Reform Agreement.

Community Service Obligations

Community Service Obligations primarily relate to Public Trading Enterprises. The definition adopted by the ACT Government is the one used by the Steering Committee on National Performance Monitoring of Government Trading Enterprises, established under the aegis of the Special Premiers’ Conference in 1991, which states:

‘A Community Service Obligation arises when a government specifically requires a public enterprise to carry out activities relating to outputs or inputs, with identified public benefit objectives, which it would not elect to do on a commercial basis, and which the government does not require other businesses in the public or private sector to undertake, or which it would only do commercially at higher prices.’

The Government extends the policy to other business units, regardless of whether the unit is formally a Territory-owned corporation or a statutory authority, and irrespective of its organisational structure.


The separate identification of Community Service Obligations provides transparency on the full cost of services as well as the financial implications of Government decisions in the provision of services to specific targeted groups in the community.

Table 4.2.3: Community Service Obligations funded in the 2017-18 Budget

CSO provided by: 2017-18 Description Budget

$’000


Exhibition Park 462 Compensation for charging below market rates, as a result of Ministerial direction, or agreements entered into by the Government.

Icon Water Limited 11,503 Rebates on water and sewerage charges for concession card holders,

schools, churches, hospitals, benevolent and charitable institutions, and remissions provided by the ACT Civil and Administrative Tribunal (ACAT).

ActewAGL/Origin

Energy/Energy Australia 14,249 Rebates on energy bills for concession card holders and community

groups, and remissions provided by the ACAT. Several Funeral Directors 274 Funerals Assistance Program. ACTION 8,314 Rebates on public transport for adult and student concession card

holders. Public Trustee and Guardian Public Trustee and

Guardian 510 Financial Management under ACAT orders, Enduring Power of

Attorney, welfare funerals, AFP callouts, estates and trusts administered valued at less than $100,000, and the examination of external ACAT orders, and will preparation.

Transport Canberra and City Services

Directorate

Yarralumla Nursery 291 Free plant issue. ACTION 104,140 Funding provided to ACTION to operate network services. Environment, Planning and

Sustainable Development Directorate

ACT Forests 2,295 Provision and upkeep of public use areas within ACT Forests.

Total Community Service Obligations

142,038


Community Sector Funding

The Government provides funding for not-for-profit non-government community organisations that deliver human services through a multi-year Service Funding Agreement to meet increasing wage-related and administrative costs.

Annual funding increases are calculated using the following formula:

Community Sector Funding Rate = (Wage Price Index × 0.8) + (Consumer Price Index × 0.2).

Table 4.2.4 sets out the rates that have been applied to eligible community sector funding for the 2017-18 Budget.

Table 4.2.4 – Community Sector Funding Rate

2017-18 Budget %

Wage Price Index 2 Consumer Price Index 2 Community Sector Funding Rate 2


2017-18 Budget Paper No.3 183 Savings

4.3 SAVINGS

The Government’s fiscal strategy is focused on achieving a strong operating balance over the medium term, maintaining sound public finances, and ensuring the delivery of quality and efficient services. To deliver this strategy, the Government routinely reviews processes and structures to ensure the delivery of all government activities is efficient, productive and targeted towards areas of identified need.

As part of its preparations for the 2017-18 Budget process, the Government reviewed the operating costs of all Directorates to offset the cost of new initiatives, particularly election commitments. We also sought to identify areas where efficiencies could be made by taking advantage of technological advances, such as the replacement of ageing information technology systems, and ensuring that processes and procedures reflect the best value for money.

As a result of this process, the Environment, Planning and Sustainable Development Directorate will increase the efficiency of its planning and delivery functions by streamlining customer service delivery, consolidating functional areas, and improving planning and leasing services to the community. The Directorate will also reduce duplication in its land use planning work, and introduce more efficient engagement on biosecurity matters.

A major contributor to increased efficiency is the Health Directorate which, through its System Innovation Program, is undertaking significant structural reforms and reducing its activity costs. These efficiencies will not impact on the quality of care, safety standards, or patient outcomes.

Efficiencies will also be achieved in the Chief Minister, Treasury and Economic Development Directorate through the replacement of ageing systems, particularly those involving human resources. Although capital expenditure will be required, ongoing efficiencies will be realised as the new systems offer increased functionality and increased automation in contrast to existing arrangements. Similar updates to information technology systems, in addition to changes to recruitment practices and procedures, will achieve efficiencies within the Justice and Community Safety Directorate.

Government agencies will continue to review their internal operations to ensure they are adequately addressing the demands placed upon them, and revising them where opportunities arise.

2017-18 Budget Paper No.3 184 Savings

The Government is also reviewing processes and systems which have the potential to achieve savings at a whole of government level. For example, the Smart Modern Strategic Procurement Reform program continues to explore opportunities for efficiencies in areas such as property maintenance, medical and health related goods and services, and information and communication technologies. In addition to achieving cost reductions, the program has also improved the interaction of small to medium suppliers with Government through a range of improved procurement practices, such as the introduction of panel arrangements for Government contracts. A key focus of this program is the requirement for Government agencies to consider local capability, and take into account the broader economic benefits for the Canberra Region when determining optimal procurement outcomes.

While delivering these efficiencies across government agencies, the ACT Government is maintaining our commitment to keep overall staffing levels constant, as detailed in Appendix M.

2017-18 Budget Paper No.3 185 Infrastructure and Capital

CHAPTER 5

INFRASTRUCTURE AND CAPITAL

Chapter Page

5.1 Overview 187

5.2 The 2017-18 Infrastructure Investment Program 191

5.3 Public Trading Enterprises capital works program 205

5.4 Supply and release of land 209

5.5 The Territory’s assets 213

5.6 Asset recycling 217

2017-18 Budget Paper No.3 186 Infrastructure and Capital


5.1 OVERVIEW

The ACT Government’s Infrastructure Investment Program is a key part of our plan to maximise economic growth, improve productivity and grow more good jobs.

The Government is already in the process of delivering a $2.8 billion infrastructure pipeline including Stage 1 of light rail from Gungahlin to the City, the ACT Law Courts precinct, and major arterial road upgrades across the Territory.

Over the next four years, we will deliver even more investment in key infrastructure to support our city’s growth and cement Canberra’s status as one of the world’s most liveable cities. Importantly, this investment will extend beyond transport infrastructure and into our schools, hospitals and public spaces to deliver better services for Canberrans through new and refurbished infrastructure.

Economic growth

The Government’s growth strategy is based on diversifying our economy, addressing transport and infrastructure gaps to prevent productivity-sapping bottlenecks, and shaping a vibrant city that can continue to attract more people to live, work and study in Canberra.

That is why this Budget will invest in better transport infrastructure, including a $54 million package of roads upgrades. The package will include the Stage 2 duplication of Gundaroo Drive and new access roads for the Canberra Brickworks and Molonglo. It will also fund early planning for future road works including the extension of Bindubi Street and the upgrade of William Hovell Drive.

The Government will also get work underway on Stage 2 of the ACT’s light rail network, which will connect Woden and the City to take more cars off one of Canberra’s busiest road corridors. Like Stage 1, the Government intends to deliver this stage of light rail through a Public Private Partnership. This will promote stronger links between government and the private sector, while ensuring Canberrans benefit from better innovation, design and service delivery.

The addition of light rail will see a major transformation of Canberra’s public transport network over the next four years. A modern and integrated light rail and bus network will be complemented by better walking and cycling infrastructure to promote more active living.

City renewal

To continue driving the renewal of Canberra’s public places and spaces, the Government is establishing two new agencies to oversee land development across the Territory.


The City Renewal Authority will be responsible for leading and managing infrastructure and other urban revitalisation initiatives within a newly-defined city precinct. This will include projects along the Northbourne corridor and central business district, through to Canberra’s lakeside at West Basin.

The Suburban Land Agency will focus on delivering new greenfield residential estates and suburban renewal, with an emphasis on more affordable housing and better suburbs.

The Government is committed to ensuring the benefits of city renewal are shared by all Canberrans. We are investing $296 million in the Public Housing Renewal Program in suburbs across Canberra, including the sixth tranche of the program in Gowrie Court at Narrabundah. The Government’s total investment in the public housing renewal program will be $608 million.

Health facilities

The ACT Government is committed to ensuring Canberrans can access good local healthcare when and where they need it. Our Health Infrastructure Program that kicked off in 2008 is the single-largest capital works program in the Territory since self-government.

The 2017-18 Budget builds on that work by starting delivery of the Government’s 10-Year Health Plan. As part of this future-focused investment, we will undertake early planning for the expansion of the Centenary Hospital for Women and Children, the Surgical Procedures, Interventional Radiology and Emergency (SPIRE) Centre at the Canberra Hospital, and a new northside hospital.

This Budget also delivers more Walk in Centres in north and south Canberra, two additional Mobile Dental Clinics, and a new purpose built facility for the Winnunga Nimmityjah Aboriginal Health Service in Canberra’s inner south.

In total, the 2017-18 Budget maps out a $262 million investment in renewing and expanding local health infrastructure, with more investment to come in the years ahead.

Education infrastructure

Along with great teachers, Canberra’s students need good learning environments to get the most out of their time at school. That encompasses both the physical infrastructure of classrooms and facilities, as well as the information and communications networks to connect our schools to the wider world.

The ACT Government is well advanced in our program of modernising ICT infrastructure in the Territory’s schools. The 2017-18 Budget goes further by planning for the roll-out of electronic devices to Canberra students who would not otherwise have access to them.

This Budget also delivers new resources to expand Gungahlin schools to cater for our growing population. The Government will upgrade classrooms, playgrounds and common facilities across both Government and non-Government schools, and deliver the Belconnen High and North Gungahlin Playing Fields.


This investment in better school infrastructure comes on top of the more than $1.1 billion the ACT Government spends each year on running and maintaining local schools across the Territory.

By delivering the 2017-18 Infrastructure Investment Program, the ACT Government will continue working to grow our economy and improve Canberra’s liveability through smart, efficient and sustainable infrastructure.


2017-18 Budget Paper No.3 191 The 2017-18 Infrastructure Investment Program

5.2 THE 2017-18 INFRASTRUCTURE INVESTMENT PROGRAM

Infrastructure investment trends and forecasts

The 2017-18 Budget represents a year of consolidation in completing the substantial program of works already in train, and planning for the delivery of the Government’s 2016 election commitments.

The Government will invest $2.8 billion in infrastructure in the ACT over the next four years, building from the substantial investment announced in the 2016-17 Budget.

The Territory’s Infrastructure Investment Program has three main components.

The Capital Works Program: funding of $1.7 billion will be delivered over the four years to 2020-21. The program includes all projects undertaken by the ACT Government for physical infrastructure, as well as investment in Information and Communications Technology (ICT), and Plant and Equipment (P&E).

Physical infrastructure works include:

- new projects approved in the 2017-18 Budget;

- work-in-progress on projects commenced in previous years; and

- improvements to existing infrastructure under the Better Infrastructure Fund (BIF) (formerly known as the Capital Upgrades Program), to extend the useful life, or improve the delivery capacity, of existing physical assets.

ICT and P&E expenditure is enabling investment to better facilitate government service delivery in the Territory.

Capital provisions: these provisions apply to the Capital Works Program and have two elements:

- Infrastructure Investment Provisions: These provisions total $766 million over four years. They set aside resourcing for significant capital works projects for which budgets are yet to be settled, or which are commercially sensitive; and

- Capital Delivery Provision: This provision has a zero net impact over the four years to 2020-21. It forecasts the cash flow profile of the aggregate Capital Works Program within the four year period, based on past expenditure trends. The provision is made at a whole of government level and will not affect the timely delivery of any project.


Public Private Partnerships (PPPs): A total of $344 million will be invested over the four years to 2020-21. The ACT is currently engaged in two PPP projects: the ACT Law Courts Facilities, and Light Rail – Stage 1. These projects are long-term contracts with private sector providers to design, finance, construct, maintain and/or operate infrastructure assets. The Government will make service payments over the life of the contracts, intended to cover the costs incurred by the private sector provider in constructing, maintaining and/or operating the assets. At the end of the contracts, the infrastructure assets will be owned by the Territory.

Projects funded under the Infrastructure Investment Program are identified, assessed and developed in accordance with The Capital Framework for the delivery of infrastructure projects in the ACT.

Summary information on the Capital Works Program is provided in Table 3.3.2 of Infrastructure and capital initiatives (Chapter 3.3) for new works, Appendix D for the Better Infrastructure Fund, and Appendix E for works-in-progress.

More detailed information on the Program can be found at http://apps.treasury.act.gov.au/budget/budget-2017-2018/capital-works-program. This online database is being provided for the first time in 2017-18 to deliver accessible information on the ACT Government’s Capital Works Program. Further information on this change is provided in the 2017-18 Readers’ Guide to the Budget – Budget Paper 3 – Infrastructure and Capital.

Investment forecasts

The 2017-18 Budget maintains the Government’s significant investment in infrastructure in recent years. In 2017-18, the Government will deliver more than $1 billion of infrastructure investment, building on a similarly large investment in 2016-17.

Figure 5.2.1 shows actual and forecast infrastructure investment in the ACT from 2013-14 to 2020-21. Most of the increase in capital works delivery over the three years to 2017-18 reflects payments associated with the ACT Law Courts Facilities and Light Rail – Stage 1.

For the four years to 2020-21, the higher levels of forecast expenditure in the first two years reflect both continued works on existing projects, and the commencement of new initiatives introduced in the 2017-18 Budget. The higher levels of provisions in the last two years are associated with both the Infrastructure Investment and Capital Delivery Provisions.


Figure 5.2.1: Infrastructure investment 2013-14 to 2020-21

0

200

400

600

800

1,000

1,200

PPPs Scheduled Expenditure ProvisionsActual Expenditure Forecast Expenditure

$ m

illion

Note: Actual and forecast expenditure includes Information and Communication Technology, and Plant and Equipment.


Table 5.2.1 provides summary budget forecasts for the 2017-18 Infrastructure Investment Program by category over the four years to 2020-21.

Table 5.2.1: Summary of 2017-18 Infrastructure Investment Program

2017-18 2018-19 2019-20 2020-21 Total Allocation Allocation Allocation Allocation Investment

$’000 $’000 $’000 $’000 $’000 New Capital Works

Early Planning 11,027 7,175 1,000 0 19,202 Forward Design 1,200 0 0 0 1,200 Construction 84,667 111,317 65,922 14,345 276,251 Information and Communications

Technology 13,506 10,585 6,359 4,012 34,459

Plant and Equipment 4,101 3,710 23,045 12,727 43,583 Capital Grants 0 0 0 0 0 Sub-Total New Capital Works 114,498 132,787 96,326 31,084 374,695

Better Infrastructure Fund 60,172 61,520 62,997 64,438 249,127

TOTAL NEW WORKS 174,670 194,307 159,323 95,522 623,822

Works-in-Progress 712,977 308,966 36,389 24,999 1,083,331 TOTAL CAPITAL WORKS PROGRAM 887,647 503,273 195,712 120,521 1,707,153 Infrastructure Investment Provisions 16,000 163,371 248,858 338,075 766,304 Capital Delivery Provision1 -131,176 -35,548 131,176 35,548 0 CAPITAL WORKS PROGRAM FORECAST 772,471 631,096 575,746 494,144 2,473,457 Public Private Partnerships ACT Law Courts Facilities 59,456 19,088 0 0 78,544 Light Rail – Stage 1 249,626 15,353 190 0 265,169 TOTAL PUBLIC PRIVATE PARTNERSHIPS 309,082 34,441 190 0 343,713 TOTAL INFRASTRUCTURE INVESTMENT

PROGRAM INCLUDING PROVISIONS2 1,081,553 665,537 575,936 494,144 2,817,170

Notes: 1. The Capital Delivery Provision is applied to the Capital Works Program. This provision indicatively re-profiles

approximately 15 per cent of the 2017-18 Capital Works Program into 2019-20, and 7 per cent of 2018-19 into 2020-21, providing forecast program expenditure based on historical trends.

2. Numbers may not add due to rounding.


Capital Works Program

The Capital Works Program forms the largest component of the Infrastructure Investment Program, with funding of $888 million in 2017-18 and $1.7 billion over the four years to 2020-21. This includes:

$114 million in 2017-18 ($375 million over four years) for new capital works;

$713 million in 2017-18 ($1.1 billion over four years) for works-in-progress; and

$60 million in 2017-18 ($249 million over four years) for the Better Infrastructure Fund.

For the first time, this program includes expenditure on ICT and P&E. Inclusion of these components provides more comprehensive information on government capital spending and allows improved transparency in reporting.

The largest component of the Capital Works Program is investment in urban development, encompassing urban roads and infrastructure, public transport and active travel, and public housing. This investment accounts for $322 million in 2017-18 and $648 million over the four years to 2020-21. Public housing renewal accounts for $194 million in 2017-18 and $296 million over four years.

Health and education also continue to be high priorities. Funding for health infrastructure projects totals $181 million in 2017-18 and $262 million over four years. The Government will provide $94 million and $226 million in education capital investment over the same periods.

To ensure that the benefits of our progressive and vibrant city are shared by all Canberrans, the Capital Works Program includes initiatives to better support those in need and ensure social inclusion, such as emergency, community services, and community safety. Investment in these areas totals $48 million in 2017-18 and $64 million over four years. Funding of $69 million in 2017-18 and $148 million over four years is also provided for initiatives to protect our environment.

Information on some of the significant projects is provided in the discussion on new works and works-in-progress below. A summary of the 2017-18 Capital Works Program for individual agencies is provided in Table 5.2.2.


Table 5.2.2: Summary of the 2017-18 Budget Capital Works Program

Agency Financing 2017-18

$’000

Financing 2018-19

$’000

Financing 2019-20

$’000

Financing 2020-21

$’000

Total Investment

$’000 Canberra Institute of Technology

New Capital Works 0 0 0 0 0 Better Infrastructure Fund 2,642 2,709 2,776 2,846 10,973 Works-in-Progress 2,150 1,257 1,257 1,257 5,921 Total 4,792 3,966 4,033 4,103 16,894


New Capital Works 24,698 28,397 35,705 16,739 105,539 Better Infrastructure Fund 7,418 7,603 7,794 7,988 30,803 Works-in-Progress 68,402 56,596 13,244 2,244 140,486 Total 100,518 92,596 56,743 26,971 276,828

City Renewal Authority

New Capital Works 7,500 15,000 14,888 0 37,388 Better Infrastructure Fund 0 0 0 0 0 Works-in-Progress 0 0 0 0 0 Total 7,500 15,000 14,888 0 37,388

Community Services Directorate

New Capital Works 1,026 0 0 0 1,026 Better Infrastructure Fund 395 405 415 426 1,641 Works-in-Progress 3,520 0 0 0 3,520 Total 4,941 405 415 428 6,187

Cultural Facilities Corporation

New Capital Works 330 0 0 0 330 Better Infrastructure Fund 398 408 418 428 1,652 Works-in-Progress 1,092 0 0 0 1,092 Total 1,820 408 418 428 3,074

Education Directorate



New Capital Works 31,365 23,559 430 0 55,354 Better Infrastructure Fund 976 1,000 1,025 1,051 4,053 Works-in-Progress 227,676 96,696 257 72 324,801 Total 260,017 121,255 1,712 1,123 384,108

Health Directorate

New Capital Works 11,684 10,675 5,900 400 28,659 Better Infrastructure Fund 5,089 5,216 5,347 5,480 21,132 Works-in-Progress 164,012 48,165 0 0 212,177 Total 180,785 64,056 11,247 5,880 261,968


Agency Financing 2017-18

$’000

Financing 2018-19

$’000

Financing 2019-20

$’000

Financing 2020-21

$’000

Total Investment

$’000 Housing ACT

New Capital Works 700 0 0 0 700 Better Infrastructure Fund 0 0 0 0 0 Works-in-Progress 5,000 5,000 5,000 5,000 20,000 Total 5,700 5,000 5,000 5,000 20,700

Justice and Community Safety Directorate

New Capital Works 3,031 2,433 0 0 5,464 Better Infrastructure Fund 1,771 1,815 1,861 1,907 7,354 Works-in-Progress 38,403 2,777 2,122 2,122 45,424 Total 43,205 7,025 3,983 4,029 58,242

Office of the Legislative Assembly

New Capital Works 0 0 0 0 0 Better Infrastructure Fund 144 108 278 285 815 Works-in-Progress 5 5 5 5 20 Total 149 113 283 290 835

Transport Canberra and City Services Directorate


Total All Agencies

New Capital Works 114,498 132,787 96,326 31,084 374,695 Better Infrastructure Fund 60,172 61,520 62,997 64,438 249,127 Works-in-Progress 712,977 308,966 36,389 24,999 1,083,331 TOTAL CAPITAL WORKS PROGRAM 887,647 503,273 195,712 120,521 1,707,153


New capital works

Funding for new capital works totals $114 million in 2017-18 and $375 million over the four years to 2020-21. This program of works includes early planning, forward design, construction projects, and investment in ICT and P&E.

Construction accounts for $85 million (or 75 per cent) of new capital works, excluding new Better Infrastructure Fund projects in 2017-18 and $276 million (74 per cent) over the four years to 2020-21.

The 2017-18 Budget also provides $5 million in 2017-18 and $10 million over four years for early planning and scoping studies for the expansion of Centenary Hospital for Women and Children, the Surgical Procedures, Interventional Radiology and Emergency Centre, and a northside hospital.


As part of the Government’s agenda to advance Canberra’s status as a smart city, the budget provides $14 million in 2017-18 and $34 million over four years for new ICT projects. This funding includes $26 million over four years to replace and modernise the ACT Government’s ICT network equipment and systems. This investment will ensure continued network security and improve service delivery.

Some of the significant new capital works projects include:

Better schools for our kids – Public school infrastructure upgrades ($85 million);

Better support when it matters – Public Housing Renewal – New and better properties ($47 million);

Building a better city – Gundaroo Drive duplication – Stage 2 ($30 million);

Better schools for our kids – Expanding schools in Gungahlin ($24 million);

More and better jobs – Expanding Belconnen Arts Centre ($15 million);

More and better jobs – Modernising government ICT infrastructure ($15 million);

Better care when you need it – New health centre for Aboriginal and Torres Strait Islander Canberrans ($12 million);

More and better jobs – Improving Manuka Oval broadcast and media facilities ($12 million); and

Building a better city – Revitalising local town centres ($8 million).

Details of new capital works projects are provided in the Infrastructure and capital initiatives Chapter 3.3 (Table 3.3.2).

Works-in-progress

The 2017-18 Budget continues significant work program from previous years, with works-in-progress totalling $713 million in 2017-18, and $1.1 billion over the four years to 2020-21.

The continuing projects include public housing ($246 million over four years), road infrastructure ($151 million), health ($212 million), education ($98 million), measures to protect our environment ($84 million), emergency, community services and community safety ($49 million), and public transport and active travel ($36 million).


Some of the significant WIP projects to be funded over the four years to 2020-21 include:

Better Public Housing – New public housing properties ($227 million);

University of Canberra Public Hospital ($75 million);

Better Health Services – Upgrading and maintaining ACT Health assets ($74 million);

Caring for our Environment – Water Quality Improvement – The Basin Priority Project ($57 million);

Better Roads for Gungahlin – Horse Park Drive duplication (Mulligans Flat Road to the Federal Highway) ($53 million);

Better Services – Weston Creek and Stromlo swimming pool and leisure centre ($33 million);

Improving Our Suburbs – New Molonglo Valley infrastructure ($33 million);

Light Rail – Stage 1 – Procurement and delivery ($27 million);

Schools for the Future – North Gungahlin and Molonglo ($27 million);

Supporting our School System – Improving ICT ($24 million);

Better Roads for Weston Creek – Cotter Road duplication (Tuggeranong Parkway to Yarralumla Creek) ($20 million);

Schools for the Future – Modernising Belconnen High ($20 million);

Better Roads for Gungahlin – Gundaroo Drive duplication – Stage 1 ($12 million);

Better Roads for Tuggeranong – Ashley Drive duplication – Stage 2 ($12 million);

Strengthening Emergency Services – Territory Radio Network upgrade – Phases 2 and 3 ($11 million); and

Sterilising Services – Relocation and upgrade ($6 million).

Summary information on works-in-progress projects is provided in Appendix E. Further detailed information on the projects can be found at http://apps.treasury.act.gov.au/budget/budget-2017-2018/capital-works-program.

Better Infrastructure Fund

In 2017-18, funding of $60 million has been allocated for improvements to existing infrastructure that extend the useful life or improve the service delivery capacity of existing Territory physical infrastructure assets ($249 million over four years). Improvements to existing infrastructure are distinct from routine repairs and maintenance, which are funded separately.


The 2017-18 Better Infrastructure Fund (BIF) includes projects in the areas of urban infrastructure and facilities, roads, health, education, and justice and community safety.

Summary information on BIF projects is provided in Appendix D. Further detailed information on the projects can be found at http://apps.treasury.act.gov.au/budget/budget-2017-2018/capital-works-program.

Capital Provisions

Infrastructure Investment Provision

Consistent with past practice, the 2017-18 Budget includes an Infrastructure Investment Provision of $766 million over the four years to 2020-21. This provision provides for significant capital works projects for which budgets are yet to be settled, or which are commercially sensitive. These projects include:

Better care when you need it – Surgical Procedures, Interventional Radiology and Emergency Centre (SPIRE) – Major expansion of services at Canberra Hospital;

Better care when you need it – Expanding Centenary Hospital – More services for women and children;

Building a better city – Light Rail Stage 2 – City to Woden – Design and procurement;

Building a better city – Dickson office accommodation;

Building a better city – New bus depot Woden;

Building a better city – Dickson Bus Station – Land acquisition;

Building a better city – Active Travel – Belconnen bikeway; and

Better services in your community – Integrated bus and light rail ticketing.

As planning or procurement progresses, future budgets will contain further specific financial details for these projects.

The $766 million Infrastructure Investment Provision includes a Future Works Provision of $100 million for each of the three years to 2020-21. This is a general provision for new initiatives in the forward years and is not allocated to any specific project.

Capital Delivery Provision

The 2017-18 Budget also includes a Capital Delivery Provision to improve the accuracy of the overall budget estimates. While agencies are funded to deliver capital projects according to agreed timelines, there remain risks to the delivery of each project.


Reflecting these risks, but recognising that it is not possible to identify when they will eventuate for any given project, the Government has adjusted the forecast of the aggregate Capital Works Program within the four years to 2020-21. The adjustment is based on past outcomes and risk analysis. This provision is included at a whole of government level and will not affect the timely delivery of any individual project.

Public Private Partnerships

Public Private Partnerships (PPPs) have increasingly been used by governments in Australia, and around the world, to deliver a range of social and economic infrastructure where such partnerships achieve value for money for taxpayers.

The key benefits of a PPP approach include government harnessing private sector efficiencies and innovation that can be achieved during construction, whole-of-life cost efficiencies, outcome-focused service delivery, and effective management of project risks between the public and private sectors.

In the ACT, PPPs have been adopted for two major projects: the ACT Law Courts Facilities and Light Rail – Stage 1. The investment associated with these projects is set out in Table 5.2.3.

Table 5.2.3: Public Private Partnerships – ACT Law Courts Facilities and Light Rail – Stage 1 – Capital Expenditure Schedule

Project 2017-18 Forecast

$’000

2018-19 Forecast

$’000

2019-20 Forecast

$’000

2020-21 Forecast

$’000

Total

$’000 ACT Law Courts Facilities 59,456 19,088 0 0 78,544 Light Rail – Stage 1 249,626 15,353 190 0 265,169 Total 309,082 34,441 190 0 343,713

ACT Law Courts Facilities

The ACT Law Courts Facilities was the first PPP project for the ACT. The contract for the project was awarded to Juris Partnership, a consortium of companies that includes Laing O’Rourke Australia Construction Pty Ltd, Macquarie Capital Group Limited, Programmed Facility Management Pty Ltd, and Lyons Architecture.

Under the contract, Juris Partnership will be responsible for the design, construction, financing and maintenance of the ACT Law Courts Facilities for the next 25 years.

The first stage of the project on Vernon Circle is expected to be complete by the end of 2017. The second stage, which comprises the reconfiguration and refurbishment of the existing Supreme Court building, is due for completion in the second half of 2018.


Light Rail – Stage 1

The construction of Light Rail – Stage 1 is being delivered by Canberra Metro, a consortium which includes Pacific Partnerships, CPB Contractors, John Holland, Mitsubishi Corporation, Aberdeen Infrastructure Investments, Deutsche Bahn and CAF.

The contract with Canberra Metro provides for the delivery of 12 kilometres of light rail track, 13 stops, 14 light rail vehicles, a depot, and 20 years of operation and maintenance.

Construction is underway along the length of the route. Structural steel construction works have commenced for the buildings at the Light Rail depot, track slab paving has been laid, and all the rail has been delivered to the site.

2016-17 Capital Works Program estimated outcomes

Funds available

The 2016-17 Budget allocated $699 million to capital works projects which included new works, works-in-progress and infrastructure improvements (excluding ICT and P&E). This Budget appropriation was adjusted for the rollover of 2015-16 program funding, opening financial year adjustments, and revisions to Commonwealth funding. These adjustments resulted in total funds of $766 million being available for expenditure in 2016-17.

Project savings and re-profiling

Over the course of 2016-17, agencies reviewed their infrastructure, improvements to existing assets and other projects in light of expenditure to date and identified where the reprofiling of their projects was appropriate. This process also included bringing forward planned outyear expenditure to accelerate some existing projects and returning savings to the budget.

A total of $155 million has been re-profiled from 2016-17 to 2017-18 and the forward years. Program savings of $24 million have also been identified for return to the budget.

Details of savings and re-profiling for individual projects can be found at http://apps.treasury.act.gov.au/budget/budget-2017-2018/capital-works-program

Table 5.2.4 provides a summary of expected outcomes for individual agencies for 2016-17, compared to total funds available for the Capital Works Program.

The table also shows estimated capital works expenditure for 2016-17 by agency. The Health Directorate ($198 million) has the largest forecast spend, followed by the Chief Minister, Treasury and Economic Development Directorate ($188 million), and the Transport Canberra and City Services Directorate ($131 million).


Table 5.2.4: Summary of the 2016-17 Capital Works Estimated Outcome1

Total Project Financing Estimated Financing Savings Re-profiled Outcome 2016-172 2016-17 2016-173 2016-172 $’000 $’000 $’000 $’000

Canberra Institute of Technology 3,886 0 0 3,886 Chief Minister, Treasury and Economic

Development Directorate 290,939 -20,080 -82,995 187,864

Community Services Directorate 1,767 0 -1,172 595 Cultural Facilities Corporation 1,771 0 0 1,771 Education Directorate 47,862 -1,000 -17,187 29,675 Environment, Planning and Sustainable

Development Directorate 23,572 -156 3,811 27,227

Health Directorate 226,883 0 -28,388 198,495 Housing ACT 5,565 0 0 5,565 Justice and Community Safety Directorate 27,073 -2,693 -6,530 17,850 Office of the Legislative Assembly 943 0 0 943 Transport Canberra and City Services

Directorate 154,085 0 -22,726 131,359

Total 784,346 -23,929 -155,187 605,230

Notes: 1. The Capital Works Program for 2016-17 excludes expenditure on Information and Communication Technology, and

Plant and Equipment. The 2017-18 Budget is the first time these items have been included in the Capital Works Program.

2. Total financing includes Section 16B rollovers from 2015-16 into 2016-17. 3. Financing from 2016-17 is re-profiled into 2017-18 and the outyears. Some projects have also been accelerated.


2017-18 Budget Paper No.3 205 Public Trading Enterprises capital works program

5.3 PUBLIC TRADING ENTERPRISES CAPITAL WORKS PROGRAM

In 2017-18, Public Trading Enterprises (PTEs) are expected to undertake new works totalling $290 million. These works are not funded through the budget and are financed by the PTEs through own-source revenue or borrowing.

Table 5.3.1: Summary of public trading enterprises’ capital works

Agency Financing

2017-18 $’000

Financing 2018-19

$’000

Financing 2019-20

$’000

Financing 2020-21

$’000

Total

$’000 ACT Public Cemeteries Authority 458 0 0 0 458 City Renewal Authority1 867 1,274 6,991 12,548 21,680 Housing ACT2 47,941 32,981 34,089 35,197 150,208 Icon Water 120,400 112,200 80,200 84,300 397,100 Suburban Land Agency3 120,319 175,240 173,078 81,076 549,713 Total PTEs 289,985 321,695 294,358 213,121 1,119,159

Notes 1. The works shown are separate to those funded through the Capital Works Program and have transferred from the

Land Development Agency. 2. The 2017-18 figure includes a net uplift payment of $1.5 million to the Public Housing Renewal Taskforce for

increasing the number of bedrooms in specific properties. This is in addition to budget funding for public housing renewal.

3. The works shown have transferred from the Land Development Agency.

ACT Public Cemeteries Authority

The ACT Public Cemeteries Authority will continue work to upgrade and enhance the Territory’s public cemeteries. The planned work in 2017-18 includes continuing the Woden Cemetery extension.

City Renewal Authority

The new City Renewal Authority will lead, manage and facilitate the delivery of major redevelopment projects within declared urban renewal precincts. The first precinct will encompass Civic, the Northbourne Avenue corridor, and West Basin.

The Authority’s role is to encourage and promote a vibrant city through the delivery of design-led, people-focussed urban renewal, while encouraging and promoting social and environmental sustainability. It will also lead extensive community engagement, manage design competitions, and negotiate contracts to ensure Canberrans get the best possible design for their new public areas and buildings.

The Authority will continue to work on the boardwalk at West Basin and develop a program of further precinct works for consideration by the Government.


Housing ACT

Housing ACT undertakes a program of constructing or purchasing properties each year, as well as upgrading and refurbishing properties to ensure they continue to meet the needs of tenants and remain at an acceptable standard. The funding for this program is derived from the proceeds from the sale of properties and, if available, funds from operations.

The redevelopment of public housing properties is essential to the effective management of the portfolio to better meet the needs of current and future tenants, including applicants on the Social Housing Register currently waiting to be housed.

Housing ACT focuses on constructing properties to deliver a range of housing options for tenants. Properties to be constructed or purchased include larger sized housing of four or more bedrooms, and a number of smaller scale multi-unit two-bedroom developments. This structured and consistent approach to the long-term management of the portfolio improves the performance of the public housing portfolio, and the effectiveness, efficiency and quality of services delivered to tenants.

In 2017-18, Housing ACT will invest $40.1 million in the purchase or construction of properties. This is similar to the activity levels of the past few years and is in line with the longer-term program. A further $6.3 million will be spent on refurbishing and upgrading existing properties. This investment by Housing ACT is augmented by the Public Housing Renewal Program funded through the budget that will see the replacement of 1,288 public housing dwellings along the Northbourne Avenue corridor and in other key locations around Canberra.

Icon Water Limited

Key capital works projects for Icon Water in 2017-18 include:

upgrading the Lower Molonglo Water Quality Control Centre. The Centre was constructed in the 1970s and elements of the plant now require substantial upgrading;

upgrading Icon Water Information Technology infrastructure. Icon Water will renew legacy systems and hardware to support a 10-year renewal program of the operational technology systems which are at their end of life;

continued investment to rehabilitate both water and sewer networks to replace old and damaged pipes, ensuring a more reliable water supply and wastewater services to the community. This is part of a rolling program to maintain over 3,200 kilometres of mains and sewer networks. In 2017-18, Icon plans to replace 8.8 kilometres of water mains and 18 kilometres of sewer mains; and

renewal and upgrading of 498 electrical and instrumentation control systems across 93 Icon Water facilities for improved safety, reliability and maintenance effectiveness.


Suburban Land Agency

The Suburban Land Agency will deliver land releases, affordable housing, better suburbs and a focus on urban renewal projects in town centres and suburbs. It will conduct all land sales and strategic acquisitions outside declared urban renewal precincts and guide a coordinated program of land release and housing supply.

Through good quality design and strong community engagement, the Agency will work across Canberra to deliver suburban development that strengthens our local communities.

Major estate developments in 2017-18 include the suburbs of Moncrieff, Taylor and Throsby in Gungahlin, Coombs and Denman Prospect in Molonglo, and Lawson and Ginninderry in Belconnen. The Suburban Land Agency will also undertake works in Greenway, Phillip and the Kingston Foreshore.


2017-18 Budget Paper No.3 209 Supply and release of land

5.4 SUPPLY AND RELEASE OF LAND

The ACT Government plans for the supply and release of land, taking into account factors such as forecast population changes, household changes, demand for land, and the capacity to deliver key infrastructure and services cost effectively.

The four-year Indicative Land Release Program (ILRP) is one of the Government’s key economic and social strategies for the community. This program helps the Government achieve its social, environmental and financial objectives by:

meeting the demand for land in the Territory and stimulating urban renewal;

supporting investment in the Territory economy;

facilitating the provision of affordable housing;

establishing an appropriate inventory of serviced land; and

achieving satisfactory returns from the sale of unleased Territory land.

The 2017-18 ILRP (Table 5.4.1) includes a four-year residential target of 16,250 dwelling sites between 2017-18 and 2020-21. This target is marginally lower than previous years and reflects the:

accumulation of approximately 2,000 privately held undeveloped sites already released from previous years. These are urban infill sites for commercial and residential use (mixed use);

expiry of the Commonwealth Government’s Asset Recycling Initiative; and

earlier than forecast release of a second stage of Denman Prospect in Molonglo.

Demand for detached housing blocks remains high, and the Government aims to maintain a supply of standard residential sites in greenfield estates in accordance with the principles of the ACT Planning Strategy. Detached housing blocks in Taylor, Throsby, Wright, Coombs, and Strathnairn are programmed for release in 2017-18. To increase the rate of land servicing and compress the time between releases and shovel ready sites, the Government is letting concurrent civil contracts in most greenfield areas, and this will continue in the coming years.

The ILRP includes 10 remaining sites that the Territory is selling under the Commonwealth Government’s Asset Recycling Initiative. These will contribute 3,071 individual dwelling sites, as well as significant commercial and mixed use releases. Releases associated with the sale of assets as part of the Asset Recycling Initiative end in 2018-19. From that point, the Government will shift the focus of urban renewal to the city and the Eastlake urban renewal area.


The Indicative Commercial Land Release Program (Table 5.4.2) seeks to ensure that adequate and affordable commercial land is available to support the needs of a growing economy. This program includes a release target of 120,970 square metres of dedicated commercial land over four years.

The Indicative Mixed Use Land Release Program (Table 5.4.3) is now accounted for separately to better reflect the delivery of urban renewal initiatives and urban infill housing in commercial areas. A further 264,100 square metres of mixed use commercial land is programmed for release over the next four years.

The Indicative Industrial Land Release Program (Table 5.4.4) includes a release target of 160,000 square metres of industrial land over the next four years in Hume, Symonston, Fyshwick and Pialligo.

The Indicative Community and Non-Urban Land Release Program (Table 5.4.5) includes a range of community facility sites, including non-government schools and the development of aged care and retirement living accommodation. This program has a release target of 323,240 square metres of community and non-urban land over the next four years.

A summary of the ILRP is set out in the tables below.

Table 5.4.1 Indicative Residential Land Release Program

2017-18 2018-19 2019-20 2020-21 Total Region Number of dwelling sites Gungahlin 595 780 935 1,130 3,440 Molonglo 555 1070 800 600 3,025 Belconnen 1,000 570 600 880 3,050 Central Canberra 1,490 1,100 1,235 990 4,815 Woden and Weston 0 450 630 250 1,330 Tuggeranong 480 30 0 50 560 Other 0 0 0 30 30 Total 4,120 4,000 4,200 3,930 16,250

Table 5.4.2 Indicative Commercial Land Release Program

2017-18 2018-19 2019-20 2020-21 Total Region m2 m2 m2 m2 m2 Gungahlin 15,400 0 40,900 15,000 71,300 Molonglo 0 0 0 15,000 15,000 Belconnen 1070 0 1,500 0 2,570 Central Canberra 0 12,000 7,300 0 19,300 Woden and Weston 0 5,200 0 0 5,200 Tuggeranong 7,600 0 0 0 7,600 Other 0 0 0 0 0 Total 24,070 17,200 49,700 30,000 120,970


Table 5.4.3 Indicative Mixed Use Land Release Program

2017-18 2018-19 2019-20 2020-21 Total Region m2 m2 m2 m2 m2 Gungahlin 9,200 10,500 10,000 11,800 41,500 Molonglo 15,700 12,200 0 10,100 38,000 Belconnen 1,500 8,000 9,800 9,400 28,700 Central Canberra 50,600 17,600 41,400 30,100 139,700 Woden and Weston 0 0 11,200 0 11,200 Tuggeranong 0 0 0 0 0 Other 0 0 0 5,000 5,000 Total 77,000 48,300 72,400 66,400 264,100

Table 5.4.4 Indicative Industrial Land Release Program

2017-18 2018-19 2019-20 2020-21 Total Region m2 m2 m2 m2 m2 Hume 20,000 20,000 20,000 20,000 80,000 Symonston 10,000 5,000 5,000 5,000 25,000 Fyshwick 0 20,000 5,000 5,000 30,000 Pialligo 0 10,000 10,000 5,000 25,000 Total 30,000 55,000 40,000 35,000 160,000

Table 5.4.5 Indicative Community and Non-Urban Land Release Program

2017-18 2018-19 2019-20 2020-21 Total Region m2 m2 m2 m2 m2 Gungahlin 47,700 19,000 440 61,400 128,540 Molonglo 0 67,700 0 0 67,700 Belconnen 6,500 0 100,000 0 106,500 Central Canberra 0 0 0 0 0 Woden and Weston 2,000 0 0 0 2,000 Tuggeranong 0 10,500 0 8,000 18,500 Other 0 0 0 0 0 Total 56,200 97,200 100,440 69,400 323,240

The 2017-18 Budget invests in projects that support the objectives of the Indicative Land Release Program, including:

Gundaroo Drive Duplication (Stage 2) ($30 million) – this project will duplicate Gundaroo Drive between the Barton Highway and Gungahlin Drive, in response to a growing population in the Gungahlin region; and

Gundaroo Drive/Mirrabei Drive intersection upgrade ($3 million) – this project will replace the Gundaroo Drive/Anthony Rolfe Avenue/Mirrabei Drive roundabout with a signalised intersection to improve pedestrian safety and traffic management. A second southeast bound lane on Mirrabei Drive will also be constructed from Paul Coe Crescent to Gundaroo Drive to provide vehicle storage on the southeast bound approach to the intersection. This initiative is funded through the Better Infrastructure Fund.


The Government will undertake a number of early planning studies to investigate the future demands on ACT roads from the expansion of new suburbs. These studies include:

Molonglo East-West arterial roads early planning ($0.3 million) – this feasibility study will investigate the realignment of the East-West arterial road at Molonglo from John Gorton Drive to the Tuggeranong Parkway;

Bindubi Street Extension Road – Early Planning ($0.3 million) – this feasibility study will explore the extension of Bindubi Street from William Hovell Drive to John Gorton Drive in Molonglo; and

William Hovell Drive – Early Planning ($0.3 million) – this feasibility study will investigate transport network improvements for West Belconnen and Molonglo. The study will include an options assessment of upgrading William Hovell Drive between Drake Brockman Drive and Coulter Drive.

A number of significant projects related to land release funded in previous budgets will continue to be delivered throughout 2017-18, including:

Better Roads for Gungahlin – Horse Park Drive duplication (Mulligans Flat Road to the Federal Highway) ($57 million) – Horse Park Drive is a key access road to Gungahlin and the project will better manage traffic flow increases associated with Majura Parkway and new developments in Gungahlin;

Improving Our Suburbs – New Molonglo Valley infrastructure ($33 million) – this project is to develop road and water infrastructure, which facilitates land releases for the new suburbs of Whitlam in the Molonglo Valley;

Better Roads for Weston Creek – Cotter Road duplication (Tuggeranong Parkway to Yarralumla Creek) ($29 million) – the duplication of Cotter Road between the Tuggeranong Parkway and Yarralumla Creek will improve traffic flow from the Molonglo region; and

Better Roads for Belconnen – Aikman Drive duplication ($10 million) – the duplication of Aikman Drive between Emu Bank and Ginninderra Drive will enhance access to the University of Canberra Public Hospital and ease the traffic congestion associated with the new suburb of Lawson.

In addition to the substantial capital investments being made by the Government in the 2017-18 Budget to support land release activities, both the Suburban Land Agency and City Renewal Authority will also deliver significant infrastructure works through their respective capital programs. In 2017-18, the estimated combined value of capital works to be funded by these two agencies is $571 million. Refer to Table 5.3.1 for further detail.

2017-18 Budget Paper No.3 213 The Territory’s assets

5.5 THE TERRITORY’S ASSETS

The Territory’s asset base

The Territory’s physical assets largely consist of public housing, public works infrastructure (such as bridges, roads, cycleways and pathways, water, sewerage and stormwater assets), community and heritage assets and schools, and the land on which they are situated.

Table 5.5.1 below shows the Territory’s physical asset base split between the General Government Sector and the Public Trading Enterprise sector. Over the 12 months to 30 June 2016, the total value of physical assets, net of depreciation, has increased by $657 million to $22 billion. Factoring in the combination of capital works projects reaching completion and asset revaluations, it is expected that the value of the Territory’s total physical assets will increase further to $23 billion by June 2018.

Table 5.5.1: Total Territory physical assets – value by sector

As at 30 June 2013 2014 2015 2016 2017 2018 Actual Actual Actual Actual Estimate Estimate $m $m $m $m $m $m

General Government Sector 13,653 13,874 14,535 14,889 14,798 15,285 Public Trading Enterprise Sector 6,430 6,506 6,642 6,945 7,183 7,537 Total Territory 20,083 20,380 21,177 21,834 21,981 22,822


Figure 5.5.1 below shows that, as at 30 June 2016, the Territory’s assets were mostly classed as infrastructure assets (41 per cent), land (24 per cent) and buildings (22 per cent).

Figure 5.5.1: Total Territory physical asset value – distribution by category as at 30 June 2016

Leasehold Improvements

0.2% Land24.1%

Buildings21.8%

Plant & Equipment1.6%

Heritage and Community Assets

11.5%

Infrastructure Assets40.9%


Distribution of Territory assets by agency and type

As at 30 June 2016, the Transport Canberra and City Services Directorate held 42 per cent of the value of the Territory’s physical assets. Housing ACT had responsibility for 21 per cent of the Territory’s asset base, Icon Water held 10 per cent, while the Chief Minister, Treasury and Economic Development Directorate (CMTEDD) held 9 per cent (see Figure 5.5.2 below).

Figure 5.5.2: Total Territory Physical Asset Value – Distribution by agency as at 30 June 2016

0% 10% 20% 30% 40% 50%

Transport Canberra and City Services

Other Agencies

Justice and Community Safety Directorate

Icon Water

Housing ACT

Health Directorate

Education Directorate

CMTEDD

Canberra Institute of Technology

The largest component of the Territory’s assets relate to the provision of public housing. Other significant asset holdings relate to road, stormwater, community and heritage, and education services (see Figure 5.5.3 below).


Figure 5.5.3: Total Territory physical asset holdings – distribution by asset type as at 30 June 2016

0% 5% 10% 15% 20% 25%

Other Government Assets

Water and Sewerage

Stormwater Assets

Roads

Public Housing

Other Municipal Assets

Justice and Community Safety

Health

Education

Cycle/Footpaths

Community and Heritage

Bridges

Asset management

As noted in the 2017-18 Infrastructure Investment Program (Chapter 5.2), the Government provides agencies with funding for projects that extend the useful life or improve the service delivery capacity of existing Territory physical infrastructure assets.

Funding is also provided for routine maintenance to ensure that assets are of an appropriate standard. The 2017-18 Budget provides $60 million for the Better Infrastructure Fund and $186 million for repairs and maintenance.

Details of projects that improve the Territory’s existing infrastructure are provided at Capital Works – Better Infrastructure Fund (Appendix D). A summary of the Territory’s repairs and maintenance funding is provided in Table 5.5.2 below.

Table 5.5.2: Total Territory repairs and maintenance funding

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Actual Actual Actual Actual Estimate Estimate $’000 $’000 $’000 $’000 $’000 $’000

153,992 145,205 153,534 167,257 177,181 185,991


2017-18 Budget Paper No.3 217 Asset recycling

5.6 ASSET RECYCLING

The Asset Recycling Initiative

The Commonwealth Government’s Asset Recycling Initiative encourages investment in productivity enhancing new infrastructure by providing financial incentives for the States and Territories to sell assets and re-invest the proceeds into productive infrastructure.

In February 2015, the Commonwealth Government and the Territory agreed to a list of assets that will attract incentive payments when sold. The total amount from these asset sales, which include office accommodation, Northbourne Avenue land sites and ACTTAB, will be invested into Light Rail – Stage 1.

The Government will continue to progress sales agreed under the Asset Recycling Initiative schedule until 2018-19. It is estimated that a total contribution of $528.4 million towards Light Rail – Stage 1 will be made as a result of the Asset Recycling Initiative, comprising proceeds of $459.5 million from asset sales and $68.9 million from Commonwealth incentive payments.

As part of the National Partnership Agreement, the ACT Government reports on Asset Recycling Initiative funds received and allocated towards Light Rail – Stage 1 in each financial year (Table 5.6.1). In 2016-17, the Territory expects to receive a total of $79.0 million from asset sales and $11.0 million in Asset Recycling Initiative incentive payments from the Commonwealth Government.

The Territory expects to receive additional incentive payments from the Commonwealth across the forward estimates period, as Asset Recycling Initiative asset sales progress.

Table 5.6.1: Asset Recycling Initiative accrued funding pool

2016-17 $’000

Opening Balance 122,033

Proceeds of Net Asset Sales 79,000

Payments from the Commonwealth (Incentives) 10,956

Sub-Total (Sales and Incentives) 89,956

Payments towards Light Rail – Stage 1 0

CLOSING BALANCE 211,989

2017-18 Budget Paper No.3 218 Asset recycling

2017-18 Budget Paper No.3 219 Revenue

CHAPTER 6

REVENUE

Chapter Page

6.1 Overview 221

6.2 Revenue and forward estimates 223

2017-18 Budget Paper No.3 220 Revenue


6.1 OVERVIEW

The Government is committed to fair and efficient revenue raising that matches the Territory’s service delivery needs and the expectations of the Canberra community.

The Government recognises that revenue initiatives play a role in ensuring the sustainability of the budget and quality service delivery. This Budget includes new revenue initiatives that will raise $38.4 million over the budget and forward estimates.

In designing new revenue initiatives, fairness and equity are at the forefront of the Government’s thinking. The Government is maintaining the progressivity of the Territory’s revenue base and ensuring that the community shares in the benefits of decisions around zoning and development. That is why the Government is changing the codified Lease Variation Charge required to enable unit titling on certain residential leases to a flat fee of $30,000 per dwelling.

The Government also understands that tax settings can act as a lever to address broader community challenges such as housing affordability and availability. That is why the Government will extend land tax to all residential dwellings that are not the owner’s principal place of residence, whether they are rented or not.

The Government remains committed to ensuring Territory taxes and charges do not fall too heavily on those with limited capacity to pay, which is why we are maintaining a strong concessions program, providing relief for low-income households and pensioners.

The Territory has comparatively less capacity and flexibility to raise own-source revenue than other jurisdictions, particularly as Commonwealth Government employment, which contributes much of the Territory’s wages expenditure, is exempt from payroll tax. Diversifying the economy by improving the economic and business regulatory environment will help to address this problem over time.

2017-18 Budget and forward estimates revenues

Total ACT General Government Sector (GGS) revenue is forecast to be $5.3 billion in 2017-18, compared to an estimated outcome of $5.2 billion in 2016-17.

The increase of $175.6 million primarily reflects increased current grants from the Commonwealth of $125.5 million (consisting largely of an additional $98.5 million in Goods and Services Tax revenue).

Own-source taxation revenue increases by $75.4 million and income from sales of goods and services increases by $28.4 million.

Offsetting these increases are lower dividend and tax equivalents income of $64.2 million and lower gains from contributed assets of $4.0 million.

Table 6.1.1 and Figure 6.1.1 provide a summary of GGS revenue by source.


Table 6.1.1: General Government Sector revenue

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est.

Outcome Budget Var Estimate Estimate Estimate

$’000 $’000 $’000 % $’000 $’000 $’000 1,633,960 Own-Source

Taxation 1,676,673 1,752,032 4 1,887,304 1,990,347 2,099,964

2,087,251 Commonwealth Grants1

2,050,968 2,176,485 6 2,230,022 2,280,200 2,365,659

155,806 Gains from Contributed Assets

161,915 157,868 -2 235,987 263,610 303,223

479,416 Sales of Goods and Services

492,229 520,623 6 535,008 547,609 560,129

116,210 Interest Income 124,521 125,124 .. 112,053 119,268 115,406 36,391 Distribution from

Financial Investments

34,738 36,851 6 45,265 48,089 51,568

405,808 Dividend and Income Tax Equivalents

472,182 407,963 -14 343,243 403,577 391,773

143,342 Other 152,610 164,493 8 149,823 147,662 152,615 5,058,184 Total 5,165,836 5,341,439 3 5,538,705 5,800,362 6,040,337

Note: 1. This amount includes the gross-up of the Goods and Services Tax (GST) on Non-Government Schools’ funding of

$19.2 million in 2016-17, $19.8 million in 2017-18, $20.7 million in 2018-19, $21.7 million in 2019-20 and $21.8 million in 2020-21.

Figure 6.1.1: Components of the 2017-18 Budget General Government Sector revenue

40.7%

32.8%

9.7% 7.6%

3.1% 3.0% 2.3% 0.7%0.0

10.0

20.0

30.0

40.0

50.0

Per c

ent

2017-18 Budget Paper No.3 223 Revenue and forward estimates

6.2 REVENUE AND FORWARD ESTIMATES

Own-source taxation

The estimated outcome for own-source taxation revenue in 2016-17 is $1.7 billion, which is $42.7 million higher than the estimate at the time of the 2016-17 Budget. The increase is largely due to higher than expected payroll tax and conveyance duties.

Total own-source taxation revenue is forecast to increase to $1.8 billion in 2017-18 as a result of indexation and new initiatives. Table 6.2.1 provides the 2016-17 estimated outcome, the 2017-18 Budget and the forward estimates for own-source taxation revenue.

In the 2017-18 Budget, the Government continues the tax reform process we started in 2012-13 to make the Territory’s taxation system fairer, simpler and more efficient. The Territory has abolished taxes on insurance premiums and continues to reduce conveyance duty rates each year, with the revenue replaced through the general rates system. The Government is fully phasing out conveyance duty for commercial transactions below $1.5 million by 2018-19.

The Government is not increasing total tax revenue through the tax reform process, but is replacing inefficient transaction taxes with efficient land based taxes. These changes to the tax mix will ensure a stable and efficient revenue base to fund the provision of high quality government services into the future.

Table 6.2.1: Own-source taxation revenue

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est.


$’000 $’000 $’000 % $’000 $’000 $’000 General Tax

439,977 Payroll Tax 445,357 470,254 6 504,413 542,183 580,556 172 Tax Waivers 172 178 3 182 182 187

158,602 Commercial General Rates1

163,245 172,090 5 185,351 199,443 214,420

288,578 Residential General Rates1

280,843 315,242 12 348,500 379,665 412,933

110,345 Land Tax 110,344 130,079 18 140,212 146,195 152,437 997,673 Total General Tax 999,960 1,087,844 9 1,178,658 1,267,670 1,360,534

l Duties

79,410 Commercial Conveyances2

105,834 73,838 -30 73,296 72,661 70,536

187,564 Residential Conveyances2

200,246 194,356 -3 210,203 213,902 217,230

30,630 Motor Vehicle Registrations and Transfers

30,631 31,040 1 31,870 32,953 34,073

297,605 Total Duties 336,711 299,234 -11 315,369 319,516 321,839


2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est.


$’000 $’000 $’000 % $’000 $’000 $’000 Gambling taxes

1,032 Tabcorp Licence Fee 1,032 1,053 2 1,077 1,104 1,132 34,098 Gaming tax 34,098 33,523 -2 36,236 37,081 37,932

2,254 Casino tax 2,254 2,299 2 2,351 2,410 2,470 14,886 Interstate lotteries 13,386 15,184 13 15,526 15,914 16,312 52,270 Total gambling taxes 50,770 52,059 3 55,190 56,509 57,846

Other taxes

127,371 Motor Vehicle Registration3

128,870 136,968 6 145,909 145,894 150,986

22,694 Ambulance Levy 21,143 22,199 5 23,309 24,591 25,943 17,744 Lease Variation Charge 19,906 22,851 15 25,840 26,982 28,181 30,049 Utilities (Network

Facilities) Tax 32,061 34,306 7 36,707 39,276 41,044

64,487 Fire and Emergency Service Levy

64,128 73,336 14 82,370 85,249 88,209

1,986 City Centre Marketing and Improvements Levy

1,986 1,989 .. 1,992 1,995 1,998

3,637 Energy Industry Levy 2,694 2,732 1 2,810 2,866 2,921 13,744 Lifetime Care and

Support Levy4 13,744 13,814 1 14,350 14,899 15,463

4,700 Safer Families Levy 4,700 4,700 - 4,800 4,900 5,000 286,412 Total Other Taxes 289,232 312,895 8 338,087 346,652 359,745

1,633,960 Total Taxation 1,676,673 1,752,032 4 1,887,304 1,990,347 2,099,964

Notes: Numbers may not add up due to rounding. 1. Variance is due to the increase in the number of rateable properties, the Wage Price Index and tax reform. 2. Variance is due to a range of market factors, including changes in property prices, the numbers of properties sold and

the composition of property types transacted. 3. This includes revenue from the ‘ACT Compulsory Third-Party Insurance Regulator’. 4. The scope of the Lifetime Care and Support Scheme was extended to include work accidents from 1 July 2016.

Payroll tax

The Government increased the payroll tax free threshold from $1.85 million to $2 million on 1 July 2016, while the payroll tax rate remained at 6.85 per cent.

Payroll tax revenue in 2016-17 is estimated at $445.4 million, and is forecast to increase to $470.3 million in 2017-18. The increase of $24.9 million largely reflects forecast growth in employment and wages, as well as an increase in payroll tax compliance.


Tax waivers

Tax waivers represent the amount of revenue that has been waived. The estimated value of waivers is also reflected in expenses. The grossing up of revenue and expenses enables tax treatments to be transparent.

The estimate for tax waivers in 2016-17 is $0.172 million, and the forecast in 2017-18 is $0.178 million.

General rates

General rates are levied on commercial and residential property owners to provide funding for a wide range of services for the ACT community.

Increases in general rates revenue are mainly due to the increases as part of the ACT tax reform program and expected revenue from new properties. Under the Government’s tax reform program, increases in general rates above the Wage Price Index are used to offset reductions in revenue from the abolition of insurance and conveyance duties. Insurance duty was abolished in the ACT from 1 July 2016.

The Government will change the early payment discount to one per cent as of 1 July 2017, reflecting the current environment of low interest rates. Refer to Revenue initiatives (Chapter 3.4) for more information.

Commercial general rates

The 2016-17 estimated outcome for commercial general rates revenue is $163.2 million. This revenue is forecast to increase to $172.1 million in 2017-18, reflecting an increase of around six per cent on average, as announced in the 2016-17 Budget, as well as adjustments to the total value of commercial land and the number of properties.

The rating system for commercial general rates in 2017-18 will have the following elements:

a fixed charge of $2,380;

a valuation-based charge on the Average Unimproved Land Value (AUV) for 2017 (which is the average of 2015, 2016 and 2017 land values); and

marginal rating factors applied to the AUV of commercial properties (refer to Table 6.2.2).

Table 6.2.2: Commercial general rates – Marginal rates

Threshold Marginal Rates % 0 to $150,000 2.9760 $150,001 to $275,000 3.4940 $275,001 to $600,000 4.9350 $600,001 and above 4.9930


Residential general rates

The 2016-17 estimated outcome for residential general rates revenue is $280.8 million and is forecast to increase to $315.2 million in 2017-18, reflecting an increase of around 7 per cent on average for houses, as announced in the 2016-17 Budget, as well as adjustments to the total value of residential land and the number of properties. The increase in general rates for units will be higher for the next two years, following the change in methodology for units, which will commence from 1 July 2017.

The rating system in 2017-18 for residential general rates will have the following elements:

a fixed charge of:

- $765 for residential properties; and

- $155 for rural properties.

a valuation-based charge on the AUV for 2017 (which is the average of 2015, 2016 and 2017 land values);

a rating factor of 0.1491 per cent applied to the AUV of rural properties;

a pensioner rebate cap of $700 for post 1 July 1997 applicants; and

marginal rating factors applied to the AUV of residential properties (refer to Table 6.2.3).

Table 6.2.3: Residential general rates – Marginal rates

Threshold Marginal Rates % 0 to $150,000 0.2960 $150,001 to $300,000 0.4088 $300,001 to $450,000 0.5130 $450,001 to $600,000 0.5603 $600,001 and above 0.6013

From 1 July 2017, the Government will change the general rates calculation for multi-unit dwellings to base it on the total AUV of the land rather than the individual AUV of the unit. This change will be phased in over two years and will establish greater equity in general rates paid between houses and units.

Land tax

Land tax applies to any residential property that is rented, or any residential property owned by a corporation or a trustee, even if the property is not rented.

Land tax assessments in 2017-18 will be based on a valuation-based charge on the AUV for 2017 (which is the average of 2015, 2016 and 2017 land values), and a fixed charge of $1,145.


In 2017-18, the Government will change the land tax calculation for multi-unit dwellings to base it on the total AUV of the land rather than the individual AUV of the unit, consistent with changes to general rates. The land tax marginal rates and thresholds have been updated to better reflect the distribution of land values under the new calculation methodology.

The estimated outcome for land tax revenue in 2016-17 is $110.3 million. Land tax revenue is forecast to increase to $130.1 million in 2017-18. From 1 July 2018, land tax will be applied to all properties that are not the owner’s principal place of residence. Refer to Revenue initiatives (Chapter 3.4) for more information.

Table 6.2.4 shows the land tax marginal rates that will apply to residential properties in 2017-18.

Table 6.2.4: Land tax – Marginal rates

Threshold Marginal Rates % $0 to $150,000 0.50 $150,001 to $275,000 0.60 $275,001 to $2,000,000 1.08 $2,000,001+ 1.10

Duty on conveyances

Duty is levied on the agreement for the sale or transfer of land, a Crown lease or a land use entitlement for residential and commercial properties located in the ACT. The duty rates are generally applied to the transfer value of the property.

For residential conveyances only, a concessional rate applies for people qualifying under the ACT Home Buyer Concession Scheme, the ACT Pensioner Duty Concession Scheme, or the Disability Duty Concession Scheme.

Commercial conveyance duty

The estimated outcome for commercial conveyance duty in 2016-17 is $105.8 million, reflecting the highest level of activity since records began in 2007-08. Commercial conveyance duty is forecast to decline to $73.8 million in 2017-18, as activity is assumed to return to more typical levels.

Table 6.2.5 outlines commercial conveyance duty thresholds and associated marginal tax rates for 2017-18 and 2018-19. The 2017-18 rates will apply from 7 June 2017.

In 2018-19, conveyance duty on commercial properties under $1.5 million will be abolished. A flat five per cent rate will apply to the total value of a transaction where its value is equal to or greater than $1.5 million. This will mean that the majority of commercial conveyance transactions in the ACT will not be subject to conveyance duty from 1 July 2018.


Table 6.2.5: Commercial conveyance duty – Thresholds and rates

Threshold 2017-18 %

Up to $200,000 0.7 $200,001 to $300,000 1.2 $300,001 to $500,000 1.9 $500,001 to $750,000 2.39 $750,001 to $1,000,000 3.15 $1,000,001 to $1,499,999 3.4 $1,500,000 and above1 5.0

Note: 1. The $1,500,000 and above rate is a flat rate on the entire value of the transaction.

Residential conveyance duty

The estimated outcome for residential conveyance duty in 2016-17 is $200.2 million, and is forecast to fall to $194.4 million in 2017-18. The decrease of $5.8 million is largely due to the one-off delay in revenue as a result of the Barrier Free conveyance duty reforms passed by the Legislative Assembly in 2017.

Table 6.2.6 outlines residential conveyance duty thresholds and associated marginal tax rates for 2017-18 to 2021-22. Conveyance duty rates will be cut each year until it is fully phased out under the Government’s tax reform program.

Table 6.2.6: Residential conveyance duty rates

Threshold 2016-17 %

2017-18 %

2018-19 %

2019-20 %

2020-21 %

2021-22 %

Up to $200,000 1.48 1.4 1.3 1.2 1.1 1.0 $200,001 to $300,000 2.5 2.4 2.3 2.2 2.1 2.0 $300,001 to $500,000 4.0 3.8 3.6 3.4 3.2 3.0 $500,001 to $750,000 5.0 4.78 4.56 4.32 4.1 3.9 $750,001 to $1,000,000 6.5 6.3 6.1 5.9 5.7 5.5 $1,000,001 to $1,454,999 7.0 6.8 6.6 6.4 6.2 6.0 $1,455,000 and above1 5.09 4.91 4.73 4.54 4.36 4.18

Note: 1. The $1,455,000 and above rate is a flat rate on the entire value of the transaction.

Duty on motor vehicle registrations and transfers

Duty is payable on an application to register a new motor vehicle or to transfer the registration of a second hand vehicle.

The estimated outcome for duty revenue from motor vehicle registrations and transfers in 2016-17 is $30.6 million and the forecast for 2017-18 is $31.0 million.


Tabcorp Licence Fee

The ACT receives an annual totalisator licence fee from Tabcorp for the provision of totalisator services in the Territory. Estimated revenue for 2016-17 is $1.032 million and is subject to annual indexation.

Gaming tax

Gaming tax revenue incorporates gaming machine taxes and interactive gaming taxes. Gaming machines are taxed on the basis of monthly revenue, which is defined as monthly gaming machine revenue less amounts paid out in prize money. Estimated total gaming tax revenue for 2016-17 is $34.1 million and the forecast for 2017-18 is $33.5 million.

Casino tax

The tax applying to Casino Canberra is 10.9 per cent of gross profits from general gaming operations and 0.9 per cent of gross profits from commission based player schemes. Estimated revenue for 2016-17 is $2.3 million and the forecast for 2017-18 is also $2.3 million.

Interstate lotteries

The ACT receives revenue based on the value of NSW Lotteries tickets purchased in the Territory. Estimated revenue for 2016-17 is $13.4 million and the forecast for 2017-18 is $15.2 million.

Motor vehicle registration fees

Estimated revenue from motor vehicle registrations in 2016-17 is $128.9 million and is forecast to increase to $137.0 million in 2017-18. The increase of $8.1 million is mainly due to a five per cent indexation of registration fees and an allowance for growth in the number of motor vehicle registrations.

Ambulance Levy

The Ambulance Levy is payable each month by private health insurance companies to offset the cost of providing ambulance services in the Territory. The levy is calculated on the number and type of private health insurance contributions.

The estimated outcome for 2016-17 is $21.1 million and the forecast for 2017-18 is $22.2 million.


Lease Variation Charge

The estimated revenue for the Lease Variation Charge for 2016-17 is $19.9 million and the forecast for 2017-18 is $22.9 million.

From 1 July 2017, the Government has changed the codified Lease Variation Charge required to enable unit titling on certain residential leases to a flat fee of $30,000 per dwelling. Refer to Revenue initiatives (Chapter 3.4) for more information.

Utilities (Network Facilities) Tax

The Utilities (Network Facilities) Tax applies to the owner of a utility network facility that is installed on or under land in the ACT.

The estimated outcome for 2016-17 is $32.1 million and the forecast for 2017-18 is $34.3 million.


A Fire and Emergency Services Levy (FESL) is charged on all rateable properties in the ACT. The revenue raised from the FESL is used to support the Emergency Services Agency.

The estimates for FESL revenue include expected revenue from both existing and new properties, and represent the net amount after allowing for pensioner rebates and discounts for early payment. The estimated outcome for FESL revenue is $64.1 million in 2016-17 and the forecast for 2017-18 is $73.3 million.

The FESL in 2017-18 will have the following elements:

a fixed charge of $294 for residential and rural properties;

a pensioner rebate of $98; and

a valuation-based charge for commercial properties with progressive marginal rating factors applied to the average of the 2015, 2016 and 2017 AUVs.

Table 6.2.7 outlines the new FESL thresholds and rates for commercial properties.

Table 6.2.7: FESL thresholds and rates for commercial properties

Threshold Marginal Rates % $1 to $300,000 0.7019 $300,001 to $2,000,000 0.8263 $2,000,001 and above 0.8491


City Centre Marketing and Improvements Levy

The City Centre Marketing and Improvements Levy applies to all rateable commercial properties in the City and selected areas in Braddon adjacent to the City Centre. The collection area is divided into two zones and the levy is applied on the AUV of each property at the rate of 0.2992 per cent for the retail core, and a rate of 0.2161 per cent for the non-retail core.

The revenue collected from the levy is used to promote, maintain and improve the amenities of the City Centre area. The estimated outcome for 2016-17 is $2 million and the forecast for 2017-18 is also $2 million.

Energy Industry Levy

The Energy Industry Levy funds:

the Territory’s national regulatory obligations and costs for the Australian Energy Market Commission and the Ministerial Council on Energy’s responsibilities under the Australian Energy Market Agreement; and

local regulatory costs incurred by the Territory in relation to energy utility services.

The levy applies to the energy utility industry sectors of: electricity distribution; electricity supply; gas distribution; and gas supply. The levy is charged on a cost recovery basis and reflects the cost of regulatory activities.

The estimated outcome for 2016-17 is $2.7 million and the forecast for 2017-18 is also $2.7 million.

Lifetime Care and Support Levy

The Lifetime Care and Support (LTCS) levy funds the Lifetime Care and Support Scheme, which provides ongoing treatment and care to people catastrophically injured in the ACT from either a motor vehicle accident or a work accident.

The estimated outcome for 2016-17 is $13.7 million and the forecast for 2017-18 is $13.8 million. The LTCS levy applying to Compulsory-Third Party (CTP) Insurance policies issued under the Road Transport (Third-Party Insurance) Act 2008 will remain unchanged at $35 per year for each motor vehicle in 2017-18, with vehicles registered under the ACT’s Veteran, Vintage and Historic Registration Scheme paying a levy of $7 per year. The LTCS levy on workers’ compensation insurers and self-insurers will also remain unchanged in 2017-18.

Safer Families Levy

The Government introduced a Safer Families Levy on 1 July 2016. The levy remains at $30 per year and is applied to all residential and rural properties. The estimated outcome in 2016-17 is $4.7 million and the forecast for 2017-18 is also $4.7 million.


Major ACT taxes compared to NSW

Table 6.2.8 shows the comparative rates of tax between the ACT and NSW for major taxation items. Note that the release of the 2017-18 NSW Budget on 20 June 2017 may change the information below.

Table 6.2.8: Major ACT taxes compared with NSW

Tax type ACT NSW

Land Tax The value of each individual property is assessed for land tax. Land tax is applied quarterly on the base value, being, for standard residential properties (eg houses), the three year Average Unimproved Value (AUV). For residential units, the AUV of the parcel of land as it relates to the residential component (AUVRU). For 2017-18, the marginal rates are as follows, in addition to the fixed charge of $1,145.00: base value up to $150,000.00 –

0.50% base value $150,000.01 to

$275,000.00 – 0.60% base value $275,000.01 to

$2,000,000.00 – 1.08% base value $2,000,000.01 and above

– 1.10% Applied to: Rateable residential properties that are rented or properties owned by a trust or a corporation even if they are not rented. Exemption: Land used for primary production is exempt from land tax. Land owned by a building or development company is exempt for up to 2 years. Commercial properties are not subject to land tax due to the Government’s Taxation Reforms.

The value of an entity’s entire land holdings is assessed for land tax (aggregation). Applied annually on the three year AUV. The 2017 rates are as follows for taxable land value between $549,000 and $3,357,000: $100 plus 1.6% of land value.

Land value above $3,357,000 has a premium rate applied: $45,028 for the first $3,357,000; then 2% over that value.

For land owned by a trustee of a special trust, a flat rate of 1.6% applies for amounts up to the premium land tax threshold; then 2% after the premium threshold. Land Tax Surcharge: From 2017 onwards, a 0.75% surcharge is payable on the taxable value of all residential land owned by a foreign person, without any land value threshold. Principal places of residence are not exempt from the surcharge. Applied to: Residential, commercial and rural properties. Exemption: Generally, the principal place of residence or land used for primary production is exempt.


Tax type ACT NSW

Payroll Tax 6.85% As of 1 July 2016, first $2,000,000 exempt per financial year ($166,666.66 per month).

5.45% For 2016-17, first $750,000 exempt. NSW has not indexed its threshold value since 1 July 2013. The monthly threshold ranges from $57,534 to $63,699 depending on the number of days in that month.

Duty on Conveyances

From 7 June 2017, conveyance duty for residential and commercial land will be levied at different rates. Duty is the greater of $20 or the amount resulting from applying the following rates based on the size of the transaction. The $20 nominal duty will be abolished once the Barrier Free Model is implemented. Residential transactions Up to $200,000 – 1.4% $200,001 to $300,000 – 2.4% $300,001 to $500,000 – 3.8% $500,001 to $750,000 – 4.78% $750,001 to $1,000,000 – 6.3% $1,000,001 to $1,454,999 – 6.8% $1,455,000 and above – 4.91% (flat rate applied to the entire transaction value). Commercial transactions Up to $200,000 – 0.7% $200,001 to $300,000 – 1.2% $300,001 to $500,000 – 1.9% $500,001 to $750,000 – 2.39% $750,001 to $1,000,000 – 3.15% $1,000,001 to $1,499,999 – 3.4% $1,500,000 and above – 5.0% (flat rate applied to the entire transaction value).

The amount resulting from applying the rates of $1.25 to a maximum of $5.50 per $100 for transactions up to $3.0 million. Premium Property Duty: For dutiable transactions above $3.0 million, the duty payable is $150,490 plus the rate of $7.00 per $100 or part thereof that exceeds $3.0 million. Premium property duty only applies to residential land. Surcharge Purchaser Duty: from 21 June 2016, a 4% surcharge is payable on the purchase of residential real estate by a foreign person.


Tax type ACT NSW

Concessions on Conveyances

Home Buyer Concession Scheme: For transactions dated from 7 June 2017: concession for house and land value

up to $607,000; and concession for vacant land value up

to $329,500. Pensioner Duty Concession Scheme: For transactions dated from 7 June 2017: concession for house and land value

up to $895,000. concession for vacant land value up

to $434,500.

First Home – New Home Scheme: The First Home – New Home scheme provides that an agreement or transfer will only be eligible for a concession or exemption if it is for the acquisition of a new home or vacant land intended to be used as the site for a new home. A duty concession is not available for established properties. Eligible first home buyers will not pay duty on a new home or off the plan purchase valued up to $550,000 with a phase-out concession up to a property value cap of $650,000. For vacant land, no duty is payable for a value up to $350,000 and is phased out at $450,000. These rates have applied from 1 July 2012.

Duty on Motor Vehicle Registrations

No green vehicle rating Valued at $45,000 or less $3 per $100. Valued at more than $45,000 $1,350 plus $5 per $100 or part thereof over $45,000. Green vehicle rating Applies to new motor vehicles not previously registered anywhere in Australia. Rates depend on A-D rating (based on CO2 emissions) and value. All new motorcycles are B rated. Valued at $45,000 or less A rated (<= 130 g/km) = nil B rated (131–175 g/km) = $1 per $100 C rated (176–220 g/km) = $3 per $100 D rated (> 220 g/km) = $4 per $100 Valued at more than $45,000 A rated (<= 130 g/km) = nil B rated (131–175 g/km) = $450 plus $2 per $100 above $45,000 C rated (176–220 g/km) = $1,350 plus $5 per $100 above $45,000 D rated (> 220 g/km) = $1,800 plus $6 per $100 above $45,000

Under $45,000: $3 per $100 (or part of $100) $45,000 and over: $1,350 plus $5 per $100 or part thereof over $45,000.


Tax type ACT NSW

Duty on General Insurance

Duty on general insurance has been abolished, effective from 1 July 2016.

2.5% to 9% of the premium, depending on the type of insurance. Type A insurance (eg a property and items not covered by Type B & C insurance): 9%. Type B insurance (eg a vehicle): 5%. Type C insurance (eg livestock): 2.5%.

Duty on Life Insurance

Duty on life insurance has been abolished, effective from 1 July 2016.

Term, temporary or insurance rider policies 5% of the first year’s premium. Trauma or disability policies 5% of premium paid to effect the insurance. All other (eg life insurance) Sum insured $0 to $2,000 - $1 Sum insured over $2,000 - $1 plus $0.20 per $200 or part thereof in excess of $2,000.

Commonwealth Government grants

Total revenue expected to be received from Commonwealth Government grants in 2017-18 is $2.2 billion. Details of Commonwealth Government grants are provided in Table 6.2.9.

Further information on funding for Commonwealth Government grants can be found in Federal Financial Relations (Chapter 7).


Table 6.2.9: Commonwealth Government grants

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est.


$’000 $’000 $’000 % $’000 $’000 $’000 Current Grants

1,154,400 GST Revenue Grant 1,126,120 1,224,615 9 1,286,583 1,325,269 1,398,634 39,100 ACT Municipal Services 39,054 39,562 1 40,116 40,717 41,287

710,373 National Specific Purpose Payments (SPPs)2

709,774 723,271 2 765,987 808,535 826,460

48,611 Financial Assistance Grants to Local Government

73,697 25,112 -66 52,059 54,545 54,805

48,864 National Partnership Payments (NPPs) – Current1

56,923 99,512 75 51,433 30,207 29,634

11,881 Other Commonwealth Government Payments – Current

11,708 12,044 3 11,391 11,686 5,868

2,013,229 Total Current Grants 2,017,276 2,124,116 5 2,207,569 2,270,959 2,356,688 Capital Grants

74,022 National Partnership Payments (NPPs) – Capital

33,692 52,369 55 22,453 9,241 8,971

74,022 Total Capital Grants 33,692 52,369 55 22,453 9,241 8,971

2,087,251 Total Commonwealth Government Funding2

2,050,968 2,176,485 6 2,230,022 2,280,200 2,365,659

Note: 1. An amount of $8.517 million relating to the Investment – Road Component / Infrastructure Investment Program –

Roads agreement has been provisioned to reflect the uncertainty of receiving the full funding amount from the Commonwealth in 2020-21.

2. This amount includes the gross-up of the Goods and Services Tax (GST) on Non-Government Schools’ funding of $19.2 million in 2016-17, $19.8 million in 2017-18, $20.7 million in 2018-19, $21.7 million in 2019-20, and $21.8 million in 2020-21.


Contributed assets

Table 6.2.10 provides a summary of contributed assets. Contributed assets largely relate to land development infrastructure assets transferred to the General Government Sector (GGS) from the Land Development Agency and private developers.

Variations between the 2016-17 estimated outcome, the 2017-18 Budget and across the forward estimates period mainly reflect revisions to the land release program. Refer to the Supply and Release of Land (Chapter 5.4) for more information on the land release program.

Table 6.2.10: Contributed assets

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est.


$’000 $’000 $’000 % $’000 $’000 $’000 155,410 Gains from contributed

assets 161,519 157,418 -3 235,547 263,162 302,717

396 Resources received free of charge

396 450 14 440 448 506

155,806 Total contributed assets 161,915 157,868 -2 235,987 263,610 303,223

Sale of goods and services

Sale of goods and services revenue in 2016-17 is estimated at $492.2 million and is forecast to increase to $520.6 million in 2017-18. This increase of $28.4 million is largely due to increased revenue from regulatory fees, cross border health receipts, rent from tenants, and service receipts (non-ACT Government), partially offset by a decrease in miscellaneous revenue.

Details of sale of goods and services revenue are provided in Table 6.2.11.


Table 6.2.11: Sale of goods and services

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est.


$’000 $’000 $’000 % $’000 $’000 $’000 Regulatory Fees

6 Casino Licence Fees 6 6 - 6 6 6 10,994 Drivers’ Licences 10,994 11,223 2 11,459 11,289 11,684

599 Taxi Licences 341 481 41 491 419 435 91,708 Fees for Regulatory

Services 96,233 99,330 3 101,069 102,188 105,284

31,172 Water Abstraction Charge

31,172 32,279 4 33,189 34,261 35,288

134,479 Total Regulatory Fees 138,746 143,319 3 146,214 148,163 152,697

Other

18,997 Parking Fees 18,997 19,576 3 20,226 20,226 20,934 36,328 Inpatient Fees 34,328 35,020 2 35,756 36,515 37,298

6,082 Outpatient Fees 6,082 6,179 2 6,318 6,486 6,675 3,596 Meals and

Accommodation 3,596 3,636 1 3,727 3,820 3,916

90,372 Cross Border Health Receipts

90,372 101,280 12 103,812 106,408 108,302

23,795 Sales 24,663 26,256 6 28,943 31,097 32,767 118,379 Service Receipts (Non

ACT Government) 124,159 132,274 7 135,790 139,406 140,665

4,477 Rent from Tenants 4,430 10,112 128 11,526 11,669 11,713 25,644 Miscellaneous 28,313 23,006 -19 23,543 24,070 24,857 17,267 User Charges - ACT

Government 18,543 19,965 8 19,153 19,749 20,305

344,937 Total Other 353,483 377,304 7 388,794 399,446 407,432 479,416 Total Sale of Goods and

Services 492,229 520,623 6 535,008 547,609 560,129

Drivers’ licences

The revenue from drivers’ licences in 2016-17 is estimated at $11.0 million and is forecast to increase to $11.2 million in 2017-18. This increase largely reflects increases in line with the Wage Price Index.

Taxi licences

The revenue from taxi licences in 2016-17 is estimated at $341,000 and is forecast to increase to $481,000 in 2017-18.

Fees for regulatory services

The 2016-17 estimated outcome for fees for regulatory services is $96.2 million. Fees for regulatory services are forecast to increase to $99.3 million in 2017-18.


Water Abstraction Charge

The revenue from the Water Abstraction Charge (WAC) in 2016-17 is estimated at $31.2 million and is forecast to increase to $32.3 million in 2017-18.

Parking fees

The estimated revenue from parking fees in 2016-17 is $19.0 million and the forecast for 2017-18 is $19.6 million.

Patient fees

Inpatient fees and outpatient fees are payments for the provision of hospital and related services, which are collected at the Canberra Hospital. Inpatient fees relate to admitted patients, while outpatient fees are primarily for accident and emergency services.

The 2016-17 estimated outcome is $34.3 million for inpatient fees and $6.1 million for outpatient fees. In 2017-18, these are forecast to increase to $35.0 million and $6.2 million, respectively.

Cross Border Health Receipts

Cross Border Health Receipts are payments from other State and Territory Governments (predominantly NSW) for the provision of medical services provided to non-ACT residents at ACT public hospitals. The estimated revenue for 2016-17 is $90.4 million and the forecast for 2017-18 is $101.3 million. These amounts only reflect the level of revenue estimated to be received directly from other States and the Northern Territory; the balance of cross border revenue is received via the Commonwealth. The overall level of cross border revenue (including the components received from the Commonwealth) is expected to increase year on year.

This rise is as a result of increased activity.

Sales

Revenues from sales include those generated from entry fees to sporting and cultural facilities, such as the Canberra Theatre Centre and hire of those venues. Sales of merchandise, programs and giftware in these venues or the rights to sell these, are also included. The estimated outcome for 2016-17 is $24.7 million and the forecast for 2017-18 is $26.3 million.


Service receipts (non-ACT Government)

This item includes payments from clients for the provision of services, such as facility fees to physicians at hospitals, medical supplies, sterilising services, Capital Linen, and commercial training.

The 2016-17 estimated outcome is $124.2 million and the 2017-18 forecast is $132.3 million. This increase is as a result of higher receipts by Capital Linen and additional health charges.

Rent from tenants

Rent from tenants is revenue sourced from a range of ACT Government-owned commercial and community facility properties, but it does not include public housing. This revenue is expected to increase from $4.4 million in 2016-17 to $10.1 million in 2017-18. The increase is primarily as a result of reallocation of some rent from internal to external revenue. Rents have increased in line with CPI indexation.

Miscellaneous

Miscellaneous revenue is estimated at $28.3 million in 2016-17 and the 2016-17 forecast is $23 million.

User charges – ACT Government

This item includes revenue for rent, property management, shared services and insurance that is collected from ACT agencies in the Public Trading Enterprise sector. The 2016-17 estimated outcome is $18.5 million and the 2017-18 forecast is $20 million.


Interest income

Table 6.2.12 provides a summary of interest expected to be received.

Table 6.2.12: Interest income

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est.


$’000 $’000 $’000 % $’000 $’000 $’000 Interest received

31,200 Interest received from banks

44,944 35,961 -20 29,841 32,707 31,749

77,374 Interest received on advances and loans to agencies

73,998 84,588 14 76,501 80,148 77,622

- Interest received on advances from the private sector – Non banks

1,226 1,204 -2 1,159 1,116 1,069

4,781 Interest received – Other 1,933 959 -50 2,065 2,655 2,133 2,855 Interest from financial

investments 2,420 2,412 .. 2,487 2,642 2,833

116,210 Total interest received 124,521 125,124 .. 112,053 119,268 115,406

Interest received from banks

This item represents the interest income for general government investments and interest earnings on cash balances held in bank accounts. General government investments comprise the balances of the Territory Banking Account and investments made on behalf of government directorates and some Territory Authorities.

The increase of $13.7 million in the 2016-17 estimated outcome from the 2016-17 Budget is mainly due to higher investment balances and returns. The decrease of $9.0 million in the 2017-18 forecast from the 2016-17 estimated outcome mainly reflects lower investment balances and investment return estimates.

Interest received on advances and loans to agencies

Interest received on advances and loans to agencies mainly relates to interest loans provided by the Territory to Icon Water.

The decrease of $3.4 million in the 2016-17 estimated outcome from the 2016-17 Budget is mainly due to lower interest receipts from Icon Water as a result of the impact of a lower Consumer Price Index on inflation-linked loans and revised estimates in relation to the volume and timing of the provision of new loans.

The increase of $10.6 million in the 2017-18 forecast from the 2016-17 estimated outcome mainly reflects higher interest receipts from Icon Water due mainly to a higher balance of outstanding loans.


Interest received from the private sector

The interest received from the private sector item relates to interest the Chief Minister, Treasury and Economic Development Directorate will receive from Community Housing Canberra for loans totalling $68.1 million.

Other interest income

Other interest income includes income mainly recognised by the Chief Minister, Treasury and Economic Development Directorate, the Transport Canberra and City Services Directorate, and the Environment, Planning and Sustainable Development Directorate. The majority of interest recognised relates to interest charged to the Land Development Agency in relation to the holding costs of land.

The estimated outcome for 2016-17 is $1.9 million, and the forecast for 2017-18 is $1.0 million.

Interest from financial investments

Interest from financial investments mainly comprises interest earnings on cash and the fixed income investment assets of the Superannuation Provision Account.

Distributions from financial investments

Table 6.2.13 provides a summary of distributions from financial investments received.

Table 6.2.13: Distributions from financial investments

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est.


$’000 $’000 $’000 % $’000 $’000 $’000 Interest received

36,391 Distributions from financial investments

34,738 36,851 6 45,265 48,089 51,568

36,391 Total interest received 34,738 36,851 6 45,265 48,089 51,568

Distributions from financial investments

The decrease of $1.7 million in the 2016-17 estimated outcome is attributed to factors such as the timing of distribution receipts, the availability of income for distribution from investment trusts, the divestment of unit trust investments and the asset allocation of the portfolio through maintaining a higher allocation to cash investments over the year.

The increase of $2.1 million in the 2017-18 Budget estimate from the 2016-17 estimated outcome mainly reflects the timing of distribution receipts and the anticipated growth in portfolio assets and changes to the portfolio’s asset allocation.


Dividends and tax equivalents

Table 6.2.14 provides a summary of dividends and tax equivalents.

Table 6.2.14: Dividends and tax equivalents

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est.


$’000 $’000 $’000 % $’000 $’000 $’000 Dividends

71,774 Dividends – Icon Water 73,702 67,112 -9 77,957 84,609 93,525 500 Dividends – CIT Solutions 1,000 500 -50 500 500 500

149,273 Dividends – Land Development Agency, Suburban Land Agency and City Renewal Authority

190,962 155,802 -18 104,105 155,833 128,189

50,990 Dividends from financial investments

51,043 52,255 2 51,333 54,536 58,481

272,537 Total Dividends 316,707 275,669 -13 233,895 295,478 280,695

Tax Equivalents

133,271 Income Tax Equivalent 155,475 132,294 -15 109,348 108,099 111,078 133,271 Total Tax Equivalents 155,475 132,294 -15 109,348 108,099 111,078 405,808 Total Dividend and Tax

Equivalents 472,182 407,963 -14 343,243 403,577 391,773

Icon Water

The estimated dividend from Icon Water in 2016-17 is $73.7 million, which is $1.9 million higher than the original 2016-17 Budget estimate. This largely reflects increased energy revenues and water operating expense savings, offset by lower revenues from the water and sewerage business due to lower volumes of water consumption and lower customer numbers.

The dividend in 2017-18 is estimated to be $67.1 million. The reduction of $6.6 million in 2017-18 from the 2016-17 estimated outcome is mainly due to decreased energy revenues and an increase in operating expenses, offset by an estimated increase in water and sewerage revenues.


Land Development Agency, City Renewal Authority and Suburban Land Agency

The Land Development Agency will be discontinued on 30 June 2017, with the Suburban Land Agency and City Renewal Authority formally established on 1 July 2017. The City Renewal Authority will lead and manage major projects and associated land acquisitions and sales within the boundaries of declared urban renewal precincts. The Government has identified the critical Northbourne Avenue, Civic and West Basin precinct as the immediate focus of the City Renewal Authority activities following its establishment. The Suburban Land Agency will be dedicated to the important task of developing vibrant new suburbs to meet the continuing demand in our growing city and leading renewal of our urban town centres that sit outside the declared precincts.

Estimates to 30 June 2017 are for the activities of the Land Development Agency and thereafter are for the City Renewal Authority and Suburban Land Agency combined. The dividend in 2016-17 is expected to be $191 million, which is $41.7 million above the original 2016-17 Budget estimate. The increase is due to a range of factors, including timing of settlements and lower development costs. The dividend forecast for 2017-18 is $155.8 million. Refer to Supply and Release of Land (Chapter 5.4).

Dividends from financial investments

This item represents dividends from financial investment assets of the Superannuation Provision Account. Variations in this estimate reflect the estimated change in the amount of dividends declared on individual share holdings over the year and expected to be received, as well as changes to the portfolio’s asset allocation.

The 2016-17 outcome for dividends from financial investments is estimated to be $51.0 million in line with the 2016-17 Budget estimate. Dividends from financial investments are expected to increase by $1.2 million to $52.3 million in 2017-18.

Income tax equivalents

This item represents income tax equivalent payments made by the Public Trading Enterprise sector. The estimated outcome for 2016-17 is $155.5 million and reflects the performance forecast from the ACT agencies that are subject to the National Tax Equivalent Regime.

The revenue from income tax equivalents is expected to decrease by $23.2 million to $132.3 million in 2017-18, consistent with the reduction in dividends from Icon Water and the land entities.


Other revenue

Table 6.2.15 provides the 2016-17 estimated outcome, the 2017-18 Budget and the forward estimates for other revenue.

The 2016-17 outcome for other revenue is estimated to be $152.6 million or $9.3 million higher than the 2016-17 Budget estimate. Other revenue is expected to increase by $11.9 million to $164.5 million in 2017-18.

Table 6.2.15: Other revenue

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est.


$’000 $’000 $’000 % $’000 $’000 $’000 Fines

24,332 Traffic Infringement Fines

26,608 27,778 4 29,419 29,046 30,768

387 Court Fines 452 526 16 529 533 537 14,442 Parking Fines 11,642 16,009 38 17,228 17,228 18,202

924 Other Fines 1,023 927 -9 930 930 954 40,085 Total Fines 39,725 45,240 14 48,106 47,737 50,461

Other

16,632 Superannuation Contribution

16,747 17,311 3 17,178 16,674 17,004

13,037 Rents and Commutation

13,777 12,795 -7 12,357 12,012 11,334

20,047 Contributions 19,879 19,875 .. 19,873 19,868 19,863 53,541 Other Miscellaneous

Revenue 62,482 69,272 11 52,309 51,371 53,953

103,257 Total Other 112,885 119,253 6 101,717 99,925 102,154 143,342 Total Other Revenue 152,610 164,493 8 149,823 147,662 152,615

Traffic infringement fines

The estimated revenue from traffic infringement fines in 2016-17 is $26.6 million. Revenue is forecast to increase by $1.2 million to $27.8 million in 2017-18. This is partly due to the introduction of two additional mobile speed cameras, and upgrades to the traffic adjudication system.

Parking fines

The estimated outcome from parking fine revenue in 2016-17 is $11.6 million, which is $2.8 million less than at the 2016-17 Budget, mainly due to construction activity at various parking sites. This revenue is forecast to increase to $16.0 million in 2017-18. The $4.4 million increase is mainly as a result of increased enforcement activity, including the introduction of Licence Plate Recognition Technology, and the indexation of parking fines by six per cent (as announced in the 2014-15 Budget).


Superannuation contributions

This item represents the payment of employer superannuation contributions to the Territory Banking Account by the Public Trading Enterprise sector and external sector (ActewAGL). The contribution calculations are based on annual actuarially determined employer contribution rates for either Commonwealth Superannuation Scheme or Public Superannuation Scheme membership. This item also includes the employee contributions to the Territory Banking Account by those Members of the Legislative Assembly who are members of the defined benefit superannuation arrangement.

Rents and commutation

Rents and commutation income is estimated at $13.8 million in 2016-17 and is forecast to decline to $12.8 million in 2017-18. This decline is as a result of participants exiting the Land Rent Scheme and converting to Crown leases.

Contributions

This item includes voluntary contributions, fundraising and excursion funds, and revenue from the hire of school buildings, which are collected by schools and the Education Directorate.

Other miscellaneous revenue

Other miscellaneous revenue is forecast to increase to $69.3 million in 2017-18, from an estimated outcome of $62.5 million in 2016-17. The variance is mainly due to higher revenues received from the Renewable Energy Innovation Fund.

Table 6.2.16 below provides a breakdown of other miscellaneous revenue.

Table 6.2.16: Other miscellaneous revenue

2016-17 2017-18 2018-19 2019-20 2020-21 Category Est. Outcome Budget Estimate Estimate Estimate

$’000 $’000 $’000 $’000 $’000 Revenue from Financial Investments 1,304 768 756 803 861 Donations 968 1,077 1,104 1,129 1,156 Other Grants 19,175 18,703 19,102 20,085 21,375 Recoveries 13,809 14,273 15,341 15,012 15,424 Perpetual Care Trust 1,388 1,397 1,526 1,579 1,635 Problem Gambling Assistance Fund 1,120 1,142 1,171 1,200 1,230 Regulatory Fees 1,339 1,431 1,468 1,499 1,532 Miscellaneous 23,379 30,481 11,841 10,064 10,740 Total Other miscellaneous revenue 62,482 69,272 52,309 51,371 53,953

2017-18 Budget Paper No.3 247 Federal financial relations

CHAPTER 7

FEDERAL FINANCIAL RELATIONS

Chapter Page

7.1 Overview 249

7.2 Federal financial relations 251



7.1 OVERVIEW

Federal financial relations continue to mature with the Council of Australian Governments (COAG) playing an increasingly prominent role in the development of Commonwealth-State agreements in areas of national significance. There has been progress in some key policy areas including health reform, competition reform, housing affordability, and infrastructure investment. The longer-term sustainability of federal financial relations remains an area of focus for the ACT Government, where further reform effort will be needed.

GST funding

The recently announced Productivity Commission review of horizontal fiscal equalisation may result in changes to the method of determining the distribution of funding among the States and Territories.

In 2017-18, the ACT will receive an increased share of the GST pool, $202 million greater than if the GST were distributed based on a population share. However, the GST’s volatility from a budgeting perspective was again illustrated in the 2017-18 Commonwealth Budget, with the Commonwealth’s estimates for the GST pool reducing by a total $2.5 billion over the 2016-17 to 2019-20 period compared to the 2016-17 Mid-Year Economic and Fiscal Outlook, partly offsetting the effect of the ACT’s increased relativity.

The net effect of these two factors is an increase of $80.5 million in the ACT’s GST entitlement over the 2016-17 to 2019-20 period, compared to the 2016-17 Mid-Year Economic and Fiscal Outlook.

Other Commonwealth funding

The recent Commonwealth Budget outlined a number of major developments in funding to the States and Territories:

� Health reform – a new interim agreement was agreed between the Commonwealth and States in March 2017, which will operate from 2017 to 2020.

� Education – the announcement of the proposed Quality Schools agreement will see changes to schools funding for government and non-government schools, centred around a stronger adoption of the Schooling Resource Standard.

� Skills – the announcement of the new Skilling Australians Fund will replace the existing National Skills Reform National Partnership Agreement.

� Housing and Homelessness reform – the announcement of a new National Housing and Homelessness agreement will combine the existing National Affordable Housing Specific Purpose Payment and the Homelessness National Partnership Agreement.


These new funding arrangements hold the promise of greater certainty for each of the sectors in the years ahead. However, many depend on further negotiation or legislation passing the Federal Parliament.

States face continued uncertainty over Commonwealth funding for National Partnership Agreements beyond their expiry dates. The States have suggested improvements to the current process for dealing with expiring agreements, and will continue to advocate for these reforms.


7.2 FEDERAL FINANCIAL RELATIONS

The federal financial relations framework established by the Intergovernmental Agreement on Federal Financial Relations (IGA-FFR) provides strong institutional and governance systems. However, the fiscal sustainability of the States and Territories (the States) in the longer term will be challenged if further reforms to tax policy and expenditure responsibilities are not considered. A strategic approach to these challenges will be needed but is not currently in evidence.

As an independent territory of the federation, the ACT receives federal funding commensurate with its State counterparts, while also receiving funding in recognition of its unique circumstances as a city/state in a national capital setting, and as a major regional centre.

These special circumstances aside, the ACT has a strong track record of leading reform within the Governments. This is illustrated by our adoption of the most progressive tax reform agenda of any jurisdiction, which is replacing conveyance stamp duties with broad-based land tax in the form of general rates.

The ACT Government acknowledges the need for further reform of the federal financial relations framework, and will continue to push for key reforms through the various Council of Australian Governments forums. Acknowledging that context, this chapter outlines developments in the ACT’s financial relations with the Commonwealth and States that occurred in 2016-17 and the likely flow-on effects into 2017-18 and outyears.

Characteristics of federal financial relations

Taxation powers are concentrated at the Commonwealth Government level, while the States are responsible for delivery of major high-cost services, including public hospitals and school education. Social welfare remains the responsibility of the Commonwealth Government. This revenue-expenditure imbalance (commonly referred to as vertical fiscal imbalance) is largely offset by significant transfers of taxation revenue – both tied and untied – to the States from the Commonwealth Government.

Consequently, the States rely on the Commonwealth Government for between 40 and 50 per cent of their revenue on a consolidated basis, with the ACT currently at around 42 per cent. All revenue that the Commonwealth collects from the Goods and Services Tax (GST), less administration costs, is distributed to the States. The Commonwealth Grants Commission determines the distribution of revenue collected from the GST among the States in accordance with the principle of horizontal fiscal equalisation.


To put the concept of vertical fiscal imbalance into perspective, the Commonwealth Government currently collects around 74 per cent of combined Commonwealth and State Government tax revenue (16 per cent of Commonwealth tax revenue being from the GST1) but is only responsible for approximately 55 per cent of total government spending. In contrast, the States collect around 26 per cent of combined tax revenue, but are responsible for around 45 per cent of total government spending.

Figure 7.2.1 below depicts the distribution of Commonwealth-State spending and revenue collection (including the GST).

Figure 7.2.1: 2015-16 Estimated distribution of commonwealth-state revenue collection and expenditure

Distribution of revenue collection Distribution of expenditure

Sources: ABS, Government Financial Statistics 2015-16 (5512.0) and Chief Minister, Treasury and Economic Development Directorate (CMTEDD) calculations. Note: Capital expenditure is not included.

State of federal financial relations

In 2016, the Commonwealth Government terminated major national initiatives to reform the Federation and the Tax System, which had been initiated after the 2013 Federal Election. This has left the sphere of federal financial relations without a clear or comprehensive pathway for reform and renewal.

Although the recent Commonwealth Budget has given increased certainty to State funding in the sectors of education, homelessness and skills, the new arrangements for education funding depend on legislation being passed by the Federal Parliament. National Partnership Agreements (NPAs) continue to be subject to short-term funding decisions by the Commonwealth, with little consultation or advance notice to the States of changes to these arrangements.

1 Source: ABS, Taxation Revenue, Australia, 2016-17 (5506.0) and CMTEDD calculations

C'wealth74%

State26%

C'wealth55%

State45%


The health sector has an interim funding agreement which expires in June 2020, with the Commonwealth Government having undertaken to develop a new long-term agreement in consultation with all jurisdictions to be agreed by Council of Australian Governments in 2018. Continuation of funding based on real growth in demand for health services will be critical for the future sustainability of State budgets.

In April 2017, the Federal Treasurer released a Terms of Reference tasking the Productivity Commission with undertaking an inquiry into the impact on the national economy of Australia’s system of horizontal fiscal equalisation. This is in addition to the previously issued Terms of Reference to the Commonwealth Grants Commission in late 2016 to undertake a review of the methodology underpinning the system of horizontal fiscal equalisation.

The Commonwealth Government is also exploring decentralisation of federal public service functions to regional cities, with federal agencies required to justify why at least some of their functions should not be relocated.

These developments indicate that the future of federal financial relations may be becoming increasingly uncertain. The ACT will continue to be active in arguing for arrangements which acknowledge the unique challenges of service delivery in different parts of the country and do not disadvantage the smaller States and Territories.

Developments in federal financial relations in 2016-17

Recent developments in federal financial relations have seen the Council of Australian Governments (COAG) play an increasing prominent role in the development of Commonwealth-State agreements in areas of national significance.

The Council on Federal Financial Relations (CFFR) has continued to play the major role in overseeing the operation of the Intergovernmental Agreement on Federal Financial Relations.

The Council on Federal Financial Relations has also provided the vehicle for driving some key policy developments, particularly in the areas of competition reform, housing affordability and infrastructure investment.

Competition reform needed to drive Australia’s economic performance and improve living standards took a step forward with a number of jurisdictions signing the Intergovernmental Agreement on Competition and Productivity-Enhancing Reforms at COAG’s 9 December 2016 meeting.

The Council on Federal Financial Relations also agreed to progress the design and implementation of a bond aggregator model to support greater provision of social housing.


Sources of federal funding

The types of federal funding within the IGA-FFR framework are General Revenue Assistance; Financial Assistance Grants to Local Government (Financial Assistance Grants); Specific Purpose Payments; and National Partnership Payments.

Figure 7.2.2 and Table 7.2.1 below illustrate the sources of State revenues. On average, States are estimated to receive 45.6 per cent of their funding from the Commonwealth in 2017-182, with an average of 54.4 per cent coming from their own sources.

Figure 7.2.2: State revenue profile from the Commonwealth, 2017-18

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

WA ACT Vic NSW Qld SA Tas NT

Perc

enta

ge o

f Rev

enue

GST funding SPPs NPPs Other GRA Own Source Revenue

Sources: CMTEDD calculation based on 2017-18 Commonwealth, Northern Territory and Victorian Budgets and 2016-17 State Mid-Year Budget Reviews.

2 CMTEDD calculation based on 2017-18 Commonwealth, Northern Territory and Victorian Budgets and 2016-17 State Mid-Year Budget Reviews.


Table 7.2.1: State revenue profile from the Commonwealth, 2017-18

WA ACT Vic NSW Qld SA Tas NT Total Commonwealth funding

($ billion) 8.4 2.1 27.3 35.3 26.9 10.6 3.6 4.2

GST funding (%) 8.7 23.8 24.1 21.6 26.7 33.6 41.8 49.9 SPPs (%) 16.3 13.8 17.3 16.1 16.0 15.3 15.9 11.3 NPPs (%) 6.1 3.2 3.1 5.6 5.5 7.7 5.9 11.0 Other GRA (%) 0.1 0.8 0.0 0.1 0.0 0.0 0.0 0.0

Total Commonwealth funding (%) 31.2 41.5 44.7 43.3 48.3 56.6 63.5 72.2 Own Source Revenue (%)1 68.8 58.5 55.3 56.7 51.7 43.4 36.5 27.8

Sources: CMTEDD calculation based on 2017-18 Commonwealth, Northern Territory and Victorian Budgets and 2016-17 State Mid-Year Budget Reviews. Notes: Numbers may not add due to rounding. 1. ACT Own Source Revenue is inclusive of local government revenue comprising general rates and the City Centre

Marketing and Improvements Levy.

The ACT is expected to receive $2.140 billion, approximately 41.5 per cent of its revenue, from the Commonwealth in 2017-18. While this is an increase of 2.5 per cent over last year’s Commonwealth funding of $2.088 billion, it would still make the ACT the second-least reliant on Commonwealth revenue among all jurisdictions. However, the ACT’s own source revenue includes general rates, which are used to support both State and local government expenses. General rates constitute about 16.2 per cent of the ACT’s total own revenue in 2017-18.3

GST funding, SPP funding and NPP funding represent a lower proportion of the ACT’s total revenue than for most other States. However, the ACT’s share of GST is almost 20 per cent above a population share, driven mainly by its low revenue raising capacity. There are several reasons for this, including the ACT’s inability to apply taxes, such as payroll tax, to the Commonwealth, as well as a lack of mineral resources and relatively low land values compared with the large States. On the other hand, our low share of NPPs is largely driven by a small share of infrastructure funding, which is typically lower in per capita terms for the smaller States. Taken together, the ACT ranks in the middle of the States in terms of the per capita amount of total Commonwealth funding received (see Figure 7.2.3 below).

3 It is not possible to identify how much of the general rates revenue is used for State type expenses and how much for local government type expenses.


Figure 7.2.3: Commonwealth funding per capita, 2017-18

$3,138$4,369 $4,461 $5,291

$5,435 $6,141 $6,957$17,084

1

10

100

1,000

10,000

100,000

WA Vic NSW ACT Qld SA Tas NT

$ pe

r cap

ita

Source: CMTEDD calculation based on the 2017-18 Commonwealth Budget.

Total Commonwealth funding to the ACT

The ACT will receive the following estimated payments from the Commonwealth Government in 2017-18:

� General Revenue Assistance, comprising:

- GST of $1,224.6 million; representing an increase of $98.5 million over 2016-17; and

- ACT Municipal Services payments of $39.6 million; representing an increase of $0.5 million over 2016-17;

� Specific Purpose Payments of $711.3 million; representing an increase of $20.2 million over 2016-17;

� National Partnership Payments of $139.8 million; representing a decrease of $5 million over 2016-17; and

� Other Commonwealth payments comprising:

- Financial Assistance Grants of $50.5 million, representing an increase of $1.9 million; of which $25.1 million will be brought forward into 2016-17 resulting in $25.1 million available in 2017-18.


The amounts above reflect the 2017-18 Commonwealth Budget estimates for 2016-17 and 2017-18. For SPPs and NPPs, the amounts are not necessarily reflected in the ACT Budget, as the ACT has included what is presently considered likely to be received based on details known about each payment. Each of the payments is discussed in more detail in the following sections.

General Revenue Assistance

General Revenue Assistance transfers from the Commonwealth Government represent a major source of untied funding in support of the delivery of state services in the ACT. It is estimated they will comprise approximately 24.5 per cent of the ACT’s General Government Sector revenues in 2017-18. Table 7.2.2 below summarises the expected level of General Revenue Assistance funding to the ACT across the budget and forward estimates.

Table 7.2.2: Commonwealth Government General Revenue Assistance funding to the ACT

2016-17 2017-18 Variance 2018-19 2019-20 2020-21 Est. Out. Budget Estimate Estimate Estimate $m $m $m % $m $m $m

GST Revenue 1,126.1* 1,224.6 98.5 8.7 1,286.6 1,325.3 1,398.6 ACT Municipal Services 39.1 39.6 0.5 1.3 40.1 40.7 41.3

Total General Revenue Assistance

1,165.2 1,264.2 99 8.5 1,326.7 1,366.0 1,439.9

Source: 2017-18 Commonwealth Budget. Notes: Numbers may not add due to rounding. *Balancing adjustment of $2.9 million for over-payment in 2015-16 paid in 2016-17.

GST Revenues

GST payments to the ACT represent the bulk of revenue assistance to the ACT and in any year reflect the total national GST pool; the ACT’s GST relativity4; and the Australian Bureau of Statistics’ estimates of the ACT and national populations.

The GST is distributed to the States as ‘untied’ payments and consistent with the principle of horizontal fiscal equalisation.5 A full description of the determination of the ACT’s 2017-18 GST relativity is provided later in this chapter.

4 A per capita weight assessed by the Commonwealth Grants Commission for use by Commonwealth Treasury in calculating the share of the GST revenue a State requires to achieve horizontal fiscal equalisation. 5 A distribution of GST revenue to State governments such that, after allowing for material factors affecting revenues and expenditures, each would have the fiscal capacity to provide services and their associated infrastructure at the same standard, if each made the same effort to raise revenue from its own sources, operated at the same level of efficiency and maintained the average per capita net financial worth.


For forward estimates purposes, the GST revenue receipts to the ACT are based on:

� 2017-18 Commonwealth Budget forward estimates of the GST pool;

� the Commonwealth’s forward estimates of the ACT population as a percentage of the national total; and

� the 2017-18 GST relativity for the ACT held constant across the forward estimates.

Since the 2016-17 Commonwealth Budget, Federal Treasury has used the same method as the ACT for projecting GST relativities across the forward estimates. The 2017-18 Commonwealth Budget again holds each State’s relativity in the budget year constant across the outyears.6 As a result, the ACT GST estimates for the outyears published in the 2017-18 ACT Budget align with the 2017-18 Commonwealth Budget GST estimates.

The overall movement in GST grants to the ACT throughout the year since the 2016-17 Budget is illustrated in Table 7.2.3 below.

It reflects parameter variations arising from the impact of the:

� 2015-16 Final Budget Outcome;

� Commonwealth’s Mid-Year Economic and Fiscal Outlook revisions;

� release of the CGC’s new relativities; and

� subsequent 2017-18 Commonwealth Budget release.

In 2017-18, the ACT is expected to receive $1,224.6 million in GST. This is $202.2 million greater than if the GST were distributed based on an equal per capita share across jurisdictions.

6 Previously the Commonwealth produced technical projections of GST relativities beyond the budget year. This approach was limited to applying each State’s fiscal needs from the last two years of the most recent Grants Commission report, with adjustment for changes in the distribution of National SPPs. It did not take account of the States’ forward estimates of their budgetary positions, nor of trends in underlying cost drivers which could affect future relativities.


Table 7.2.3: Reconciliation of GST revenue grants to the ACT

2016-17 2017-18 2018-19 2019-20 2020-21 Total $m $m $m $m $m $m

2016-17 ACT Budget Jun-16 1,154.4 1,215.7 1,279.1 1,334.5 4,983.7 Variation -2.9 0.0 0.0 0.0 -2.9

2015-16 Final Commonwealth Budget Outcome1

Nov-16 1,151.5^ 1,215.7 1,279.1 1,334.5 4,980.8 Variation -18.5 -24.0 -27.9 -28.4 -98.8

2016-17 Commonwealth MYEFO2

Dec-16 1,133.0^ 1,191.7 1,251.2 1,306.2 4,882.0

2016-17 ACT Budget Review

Feb-17 1,133.0 1,191.7 1,251.2 1,306.2 4,882.0 Variation 0.0 38.2 40.0 41.7 119.8

2017 Update Report3 Mar-17 1,133.0^ 1,229.9 1,291.2 1,347.9 5,001.9 Variation -6.9 -5.3 -4.6 -22.6 N/A -39.3*

2017-18 Commonwealth Budget4

May-17 1,126.1^ 1,224.6 1,286.6 1,325.3 1,398.6 6,361.2

2017-18 ACT Budget Jun-17 1,126.1^ 1,224.6 1,286.6 1,325.3 1,398.6 6,361.2 Total Variation since

2016-17 ACT Budget -28.3 8.9 7.5 -9.2 N/A -21.1*

Note: Numbers may not add due to rounding. ^ Includes a balancing adjustment of -$2.9 million in 2016-17, for overpayment in 2015-16. * Total does not include 2020-21 Parameter variations: 1. The 2015-16 Final Budget Outcome – Balancing adjustment of -$2.9 million in 2016-17, for overpayment in 2015-16. 2. The 2016-17 Commonwealth Mid-Year Economic and Fiscal Outlook: Revised GST revenue pool and population

estimates. 3. The Commonwealth Grants Commission 2017 Update Report: Revised GST relativities. 4. The 2017-18 Commonwealth Budget: Revised GST revenue pool and population estimates.

The table above also illustrates the short-term volatility of GST estimates, with different drivers of payments, such as total GST collections and updates of relativities, often impacting in opposite directions. This complicates the ACT’s budgeting task.

ACT municipal services

The Commonwealth also provides General Revenue Assistance to the ACT to assist in meeting the additional local government municipal costs which arise from Canberra’s role as the national capital. This general revenue assistance also compensates the ACT for additional costs resulting from national capital planning influences on the provision of water and sewerage services.

This level of funding arises from recommendations by the Commonwealth Grants Commission at the time the ACT was granted self-government. It is indexed annually by a growth factor comprised of indicators for wage growth and inflation.


National Specific Purpose Payments

The Commonwealth provides grants to the Territory in the form of Specific Purpose Payments to support services in health, schools, skills and workforce development, and affordable housing. The funding from the previous Specific Purpose Payments relating to disability services will be redirected to the National Disability Insurance Agency from 2017-18 as part of the ACT’s transition to the National Disability Insurance Scheme. The States are required to spend each SPP in the relevant sector.

Current funding levels

Commonwealth grants to the Territory for specific purposes are projected to be $3,040.1 million across the forward estimates. The relative distribution of these payments across sectors is outlined in Table 7.2.4.

Table 7.2.4: Commonwealth Specific Purpose Payments to the ACT

2016-17 2017-18 Variation 2016–17 and

2017-18

2018-19 2019-20 2020-21 Est. Out. Budget Estimate Estimate Estimate

$m $m $m % $m $m $m National Health Reform¹ 340.8 363.0 22.2 6.5 385.0 408.3 425.3 Students First funding² 278.9 293.6 14.7 5.3 312.8 330.4 330.7 National Skills and Workforce

Development 24.3 24.5 0.2 1.1 24.8 25.1 25.4

National Disability3 24.5 0.0 -24.5 -100.0 0.0 0.0 0.0 National Affordable Housing4 22.1 22.3 0.2 1.1 22.6 22.9 23.2

Total Specific Purpose Payments

690.6 703.5 12.9 1.9 745.2 786.8 804.6

Source: The 2017-18 Commonwealth Budget and CMTEDD calculations. Notes: Numbers may not add due to rounding. 1. National Health Reform funding has increased over the ACT Budget forward estimates, but is lower than published in the

2017-18 Commonwealth Budget given the more current information on likely growth and activity levels available to the ACT Government.

2. The change in the schools funding, recently announced by the Commonwealth Government has not been reflected in the ACT Budget at this time. Estimates excludes GST gross-up for non-government schools.

3. The ACT has fully transitioned to the National Disability Insurance Scheme and is not expecting Disability SPP funding from 2017-18. 4. The 2017-18 Commonwealth Budget announced a new National Housing and Homelessness package commencing in 2018-19. The

new package merges the National Affordable Housing SPP and the Homelessness NPA with ongoing indexed funding continuing for both. The ACT 2017-18 Budget continues to represent the amounts separately over the forward estimates. This will be updated when further details about the new agreement are known.

Further details of the changes made to funding arrangements under the Specific Purpose Payments in each sector are set out below.


Health funding

In March 2017, the Commonwealth and States signed an addendum to the National Health Reform Agreement. This interim agreement provides continued Commonwealth funding for public hospitals at a funding growth rate capped at 6.5 per cent a year nationally, effective from 1 July 2017 for three years. The ACT and the Commonwealth also signed a separate bilateral agreement providing a guaranteed minimum Commonwealth financial contribution for ACT public hospital services for the period of the interim agreement. A longer-term public hospital funding agreement between the Commonwealth and the States is proposed to commence on 1 July 2020, with a draft to be considered by the Council of Australian Governments before September 2018.

The 2017-18 Commonwealth Budget estimates for the Territory’s share of the National Health Reform Funding provides an average annual growth rate over the forward estimates of 6.8 per cent. ACT Health’s estimates, based on recent activity forecasts, suggest that a lower average annual growth rate of 5.7 per cent over the forward estimates is more accurate. Based on ACT Health’s activity estimates, the impact of the interim agreement over the forward estimates provides an additional $52.2 million, which is reflected in the 2017-18 ACT Budget.

Schools funding

In May 2017 the Commonwealth Government announced changes to schools funding for government and non-government schools centred around a stronger adoption of the Schooling Resource Standard. The proposed agreement, to be called the Quality Schools Agreement, would provide a lower average annual funding growth rate of 4.32 per cent for the ACT across the forward estimates, compared to the 5.67 per cent growth in the current arrangement. However, the proposed agreement would increase funding to government schools.

The proposed new funding arrangement is subject to legislation yet to be passed by the Federal Parliament. Funding outlined in the 2017-18 Commonwealth Budget associated with the proposed change has therefore not been reflected in the 2017-18 ACT Budget at this time.

Skills and workforce development funding

The Commonwealth has announced a Skilling Australians Fund which will replace the existing National Skills Reform National Partnership Agreement, which ceases on 30 June 2017. From 2018-19, funding will be based on amounts paid into the Fund from a national levy on foreign workers on certain skilled visas. The Commonwealth has allocated a notional amount of $24 million to the ACT over the forward estimates. Access to the Fund is likely to depend on meeting eligibility criteria defined by the Commonwealth and may include the requirement to match funding.


Disability funding

The Disability Specific Purpose Payment is being progressively phased out as States transition existing and new clients to the National Disability Insurance Scheme over the period 2016-17 to 2018-19. As the ACT has already transitioned all eligible participants to the National Disability Insurance Scheme, it will not receive any further funding under this agreement from 2017-18. The ACT will receive funding from the Commonwealth through the Disability Care Australia Fund agreement to assist in meeting the ACT’s National Disability Insurance Scheme contributions. Under this agreement, States are paid an allocation of the Medicare Levy based on the percentage of participants transitioned to the National Disability Insurance Scheme.

Please refer to the Statement of Risks (Appendix K) for more information in relation to ongoing funding arrangements for the National Disability Insurance Scheme.

Affordable housing funding

Long-term funding arrangements for housing and homelessness are to be reformed with a new National Housing and Homelessness agreement recently announced by the Commonwealth. From 2018-19, funding which is currently provided under the National Affordable Housing Specific Purpose Payment and the Homelessness National Partnership Agreement will be combined. Funding will be ongoing and indexed, with new targets and measures to be settled on a state specific basis, and with some matched funding required. Estimates will be updated as more details become known.

National Partnership Payments

The Commonwealth provides National Partnership Payments to the States and Territories, to support the delivery of specified projects, facilitate reforms or reward those that deliver on national reforms or achieve service delivery improvements.

National Partnership Agreements are typically entered into for a fixed period of time, reflecting the nature of the project or the reform involved. Payments are generally aligned with the achievement of milestones and are made after specific outcomes or outputs have been achieved. The sectors in which these payments are made to the ACT across the forward estimates are shown in Table 7.2.5.


Table 7.2.5: Commonwealth National Partnership Payments to the ACT

2016-17 2017-18 Variation 2018-19 2019-20 2020-21 Est.

Out. Estimate Estimate Estimate Estimate $m $m $m % $m $m $m

Affordable Housing1 1.5 1.6 0.01 2.2 1.6 1.6 1.7 Community Services2 21.2 44.0 22.8 107.4 17.4 17.6 18.5 Environment 18.0 43.5 25.5 142.1 18.5 0.3 0.0 Health 3.0 2.8 -0.2 -7.1 2.6 2.7 2.5 Skills and Workforce

Development3 8.3 5.7 -2.5 -30.6 5.9 6.4 6.0

Education 9.6 9.2 -0.4 -3.8 6.3 0.0 0.0 Other4 12.1 12.0 -0.1 -0.5 11.4 11.7 5.9 Infrastructure 28.7 45.1 16.4 57.4 21.5 10.8 18.4

Total NP Payments 102.3 163.9 61.7 60.2 85.3 51.1 53.0

Source: ACT Government expected payments derived from 2017-18 Commonwealth Budget and CMTEDD calculations. Notes: Numbers may not add due to rounding. 1. The 2017-18 Commonwealth Budget announced a new National Housing and Homelessness package commencing

2018-19. The new package merges the existing National Affordable Housing SPP and the Homelessness NPA into one ongoing indexed agreement. The ACT 2017-18 Budget continues to represent the agreements separately over the forward estimates. This will be updated when further details about the new agreement are known.

2. Disability Care Australia Fund receipts from 2016-17 onwards reflects different timing of payments to those published in the Commonwealth’s 2017-18 Budget as the ACT is continuing discussions with the Commonwealth about this funding.

3. Includes Skilling Australians Fund from 2017-18. This agreement replaces the expiring Building Australia’s Future Workforce – Skills Reform Funding agreement.

4. The ‘Other’ category excludes Financial Assistance Grants funding to the ACT.

Expiring National Partnership Payments

The following National Partnership Agreements are due to expire in 2016-17:

� Specialist Disability Services for over 65s. This was intended to provide $2.112 million in 2016-17 for the ACT. Negotiations are ongoing in relation to the 2016-17 funding and this will cease as of 2017-18 as ACT clients associated with this agreement have transitioned to the National Disability Insurance Scheme.

� The National Outcome Standards for Perpetrator Interventions. This provided $45,778 for the ACT in 2016-17 and was not intended to be ongoing.

� The Independent Public Schools Initiative. This provided $260,000 for the ACT in 2016-17 to support increased autonomy in government schools across Australia.

� Trade Training Centres in Schools – Government Schools. This provided $725,000 for the ACT in 2016-17 for the creation, upgrade and refurbishment of trade training centres.

� Infrastructure Growth Package- Asset Recycling Fund - New Investments. This provided $957,000 in 2016-17 for significant road projects.

� National Bushfire Mitigation. This provided $299,000 for the ACT in 2016-17 for work that is largely completed.


� National Register for Foreign Ownership. This provided $400,000 for the ACT to develop a system to capture data on sales and transfers of real property involving foreign owners.

Two NPAs that were due to expire in 2016-17 have been extended, or replaced, with new agreements.

� The BreastScreen Australia NPA, which provided $263,000 to the ACT in 2016-17, has been extended to 2020-21 with state allocations yet to be determined.

� The Building Australia’s Future Workforce - Skills Reform NPA, which provided $8.276 million to the ACT in 2016-17, has been replaced with the Skilling Australians Fund for which state allocations are also yet to be determined.

New National Partnership Payments

The 2017-18 Commonwealth Budget announced other new National Partnership Payments funding or agreements under development as follows:

� Encouraging More Clinical trials in Australia

� Suicide Prevention

� National Housing and Homelessness

� Social Impact Investments

� Transition to Independent Living Allowances

� Women’s Safety Package – Technology Trials

� Trade Training Centres – Non-Government Schools

� National Water Infrastructure Development Fund

� Regulatory Reform

Other Commonwealth payments

This component of Commonwealth funding to the ACT reflects a variety of grants outside the Intergovernmental Agreement framework, with the largest being Financial Assistance Grants.

Financial Assistance Grants to Local Government

Financial Assistance Grants are paid to State Governments for delivering to local governments through the State Grants Commissions. Financial Assistance Grants to local government are untied and can be spent according to local government priorities.


As the ACT Government has responsibility for both State and municipal functions, the Financial Assistance Grants are paid directly to the ACT to be spent according to its budget priorities, at approximately two per cent of the Financial Assistance Grants pool.

Financial Assistance Grants payments are made up of two components: general purpose funding and identified local road funding.

The general purpose component is divided amongst the States on an equal per capita basis.

The identified local roads funding shares were agreed at the 1990 Special Premiers conference and are based on historical road lengths from 1991-92. The ACT’s share is 3.2 per cent.

Indexation of Financial Assistance Grants resumed in the Commonwealth Budget following a three-year freeze. In addition, the Commonwealth has brought forward half of States’ 2017-18 funding entitlement into 2016-17.

The ACT’s Financial Assistance Grants funding is shown in Table 7.2.6 below.

Table 7.2.6: Commonwealth Government Financial Assistance Grants funding to the ACT

2016-17 2017-18 Variation 2018-19 2019-20 2020-21 Est. Out. Budget Estimate Estimate Estimate $m $m $m % $m $m $m

Financial Assistance Grants 73.7 25.1 -48.6 -65.9 52.1 54.5 54.8

Source: 2017-18 Commonwealth Budget


Total Commonwealth Funding to the ACT

The ACT Government’s estimated and expected revenue transfers from the Commonwealth Government over the forward estimates are detailed in Table 7.2.7. The amounts may not match those published in the 2017-18 Commonwealth Budget as the ACT includes in its budget amounts that are presently considered likely to be received, based on details known about each payment.

Table 7.2.7: Total Commonwealth Funding to the ACT

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget FUNDING CATEGORIES Est. Budget Estimate Estimate Estimate

Outcome $’000 $’000 $’000 $’000 $’000 $’000

General Revenue Assistance 39,100 ACT Municipal Services 39,054 39,562 40,116 40,717 41,287

1,154,400 GST Revenue 1,126,117 1,224,615 1,286,584 1,325,269 1,398,634 1,193,500 Total General Revenue

Assistance 1,165,171 1,264,177 1,326,700 1,365,986 1,439,921

Health Services

334,734 National Health Reform Funding – Hospital Services1

334,782 356,640 378,326 401,326 0

6,096 National Health Reform Funding – Public Health1

6,048 6,344 6,655 6,985 425,296

340,830 Total Health Services SPP 340,830 362,984 384,981 408,311 425,296 Health Services NPPs

0 Public Dental Services for Adults2, 3

0 0 0 0 0

0 Encouraging More Clinical Trials in Australia3

0 0 0 0 0

2,402 Essential Vaccines 2,402 2,416 2,452 2,475 2,542 263 Health Services – BreastScreen

Australia – Expansion of Program4

263 0 0 0 0

35 Health Services – Vaccine Preventable Diseases Surveillance

35 36 37 38 0

151 National Bowel Cancer Screening Programme – Participant Follow-Up Function

151 184 0 0 0

141 OzFoodNet 141 143 145 147 0 0 Suicide Prevention3 0 0 0 0 0

2,992 Total Health Services NPPs 2,992 2,779 2,634 2,660 2,542 343,822 Total Health Services 343,822 365,763 387,615 410,971 427,838

Housing

22,027 National Affordable Housing SPP5

22,067 22,306 22,602 22,919 23,213

Housing NPPs 1,520 Homelessness5 1,520 1,554 1,573 1,597 1,621



Outcome $’000 $’000 $’000 $’000 $’000 $’000

0 National Housing and Homelessness3

0 0 0 0 0

0 Social Impact Investments3 0 0 0 0 0 1,520 Total Housing NPPs 1,520 1,554 1,573 1,597 1,621

23,547 Total Housing 23,587 23,860 24,175 24,516 24,834 Community Services

24,394 National Disability SPP6 24,497 0 0 0 0 Community Services NPPs

0 Family Advocacy and Support Services

341 555 555 0 0

2,112 Specialist Disability Services for over 65's

2,112 0 0 0 0

46 National Outcome Standards for Perpetrator Interventions

46 0 0 0 0

2,603 Pay Equity for Social and Community Services

5,541 923 1,137 1,368 1,619

12,490 Payments from the Disability Care Australia Fund7

13,184 42,540 15,715 16,265 16,835

0 Transition to Independent Living Allowances3

0 0 0 0 0

0 Women's Safety Package – Technology Trials3

0 0 0 0 0

17,251 Total Community Services NPPs 21,224 44,018 17,407 17,633 18,454 41,645 Total Community Services 45,721 44,018 17,407 17,633 18,454

Education and Early Childhood

National Schools SPPs and National Education Reform Agreement (Students First) Funding

86,673 National Education Reform (Students First) – Government8

86,673 95,510 105,295 112,869 112,315

192,936 National Education Reform (Students First) – Non-Government8, 9

192,222 198,129 207,547 217,563 218,394

279,609 Total National Schools SPPs and National Education Reform Agreement (Students First) Funding

278,895 293,639 312,842 330,432 330,709

Education and Early Childhood NPPs10

260 Independent Public Schools Initiative

260 0 0 0 0

0 Money Smart Teaching 0 NFP NFP NFP NFP 489 National Quality Agenda for Early

Childhood Education and Care 489 459 NFP NFP NFP

966 National School Chaplaincy Programme

966 966 0 0 0



Outcome $’000 $’000 $’000 $’000 $’000 $’000

0 Schools Security – Government Schools

0 0 0 0 0

13 Schools Security – Non-Government Schools

0 0 0 0 0

0 Trade Training Centres Schools – Government Schools

725 0 0 0 0

0 Trade Training Centres Schools – Non-Government Schools

0 0 0 0

7,150 Universal Access to Early Childhood Education

7,150 7,797 6,319 0 0

8,878 Total Education & Early Childhood NPPs

9,590 9,222 6,319 0 0

288,487 Total Education & Early Childhood 288,485 302,861 319,161 330,432 330,709 Skills and Workforce Development

24,217 National Skills and Workforce Development SPP

24,261 24,527 24,821 25,143 25,441

Skills and Workforce Development NPPs

8,276 Building Australia’s Future Workforce – Skills Reform11

8,276 0 0 0 0

0 Skilling Australians Fund12 0 5,740 5,891 6,366 6,024 8,276 Total Skills and Workforce

Development NPPs 8,276 5,740 5,891 6,366 6,024

32,493 Total Skills and Workforce Development

32,537 30,267 30,712 31,509 31,465

Infrastructure Investment

Programme

1,619 Black Spot Projects 405 1,371 1,371 1,371 966 708 Bridges Renewal Programme 740 542 1,081 1,269 978 614 Heavy Vehicle Safety and

Productivity 0 290 369 226 652

6,300 Investment – Road Component/ IIP-Roads

788 2,773 2,691 1,243 9,117

12,931 Roads to Recovery 14,465 9,666 1,461 6,375 6,375 Infrastructure Growth Package –

Asset Recycling Fund

29,540 Asset Recycling Initiative 10,951 30,113 14,200 0 0 1,610 New Investments 957 0 0 0 0

Other Projects 355 Interstate Road Transport 355 355 355 355 355

53,677 Total Infrastructure 28,661 45,110 21,528 10,839 18,443 Environmental Services Environmental Services NPPs

299 Bushfire Mitigation 299 0 0 0 0



Outcome $’000 $’000 $’000 $’000 $’000 $’000

327 Implementing Water Reform in the Murray Darling Basin

327 327 327 327 0

27,000 Sustainable Rural Water Use and Infrastructure Programme

16,000 40,500 18,171 0 0

2,610 Natural Disaster Resilience 1,305 2,610 NFP NFP NFP 21 Established Pest and Weed

Management 21 21 21 0 0

0 National Water Infrastructure Development Fund – Feasibility Studies Component

0 0 0 0 0

0 National Water Infrastructure Development Fund – Capital Component

0 0 0 0 0

30,257 Total Environmental Services 17,952 43,458 18,519 327 0 Other Other NPPs

775 Developing Demand-Driver Infrastructure for the Tourism Industry

602 948 0 0 0

5,813 Legal Assistance Services 5,813 5,618 5,721 5,818 0 5,293 Provision of Fire Fighting Services 5,293 5,478 5,670 5,868 5,868

400 National Register of Foreign Ownership of Land Titles13

400 0 0 0 0

0 Regulatory Reform3 0 0 0 0 0 12,281 Total Other NPPS 12,108 12,044 11,391 11,686 5,868

Other Payments 48,611 Financial Assistance Grants – Local

Government 73,697 25,112 52,059 54,545 54,805

60,892 Total Other Payments 85,805 37,156 63,450 66,231 60,673

2,068,320 Total Commonwealth Government Funding

2,031,741 2,156,670 2,209,267 2,258,444 2,352,337

Source: The 2017-18 Commonwealth Budget and CMTEDD calculations. Notes: NFP indicates ‘not for publication’ in the 2017-18 Commonwealth Budget as negotiations are yet to be finalised. 1. National Health Reform funding in the 2017-18 ACT Budget has been increased over the forward estimates, but is

lower than published in the 2017-18 Commonwealth Budget given the more current information on likely growth and activity levels available to the ACT Government.

2. The Adult Public Dental agreement expired on 30 June 2016. The agreement was extended by the Commonwealth for a further six months to 31 December 2016. This resulted in funding to the ACT of $1.182 million for that period. The 2017-18 Commonwealth Budget published total funding for this agreement at a national level over three years to 2018-19 of $320.1 million, which includes the funding provided for the six months to 31 December 2016.

3. Where all zeros appear for 2016-17, as well as for the 2017-18 Budget and forward estimates, this is due to agreements for which state allocations are not yet determined or not certain.

4. The BreastScreen Australia Expansion Program has been extended to 2020-21 with state allocations yet to be determined.


5. The 2017-18 Commonwealth Budget announced a new National Housing and Homelessness package commencing 2018-19. The new package merges the existing National Affordable Housing SPP and the Homelessness NPA into one ongoing indexed agreement. The ACT 2017-18 Budget continues to represent the agreements separately over the forward estimates. This will be updated when further details about the new agreement are known.

6. As the ACT has already transitioned all eligible participants to the National Disability Insurance Scheme, it will not receive any further funding under the Disability SPP from 2017-18.

7. Disability Care Australia Fund for 2017-18 onwards reflects different timing of payments to those published in the Commonwealth’s 2017-18 Budget as the ACT is continuing discussions with the Commonwealth about this funding.

8. The change in the Students First funding, now called Quality Schools, recently announced by the Commonwealth Government has not been reflected in the ACT budget at this time.

9. Non-Government Schools funding, including Students First funding, excludes GST gross-up for non-government schools.

10. The funding amounts for the Online Safety Program NPAs for Government and non-Government schools published in the 2016-17 ACT Budget Paper 3 have been removed from this table as the ACT did not sign up.

11. This agreement is being replaced by the Skilling Australians Fund. 12. This agreement replaces Building Australia’s Future Workforce – Skills Reform. 13. The 2016-17 ACT Budget Paper 3 did not include funding of $400,000 under the National Register of Foreign

Ownership of Land Titles agreement as it was signed after publication of the 2016-17 ACT Budget.

Drivers of ACT GST Estimates

Report on GST Revenue Sharing Relativities – 2017 Update, Commonwealth Grants Commission

The Commonwealth Grants Commission recommends how revenues raised from the GST should be distributed to the States to achieve horizontal fiscal equalisation. The latest assessments in the Report on GST Revenue Sharing Relativities – 2017 Update (2017 Update) were calculated on the basis of the latest three years (2013-14 to 2015-16) of socio-economic and demographic data. This led to an increase in the ACT’s GST relativity from 1.15648 (2016 Review) to 1.19496 (2017 Update). The relativities were subsequently adopted by the Federal Treasurer on 24 March 2017 and will be used to distribute GST revenue in 2017-18.

2017 Recommendations

Table 7.2.8 shows the per capita relativities to be used for distributing the GST revenue among the States in 2017-18. It also shows State shares of the GST revenue for 2017-18 and the amounts per State in dollar terms. Comparisons are shown with the relativities, shares and amounts for 2016-17.


Table 7.2.8: Results – relativities, shares and GST distribution in 2016-17 and 2017-18

Relativities Shares GST distribution 2016-17 2017-18 2016-17 2017-18 2016-17 2017-18 % % $m $m

New South Wales 0.90464 0.87672 29.1 28.2 17,216 17,554 Victoria 0.90967 0.93239 23.0 23.6 13,632 14,765 Queensland 1.17109 1.18769 23.6 23.8 13,955 14,871 Western Australia 0.30330 0.34434 3.3 3.8 1,950 2,327 South Australia 1.41695 1.43997 10.0 10.1 5,934 6,303 Tasmania 1.77693 1.80477 3.8 3.8 2,259 2,387

Australian Capital Territory 1.15648 1.19496 1.9 2.0 1,129 1,225 Northern Territory 5.28450 4.66024 5.3 4.7 3,165 2,908

Total 1.00000 1.00000 100.0 100.0 59,240 62,340

Source: Commonwealth Grants Commission calculation.

Notes: Numbers may not add and percentages may not add to 100 per cent due to rounding Numbers are non-inclusive of adjustment for overpayment in 2015-16

In per capita terms the States of Victoria, Queensland, Western Australia, South Australia, Tasmania and the ACT received an increase in their relative share of the pool, at the expense of New South Wales and the Northern Territory.

The Commonwealth Grants Commission’s 2017 Update Report highlights that States’ assessed fiscal capacities continue to reflect both underlying differences in their economic, social and demographic fundamentals, as well as differences between States in the timing and nature of their economic cycles.

Key reasons for change in the 2017 Update were:

� an increase in the capacity of New South Wales and Victoria to raise revenue from property sales;

� slowing population growth in the mining States and increased population growth in New South Wales and Victoria;

� a fall in the value of mining production across a number of minerals, particularly iron ore;

� changes in the values of taxable land, particularly in New South Wales and Queensland;

� differing growth rates of taxable payrolls;

� shifts in Commonwealth payments; and

� faster relative wage growth in Victoria, Queensland and the ACT.


Implications for the ACT

Historically, the ACT is characterised by having a below average fiscal capacity, mainly due to its below average capacity to raise revenue across all revenue bases. It has no mining industry and relatively low revenue raising capacity from land values, stamp duty and taxable payrolls. It also receives below average revenue from Commonwealth payments.

Partially offsetting this low revenue raising capacity, the ACT’s assessed cost of providing services is below average. The below average cost of providing services is a result of the low cost of its relatively young, urbanised, higher socio-economic status population. This counterbalances the impact of diseconomies of scale in administration and above average wage costs on expenditure needs.

Reasons for change in the 2017 Update

The ACT’s fiscal capacity fell from fourth to fifth in the ranking of all jurisdictions, seeing its relativity increased due to a number of factors including:

� an increase in the number of estimated full-scheme NDIS participants, which increasesthe requirement for disability services expenses, gaining $35 million in GST; and

� weak growth in taxable private sector payrolls, which reduced the Territory’s revenueraising capacity, gaining $15 million in GST.

These increases were partly offset by changes in community health services and relatively lower administration costs, which reduced the ACT’s GST share.

The ACT is now expected to receive $202.2 million above its per capita share in 2017-18.

The increase in the ACT’s GST relativity in 2017-18 reflects a move above the historical average of 1.16 as illustrated by Figure 7.2.4.


Figure 7.2.4: ACT historic GST revenue sharing relativities, 2000-01 to 2017-18

0.80000

0.85000

0.90000

0.95000

1.00000

1.05000

1.10000

1.15000

1.20000

1.25000

1.30000

ACT

Rela

tivity

Relativity Average

Average = 1.16445

Underlying Horizontal Fiscal Equalisation Methodology

The methods used to derive these horizontal fiscal equalisation results for 2017-18 are set out in the Report on GST Revenue Sharing Relativities, 2015 Review and the Report on GST Revenue Sharing Relativities, 2017 Update.

Using these methods and data for 2013-14, 2014-15 and 2015-16, the Commonwealth Grants Commission has measured how the economic, social, demographic and other characteristics in the States affect the relative expenses States need to incur to provide services and infrastructure, along with the relative capacity of States to raise their own revenue.

The expense and revenue assessments are then combined with the additional Commonwealth support States receive, and State populations, to calculate State shares of the GST.

These shares aim to give each State in 2017-18 the fiscal capacity to provide the average standard of services and associated infrastructure for its population, if it makes the average effort to raise revenue and operates at the average level of efficiency.

Copies of the ACT’s submissions to the 2017 Update Report are available on the Commonwealth Grants Commission’s website (www.cgc.gov.au).


Terms of Reference for the 2020 Methodology Review

Every five years, the Commonwealth Grants Commission is asked by the Federal Treasurer to undertake a review of the methodology underpinning the system of horizontal fiscal equalisation. The current review (the 2020 Review) is due to be completed by February 2020. The methodologies developed throughout this process will be used to distribute the GST pool among the States and Territories for a five year period commencing in 2020-21.

The ACT’s involvement will now be guided by the Commonwealth Grants Commission’s comprehensive work plan with the ACT identifying in advance a number of areas that it would like the Commission to consider.

Terms of Reference for Inquiry into Australia’s System of Horizontal Fiscal Equalisation by the Productivity Commission

The Productivity Commission has been tasked by the Federal Treasurer with undertaking an inquiry into horizontal fiscal equalisation. The inquiry has been asked to consider the influence the current system has on productivity, efficiency and economic growth, including the movement of capital and labour across state borders. It will also consider the incentives for the States to undertake fiscal reforms that improve the operation of their own jurisdictions, and on the States’ abilities to prepare and deliver annual budgets.

This inquiry stems from some States and commentators suggesting Australia’s approach to horizontal fiscal equalisation does not sufficiently recognise the differences between States’ individual circumstances nor States’ efforts to manage those circumstances, thereby creating disincentives for reform. In commissioning this inquiry, the Commonwealth Government has requested an examination of the issues underlying these claims and concerns that any gains from reform and economic development are effectively redistributed to other States.

The former Gillard Government commissioned a similar review of the GST distribution system in 2011-12, which was led by former state premiers John Brumby and Nick Greiner. It recommended no major changes, instead largely backing the current system.

The ACT argued at the time that the current approach to horizontal fiscal equalisation continues to achieve the goals of the equalisation system and this view has not changed since. Given the zero-sum nature of the GST distribution under horizontal fiscal equalisation, it is not surprising that the system generates friction between States. However, the concerns identified in the terms of reference for this latest review ,have in most cases, been thoroughly addressed in previous reviews, including the 2011-12 Brumby/Greiner review, which validated the effectiveness and fairness of the current approach to horizontal fiscal equalisation.

2017-18 Budget Paper No.3 275 Asset and liability management

CHAPTER 8

ASSET AND LIABILITY MANAGEMENT

Chapter Page

8.1 Overview 277

8.2 Net debt and net financial liabilities 279

8.3 Unfunded superannuation liability 283

8.4 Management of financial assets and liabilities 291

2017-18 Budget Paper No.3 276 Asset and liability management


8.1 OVERVIEW

The ACT Government is continuing to deliver a strong balance sheet, which is reflected in the Territory’s AAA credit rating from Standard & Poor’s – the highest possible rating.

The Government’s strong fiscal management is reflected by maintaining debt at sustainable levels to provide the flexibility to deal with emerging pressures, while continuing to build the infrastructure necessary to maximise economic growth, improve productivity and grow more jobs.

The Government is already in the process of delivering a $2.8 billion infrastructure pipeline, including Stage 1 of light rail from Gungahlin to the City, the ACT Law Courts precinct, and major arterial road upgrades across the Territory.

Over the next four years, we will deliver even more investment in key infrastructure to support our city’s growth and cement Canberra’s status as one of the world’s most liveable cities. Importantly, this investment will extend beyond transport infrastructure and into our schools, hospitals and public spaces to deliver better services for Canberrans through new and refurbished infrastructure.

The Government continues to maintain the important financial objective of extinguishing the Territory’s unfunded superannuation liability by 2030. This is the largest liability on the Government’s balance sheet, but our strategy remains on target to fully fund this over time.

The Government is continuing on a steady path back to budget balance. As has been forecast since the 2015-16 Budget, we are progressing towards restoring the budget to balance from 2018-19. The Government’s capacity to manage the Territory’s finances has been acknowledged by Standard & Poor’s in its most recent assessment, which highlighted the Territory’s strong economy, financial management, and budgetary flexibility.

The return to balance will provide the Government with even greater capacity to address future economic and financial shocks, if they arise. It will also create more space for future investment to support Canberra’s growth.

The Government considers that the estimates reflected in this Budget, and the resulting strong outlook for the Territory’s financial position are consistent with maintaining a AAA credit rating.


2017-18 Budget Paper No.3 279 Net debt and net financial liabilities

8.2 NET DEBT AND NET FINANCIAL LIABILITIES

The ACT Government continues to maintain a strong balance sheet. The key indicators, measured as a proportion of Gross State Product and using the most recent budget estimates, are broadly in line with other AAA rated jurisdictions.

Table 8.2.1 provides a summary of the key balance sheet measures for the General Government Sector.

Table 8.2.1: General Government Sector key balance sheet measures

2016-17 Budget

2016-17 Est. Outcome

2017-18 Budget

2018-19 Estimate

2019-20 Estimate

2020-21 Estimate

$m $m $m $m $m $m 2,080.2 Net debt (excluding super) 1,746.5 2,001.1 2,746.9 2,866.1 2,826.9 5,496.5 Net financial liabilities 4,768.7 5,107.1 5,879.6 6,057.4 6,092.3

17,100.2 Net worth 17,701.0 18,002.3 18,168.7 18,344.8 18,578.1

Net debt

Net debt is a key balance sheet measure of financial sustainability, taking into account gross debt liabilities – including the impact of Public Private Partnerships – as well as financial assets (such as cash reserves and investments).

Table 8.2.2 below presents net debt and net debt to Gross State Product for the General Government Sector.

Table 8.2.2: General Government Sector net debt

2016-17 Budget


2017-18 Budget

2018-19 Estimate

2019-20 Estimate

2020-21 Estimate

$m $m $m $m $m $m 2,080.2 Net debt (excluding super) 1,746.5 2,001.1 2,746.9 2,866.1 2,826.9

5.6% Net debt to Gross State Product

4.6% 5.0% 6.5% 6.5% 6.1%

Net debt over the budget and forward estimates period is positive, indicating that General Government Sector cash reserves and investments are lower than gross debt liabilities, which include market and Commonwealth borrowings, and liabilities associated with Public Private Partnerships.

Compared to the 2016-17 Budget, net debt has decreased in each year from 2016-17 to 2018-19. The improvement in net debt largely reflects changes in the land release program and higher distributions in relation to the land rent scheme due to more participants exiting the scheme and converting to Crown leases by purchasing their property.


Net debt in 2019-20 is forecast to increase compared to the 2016-17 Budget, largely due to the inclusion of capital provisions in the forward estimates, relating to the Government’s significant investments in health, schools, and transport infrastructure.

Details of market borrowings, Commonwealth borrowings and finance leases (mainly Public Private Partnerships) can be found at Table 8.4.2 in Management of financial assets and liabilities (Chapter 8.4).

Net financial liabilities

Net financial liabilities are a broad measure of General Government Sector liabilities, including net debt and superannuation liabilities. Table 8.2.3 below details net financial liabilities and the ratio of net financial liabilities to Gross State Product for the General Government Sector.

Table 8.2.3: General Government Sector net financial liabilities

2016-17 Budget


2017-18 Budget

2018-19 Estimate

2019-20 Estimate

2020-21 Estimate

$m $m $m $m $m $m 5,496.5 Net financial liabilities 4,768.7 5,107.1 5,879.6 6,057.4 6,092.3

14.9% Net financial liabilities to Gross State Product

12.4% 12.7% 14.0% 13.7% 13.1%

Net financial liabilities are forecast to decrease by $727.8 million in 2016-17, compared to the original budget. This decrease is mainly due to the variation in net debt described above, revised provision estimates in relation to the Loose-fill Asbestos Eradication Scheme, and an improvement in the superannuation liability based on the latest Commonwealth Superannuation Scheme and Public Superannuation Scheme defined benefit actuarial review. The improvement is due to a reduction in the long-term salary growth assumptions as well as salary growth and pension indexation being lower than assumed over 2015-16.

In 2017-18, net financial liabilities are forecast to increase by $338.4 million. This largely reflects forecast growth in the superannuation liability and the inclusion of lease liabilities associated with Public Private Partnerships.

The ratio of net financial liabilities to Gross State Product provides an indicator of the sustainability of a jurisdiction’s debt. The ACT’s ratio is in line with other AAA-rated jurisdictions. While this ratio is subject to volatility, it is desirable that it remains broadly stable over time.

Net worth

Net worth is the value of all financial and non-financial assets less liabilities. The ACT maintains strong positive net worth. Table 8.2.4 below presents net worth and the ratio of net worth to Gross State Product for the General Government Sector.


Table 8.2.4: General Government Sector net worth

2016-17 Budget


2017-18 Budget

2018-19 Estimate

2019-20 Estimate

2020-21 Estimate

$m $m $m $m $m $m 17,100.2 Net worth 17,701.0 18,002.3 18,168.7 18,344.8 18,578.1

46.4% Net worth to Gross State Product

46.1% 44.8% 43.1% 41.4% 40.0%

Net worth is forecast to increase in 2016-17, compared to the original budget, by $600.8 million. This increase is largely due to the variation in net financial liabilities described above. Across the budget and forward estimates, net worth is forecast to increase from $18.0 billion to $18.6 billion.

The ACT continues to maintain one of the strongest net worth to Gross State Product ratios compared to other jurisdictions at 44.8 per cent.


2017-18 Budget Paper No.3 283 Unfunded superannuation liability

8.3 UNFUNDED SUPERANNUATION LIABILITY

Introduction

ACT Government employees (‘employees’) are members of a number of different superannuation schemes. This is because superannuation arrangements available to the employee at the time of commencing employment have changed over time. Unlike other jurisdictions, the Government does not operate a standalone superannuation fund for employees.

Approximately 8,000 current full time employees are members of Commonwealth defined benefit superannuation schemes including the Commonwealth Superannuation Scheme (CSS) and the Public Sector Superannuation Scheme (PSS). Both of these schemes are closed to new ACT employee members.

As a result of these prior Commonwealth Government arrangements, the ACT Government currently has an unfunded superannuation liability.

The Government maintains, as a key financial objective, a funding plan to extinguish the Territory’s unfunded defined benefit superannuation liability by 2030. The funding plan involves the accumulation of funds in the Superannuation Provision Account. The Superannuation Provision Account currently receives budget appropriations that are put towards annual benefit payments to the Commonwealth Government.

From 1 July 2005, new employees have accessed defined contribution scheme arrangements under which the Government makes fortnightly payments to each employee’s superannuation fund.

ACT Government employee superannuation arrangements

The superannuation arrangements applicable to permanent employees are outlined below.

Defined benefit superannuation schemes

The CSS was closed to new ACT employee members from 1 July 1990 and the PSS from 1 July 2005.

The CSS and PSS are types of defined benefit superannuation schemes, in which some or all of the benefits payable to members are defined in advance according to a set of formulae which are linked to factors such as years of service, final average salary and level of individual member contribution over time. With the exception of employer productivity contributions, the employer financed component of entitlements is unfunded and is not required to be paid until a member receives their benefit entitlement.


The administration of the CSS and PSS is undertaken by the Commonwealth Superannuation Corporation (CSC), with all benefits paid to entitled CSS and PSS members by CSC. The Government reimburses CSC annually for the Territory’s share of employer superannuation benefits paid to entitled ACT employees who are, or were, members of the CSS or PSS.

Public Sector Superannuation Accumulation Plan

From 1 July 2005, all new ACT employees were required to become members of the Public Sector Superannuation Accumulation Plan (PSSap), a defined contribution plan (accumulation) arrangement where the ACT Government is required to contribute 15.4 per cent of an employee’s salary. Existing CSS and PSS members were not able to transfer to the new superannuation scheme. The PSSap closed to new ACT employees on 6 October 2006.

Post 6 October 2006 – Fund of choice arrangements

From 6 October 2006, the Government introduced superannuation fund of choice arrangements for all new employees. Employees can choose their preferred superannuation fund. If an employee does not elect a fund, he or she becomes an automatic member of the Government’s appointed default superannuation fund.

Under the fund of choice arrangements, employees must join a defined contribution (accumulation) fund into which the ACT Government is required to contribute at a minimum, the prevailing superannuation guarantee percentage rate as set by Commonwealth Government legislation, which is currently 9.5 per cent. The Government is currently paying a contribution rate of 10.5 per cent. The Government will contribute an additional 1 per cent for employees who contribute 3 per cent or more of their salary to their chosen fund.

Members of the Legislative Assembly

There are two superannuation arrangements for Members of the ACT Legislative Assembly (MLAs). MLAs who were elected before the 2008 general election and have a relevant period of service with no discontinuance, are members of an unfunded defined benefit superannuation arrangement, prescribed under the Legislative Assembly (Members’ Superannuation) Act 1991.

Those MLAs elected at, or after, the 2008 general election, and who were not an existing member of the Defined Benefit Scheme prior to the election, assume membership of a choice of fund accumulation scheme. The ACT Government is required to contribute the equivalent of 14 per cent of the Member’s eligible salary. The Government contributes an additional 1 per cent for MLAs who contribute 3 per cent or more of their salary to their chosen fund.


Defined benefit superannuation liabilities

The ACT Government currently recognises a defined benefit superannuation liability for approximately 36,000 past and current employees, including current contributors, deferred beneficiaries and pensioners. As at 30 June 2016, 7,906 current full-time employees were contributors to the CSS and the PSS.

Table 8.3.1 outlines the breakdown of the defined benefit superannuation scheme employee members as at 30 June 2016.

Table 8.3.1: ACT employee defined benefit scheme membership

Contributors

Deferred Beneficiaries

Current Pensioners

Dependent Pensioners

Total

Group A Members1

CSS 547 206 5,558 505 6,816 PSS 7,359 8,366 4,115 199 20,039 Total 7,906 8,572 9,673 704 26,855 Group B Members2 CSS 256 134 999 46 1,435 PSS 3,150 3,106 1,353 38 7,647 Total 3,406 3,240 2,352 84 9,082

Notes: 1. Group A membership data includes CSS and PSS contributors who were employees of the ACT Government at

30 June 2016, and CSS and PSS deferred beneficiaries and pensioners who were employees of the ACT Government when their employment ceased.

2. Group B membership data includes CSS and PSS contributors who were not employees of the ACT Government at 30 June 2016, but were so previously, and CSS and PSS deferred beneficiaries and pensioners who were not employees of the ACT Government when their employment ceased, but were so previously.

As the employer financial obligations will be settled many years into the future, the estimated financial obligation is measured on a discounted basis. The ultimate cost of the financial obligation will be influenced by several factors.

Actuarial assumptions are required to measure the estimated future liability and expense. The actuarial assumptions must be unbiased, being neither imprudent nor excessively conservative, and mutually compatible if they reflect the economic relationships between factors. The financial and demographic assumptions are the best estimates of the variables that will determine the ultimate cost of the defined benefit financial obligations. The financial and demographic assumptions supporting the valuation estimates are reviewed by the Government, in consultation with Treasury’s appointed actuary, on an ongoing basis.

The projected benefit payments are determined from actual accrued member balances at valuation date and are actuarially projected forward using a range of financial and demographic assumptions such as inflation, wages growth, rates of retirement and resignation, investment returns, benefit stream election, and mortality rates.


Every three years the actuary undertakes a more comprehensive review of the defined benefit employer superannuation liability by also incorporating a review of all financial and demographic assumptions, following a comprehensive review of actual outcomes and membership experience over time. The outcomes from this analysis form the basis for the financial and demographic assumptions adopted for the annual reviews of the liability and emerging cost projections.

The recent actuarial review, which utilised the latest salary and membership data as at 30 June 2016, was an annual actuarial review with the results incorporated into the 2017-18 Budget estimates.

A long-term average discount rate assumption of six per cent is currently used to estimate the superannuation liability valuation and superannuation expense projections over the budget and forward years. This is consistent with the long-term discount rate assumption used by the Commonwealth Government to estimate the liability valuation for their CSS and PSS defined benefit employee superannuation liabilities.

The use of a long-term discount rate assumption for the budget and forward year estimates removes significant and unnecessary valuation volatility due to the day to day movement in domestic interest rates, and is appropriate to the management of a long-term funding strategy. This is particularly relevant in the current environment of historically low interest rates.

At financial year end for the purpose of the annual financial statements, Australian Accounting Standards (AASB 119 Employee Benefits) requires the use of the yield (interest rate) on a suitable Commonwealth Government bond as the discount rate to estimate the present value of the superannuation liability.

The discount rate used to calculate the present value of the superannuation liability has a significant financial impact on the estimated present value of the superannuation liability and related superannuation expense. A lower discount rate leads to a higher estimate of the superannuation liability and related superannuation expense, and vice versa.

The estimated defined benefit superannuation liability is set out in Table 8.3.2.

Table 8.3.2: Defined benefit superannuation liability


$’000

2017-18 Budget

$’000

2018-19 Estimate

$’000

2019-20 Estimate

$’000

2020-21 Estimate

$’000 Opening liability 10,714,570 6,127,350 6,366,512 6,595,981 6,814,083 Service cost 309,294 122,627 117,809 113,083 108,592 Interest cost 293,498 367,684 381,208 394,123 406,389 Benefit payments -230,525 -251,149 -269,547 -289,103 -308,044 Actuarial (Gain)/Loss1 -4,959,486 0 0 0 0 Closing liability 6,127,351 6,366,512 6,595,981 6,814,083 7,021,019 Notes: Numbers may not add due to rounding. 1. The actuarial (gain)/loss is the change in the present value of the superannuation liability resulting from a change in

the discount rate assumption. The liability valuation at 30 June 2016 utilised a discount rate assumption of 2.69 per cent. The liability valuations from 30 June 2017 utilise a long-term discount rate assumption of 6 per cent. A lower discount rate leads to a higher liability valuation estimate.


The defined benefit superannuation liability is estimated to grow to approximately $7.021 billion by 30 June 2021. The service cost associated with the accrual of employee superannuation benefits is forecast to decrease over time as ACT employee members leave the schemes through resignation or retirement. The interest cost is forecast to increase due to past benefits accrued by ACT employee members moving one year closer to payment.

The 2017-18 Budget estimates for the liability and emerging cost payments have reduced due to a reduction in the long-term salary growth assumption, as well as salary growth and pension indexation being lower than assumed over the 2015-16 financial year.

The impact on the estimates for the projected defined benefit employer superannuation liabilities is illustrated in Figure 8.3.1.

Figure 8.3.1: Actuarial revision to the estimated employer superannuation liability

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

$ m

illio

n

2016-17 Budget Liability 2017-18 Budget Liability

The defined benefit superannuation liability is projected to peak, in nominal terms, at approximately $8.232 billion by 30 June 2032.

The impact on the estimates for the Territory’s projected emerging cost payments is illustrated below in Figure 8.3.2.


Figure 8.3.2: Actuarial revision to estimated employer emerging cost payments

-

100

200

300

400

500

600

700

800$

mill

ion

2016-17 Budget Benefits 2017-18 Budget Benefits

The total superannuation payments to the Commonwealth are projected to be approximately $1.118 billion over the 2017-18 Budget and forward years. The annual superannuation benefit payments (in nominal terms) made to the Commonwealth to extinguish the liability are projected to increase over time from approximately $251 million in 2017-18 to a peak of $638 million in 2042-43.

Defined benefit superannuation funding

The Government maintains, as a key financial objective, a funding plan to extinguish the Territory’s unfunded defined benefit superannuation liability by way of accumulating funds in the Superannuation Provision Account.

Details on the budget appropriation to the Superannuation Provision Account, projected benefit payments to the Commonwealth, and the estimated investment portfolio assets, investment earnings, and Superannuation Provision Account expenses are set out below in Table 8.3.3.

Table 8.3.3: Defined benefit superannuation assets


$’000

2017-18 Budget

$’000

2018-19 Budget

$’000

2019-20 Budget

$’000

2020-21 Budget

$’000 Opening Assets 3,446,844 3,689,720 3,877,533 4,079,046 4,374,049 Net Investment Earnings 326,611 268,196 282,028 300,654 322,391 Appropriation 155,525 176,149 194,547 289,103 308,044 Benefit Payments -232,898 -251,149 -269,547 -289,103 -308,044 Other Payments -6,362 -5,383 -5,515 -5,651 -5,788 Closing Assets 3,689,720 3,877,533 4,079,046 4,374,049 4,690,652 Note: Numbers may not add due to rounding.


The funding plan for the defined benefit superannuation liability will help reduce the longer-term cost as investment returns provide a source of funding for future liabilities.

The difference between the estimated liability and investment assets represents the level of unfunded superannuation liability. The estimated funding percentage of the defined benefit superannuation liability over the budget and forward years is projected to increase as illustrated below in Table 8.3.4.

Table 8.3.4: Superannuation liability funding


$’000

2017-18 Budget

$’000

2018-19 Estimate

$’000

2019-20 Estimate

$’000

2020-21 Estimate

$’000 Superannuation Liability1 6,127,351 6,366,512 6,595,981 6,814,083 7,021,019 Investments 3,689,720 3,877,533 4,079,046 4,374,049 4,690,652 Unfunded Liability 2,437,631 2,488,979 2,516,935 2,440,034 2,330,367 Funding Percentage 60 61 62 64 67

Notes: Numbers may not add due to rounding. 1. The liability valuations from 30 June 2017 utilise a long-term discount rate assumption of six per cent. The actual

discount rate at 30 June 2016 was 2.69 per cent. A lower discount rate leads to a higher liability valuation estimate.


2017-18 Budget Paper No.3 291 Management of financial assets and liabilities

8.4 MANAGEMENT OF FINANCIAL ASSETS AND LIABILITIES

Financial assets

The Territory’s financial assets account for approximately 46 per cent of total assets held by the General Government Sector.

Figure 8.4.1 shows the proportion of these assets by category. The largest components are General Government Sector investment in other public sector entities (47 per cent) and investments and loans (32 per cent).

Figure 8.4.1: General Government Sector estimated financial assets

Cash and Deposits

3%

Advances Paid13%

Investments and Loans32%

Receivables5%

Investments in Other Public

Sector Entities47%

Investments in other public sector entities

Investments in other public sector entities represents the General Government Sector investment in the Public Trading Enterprise sector recorded as the value of net assets held by the sector. Significant assets held by the Public Trading Enterprise sector include land, water and sewerage infrastructure, and public housing.


Financial investments

The Chief Minister, Treasury and Economic Development Directorate (CMTEDD) manages the financial investment portfolios of the Territory Banking Account and the Superannuation Provision Account. These investment portfolios comprise the majority of the Territory’s financial investment assets.

The purpose and role of the investment portfolios is to derive competitive financial returns, based on prudent financial and portfolio management principles, with an investment structure that is low cost, efficient to manage, and effective in deriving market-based returns. These investment assets are managed in accordance with an established Investment Plan and Responsible Investment Policy.

The Government holds significant financial investments. Table 8.4.1 outlines the components of investments held by the General Government Sector, including the Territory Banking Account and the Superannuation Provision Account.

Table 8.4.1: General Government Sector investments

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est.


$’000 $’000 $’000 % $’000 $’000 $’000

326,812 Cash and Deposits 291,859 308,172 6 314,709 322,597 329,641 4,196,927 Investments and Loans 4,609,286 4,533,357 -2 4,762,627 5,114,136 5,448,719 4,523,739 Total Investments 4,901,145 4,841,529 -1 5,077,336 5,436,733 5,778,360

Comprising:

3,622,151 Superannuation Provision Account

3,686,555 3,874,368 5 4,075,881 4,370,884 4,687,487

211,471 Territory Banking Account

561,604 257,795 -54 247,435 265,633 244,900

1,501 Investments held on behalf of PTE agencies

- - - - - -

337,866 ACTIA Investments 344,991 370,613 7 396,176 422,000 446,584 350,750 Other GGS agency

investments 307,995 338,753 10 357,844 378,216 399,389

4,523,739 Total Investments 4,901,145 4,841,529 - 5,077,336 5,436,733 5,778,360


Territory Banking Account investment portfolio

Cash of the General Government Sector that is not required for immediate expenditure may be invested domestically in accordance with an established Investment Plan and Responsible Investment Policy that takes into account liquidity requirements and risk tolerances. To facilitate an efficient cash and investment management structure, a centralised investment platform facility is provided through the Territory Banking Account which makes available a range of single and multi-asset class funds for directorates and Territory Authorities to meet their specific investment objectives.

The estimated 2016-17 return for the aggregate portfolio of funds invested through the Territory Banking Account investment platform is 2.5 per cent. This compares to the original Budget estimate of 2 per cent. The investment return objective for the Territory Banking Account investment portfolio in aggregate is to achieve a return on a gross of fees basis equivalent to, or greater than, the Bloomberg AusBond Bank Bill Index.

Superannuation Provision Account investment portfolio

Funds set aside in the Superannuation Provision Account are earmarked to assist the Government in meeting the long-term defined benefit employer superannuation obligations. These funds are invested in accordance with an established Investment Plan and Responsible Investment Policy that takes into account the long-term nature of the superannuation liability and projected cash flow requirements.

The long-term net investment return objective for the Superannuation Provision Account is the Consumer Price Index (CPI) plus 4.75 per cent per annum. This return objective has been reduced by the Government in this Budget from CPI plus 5 per cent. The investment strategy recognises the risk associated with targeting the long-term investment return objective and the asset allocation modelling identifies a risk of negative investment returns one in every four years. Due to the volatile nature of global investment markets, actual investment earnings recognised in any particular year will vary from the annual budget estimates.

The long-term strategic asset allocation behind this long-term investment objective currently equates to 75 per cent of the portfolio being invested in growth assets (such as shares and property), and 25 per cent of the portfolio being invested in defensive assets (such as cash and fixed interest investments).

The nominal net investment return for the portfolio for 2016-17 is estimated to be 9.6 per cent, with investment earnings of approximately $326 million. The actual net investment return for the 2015-16 financial year was 2.7 per cent with investment earnings of $96 million.

Incorporating the estimated investment return outcome for 2016-17, the Superannuation Provision Account portfolio will have generated an annualised net investment return of CPI plus 5.1 per cent over the past 21 years (1996-97 to 2016-17).


Loan receivables

General Government Sector financial assets include loans provided to Icon Water Ltd, ACTION and the Chief Minister, Treasury and Economic Development Directorate.

Icon Water Ltd loans are funded by matching external borrowings from the Territory’s debt issuance program. Forms of funding include inflation-linked bonds, fixed rate medium term notes, and short-term discount securities. Loan maturity dates range from June 2018 to June 2048. The total estimated outstanding principal at 30 June 2017 is $1.586 billion.

The Chief Minister, Treasury and Economic Development Directorate Community Housing Canberra loans, provided through repayable capital injection appropriations, are to support the Government’s affordable housing action plan. The total estimated outstanding principal at 30 June 2017 is $68.112 million. Repayment of the loan principal will commence from 1 January 2018.

The Chief Minister, Treasury and Economic Development Directorate Exhibition Park loan, provided through a repayable capital injection appropriation, is to support the development and operation of low cost accommodation facilities. Loan principal and interest repayments commence on 1 October 2018 with a maturity date of 1 July 2033. The total estimated outstanding principal at 30 June 2017 is $1.5 million.

The ACTION loan relates to funding provided from the Commonwealth Government at the commencement of self-government. The loan matures in June 2023. The total estimated outstanding principal at 30 June 2017 is $2 million.

Liabilities

Figure 8.4.2 demonstrates the proportion of liabilities by category. The majority of the General Government Sector liabilities comprise superannuation (51 per cent) and borrowings (28 per cent).

Further details regarding the superannuation liability can be found in Unfunded Superannuation Liability (Chapter 8.3).


Figure 8.4.2: General Government Sector liabilities

Advances Received

8%

Borrowings30%

Superannuation52%

Employee Benefits

5%

Other Provisions 1%

Payables4%

Borrowings

Total Territory borrowings comprise raising money or obtaining credit, whether by dealing in securities or otherwise, and financing leases which include Public Private Partnership contracts.

The funding and management of the Government’s Australian capital market borrowings is undertaken through the Treasury portfolio of the Chief Minister, Treasury and Economic Development Directorate. The Government’s capital requirements are mainly achieved by the issuance of debt securities in the financial capital markets.

Debt management objectives include: managing the Government’s liquidity and financial payment obligations; meeting the ongoing capital requirements of the Government; raising capital at a competitive cost in line with peers, having regard to the Territory’s credit rating and issuer profile; establishing bond lines of select debt maturity and volume; maximising investor participation and diversification; and minimising interest rate volatility and refinancing risk.

Debt securities issued include:

short-term discount debt securities with maturities of less than 12 months;

nominal fixed rate bonds where the interest cost (coupon) is fixed for the life of each bond and that feature differing maturity profiles (2018, 2020, 2022, 2024 and 2026), with the repayment of principal at maturity; and


inflation-linked bonds where the interest and principal repayments are indexed to inflation that feature differing maturity profiles (2020, 2030 and 2048), and the repayment of principal over time or at maturity.

The debt funding program has been supplemented by loans provided from the Commonwealth Government. These include:

the Commonwealth loans provided to the Territory at self-government that are fixed rate, with annual principal and interest repayments until maturity; and

in 2015, a $1 billion loan to support the financing of the Asbestos Eradication Scheme, which is a fixed rate loan, with annual principal and interest repayments until maturity.

Finance leases mainly comprise the lease liabilities associated with the Public Private Partnership contracts for the ACT Law Courts Facilities and Stage 1 of light rail. For more information on the budgetary and accounting treatment for Public Private Partnerships, refer to Chapter 5 – Infrastructure and Capital and Appendix B – Accounting Treatment for Public Private Partnerships.

A summary of the borrowing estimates for the 2017-18 Budget are detailed below in Tables 8.4.2 and 8.4.3.

Table 8.4.2: Territory borrowings – principal outstanding

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est.

Outcome Budget Estimate Estimate Estimate

$m $m $m $m $m $m General Government Sector

1,946.4 Market Borrowings 1,941.8 1,892.4 2,344.3 2,591.3 2,693.7 71.8 Historic Commonwealth Loans

(self-government) 71.8 67.8 63.7 59.4 54.9

1,000.0 Commonwealth Loan – Asbestos Eradication Scheme

1,000.0 950.0 900.0 850.0 750.0

3.3 Finance Leases 3.5 111.0 490.2 478.0 463.1 3,021.5 Sub-Total 3,017.1 3,021.2 3,798.2 3,978.7 3,961.7

Public Trading Enterprise Sector

1,646.4 Market Borrowings 1,584.6 1,678.7 1,735.3 1,789.1 1,842.9 62.8 Historic Commonwealth Loans

(self-government) 62.8 58.1 53.5 49.0 44.6

1,709.2 Sub-Total 1,647.3 1,736.8 1,788.8 1,838.1 1,887.5

4,730.7 Total 4,664.4 4,758.0 5,587.0 5,816.8 5,849.2



Table 8.4.3: Territory borrowings – interest expense

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est. Outcome Budget Estimate Estimate Estimate

$m $m $m $m $m $m General Government Sector

79.4 Market Borrowings 78.8 81.1 77.9 95.3 95.5 3.7 Historic Commonwealth Loans

(self-government) 3.7 3.5 3.3 3.0 2.8

27.1 Commonwealth Loan – Asbestos Eradication Scheme

27.1 27.1 25.7 24.4 23.0

0.6 Finance Leases 0.5 5.8 28.6 32.1 31.3 110.8 Sub-Total 110.1 117.4 135.5 154.8 152.6

Public Trading Enterprise

Sector

72.1 Market Borrowings 69.2 74.1 71.6 72.3 74.2 3.0 Historic Commonwealth Loans

(self-government) 3.0 2.8 2.6 2.4 2.2

75.1 Sub-Total 72.3 76.9 74.2 74.7 76.4

185.9 Total 182.4 194.3 209.7 229.5 229.0


Credit rating

The Territory holds AAA long-term and A-1+ short-term local currency credit ratings from the International ratings agency Standard & Poor’s.

The AAA credit rating reflects the Government’s strong fiscal management resulting in a sound fiscal position with manageable debt levels.

The Government considers that the estimates reflected in this Budget resulting in the strong outlook for the Territory’s financial position are consistent with maintaining a AAA credit rating.

Market borrowings and loans

General Government Sector

Total market-financed borrowings and loans for the General Government Sector are estimated to be $3.014 billion as at 30 June 2017, in line with the 2016-17 Budget estimate.

The Government estimates that there will be a net increase in General Government Sector market financed borrowings of approximately $750 million over the 2017-18 Budget and forward estimates period. Over this same period, loans from the Commonwealth will be reduced by an estimated $267 million.


The Government’s 2017-18 Budget strategy remains focused on maintaining debt at sustainable levels to provide the flexibility to deal with emerging pressures, while continuing to build the infrastructure necessary to maximise economic growth, improve productivity and grow more jobs.

Building on the delivery of the current $2.8 billion infrastructure pipeline, over the next four years the Government will continue investment in key infrastructure including transport, schools, hospitals, and public spaces to deliver better services for Canberrans through new and refurbished infrastructure.

Public Trading Enterprise sector

Total market-financed borrowings and loans for the Public Trading Enterprise sector are estimated to be $1.647 billion as at 30 June 2017 compared with the 2016-17 Budget estimate of $1.709 billion. The decrease is due to Icon Water having a lower new borrowing requirement.

The Government estimates that there will be a net increase in Public Trading Enterprise market-financed borrowings and loans of $240 million over the 2017-18 Budget and forward estimates period. Icon Water’s future general capital works program is designed to renew infrastructure to maintain service standards, expand the network to support growth in the ACT, improve assets to generate efficiencies, and to renew a number of operational systems including work management systems.

The Government has a preference for Icon Water to maintain an appropriate and sustainable capital structure during various phases of the capital investment cycle.

Total Outstanding market borrowings and loans

Figure 8.4.3 shows the total estimated outstanding principal value of market borrowings and loans by funding type and year of maturity as at 30 June 2017.

Figure 8.4.3: Total external Territory market borrowings and loans

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

1,600.0

<12-months 2018maturity

2020maturity

2022maturity

2024maturity

2026maturity

2030maturity

2040maturity

2048maturity

Short-Term Notes Fixed Rate Medium Term Bonds Inflation-Linked Bonds Commonwealth Government Loans

Curr

ent O

utst

andi

ngVa

lue

($ m

illio

n)


Figure 8.4.4 shows the estimated Territory issued debt securities as at 30 June 2017.

Figure 8.4.4: Territory issued debt securities

0

100

200

300

400

500

600

700

800

900

<12-months 2018maturity

2020maturity

2022maturity

2024maturity

2026maturity

2030maturity

2048maturity

Short-Term Notes Fixed Rate Medium Term Bonds Inflation-Linked Bonds

Face

Val

ue ($

mill

ion)

Table 8.4.4 provides details of the Territory’s outstanding issued nominal fixed rate bonds.

Table 8.4.4: Nominal fixed rate bonds on issue

Coupon1 Maturity Face Value $m

Principal Outstanding2

$m

Timing of Interest Payments3

5.50% Jun 2018 550 550.5 Semi-annual Jun, Dec 4.25% May 2020 570 570.8 Semi-annual May, Nov 4.25% Apr 2022 550 543.9 Semi-annual Apr, Oct 4.00% May 2024 500 494.0 Semi-annual May, Nov 2.50% May 2026 525 519.0 Semi-annual May, Nov

Notes: 1. The coupon rate is the fixed interest rate used to calculate interest payments over the life of the bond. 2. Estimated capital value outstanding as at 30 June 2017. The difference between principal outstanding and the face

value reflects the unamortised issuance premium or discount. 3. Interest is paid semi-annually with the capital value repaid at maturity.


Table 8.4.5 provides details of the Territory’s outstanding market-issued inflation bonds.

Table 8.4.5: Inflation linked bonds on issue

Coupon Maturity Face Value

$m

Principal Outstanding

$m Timing of Payments

3.74%1 Apr 2020 250 80.1 Quarterly Jan, Apr, Jul, Oct 2.83%1 Jun 2048 420 414.5 Quarterly Mar, Jun, Sep, Dec 3.50%2 Jun 2030 250 285.5 Quarterly Mar, Jun, Sep, Dec

Notes: 1. Indexed Annuity Bond. Annuity payments are made quarterly comprising both principal and interest amounts. Both

the interest and principal payments are adjusted for movements in the CPI. There is no capital value repayment at maturity.

2. Capital Indexed Bond. The capital value of the security is adjusted for movements in the CPI. Interest is paid quarterly at a fixed rate on the adjusted capital value. The adjusted capital value of the security is repaid at maturity.

Table 8.4.6 provides details of the Territory’s outstanding Commonwealth provided loans.

Table 8.4.6: Commonwealth loans

Interest Rate1 Maturity Face Value $m

Principal Outstanding

$m2 Timing of Payments

12.57% Jun 2023 19 3.3 Annual Jun 4.50% Jun 2040 174 68.5 Annual Jun 4.50% Jun 2042 124 62.8 Annual Jun 2.71% Jun 2024 1,000 1,000.0 Annual Jun

Notes: 1. The fixed interest rate used to calculate the annual interest payments. 2. Principal and interest is paid annually in arrears in accordance with established amortising loan schedules.

Table 8.4.7 details the Territory’s projected gross borrowing program through the issuance of debt securities in the financial capital markets.

Table 8.4.7: Territory debt funding program

2016-17 2017-18 2018-19 2019-20 2020-21 Est. Outcome Budget Estimate Estimate Estimate $m $m $m $m $m

New Funding Requirements

General Government Sector 0.0 0.0 450.0 245.0 100.0 Public Trading Enterprise Sector 68.0 109.0 74.0 74.0 45.5

Sub-Total 68.0 109.0 524.0 319.0 145.5

Refinancing

General Government Sector 0.0 200.0 0.0 355.0 0.0 Public Trading Enterprise Sector 0.0 368.0 0.0 215.0 0.0

Sub-Total 0.0 568.0 0.0 570.0 0.0 Empty Cell

Total Funding Requirement1,2 68.0 677.0 524.0 889.0 145.5

Notes: 1. Estimated funding requirements will be sourced through the issuance of debt securities in accordance with the

Territory’s Australian Dollar Debt Issuance Program. 2. Projections are based on a range of assumptions and will vary with changes to assumptions and budget estimates.

2017-18 Budget Paper No.3 301 GGS harmonised financial statements

CHAPTER 9

GGS HARMONISED FINANCIAL STATEMENTS

Chapter Page

9.1 GFS/GAAP harmonised financial statements 303

2017-18 Budget Paper No.3 302 GGS harmonised financial statements

2017-18 Budget Paper No.3 303 GFS/GAAP harmonised financial statements

9.1 GFS/GAAP HARMONISED FINANCIAL STATEMENTS

Table 9.1 Australian Capital Territory General Government Sector

Operating Statement

2016-17 2016-17 2017-18 Cell l 2018-19 2019-20 2020-21 Budget Est. Outcome Budget Var Estimate Estimate Estimate

$’000 $’000 $’000 % $’000 $’000 $’000 Revenue

1,633,960 Taxation Revenue 1,676,673 1,752,032 4 1,887,304 1,990,347 2,099,964 Grants Revenue

2,087,251 Commonwealth Grants 2,050,968 2,176,485 6 2,230,022 2,280,200 2,365,659 155,806 Gains from Contributed Assets 161,915 157,868 -2 235,987 263,610 303,223 479,416 Sales of Goods and Services 492,229 520,623 6 535,008 547,609 560,129 116,210 Interest Income 124,521 125,124 .. 112,053 119,268 115,406

36,391 Distributions from Financial Investments

34,738 36,851 6 45,265 48,089 51,568

405,808 Dividend and Income Tax Equivalents Income

472,182 407,963 -14 343,243 403,577 391,773

143,342 Other Revenue 152,610 164,493 8 149,823 147,662 152,615 5,058,184 Total Revenue 5,165,836 5,341,439 3 5,538,705 5,800,362 6,040,337

Expenses

1,892,025 Employee Expenses 1,899,771 1,963,198 3 1,983,439 2,017,794 2,051,128 Superannuation Expenses

315,534 Superannuation Interest Cost 293,498 367,684 25 381,208 394,123 406,389 417,211 Other Superannuation Expense 452,855 286,781 -37 281,285 275,815 274,554 372,680 Depreciation and Amortisation 368,160 379,602 3 414,180 434,792 430,502 187,445 Interest Expense 183,499 200,728 9 211,536 234,549 230,082

Other Operating Expenses

1,028,169 Supplies and Services 980,371 1,096,814 12 1,103,701 1,159,958 1,268,546 191,697 Other Operating Expenses 174,332 209,355 20 216,962 225,047 239,200 998,988 Grants and Purchased Services 1,058,093 1,092,208 3 1,116,870 1,222,940 1,283,178

5,403,749 Total Expenses 5,410,579 5,596,370 3 5,709,181 5,965,018 6,183,579

-345,565 UPF Net Operating Balance -244,743 -254,931 4 -170,476 -164,656 -143,242 Other Economic Flows – Included

in the Operating Result

62,014 Dividends (Market Gains on Land Sales)

49,395 86,755 76 74,609 11,817 34,554

94,092 Net Land Revenue (Undeveloped Land Value)

112,559 68,695 -39 59,548 40,281 35,246

-1,513 Net Gain/(Loss) on Sale/(Disposal) of Non-Financial Assets

27,581 -2,529 -109 -3,469 -4,439 -5,458

163,566 Net Gain/(Loss) on Financial Assets or Liabilities at Fair Value

225,930 171,522 -24 180,269 192,584 206,514


Table 9.1 (cont.) Australian Capital Territory General Government Sector

Operating Statement

2016-17 2016-17 2017-18 l 2018-19 2019-20 2020-21 Budget Est. Outcome Budget Var Estimate Estimate Estimate

$’000 $’000 $’000 % $’000 $’000 $’000 -6,887 Doubtful Debts -6,880 -7,018 2 -7,139 -7,259 -7,400

-34,293 Operating Result 163,842 62,494 -62 133,342 68,328 120,214 Other Economic Flows – Other

Comprehensive Income

Items that will not be Subsequently Reclassified to Profit or Loss

-21,855 Payments to ACT Government Agencies

-25,867 -36,370 41 -41,930 -19,888 -5,000

89,667 Capital Distributions 83,671 50,849 -39 136,995 - - -236,400 Transfer of Assets to the PTE

Sector -197,934 -164,956 -17 -165,389 - -

3,815,947 Superannuation Actuarial Gain/(Loss)

4,959,486 - -100 - - -

- Prior year adjustment 2,154 46 -98 178 169 169 889 Other Movements -1,202 -521 -57 2,010 -3,142 -4,120

17,993 Increase/(Decrease) in the Asset Revaluation Surplus

100,932 136,624 35 17,266 5,715 5,715

Items that may be Subsequently Reclassified to Profit or Loss

Empty

247,651 Increase/(Decrease) in Net Assets of Public Trading Entities

207,410 253,158 22 83,890 124,953 116,306

3,879,599 Total Comprehensive Income 5,292,492 301,324 -94 166,362 176,135 233,284 Key Fiscal Aggregates

-345,565 UPF Net Operating Balance -244,743 -254,931 4 -170,476 -164,656 -143,242 less Net Acquisition of

Non-Financial Assets

934,387 Payments for Non-Financial Assets 844,694 900,010 7 694,396 657,194 608,661 -299,893 Sales of Non-Financial Assets -314,280 -330,092 5 -196,516 -118,484 -151,837

-51,312 Land Revenue (Net Cash Receipts) -43,632 -15,806 -64 -34,705 -40,548 -51,375 -372,680 Depreciation and Amortisation -368,160 -379,602 3 -414,180 -434,792 -430,502 155,410 Other Movements in

Non-Financial Assets 116,719 120,177 3 158,591 128,506 130,118

365,912 Total Net Acquisition of Non-Financial Assets

235,341 294,687 25 207,586 191,876 105,065

-711,477 Net Lending/(Borrowing) -480,084 -549,618 14 -378,062 -356,532 -248,307



Operating Statement


$’000 $’000 $’000 % $’000 $’000 $’000 GOVERNMENT FISCAL MEASURE – BUDGET OPERATING SURPLUS/DEFICIT

-345,565 UPF Net Operating Balance -244,743 -254,931 4 -170,476 -164,656 -143,242 163,566 Superannuation Return

Adjustment 170,812 171,522 .. 180,269 192,584 206,514

-181,999 HEADLINE NET OPERATING BALANCE

-73,931 -83,409 13 9,793 27,928 63,272



Balance Sheet


$’000 $’000 $’000 % $’000 $’000 $’000

Financial Assets

326,812 Cash and Deposits 291,859 308,172 6 314,709 322,597 329,641 1,717,094 Advances Paid 1,657,107 1,748,191 5 1,801,753 1,852,377 1,903,354 4,196,927 Investments and Loans 4,609,286 4,533,357 -2 4,762,627 5,114,136 5,448,719

637,412 Receivables 703,333 678,565 -4 748,786 682,525 537,915 6,443,155 Equity - Investments in Other

Public Sector Entities 6,519,174 6,772,332 4 6,856,222 6,981,175 7,097,481

13,321,400 Total Financial Assets 13,780,759 14,040,617 2 14,484,097 14,952,810 15,317,110


Produced Assets

11,610,181 Property, Plant and Equipment

11,763,244 12,315,728 5 13,291,048 13,657,888 13,852,830

2,600 Investment Properties 5,410 5,410 - 5,410 5,410 5,410 98,998 Intangibles 116,821 224,507 92 299,349 341,923 338,379 15,734 Inventories 17,868 18,515 4 18,705 18,895 19,085

50 Assets Held for Sale 126,115 81,115 -36 7,759 21,204 1 973,167 Capital Works-in-Progress 860,223 695,676 -19 566,600 369,680 339,862

Non-Produced Assets


2,885,416 2,965,828 3 2,975,268 2,979,535 2,990,801

262,332 Loose-fill Asbestos Insulation Eradication Scheme Land

148,914 3,778 -97 1,372 - -

26,514 Biological Assets 26,514 26,514 - 26,514 26,514 26,514 2 Other Non-Financial Assets - - - - - -

16,153,582 Total Non-Financial Assets 15,950,525 16,337,071 2 17,192,025 17,421,049 17,572,882 29,474,982 Total Assets 29,731,284 30,377,688 2 31,676,122 32,373,859 32,889,992

Liabilities

17,195 Deposits Held - - - - - - 1,071,835 Advances Received 1,071,835 1,017,833 -5 963,676 909,357 804,868

Borrowings

3,292 Finance Leases 3,465 110,964 # 490,213 478,024 463,058 3,606,518 Other Borrowings 3,539,733 3,584,532 1 4,093,063 4,393,824 4,550,068 6,253,375 Superannuation 6,130,056 6,369,460 4 6,599,182 6,817,547 7,024,757

633,714 Employee Benefits 650,022 678,692 4 706,329 734,014 763,838 343,285 Other Provisions 185,671 136,310 -27 147,754 158,140 130,202 440,711 Payables 430,616 459,449 7 489,927 521,678 559,592

4,826 Other Liabilities 18,918 18,156 -4 17,325 16,488 15,539 12,374,751 Total Liabilities 12,030,316 12,375,396 3 13,507,469 14,029,072 14,311,922

17,100,231 Net Assets 17,700,968 18,002,292 2 18,168,653 18,344,787 18,578,070



Balance Sheet


$’000 $’000 $’000 % $’000 $’000 $’000

6,443,155 Equity in Public Trading Entities 6,519,174 6,772,332 4 6,856,222 6,981,175 7,097,481 5,289,758 Accumulated Funds 5,691,835 5,603,377 -2 5,668,582 5,714,048 5,825,310 5,366,818 Asset Revaluation Surplus 5,489,159 5,625,783 2 5,643,049 5,648,764 5,654,479

500 Other Reserves 800 800 - 800 800 800 17,100,231 Net Worth 17,700,968 18,002,292 2 18,168,653 18,344,787 18,578,070

946,649 Net Financial Worth 1,750,443 1,665,221 -5 976,628 923,738 1,005,188 5,496,506 Net Financial Liabilities 4,768,731 5,107,111 7 5,879,594 6,057,437 6,092,293

-1,541,993 Net Debt (including Superannuation Related Investments)

-1,943,219 -1,876,391 -3 -1,332,137 -1,507,905 -1,863,720

2,080,158 Net Debt (excluding Superannuation Related Investments)

1,746,497 2,001,138 15 2,746,905 2,866,140 2,826,928



Statement of changes in equity


$’000 $’000 $’000 % $’000 $’000 $’000 Opening Equity

6,195,504 Opening Equity in Public Trading Entities

6,311,764 6,519,174 3 6,772,332 6,856,222 6,981,175

1,675,803 Opening Accumulated Funds 707,685 5,691,835 704 5,603,376 5,668,581 5,714,047 5,348,825 Opening Asset Revaluation

Surplus 5,388,227 5,489,159 2 5,625,783 5,643,049 5,648,764

500 Opening Other Reserves 800 800 - 800 800 800 13,220,632 Opening Balance 12,408,476 17,700,968 43 18,002,291 18,168,652 18,344,786


Included in Accumulated Funds:

-34,293 Operating Result for the Period 163,842 62,494 -62 133,342 68,328 120,214 -21,855 Payments to ACT Government

Agencies -25,867 -36,370 41 -41,930 -19,888 -5,000

89,667 Capital Distributions 83,671 50,849 -39 136,995 - - 3,815,947 Superannuation Actuarial

Gain/(Loss) 4,959,486 - -100 - - -

- Prior year adjustment 2,154 46 -98 178 169 169 -236,400 Transfer of Assets to the PTE

Sector -197,934 -164,956 -17 -165,389 - -

889 Other Movements -1,202 -521 -57 2,010 -3,142 -4,120 Included in Equity in Public

Trading Entities:

247,651 Increase/(Decrease) in Net Assets of Public Trading Entities

207,410 253,158 22 83,890 124,953 116,306

Included in Asset Revaluation Surplus:

17,993 Increase/(Decrease) in Asset Revaluation Surplus

100,932 136,624 35 17,266 5,715 5,715

3,879,599 Total Comprehensive Income 5,292,492 301,324 -94 166,362 176,135 233,284

Other

- Transfer to/(from) Accumulated Funds

- - - - - -

- Movement in the Asset Revaluation Surplus

- - - - - -

0 Total Other 0 0 - 0 0 0



Statement of changes in equity


$’000 $’000 $’000 % $’000 $’000 $’000

Closing Equity

6,443,155 Closing Equity in Public Trading Entities

6,519,174 6,772,332 4 6,856,222 6,981,175 7,097,481

5,289,758 Closing Accumulated Funds 5,691,835 5,603,377 -2 5,668,582 5,714,048 5,825,310 5,366,818 Closing Asset Revaluation

Surplus 5,489,159 5,625,783 2 5,643,049 5,648,764 5,654,479

500 Closing Other Reserves 800 800 - 800 800 800

17,100,231 Balance at the End of the Reporting Period

17,700,968 18,002,292 2 18,168,653 18,344,787 18,578,070



Cash Flow Statement


$’000 $’000 $’000 % $’000 $’000 $’000 Cash Flows from Operating

Activities

Cash Receipts

1,638,504 Taxes Received 1,681,218 1,759,749 5 1,894,681 1,997,214 2,106,826 493,650 Receipts from Sales of Goods and

Services 503,981 513,685 2 568,467 567,907 591,588

2,095,750 Grants/Subsidies Received 2,060,104 2,212,958 7 2,234,308 2,285,146 2,373,572 114,214 Interest Receipts 121,699 116,522 -4 103,010 109,865 105,338

36,391 Distributions from Financial Investments

34,738 36,851 6 45,265 48,089 51,568

361,335 Dividends and Income Tax Equivalents

428,735 353,480 -18 388,471 291,121 486,192

408,014 Other Receipts 409,877 431,978 5 409,037 413,824 395,278 5,147,858 Total Cash Received from

Operating Activities 5,240,352 5,425,223 4 5,643,239 5,713,166 6,110,362

Cash Payments

-2,245,746 Payments for Employees -2,255,679 -2,366,439 5 -2,404,580 -2,457,936 -2,513,286 -958,421 Payments for Goods and Services -973,122 -1,094,113 12 -1,097,431 -1,154,047 -1,272,181

-1,004,905 Grants/Subsidies Paid -979,565 -1,012,089 3 -995,597 -1,051,391 -1,072,722 -186,570 Interest Paid -177,096 -192,286 9 -200,918 -224,894 -219,631 -482,956 Other Payments -471,909 -448,690 -5 -448,872 -458,601 -468,096

-4,878,598 Total Cash Paid from Operating Activities

-4,857,371 -5,113,617 5 -5,147,398 -5,346,869 -5,545,916

269,260 Net Cash Flows from Operating Activities

382,981 311,606 -19 495,841 366,297 564,446

Cash Flows from Investing Activities

Cash Flows from Investments in Non-Financial Assets

299,893 Sales of Non-Financial Assets 314,280 330,092 5 196,516 118,484 151,837 -934,387 Payments for Non-Financial Assets -844,694 -900,010 7 -694,396 -657,194 -608,661 -634,494 Net Cash Flows from Investments

in Non-Financial Assets -530,414 -569,918 7 -497,880 -538,710 -456,824

Cash Flows from Investments in Financial Assets for Policy Purposes

Cash Receipts

308 Repayment of Loans 291 2,727 837 2,677 2,677 2,677 62,014 Dividends – Market Gains on Land

Sales 49,395 86,755 76 74,609 11,817 34,554



Cash Flow Statement


$’000 $’000 $’000 % $’000 $’000 $’000 95,002 Capital Distributions 58,359 77,552 33 - 152,168 -

157,324 Total Cash Received from Investments in Financial Assets for Policy Purposes

108,045 167,034 55 77,286 166,662 37,231

Cash Payments

-62 Issue of Loans - - - - - - -21,855 Capital Payments to Government

Agencies -25,867 -36,370 41 -41,930 -19,888 -5,000

-21,917 Total Cash Paid from Investments in Financial Assets for Policy Purposes

-25,867 -36,370 41 -41,930 -19,888 -5,000

135,407 Net Cash Flows from Investments in Financial Assets for Policy Purposes

82,178 130,664 59 35,356 146,774 32,231

Cash Flows from Investments in Financial Assets for Liquidity Purposes

591,241 Sales of Investments 17,452 559,735 # 11,780 16,804 17,148 -371,363 Payments for Investments -265,020 -311,812 18 -59,643 -174,291 -143,435 219,878 Net Cash Flows from Investments

in Financial Assets for Liquidity Purposes

-247,568 247,923 -200 -47,863 -157,487 -126,287

-279,209 Net Cash Flows from Investing Activities

-695,804 -191,331 -73 -510,387 -549,423 -550,880

Cash Flows from Financing Activities

Cash Receipts

133,596 Borrowings 74,085 437,225 # 535,759 545,389 156,878 133,596 Total Cash Received from

Financing Activities 74,085 437,225 # 535,759 545,389 156,878

Cash Payments

-137,294 Borrowings -78,079 -541,187 # -514,676 -354,375 -163,400 -137,294 Total Cash Paid from Financing

Activities -78,079 -541,187 # -514,676 -354,375 -163,400

-3,698 Net Cash Flows from Financing Activities

-3,994 -103,962 # 21,083 191,014 -6,522

-13,647 Net Increase/(Decrease) in Cash Held

-316,817 16,313 -105 6,537 7,888 7,044



Cash Flow Statement


$’000 $’000 $’000 % $’000 $’000 $’000 370,480 Cash and Cash Equivalents at the

Beginning of Reporting Period 622,079 305,262 -51 321,575 328,112 336,000

356,833 Cash and Cash Equivalents at the End of Reporting Period

305,262 321,575 5 328,112 336,000 343,044

Key Fiscal Aggregates 269,260 Net Cash from Operating Activities 382,981 311,606 -19 495,841 366,297 564,446

-634,494 Investments in Non-FinancialAssets

-530,414 -569,918 7 -497,880 -538,710 -456,824

-365,234 Cash Surplus (+) /Deficit (-) -147,433 -258,312 75 -2,039 -172,413 107,622

Note: A positive number denotes a cash inflow, a negative sign denotes a cash outflow.

Derivation of ABS GFS Cash Surplus/(Deficit)

-365,234 Cash Surplus (+)/Deficit (-) -147,433 -258,312 75 -2,039 -172,413 107,622 -99 Acquisitions Under Finance Leases

and Similar Arrangements(a) -99 -871 # -376,950 -2,197 -4,349

-365,333 ABS GFS Cash Surplus (+) /Deficit (-) Including Finance and Similar Arrangements

-147,532 -259,183 76 -378,989 -174,610 103,273

Note: (a) Finance leases are shown with a negative sign as they are deducted in compiling the ABS GFS cash surplus/deficit.


Table 9.5 General Government Sector taxes

2016-17 2017-18 2018-19 2019-20 2020-21 Est. Outcome Budget Estimate Estimate Estimate $’000 $’000 $’000 $’000 $’000

Taxes on Employers’ Payroll and Labour Force

445,529 470,432 504,595 542,365 580,743

Taxes on Property

Land Taxes 110,344 130,079 140,212 146,195 152,437 Stamp Duties on Financial and Capital

Transactions - - - - -

Financial Institutions' Transactions Taxes - - - - - Other 834,201 851,714 925,560 977,904 1,031,510 Total Taxes on Property 944,545 981,793 1,065,772 1,124,099 1,183,947

Taxes on the Provision of Goods and Services

Excises and Levies - - - - - Taxes on Gambling 50,770 52,059 55,190 56,509 57,846 Taxes on Insurance 40,093 41,227 42,993 44,946 46,984 Total Taxes on the Provision of Goods and

Services 90,863 93,286 98,183 101,455 104,830

Taxes on Use of Goods and Performance of Activities

Motor Vehicle Taxes 158,995 167,494 177,245 178,291 184,481 Franchise Taxes - - - - - Other 36,741 39,027 41,509 44,137 45,963 Total Taxes on Use of Goods and

Performance of Activities 195,736 206,521 218,754 222,428 230,444

Total Taxation Revenue 1,676,673 1,752,032 1,887,304 1,990,347 2,099,964



Table 9.6 General Government Sector grant revenue


Current Grant Revenue

Current Grants from the Commonwealth

GST Revenue and Municipal Grants 1,165,174 1,264,177 1,326,699 1,365,986 1,439,921 Non-Government School Grants 211,446 217,944 228,302 239,319 240,233 Other Contributions and Grants 641,052 642,445 653,008 666,102 677,040

Total Current Grant Revenue 2,017,672 2,124,566 2,208,009 2,271,407 2,357,194

Capital Grant Revenue

Capital Grants from the Commonwealth

Non-Government School Grants - - - - - Other Contributions and Grants 195,211 209,787 258,000 272,403 311,688

Total Capital Grant Revenue 195,211 209,787 258,000 272,403 311,688

Total Grant Revenue 2,212,883 2,334,353 2,466,009 2,543,810 2,668,882



Table 9.7 General Government Sector grants and purchased services expense


Current Grant Expense

Private and Not-for-Profit Sector 200,405 200,604 171,621 186,320 193,610 Non-Government School Grants 211,446 217,944 228,302 239,319 240,233 Grants to Other Sectors of Government 577,488 609,036 630,350 652,856 666,786 Total Current Grant Expense 989,339 1,027,584 1,030,273 1,078,495 1,100,629

Capital Grant Expense

Private and Not-for-Profit Sector 23,954 27,383 9,641 9,789 9,950 Non-Government School Grants - - - - - Grants to Other Sectors of Government 44,800 37,241 76,956 134,656 172,599 Total Capital Grant Expense 68,754 64,624 86,597 144,445 182,549

Total Grant Expense 1,058,093 1,092,208 1,116,870 1,222,940 1,283,178



Table 9.8 General Government Sector Dividend and

Income Tax Equivalent income 2016-17 2017-18 2018-19 2019-20 2020-21 Est. Outcome Budget Estimate Estimate Estimate $’000 $’000 $’000 $’000 $’000

Dividends from PNFC Sector 265,664 223,414 182,562 240,942 222,214 Dividends from Superannuation Investments 51,043 52,255 51,333 54,536 58,481 Income Tax Equivalent 155,475 132,294 109,348 108,099 111,078

Total GGS Dividend and Income Tax Equivalent Income

472,182 407,963 343,243 403,577 391,773



Table 9.9 General Government Sector expenses by function


01 General Public Services 603,719 506,887 493,943 504,432 520,467 03 Public Order and Safety 431,867 446,898 446,040 452,720 469,374 04 Education 1,117,912 1,149,346 1,188,366 1,222,526 1,251,383 05 Health 1,467,927 1,524,492 1,568,197 1,636,815 1,718,233 06 Social Security 344,366 319,218 328,974 359,426 372,419 07 Housing and Community Amenities 239,152 285,355 250,013 244,030 230,933 08 Recreation and Culture 222,161 231,611 218,912 223,415 229,337 09 Fuel and Energy 19,174 65,579 95,227 148,991 190,407 10 Agriculture, Forestry, Fishing and

Hunting 4,816 3,799 3,421 3,359 3,747

11 Mining and Mineral Resources Other than Fuels, Manufacturing and Construction

24,939 25,133 26,125 27,088 27,921

12 Transport and Communications 347,192 355,350 409,613 428,440 442,556 13 Other Economic Affairs 87,130 84,736 80,224 80,751 81,210 14 Other Purposes 500,225 597,967 600,126 633,028 645,594

Total Expenses 5,410,579 5,596,370 5,709,181 5,965,018 6,183,579



Table 9.10 General Government Sector expenses by function


01 General Public Services 603,719 506,887 493,943 504,432 520,467 011 Government Superannuation Benefits - - - - - 019 Other General Public Services 603,719 506,887 493,943 504,432 520,467 03 Public Order and Safety 431,867 446,898 446,040 452,720 469,374 031 Police and Fire Protection Services 229,991 235,504 239,369 241,795 258,439 0311 Police Services 157,963 163,349 166,240 167,265 180,183 0312 Fire Protection Services 72,028 72,155 73,130 74,530 78,256 032 Law Courts and Legal Services 113,365 118,180 114,954 116,694 114,498 033 Prisons and Corrective Services 72,917 75,928 75,779 77,937 79,822 039 Other Public Order and Safety 15,594 17,285 15,937 16,293 16,615 04 Education 1,117,912 1,149,346 1,188,366 1,222,526 1,251,383 041 Primary and Secondary Education 924,939 958,690 995,219 1,023,994 1,046,479 0411 Primary Education 479,883 498,098 517,025 531,990 543,888 0412 Secondary Education 445,057 460,592 478,194 492,004 502,591 0419 Primary and Secondary Education

n.e.c. - - - - -

042 Tertiary Education 128,014 124,425 126,690 130,034 134,452 0421 University Education 16,322 17,289 18,158 19,139 20,177 0422 Technical and Further Education 111,692 107,135 108,533 110,895 114,275 0429 Tertiary Education n.e.c. - - - - - 043 Pre-School Education and Education

not Definable by Level 57,618 59,923 60,329 62,264 64,062

0431 Pre-School Education 40,438 42,038 43,321 44,734 45,783 0432 Special Education 17,133 17,820 16,969 17,490 18,239 0439 Other Education not Definable by

Level 47 65 39 40 41

044 Transportation of Students 7,056 5,917 5,895 5,995 6,146 0441 Transportation of Non-Urban School

Children 189 261 155 159 163

0449 Transportation of Other Students 6,866 5,656 5,739 5,836 5,983 049 Education n.e.c. 284 392 233 239 245 05 Health 1,467,927 1,524,492 1,568,197 1,636,815 1,718,233 051 Acute Care Institutions 1,112,067 1,157,137 1,187,802 1,240,600 1,303,206 0511 Admitted Patient Services in Acute

Care Institutions 805,344 840,327 857,583 895,642 940,696

0512 Non-Admitted Patient Services in Acute Care Institutions

306,724 316,810 330,219 344,958 362,510

052 Mental Health Institutions 8,207 8,724 9,112 9,582 10,082 053 Nursing Homes for the Aged - - - - - 054 Community Health Services 234,351 239,350 248,726 259,617 272,349 0541 Community Mental Health 72,843 74,312 77,755 81,573 86,021 0542 Patient Transport 41,264 42,031 42,304 43,085 44,147 0549 Other Community Health Services 120,244 123,006 128,666 134,958 142,180 055 Public Health Services 49,240 50,845 52,933 55,388 58,242 056 Pharmaceutical, Medical Aids and

Appliances 41,693 44,699 44,868 45,664 47,062

057 Health Research 17,907 18,994 19,861 20,862 21,942 059 Health Administration n.e.c. 4,460 4,743 4,895 5,103 5,351


Table 9.10 (cont.) General Government Sector expenses by function


06 Social Security 344,366 319,218 328,974 359,426 372,419 061 Social Security - - - - - 062 Welfare Services 341,133 315,003 325,125 355,482 368,435 0621 Family and Children Services 153,596 140,180 144,948 156,384 161,905 0622 Welfare Services for the Aged 11,641 12,044 12,415 12,910 13,240 0623 Welfare Services for People with a

Disability 142,665 141,761 146,078 161,449 168,087

0629 Welfare Services n.e.c. 33,231 21,018 21,685 24,738 25,203 069 Social Security and Welfare n.e.c. 3,233 4,215 3,849 3,944 3,984 07 Housing and Community Amenities 239,152 285,355 250,013 244,030 230,933 071 Housing and Community Development 167,461 206,394 184,838 178,429 159,850 0711 Housing 84,025 73,060 83,208 83,194 66,342 0712 Aboriginal Community Development - - - - - 0719 Other Community Development 83,435 133,334 101,630 95,236 93,508 072 Water Supply 19,558 23,909 21,171 22,288 25,611 0721 Aboriginal Community Water Supply - - - - - 0729 Other Water Supply 19,558 23,909 21,171 22,288 25,611 073 Sanitation and Protection of the

Environment 46,698 49,966 38,715 37,974 40,017

0731 Aboriginal Community Sanitation - - - - - 0739 Other Sanitation and Protection of the

Environment 46,698 49,966 38,715 37,974 40,017

079 Other Community Amenities 5,436 5,086 5,289 5,338 5,455 0791 Aboriginal Community Amenities - - - - - 0799 Other Community Amenities 5,436 5,086 5,289 5,338 5,455 08 Recreation and Culture 222,161 231,611 218,912 223,415 229,337 081 Recreation Facilities and Services 118,822 130,024 120,245 123,352 129,156 0811 National Parks and Wildlife 18,848 19,446 19,432 19,532 20,799 0819 Recreation Facilities and Services n.e.c. 99,974 110,579 100,812 103,820 108,357 082 Cultural Facilities and Services 68,223 64,700 64,582 65,240 65,565 083 Broadcasting and Film Production - - - - - 089 Recreation and Culture n.e.c. 35,116 36,886 34,086 34,823 34,616 09 Fuel and Energy 19,174 65,579 95,227 148,991 190,407 091 Fuel Affairs and Services 38 39 40 41 43 0911 Gas 38 39 40 41 43 0919 Fuel Affairs and Services n.e.c. - - - - - 092 Electricity and Other Energy 4,898 5,026 5,202 5,385 5,584 0921 Aboriginal Community Electricity - - - - - 0922 Other Electricity 4,898 5,026 5,202 5,385 5,584 0929 Other Energy - - - - - 099 Fuel and Energy n.e.c. 14,239 60,514 89,984 143,564 184,779 10 Agriculture, Forestry, Fishing and

Hunting 4,816 3,799 3,421 3,359 3,747

101 Agriculture - - - - - 102 Forestry, Fishing and Hunting 4,816 3,799 3,421 3,359 3,747




11 Mining and Mineral Resources other than Fuels, Manufacturing and Construction

24,939 25,133 26,125 27,088 27,921

111 Mining and Mineral Resources other than Fuels

- - - - -

112 Manufacturing - - - - - 113 Construction 24,939 25,133 26,125 27,088 27,921 12 Transport and Communications 347,192 355,350 409,613 428,440 442,556 121 Road Transport 208,612 205,596 209,384 214,370 219,241 1211 Aboriginal Community Transport - - - - - 1212 Road Maintenance 204,600 198,086 197,935 202,392 207,077 1213 Road Rehabilitation - - - - - 1214 Road Construction - - - - - 1219 Road Transport n.e.c. 4,011 7,511 11,449 11,978 12,163 122 Water Transport - - - - - 1221 Aboriginal Community Water - - - - - 1222 Urban Water Transport Services - - - - - 1223 Non Urban Water Transport Services - - - - - 123 Rail Transport 829 754 50,730 61,234 58,526 1231 Urban Rail Transport Services 829 754 50,730 61,234 58,526 1232 Non-Urban Rail Transport Freight

Services - - - - -

1233 Non-Urban Rail Transport Passengers Services

- - - - -

124 Air Transport - - - - - 1241 Aboriginal Community Air Transport - - - - - 1249 Other Air Transport Services - - - - - 125 Pipelines - - - - - 128 Other Transport 99,306 104,180 109,679 113,100 124,475 1281 Multi-Mode Urban Transport - - - - - 1289 Other Transport n.e.c. 99,306 104,180 109,679 113,100 124,475 129 Communication 38,445 44,819 39,820 39,735 40,314 13 Other Economic Affairs 87,130 84,736 80,224 80,751 81,210 131 Storage, Saleyards and Markets - - - - - 132 Tourism and Area Promotion 33,361 33,908 31,964 31,896 31,604 133 Labour and Employment Affairs 36,351 32,869 31,798 32,234 32,779 1331 Vocational Training 16,843 12,476 12,780 13,060 13,380 1339 Other Labour and Employment Affairs 19,508 20,393 19,018 19,174 19,399 139 Other Economic Affairs 17,418 17,959 16,462 16,621 16,827




14 Other Purposes 500,225 597,967 600,126 633,028 645,594 141 Public Debt Transactions 488,742 581,772 588,051 620,818 629,089 142 General Purpose Inter-Government

Transactions - - - - - 143 Natural Disaster Relief - - - - - 149 Other Purposes n.e.c. 11,483 16,196 12,076 12,210 16,504 Total Expenses 5,410,579 5,596,370 5,709,181 5,965,018 6,183,579



Table 9.11 General Government Sector

Purchases of non-financial assets by function 2016-17 2017-18 2018-19 2019-20 2020-21 Est. Outcome Budget Estimate Estimate Estimate $’000 $’000 $’000 $’000 $’000

01 General Public Services 83,300 61,361 65,979 68,196 44,916 03 Public Order and Safety 32,642 30,772 8,015 13,805 8,696 04 Education 48,769 82,502 70,922 89,421 60,352 05 Health 236,681 148,631 89,637 118,433 265,802 06 Social Security and Welfare 1,942 4,757 2,418 2,324 1,849 07 Housing and Community Amenities 276,770 394,333 250,882 173,128 145,370 08 Recreation and Culture 49,669 12,393 35,779 52,465 27,862 09 Fuel and Energy - - - - - 10 Agriculture, Forestry, Fishing and

Hunting - - - - -

11 Mining and Mineral Resources other than Fuels, Manufacturing and Construction

48 47 64 90 57

12 Transport and Communications 112,794 164,367 156,872 104,353 51,885 13 Other Economic Affairs 1,601 650 1,520 2,553 1,643 14 Other Purposes 478 198 12,307 32,427 229

Purchases of Non-Financial Assets 844,694 900,010 694,396 657,194 608,661



Loan Council Allocation

The ACT’s Loan Council Allocation (LCA) agreed to at the 2017 Loan Council meeting was $205 million, based on an accrual Government Finance Statistics cash surplus of $212 million.

The nomination established a tolerance limit for the Budget-time estimate of between $92 million and $318 million (+/- 2 per cent of total public sector receipts).

The Budget-time estimate has been revised to $164 million, and is within the tolerance limit.

Table 9.12 Loan Council Allocations

Loan Council Budget-Time Nomination Estimate $m $m GGS Cash Deficit/(Surplus)(a) 193 258 PNFC Sector Cash Deficit/(Surplus)(a) 14 -25 NFPS Sector Cash Deficit/(Surplus)(a), (b) 207 233 Acquisition under Finance Leases and Similar Arrangements(a) 5 5

equals ABS GFS Cash Deficit/(Surplus)(a), (b) 212 238 less Net Cash Flows from Investments in Financial Assets for Policy Purposes(c) 3 14

Adjusted NFPS Sector Cash Deficit/(Surplus) 209 224 plus Memorandum Items(d) -4 -60

Loan Council Allocation 205 164

Notes:

(a) Cash surplus/deficits and finance leases are displayed with the opposite sign to that under which they are reported in cash flow statements. That is, a surplus is displayed as a negative number and vice versa.

(b) May not directly equate to the sum of the GGS and PNFC sector cash surplus/deficit due to intersectoral transfers which are netted out, and/or rounding.

(c) Net cash flows from investments in financial assets for policy purposes are displayed with the same sign as which they are reported in cash flow statements.

(d) Memorandum items are used to adjust the ABS GFS cash surplus/deficit to include in LCA’s transactions – such as operating leases – that have many of the characteristics of public sector borrowings, but do not constitute formal borrowings. They are also used, where appropriate, to deduct from the ABS GFS cash surplus/deficit transactions that Loan Council has agreed should not be included in LCAs – for example, the funding of more than employers’ emerging costs under public sector superannuation schemes, or borrowings by entities such as statutory marketing authorities. Memorandum items also include the net surplus/deficit of public universities in the jurisdiction controlled by the Government. For the ACT, the University of Canberra has been included to reflect its financing requirement.

Tolerance Limit:

Nomination – 2 per cent of public sector receipts ($5.635 billion) +/- $113 million.

Budget – 2 per cent of public sector receipts ($5.959 billion) +/- $119 million.


2017-18 Budget Paper No.3 325 Appendices

APPENDICES

Page

A ACT Government structure 327

B Accounting treatment for Public Private Partnerships 337

C Budget consultation (submission acknowledgement) 341

D Capital works – Better Infrastructure Fund 347

E Capital works – Works-in-Progress 355

F Consolidated financial statements – Public Trading Enterprises

365

G Consolidated financial statements – Total Territory 375

H General Government Sector – Key aggregates history 387

I Loose-fill Asbestos Insulation Eradication Scheme 391

2017-18 Budget Paper No.3 326 Appendices

J Safer Families 399

K Statement of risks 407

L Statement of sensitivity of Budget estimates 419

M Whole of government staffing 425

2017-18 Budget Paper No.3 327 ACT Government structure

APPENDIX A

ACT GOVERNMENT STRUCTURE



APPENDIX A: ACT GOVERNMENT STRUCTURE

The ACT Government structure is based on the current Administrative Arrangements (No 5 dated 16 December 2016), updated to reflect any functions already announced by the Government (eg the creation of the two new land agencies, the City Renewal Authority and the Suburban Land Agency). These changes will be formalised through new Administrative Arrangements prior to 1 July 2017.

ACT GOVERNMENT STRUCTURE ANDREW BARR MLA

Responsible for: Chief Minister Access to government information

ACT Public Service Audit policy Chief Digital Officer Communication and community

engagement Governance and oversight of the City

Renewal Authority

Government strategy and policy Integrity Commission Intergovernmental relations Regional development Support to Cabinet

Treasurer ACT Insurance Authority Borrowing, funds management and

infrastructure finance Budget process and financial reporting Concessions Fiscal and economic policy, including

competition

Government business enterprises Insurance policy Revenue Office Shared services, including transactional

services and ICT services Taxation and revenue policy

Minister for Economic Development

Capital works and procurement Digital Canberra Government accommodation and

property services

Innovation, trade and investment Skills and economic development

Minister for Tourism and Events

Major events (Floriade, Enlighten) Territory venues (Arboretum, Exhibition

Park in Canberra, GIO Stadium, Manuka Oval, Stromlo Forest Park)

Tourism Special Events Fund


YVETTE BERRY MLA Responsible for:

Deputy Chief Minister

Childcare services and regulation Education (including early childhood

education)

Government and non-government schools

Minister for Education and Early Childhood Development

Minister for Housing and Suburban Development

Affordable housing Governance and oversight of the

Suburban Land Agency Homelessness services Housing policy and services Housing sector regulation

Land release policy (as it relates to greenfield sites)

Public housing asset management Public housing renewal program Suburban land development

Minister for the Prevention of Domestic and Family Violence

Family Safety (Coordinator-General)

Minister for Women Women’s affairs policy and services Minister for Sport

and Recreation Elite sporting performance agreements Sport and recreation

Sportsground management

MEEGAN FITZHARRIS MLA Responsible for:

Minister for Health Acute health services Aged care and rehabilitation services Cancer services Child health development Community health services Drug and alcohol policy and services

Health policy (excluding mental health policy)

Healthy Weight Initiative Local hospital network Population health and preventative health

services Minister for

Transport and City Services

Active travel (Coordinator-General) Community transport Municipal services Roads ACT Roads (Coordinator-General)

Transport Canberra (including ACTION and light rail)

Transport reform Waste policy

Minister for Higher Education, Training and Research

Higher education and research State Training Authority

Vocational education and training


MICK GENTLEMAN MLA Responsible for:

Minister for Police and Emergency Services

Emergency services and policing

Minister for the Environment and Heritage

Environment protection policy Heritage Land management and stewardship Parks and Conservation

Support to the Conservator of Flora and Fauna

Water policy and water efficiency programs

Minister for Planning and Land Management

Asbestos (Coordinator-General) Government architect Land release policy (including the land

release program) Major land and property project

facilitation

Parking (Coordinator-General) Planning and development Strategic land use and transport planning Survey and leasing

Minister for Urban Renewal

Land release policy (as it relates to commercial, industrial and urban renewal sites)

Major land and property project facilitation

Urban renewal (Coordinator-General)

GORDON RAMSAY MLA Responsible for:

Attorney-General Administration of justice, civil and criminal law

Electoral policy Policy relating to incorporation of

associations

Policy relating to liquor Policy relating to security Policy relating to the registration of land

titles and tenancies Racing and gaming policy

Minister for Regulatory Services

Access Canberra Building, utilities, land and lease

regulation* Electricity and natural gas, water and

sewerage industry technical regulation*

Environment protection and water regulation*

Fair trading and registration, inspection and regulatory services (including transport regulation and licensing)*

Food safety licensing and regulation* Occupational licensing* Public unleased land regulation (permits)* Racing and gaming regulation* Registration of civil unions, domestic

relationships and parentage* Regulatory reform Small business WorkSafe ACT*

Minister for the Arts and Community Events

ACT events fund Art and cultural policy and services

Community events

Minister for Veterans and Seniors

Seniors and ageing policy Veterans

Note: * this is a matter relating to Access Canberra (see Public Sector Management Act 1994, s 21 (8), relevant matter, part (b)).


SHANE RATTENBURY MLA Responsible for:

Minister for Climate Change and Sustainability

Climate change policy Energy policy and energy efficiency

programs

Government sustainability

Minister for Justice and Consumer Affairs

ACT Human Rights Commission Fair trading policy relating to Australian

consumer law, fuel prices and licensing motor vehicle repairers

Justice reinvestment Policy for administration of human rights Policy relating to civil unions Policy relating to prostitution Policy relating to retirement villages, egg

labelling, sale of goods and uncollected goods

Policy relating to the licensing of agents, hawkers, pawnbrokers, motor vehicle dealers, second-hand dealers, x-films

Policy relating to the registration of deeds, births, deaths, parentage, marriages, civil unions, domestic relationships and charitable collections

Policy relating to transport regulation and safety

Reducing recidivism Restorative justice Sentence Administration Board Victims of Crime Commissioner

Minister for Corrections

Corrective services Justice Health

Minister for Mental Health

Mental health services, facilities, policy and programs

RACHEL STEPHEN-SMITH MLA Responsible for:

Minister for Community Services and Social Inclusion

Better Services initiative Community recovery policy and services Community sector policy and services

Community sector reform program Human Services Blueprint Social inclusion and equality

Minister for Disability, Children and Youth

Children, young people and family policy and services

Children and young people protection (including youth justice) policy and services

Disability policy Disability reform and services Therapy services Youth affairs policy

Minister for Aboriginal and Torres Strait Islander Affairs

Aboriginal and Torres Strait Islander affairs policy and services

Aboriginal and Torres Strait Islander Elected Body secretariat

Minister for Multicultural Affairs

Multicultural affairs policy and services

Minister for Workplace Safety and Industrial Relations

ACT Public Sector workers’ compensation improvement

Private sector industrial relations and workers’ compensation

Work safety policy


STRUCTURE OF ACT DIRECTORATES CHIEF MINISTER, TREASURY AND ECONOMIC DEVELOPMENT DIRECTORATE

Head of Service and Director-General Kathy Leigh Under Treasurer David Nicol

With responsibility for: Access Canberra Access to government information ACT events fund ACT Insurance Authority ACT Public Sector workers’

compensation improvement ACT Public Service Affordable housing Art and cultural policy and services Audit policy Borrowing, funds management

and infrastructure finance Budget process and financial

reporting Building, utilities, land and lease

regulation* Capital works and procurement Chief Digital Officer Communication and community

engagement Community events Concessions Digital Canberra Electricity and natural gas, water

and sewerage industry technical regulation*

Elite sporting performance agreements

Environment protection and water regulation*

Fair trading and registration, inspection and regulatory services (including transport regulation and licensing)*

Fiscal and economic policy including competition

Food safety licensing and regulation*

Government accommodation and property services

Government business enterprises Government strategy and policy Healthy Weight Initiative Higher education and research Innovation, trade and investment Insurance policy Integrity Commission Intergovernmental relations Land release policy (including the

land release program) Major events (Floriade, Enlighten) Major land and property project

facilitation Occupational licensing* Private sector industrial relations

and workers’ compensation Public housing renewal program Public unleased land regulation

(permits)* Racing and gaming regulation*

Regional development Registration of civil unions,

domestic relationships and parentage*

Regulatory reform Revenue Office Shared services, including

transactional services and ICT services

Skills and economic development Small business Special Events Fund Sport and recreation State Training Authority Suburban land development Support to Cabinet Taxation and revenue policy Territory venues (Arboretum,

Exhibition Park in Canberra, GIO Stadium, Manuka Oval, Stromlo Forest Park)

Tourism Urban renewal

(Coordinator-General) Vocational education and training WorkSafe ACT* Work safety policy

OTHER GENERAL GOVERNMENT SECTOR ENTITIES ACT COMPULSORY THIRD-PARTY INSURANCE

REGULATOR ACT GAMBLING AND RACING COMMISSION

ACT INSURANCE AUTHORITY CANBERRA INSTITUTE OF TECHNOLOGY CULTURAL FACILITIES CORPORATION INDEPENDENT COMPETITION AND REGULATORY

COMMISSION LIFETIME CARE AND SUPPORT FUND SUPERANNUATION PROVISION ACCOUNT TERRITORY BANKING ACCOUNT

Note: * this is a matter relating to Access Canberra (see Public Sector Management Act 1994, s 21 (8), relevant matter, part (b)).


COMMUNITY SERVICES DIRECTORATE Director-General Michael De’Ath

With responsibility for: Aboriginal and Torres Strait

Islander affairs policy and services

Aboriginal and Torres Strait Islander Elected Body secretariat

Better Services initiative Children, young people and family

policy and services Children and young people

protection (including youth justice) policy and services

Community recovery policy and services

Community sector policy and services

Community sector reform program Disability policy Disability reform and services Homelessness services Housing policy and services Housing sector regulation Human Services Blueprint

Multicultural affairs policy and services

Public housing asset management Seniors and ageing policy Social inclusion and equality Therapy services Veterans Women’s affairs policy and

services Youth affairs policy

EDUCATION DIRECTORATE Director-General Natalie Howson

With responsibility for: Childcare services and regulation Education (including early

childhood education) Government and non-government

schools

ENVIRONMENT, PLANNING AND SUSTAINABLE DEVELOPMENT DIRECTORATE Director-General Ben Ponton

With responsibility for: Asbestos (Coordinator-General) Climate change policy Energy policy and energy efficiency

programs Environment protection policy Governance and oversight of the

City Renewal Authority Governance and oversight of the

Suburban Land Agency Government architect Government sustainability

Heritage Land management and

stewardship Land release policy (as it relates to

greenfield sites) Land release policy (as it relates to

commercial, industrial and urban renewal sites)

Major land and property project facilitation

Parking (Coordinator-General) Parks and Conservation Planning and development Strategic land use and transport

planning Support to the Conservator of

Flora and Fauna Survey and leasing Water policy and water efficiency

programs

OTHER GENERAL GOVERNMENT SECTOR ENTITIES CITY RENEWAL AUTHORITY SUBURBAN LAND AGENCY


HEALTH DIRECTORATE Director-General Nicole Feely

With responsibility for: Acute health services Aged care and rehabilitation

services Cancer services Child health development Community health services

Drug and alcohol policy and services

Health policy (excluding mental health policy)

Justice Health

Local hospital network Mental health services, facilities,

policy and programs Population health and

preventative health services

OTHER GENERAL GOVERNMENT SECTOR ENTITY ACT LOCAL HOSPITAL NETWORK

JUSTICE AND COMMUNITY SAFETY DIRECTORATE Director-General Alison Playford

With responsibility for: ACT Human Rights Commission Administration of justice, civil and

criminal law Corrective services Electoral policy Emergency services and policing Fair trading policy relating to

Australian consumer law, fuel prices and licensing motor vehicle repairers

Family Safety (Coordinator-General)

Justice reinvestment Policy for administration of human

rights

Policy relating to civil unions Policy relating to incorporation of

associations Policy relating to liquor Policy relating to prostitution Policy relating to retirement

villages, egg labelling, sale of goods and uncollected goods

Policy relating to security Policy relating to the licensing of

agents, hawkers, pawnbrokers, motor vehicle dealers, second-hand dealers, x-films

Policy relating to the registration of deeds, births, deaths, parentage, marriages, civil unions, domestic relationships and charitable collections

Policy relating to the registration of land titles and tenancies

Policy relating to transport regulation and safety

Racing and gaming policy Reducing recidivism Restorative justice Sentence Administration Board Victims of Crime Commissioner

OTHER GENERAL GOVERNMENT SECTOR ENTITIES LEGAL AID COMMISSION ACT PUBLIC TRUSTEE AND GUARDIAN

TRANSPORT CANBERRA AND CITY SERVICES DIRECTORATE Director-General Emma Thomas

With responsibility for: Active travel

(Coordinator-General) Community transport Municipal services

Roads ACT Roads (Coordinator-General) Sportsground management

Transport Canberra (including ACTION and light rail)

Transport reform Waste policy

OTHER GENERAL GOVERNMENT SECTOR ENTITY ACT PUBLIC CEMETERIES AUTHORITY


OTHER GENERAL GOVERNMENT SECTOR ENTITIES ACT EXECUTIVE

AUDITOR-GENERAL ELECTORAL COMMISSIONER

OFFICE OF THE LEGISLATIVE ASSEMBLY

PUBLIC TRADING ENTERPRISES/PUBLIC NON-FINANCIAL CORPORATIONS

ACTION CIT SOLUTIONS

CITY RENEWAL AUTHORITY HOUSING ACT

ICON WATER LIMITED SUBURBAN LAND AGENCY

2017-18 Budget Paper No.3 337 Accounting treatment for Public Private Partnerships

APPENDIX B

ACCOUNTING TREATMENT FOR PUBLIC PRIVATE PARTNERSHIPS



APPENDIX B: ACCOUNTING TREATMENT FOR PUBLIC PRIVATE PARTNERSHIPS

In 2015-16, the ACT Government entered into public private partnership contracts for both the ACT Law Courts Facilities and the Light Rail Network. These are long-term contracts with private sector consortia to design, finance, construct, maintain and operate infrastructure assets. The Government will make service payments over the life of the contracts, intended to cover the costs incurred by the consortia in constructing, financing, maintaining and operating the assets. At the end of these contracts, the infrastructure will become Territory assets.

There is currently no Australian Accounting Standard which prescribes the accounting treatment for these types of arrangements from the perspective of a government grantor. In the absence of an Accounting Standard and by virtue of the application of the hierarchy for the selection of accounting policies under the Australian Accounting Standard, the Government has adopted an accounting policy for these types of arrangements based on the principles of Application Note F Private Finance Initiative and Similar Contracts issued in 1998 by the United Kingdom Accounting Standards Board as an amendment to its Financial Reporting Standard 5 Reporting the Substance of Transactions.

This approach is consistent with Victoria, New South Wales, South Australia, Western Australia and Queensland which all apply a policy based on the principles of Financial Reporting Standard 5.

Financial Reporting Standard 5 applies a risks and rewards approach. Under this approach, the focus is on the grantor’s contractual obligations to the operator. As the ACT Law Courts Facilities and the Light Rail Network contracts are able to be separated into property and service elements, application of the requirements of Financial Reporting Standard 5 results in these projects being accounted for as finance leases in accordance with Australian Accounting Standards 117 Leases.

As a result, the fair value of the leased assets and a corresponding lease liability will be recognised on the balance sheet for each contract at the commencement of the lease term which is the date the assets are ready for the provision of the services.

Initial direct costs of the Government are capitalised when incurred and are added to the finance lease assets on initial recognition at commercial acceptance, the commencement of the lease term.

The Territory’s contract service payments will be apportioned between maintenance/ operating costs, a financing component and reduction of the lease liability. The financing component is calculated at the rate implicit in the lease and is accounted for as an interest expense. The portion of the payment related to the maintenance/operating costs is accounted for as a supplies and services expense.

In addition, the leased assets are depreciated over their useful life with depreciation expenses being recognised.


The interest, maintenance/operating costs and depreciation expenses will all affect the operating statement and the headline net operating balance.

Tables B.1 and B.2 below provide the financial impacts on the Territory of the Light Rail – Stage 1 and ACT Law Courts Facilities contracts.

Table B.1: PPP Impact – Light Rail – Stage 11

2017-18 2018-19 2019-20 2020-21 Financial

Year Financial

Year Financial

Year Financial

Year $’000 $’000 $’000 $’000

Headline Net Operating Balance (HNOB) Impact

Maintenance/Operating Costs - -21,216 -25,722 -26,172 Interest - -15,922 -18,901 -18,275 Depreciation - -10,559 -14,079 -14,079 Total HNOB Impact 0 -47,697 -58,702 -58,526

Assets and Liabilities

Lease Asset2 - 693,393 679,314 665,235 Lease Liability - 330,029 320,383 310,111 Total Impact on Net Assets 0 363,364 358,931 355,124

Payments to Canberra Metro

Service Payments - -37,138 -54,269 -54,719 Capital Contribution - -375,000 - - Total Payments 0 -412,138 -54,269 -54,719

Notes: 1. The figures for Light Rail – Stage 1 are pre-financial close estimates. 2. Includes accumulated depreciation.

Table B.2: PPP Impact – ACT Law Courts Facilities

2017-18 2018-19 2019-20 2020-21 Financial

Year Financial

Year Financial

Year Financial

Year $’000 $’000 $’000 $’000

Headline Net Operating Balance (HNOB) Impact

Maintenance/Operating Costs -2,368 -5,808 -6,306 -6,464 Interest -5,288 -12,194 -12,680 -12,495 Depreciation -1,623 -3,808 -4,006 -4,006 Total HNOB Impact -9,279 -21,810 -22,992 -22,965

Assets and Liabilities

Lease Asset1 107,094 154,802 150,796 146,790 Lease Liability 107,948 157,540 155,343 150,995 Total Impact on Net Assets -854 -2,738 -4,547 -4,205

Payments to Juris Partnership

Service Payments -8,425 -19,926 -21,183 -21,340 Total Payments -8,425 -19,926 -21,183 -21,340

Note: 1. Includes accumulated depreciation.

2017-18 Budget Paper No.3 341 Budget consultation (submission acknowledgement)

APPENDIX C

BUDGET CONSULTATION (SUBMISSION ACKNOWLEDGEMENT)


2017-18 Budget Paper No.3 343 Budget consultation(submission acknowledgement)

APPENDIX C: BUDGET CONSULTATION (SUBMISSION ACKNOWLEDGEMENT)

The 2017-18 Budget consultation process was launched on 10 November 2016, encouraging interested community members, businesses and local organisations to share their views and suggestions as to how the ACT Government’s resources are allocated, where services could be enhanced, and where possible efficiencies could be made.

The Government established a dedicated webpage for the 2017-18 Budget Consultation process on the ‘Your Say’ website (www.yoursay.act.gov.au). The Your Say site invited interested parties to complete:

a simple survey (primarily aimed at individuals), which sought input via a priority ranking exercise and also asked respondents to provide some basic demographic data; and/or

a detailed survey (primarily aimed at organisations and community groups, although individuals were welcome to complete the detailed survey if they wished).

Contributors were also invited to provide a detailed submission outlining their views; this input was made publicly available on the Budget Consultation Website unless the author specified that the submission was to be classified as confidential.

There were 368 responses to the short survey. The top service areas identified by respondents were sport and recreational facilities, health and health infrastructure, and education.

The Government received 72 detailed submissions and 57 responses to the detailed survey. The detailed surveys and submissions covered a diverse range of issues, including arts and entertainment, community services, disability, education, public infrastructure and transport, sport, sustainability, as well as matters relating to the Territory’s finances. Agencies reviewed the submissions as part of the process for developing proposals for the 2017-18 Budget. Views and suggestions provided by the community informed decision making, drawing on the knowledge and experiences of users and providers of government services.

All non-confidential submissions are available through the Budget Consultation Website (www.budgetconsultation.act.gov.au).


The Government would like to thank the following individuals, community groups and organisations for their contribution and participation in the consultation process:

A Playschool for Gungahlin. A Three-Year-Old Preschool ACT Broomball ACT Council of Parents & Citizens Associations ACT Council of Social Services ACT Disability, Aged and Carer Advocacy Service (ADACAS) ACT Playgroups Association Inc. Advocacy for Inclusion AIDS Action Council Alcohol Tobacco & Other Drug Association ACT Alzheimer’s Australia ACT Australasian Railway Association Australian Nursing and Midwifery Federation Belconnen Arts Centre Belconnen Community Council Borg, Mr Jerome Canberra Business Chamber Canberra Community Law Canberra Glassworks Limited Canberra Multicultural Community Forum Inc Capital Health Network Carers ACT C.C. Concreting Community and Public Sector Union Dogs on the run Families ACT Foster Care Australia ACT Friends of Grasslands Friends of Hawker Village Friends of Manuka Pool Griffith/Narrabundah Community Association headspace Canberra Heart Foundation ACT Holy Covenant Anglican Church Kaczmarek, Dr Marlena Kingston and Barton Residents Group Living Streets Canberra


M16 artspace Master Builders Association Mental Health Community Coalition ACT MOVE muscle, bone and joint health National Electrical and Communications Association National Seniors Australia North Canberra Community Council Nutrition Australia ACT Paine, Mr Bruce Pedal Power ACT People with Disabilities ACT Public Transport Association of Canberra Russell, Miss Isabella Saunders, Ms M. SEE-Change St James Uniting Church – Curtin Superannuated Commonwealth Officers’ Association The Childers Group Tjillari Justice Aboriginal Corporation Tuggeranong Community Council UnionsACT UnitingCare Kippax Wilson, Mr Trevor Winnunga Nimmityjah Aboriginal Health Service Woden Community Service Woden Valley Community Council Youth Coalition of the ACT YWCA Canberra


2017-18 Budget Paper No.3 347 Capital works – Better Infrastructure Fund

APPENDIX D

CAPITAL WORKS – BETTER INFRASTRUCTURE FUND



APPENDIX D: CAPITAL WORKS – BETTER INFRASTRUCTURE FUND

The Better Infrastructure Fund1 provides resources to extend the useful life or improve the service delivery capacity of existing Territory physical infrastructure assets. The funding is distinct from routine repairs and maintenance that receive separate funding.

In the 2017-18 Budget, the Government has allocated $60 million for the Better Infrastructure Fund for the coming year.

The following table lists the 2017-18 Better Infrastructure Fund projects by agency.

Table D.1: Summary of the Better Infrastructure Fund initiatives in the 2017-18 Budget

Project Financing 2017-18

$’000 Canberra Institute of Technology Better facilities for our students – Improving vocational training facilities

All Campuses Internal signage 80 Upgrade fire detection and suppression service 100 Upgrade the security and access system 100 Bruce Campus Disabled access ramp to S Block 50 Landscaping 100 Refurbishment of cabinet making workshops 250 Refurbishment of A Block classrooms 300 Refurbishment of the Forensic Crime Scene Facility 100 Upgrade Building Management System 150 Upgrade Building A HVAC system 300 Upgrade G Block lift 200 Upgrade sawdust extraction system in G02 and G06 100 Fyshwick Campus Evaporative cooling for C21 classroom and workshop 60 Refurbishment of A Block toilets 70 Upgrade electrical switchboards 100 Upgrade lighting 100

1 Formerly known as the Capital Upgrades Program.



$’000 Reid Campus Refurbishment of Building N 62 Refurbishment of library 300 Upgrade the barbering and hair salon 70 Upgrade simulated travel office 50

Total 2,642

Chief Minister, Treasury and Economic Development Directorate ACT Property Upgrades Building and safety upgrades – various buildings 1,020 Building refurbishment including roofing, energy efficiency upgrades and internal remediation –

various buildings 500

Building renovations and extensions including modifications to amenities – various buildings 500 Childcare centre upgrades 470 Fire services upgrades – various buildings 155 Grounds upgrades including fencing and landscaping – various buildings 150 Hazardous material removal – various buildings 400 Pools Improvement Program 785 Upgrades to address ageing infrastructure – various buildings 395 Upgrades to heritage buildings 405 Arts Buildings and Facilities Upgrades to arts buildings 375 More and better jobs – Improving arts facilities 145 Building a better city – Improving major venues Arboretum and buildings 250 Exhibition Park 540 GIO Stadium 525 Manuka Oval 380 Stromlo Forest Park 120 Events Floriade 303

Total 7,418 Community Services Directorate Better support when it matters – Improving community facilities Bimberi Residential Services 105 Child Development Centre – Holder 80 Gungahlin 70 Tuggeranong 70 West Belconnen 70

Total 395



$’000 Cultural Facilities Corporation Cultural Facilities ACT Historic Places 140 Canberra Museum and Galleries and Corporate 140 Canberra Theatre Centre 68 Cultural Facilities Corporation – Corporate 50

Total 398

Education Directorate Better schools for our kids – Public school infrastructure upgrades Disability Access Compliance 1,450 Environmental Sustainable Design 975 External Learning Environments 450 Joint Funding Works Program 1,795 School Administration and Support Area Improvements 1,760 School Learning Area Improvements 3,720 School Revitalisation 9,450 School Safety Improvements 550 School Security Improvements 550

Total 20,700 Environment, Planning and Sustainable Development Directorate Better services in your community – Improving our parks and nature reserves Adaptive reuse of former Ranger Housing – Phase 2 150 Jerrabomberra Wetlands Education and Community Centre repairs 80 Upgrade Rural Land Management Assets 150 Sheedy’s playground upgrade and Gibraltar Falls access and parking 150 Heritage Canberra Tracks Interpretive Signage Trails 50 Conservation Management Plan – Aboriginal Heritage Places 86 Glenburn Homestead pisé wall stabilisation 15 Infrastructure and Equipment (civil infrastructure works) Land release infrastructure 295

Total 976

Health Directorate Better care when you need it – Improving health facilities

ACT Health Building upgrades 1,645 Electrical, fire and safety upgrades 1,600 Mechanical and services infrastructure 1,000



$’000 Calvary Hospital Building works 434 Environmental systems upgrades 164 Fire safety upgrade 246

Total 5,089

Justice and Community Safety Directorate Directorate Projects Accommodation upgrades, work health and safety, security and energy efficiency upgrades 525 Corrective Services upgrade 540 Courts and Tribunal facilities upgrade 107 Emergency services Agency Projects ESA facilities upgrades, security upgrades, and work health and safety upgrades 330 Territorial Projects ACT Policing facilities and security upgrades 268

Total 1,770

Office of the Legislative Assembly Assembly Buildings Kitchen/Bathroom Upgrade Program 130 Other Works 14

Total 144

Transport Canberra and City Services Directorate ACTION Bus major component overhauls including driver and passenger seat refurbishment 1,500 Tuggeranong and Belconnen depot upgrades 1,750 Active Travel Better schools for our kids – Safer walking and cycling around schools 525 Building a better city – Active Travel – Footpath and cycleway upgrades 1,220 Town Centres Building a better city – Revitalising local town centres 4,000 Birrigai Ageing water treatment and power supply upgrade to Birrigai 530 Sports Facilities (Active Canberra) Sport Facilities Improvement Program 1,315 Water Demand Management 540



$’000 Safety compliance and essential upgrades of the city infrastructure Bridge bearing replacement 500 Relocation of streetlight control panels 500 Residential street improvements 600 Resurfacing program and safety upgrades 1,427 Stormwater upgrade program 1,700 Street lighting upgrades – in conjunction with future potential outsourcing of streetlight

arrangements 2,050

Road Safety Measures Traffic signal control box upgrades 400 Library Better services in your community – Revitalising Woden Library 1,000 Yarralumla Nursery Upgrade power supply to ensure business continuity of essential services at the nursery 132 Domestic Animal Services Better services in your community – Expanding the Domestic Animal Shelter 400 Property Improvements Relocate Fyshwick maintenance depot and upgrade security

550

Total 20,639 Total Better Infrastructure Fund 60,171



2017-18 Budget Paper No.3 355 Capital works – Works-in-Progress

APPENDIX E

CAPITAL WORKS – WORKS-IN-PROGRESS



APPENDIX E: CAPITAL WORKS – WORKS-IN-PROGRESS

The works-in-progress component of the Capital Works Program includes projects from previous years. The value of works-in-progress over the four years to 2020-21 is $1.1 billion, of which $713 million is allocated in 2017-18.

The following table lists the 2017-18 capital works-in-progress by agency.

Table E.1: 2017-18 Capital Works – Works-in-progress

Project 2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000

Four Year Investment

$’000

Physical Completion

Date1

Canberra Institute of Technology CIT Plant and Equipment 2,150 1,257 1,257 1,257 5,921 ongoing

Total 2,150 1,257 1,257 1,257 5,921 Chief Minister, Treasury and

Economic Development Directorate

Better Roads for Gungahlin – Enhanced Town Centre road network

624 0 0 0 624 Dec-17

Better Roads for Gungahlin – Gungahlin Town Centre road network improvements

1,944 2,500 0 0 4,444 Jun-19

Better Roads for Gungahlin – Horse Park Drive duplication

2,945 3,000 0 0 5,945 Jun-19

Better Roads for Gungahlin – Horse Park Drive pedestrian overpass

153 100 0 0 253 Jun-19

Better Roads for the Inner South – Yarralumla Estate

145 0 0 0 145 Jun-18

Better Services – Weston Creek and Stromlo swimming pool and leisure centre

10,940 11,000 11,000 0 32,940 Jun-20

Canberra Regional Visitors Centre Relocation

562 0 0 0 562 Jun-18

Caring for our Environment – Lake Tuggeranong Water Quality Improvement – Stage 2 (Isabella Weir)

500 8,500 0 0 9,000 Jun-19

City to the Lake – New Canberra Theatre (Early Planning)

100 0 0 0 100 Jun-18

Cravens Creek Water Quality Control Pond

200 0 0 0 200 Sep-17

Digital Canberra – Protecting our data 310 0 0 0 310 Jun-18 Equipment Purchase Funding 1,000 1,000 1,000 1,000 4,000 ongoing Fyshwick Depot – Fuel storage tanks

removal and site remediation 200 0 0 0 200 Jun-18

Government Budget Management System

3,177 0 0 0 3,177 Jun-18


Project 2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000


$’000

Physical Completion

Date1

Government Office Accommodation and Relocation Fitout

300 0 0 0 300 Jun-18

Grant for Development of a New Basketball Centre and Player Amenities

65 0 0 0 65 Jun-18

iConnect 5,852 1,673 0 0 7,525 Jun-19 ICT Transformation – Hybrid cloud

computing 500 500 0 0 1,000 Jun-19

Improving Our Suburbs – New Molonglo Valley infrastructure

9,552 23,370 0 0 32,922 Jun-19

Improving Road Safety – Traffic camera adjudication system upgrades

1,160 0 0 0 1,160 Dec-17

Isabella Weir Spillway Upgrades 7,688 0 0 0 7,688 Jun-18 Land Title Business System

Modernisation 1,041 0 0 0 1,041 Jun-18

Majura Parkway to Majura Road – Link road

3,059 2,000 0 0 5,059 Jun-19

Molonglo 2 – Sewer and Pedestrian Bridge over Molonglo River

766 0 0 0 766 Dec-17

Molonglo 2 – Uriarra Road Upgrade 111 0 0 0 111 Dec-17 Molonglo 2 – Water Quality Control

Ponds, Sewers and Cycle path (Design)

0 709 0 0 709 Jun-19

Molonglo 2 – Water Supply, Trunk Sewer and Stormwater Infrastructure – Stage 1

65 0 0 0 65 Dec-17

Molonglo Infrastructure Investment 588 0 0 0 588 Dec-17 More Efficient Public Service

Administration – Long service leave calculations

1,016 0 0 0 1,016 Jun-18

National Arboretum Canberra – Water Security

273 0 0 0 273 May-18

National Arboretum Canberra – Water Security – Stage 2

100 0 0 0 100 Jun-18

New Stadium Early Planning Study 97 0 0 0 97 completed North Building – Upgrade of HVAC

system 1,600 0 0 0 1,600 Dec-17

Office Accommodation 500 500 500 500 2,000 ongoing Public Arts Scheme 190 0 0 0 190 Dec-17 Refurbishment of the National

Convention Centre 600 0 0 0 600 Jun-18

Rego.ACT – Ongoing investment 666 431 431 431 1,959 ongoing Revenue Collection Transformation 3,684 0 0 0 3,684 Apr-18 Smart Parking – Stage 2 52 0 0 0 52 completed Smarter Regulation – Red tape

reduction 1,812 0 0 0 1,812 Jun-18

Stromlo Forest Park – Enclosed Oval (Early Planning)

200 0 0 0 200 Jun-18

Stromlo Forest Park – Implementation of Bushfire Management Plan

300 0 0 0 300 Jun-18


Project 2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000


$’000

Physical Completion

Date1

Stromlo Forest Park Planning and Infrastructure

900 0 0 0 900 Jun-18

Throsby – Access road and western intersection

533 0 0 0 533 Jun-18

Throsby – Multisport Complex (Design)

185 0 0 0 185 Jun-18

Urban Renewal Program – Melrose football precinct

495 0 0 0 495 Feb-17

Urban Renewal Program – Molonglo 3 infrastructure

760 1,000 0 0 1,760 Jun-19

Working with Vulnerable People Checks

992 313 313 313 1,931 ongoing

Total 68,502 56,596 13,244 2,244 140,586 Community Services Directorate Client Management System for Child

and Youth Protection Services 2,348 0 0 0 2,348 Jun-18

Support for People with Disability – New Respite Property

1,172 0 0 0 1,172 Jun-17

Total 3,520 0 0 0 3,520 Cultural Facilities Corporation Canberra Theatre Centre Upgrade –

Stage 3 792 0 0 0 792 Jun-18

Infinity Wiring Replacement at the Canberra Theatre Centre

300 0 0 0 300 Jun-18

Total 1,092 0 0 0 1,092 Education Directorate ACT Teacher Quality Institute – Digital

Service Delivery Phase 2 139 79 0 0 218 Jun-19

Better Infrastructure Fund (Prior Year) 1,273 0 0 0 1,273 Sep-17 Better Schools – Investment in

Gungahlin school infrastructure 8,650 0 0 0 8,650 Feb-18

Better Schools – IT upgrade for school administration

4,291 2,397 0 0 6,688 Jun-19

Coombs P–6 School Construction Funding

100 0 0 0 100 completed

School Staffing Integrated Management System

280 0 0 0 280 Jun-18

Schools for the Future – Caroline Chisholm School – Centre for Innovation and Learning

3,521 0 0 0 3,521 Dec-17

Schools for the Future – Modernising Belconnen

15,825 4,272 0 0 20,097 Feb-19

Schools for the Future – North Gungahlin and Molonglo

17,000 10,198 0 0 27,198 Feb-19

Supporting our School System – Improving ICT

6,849 5,861 5,861 5,861 24,432 ongoing

Total 57,928 22,807 5,861 5,861 92,457


Project 2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000


$’000

Physical Completion

Date1

Environment, Planning and


Better Infrastructure Fund (Prior Year) 216 0 0 0 216 Jun-18 Better Public Housing – New public

housing properties 147,200 80,019 0 0 227,219 Jun-19

Caring for our Environment – Establishing the Molonglo River Reserve Stage 3

440 258 0 0 698 Jun-19

Caring for our Environment – improving species and habitat protection

959 857 257 72 2,145 Jun-21

Caring for our Environment – Tharwa fish habitat improvement

200 0 0 0 200 Jun-18

Caring for our Environment – Water Quality Improvement – Contributions to the Basin Priority Project

42,300 14,471 0 0 56,771 Jun-19

City to the Lake – New Civic pool 400 0 0 0 400 Jun-18 Digital Canberra – New digital radio

communication system 1,130 0 0 0 1,130 Dec-17

Enhancement of eDevelopment Interface

190 0 0 0 190 Jun-18

Enhancing the Protection of Endangered Species and Habitat

3,506 619 0 0 4,125 Jun-19

Environmental Offsets – Lawson South

161 197 0 0 358 Jun-19

Improving Our City – Woden bus interchange improvements

150 0 0 0 150 Jun-18

Molonglo Valley – Environmental Impact Statement for Deferred Area

200 0 0 0 200 Jun-18

Molonglo Valley – Implementation of Commitments in the NES Plan

100 0 0 0 100 Jun-18

Molonglo Valley – Implementation of Commitments in the NES Plan – Stage 2

902 0 0 0 902 Jun-18

Red Hill Nature Reserve Remediation (Finalisation and Design)

111 0 0 0 111 Jun-18

Securing Electricity Supply in the ACT – Second supply network

150 275 0 0 425 Jun-18

Support for Building Industry – eDevelopment Renovation Project

1,881 0 0 0 1,881 Jun-18

Urban Renewal Program – Better Public Housing – Allawah Court

11,300 0 0 0 11,300 Mar-18

Urban Renewal Program – Better Public Housing – Karuah

5,000 0 0 0 5,000 Mar-18

Urban Renewal Program – Better Public Housing – Red Hill housing precinct

2,300 0 0 0 2,300 Mar-18


Project 2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000


$’000

Physical Completion

Date1

Urban Renewal Program – City to the

Lake – West Basin infrastructure 7,500 0 0 0 7,500 Jun-18

Urban Renewal Program – Civic and Braddon public realm improvements

1,050 0 0 0 1,050 Jun-18

Woden Valley Stormwater Retardation Basins (Design)

230 0 0 0 230 Dec-17

Total 227,576 96,696 257 72 324,601 Health Directorate Aboriginal Torres Strait Islander

Residential Alcohol and Other Drug Rehabilitation Facility

1,700 0 0 0 1,700 completed

An E-Healthy Future 9,000 0 0 0 9,000 Jun-18 Better Health Services – Improved

Drugs and Poisons Information System

379 300 0 0 679 Jun-19

Better Health Services – Upgrading and maintaining ACT Health assets

39,091 35,328 0 0 74,419 Jun-19

Calvary Public Hospital – Operating theatre upgrade

4,827 0 0 0 4,827 Jun-18

Calvary Public Hospital – Upgrade of medical imaging equipment

2,222 0 0 0 2,222 Jun-18

Canberra Hospital – More beds 500 0 0 0 500 Jun-18 Clinical Services and Inpatient Unit

Design and Infrastructure Expansion

910 0 0 0 910 completed

Clinical Services Redevelopment – Phase 3

2,357 0 0 0 2,357 Jun-17

Critical Hospital Infrastructure Systems – Enhancing patient and staff safety

800 0 0 0 800 Jun-18

Improved Infrastructure for Acute Aged Care and Cancer Inpatients

10,000 7,310 0 0 17,310 Jun-19

Major Building Plant Replacement and Upgrade

450 0 0 0 450 Jun-18

Secure Mental Health Unit 700 0 0 0 700 completed Staging and Decanting – Moving To

Our Future 750 0 0 0 750 completed

Sterilising Services – Relocation and upgrade

550 5,203 0 0 5,753 Jun-19

Supporting Good Mental Health Directorate – Support for people with mental Health issues to recover and live in the community

2,166 24 0 0 2,190 Jun-18

The Canberra Hospital – Essential infrastructure and engineering works

1,500 0 0 0 1,500 Jul-17

The Canberra Hospital Redevelopment (Grant component)

500 0 0 0 500 Jun-18


Project 2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000


$’000

Physical Completion

Date1

University of Canberra Public Hospital 75,410 0 0 0 75,410 Mar-18 University of Canberra Public Hospital

Car Park 10,200 0 0 0 10,200 Mar-18

Total 164,012 48,165 0 0 212,177 Housing ACT Community and Social Housing &

National Affordable Housing Agreement Funding

5,000 5,000 5,000 5,000 20,000 ongoing

Total 5,000 5,000 5,000 5,000 20,000 Justice and Community Safety

Directorate

ACT Corrective Services – Information management

3,467 0 0 0 3,467 Jun-18

ACT Corrective Services – Information management solution

2,226 0 0 0 2,226 Jun-18

ACT Legislation Register Replacement 1,400 474 0 0 1,874 Jun-19 Alexander Maconochie Centre

Detainee Industries and Activities Enhancement Project

400 0 0 0 400 Dec-16

City Station Early Planning 400 0 0 0 400 completed Courts Public Private Partnership

(PPP) – (Formerly called ACT Court Facilities Early Works Package)

5,381 181 0 0 5,562 Nov-18

Digital Canberra – New digital radio communication system

2,333 0 0 0 2,333 Jun-18

ESA – Station Relocation and Upgrade – Phase 2 Due Diligence

384 0 0 0 384 Jun-18

ESA – Urban Search and Rescue and Chemical, Biological, Radiological and Nuclear Equipment Replacement

222 111 111 111 555 ongoing

ESA Vehicle Replacement Program 2,297 2,011 2,011 2011 8,330 ongoing New ACT Court Facilities 720 0 0 0 720 Jun-18 Reforming Emergency Services –

Fyshwick Fire and Rescue Station upgrade

452 0 0 0 452 Jul-17

Reforming Emergency Services – More ambulance services

80 0 0 0 80 Jul-17

SES station for Tuggeranong 2,756 0 0 0 2,756 Dec-17

Replacement of the Courts and Tribunal ICT Case Management System

4,443 0 0 0 4,443 Jun-18

Guises Creek Rural Fire Station upgrade

100 0 0 0 100 Oct-17

Strengthening Emergency Services – Territory Radio Network upgrade – Phase 2 and 3

11,342 0 0 0 11,342 Jun-18

Total 38,403 2,777 2,122 2,122 45,424


Project 2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000


$’000

Physical Completion

Date1

Office of the Legislative Assembly Library 5 5 5 5 20 ongoing

Total 5 5 5 5 20 Transport Canberra and City Services

Directorate

Better Infrastructure Fund (Prior Year) 140 0 0 0 140 Jun-17 Better Public Transport – Active travel

for schools and shopping centres 1,000 0 0 0 1,000 Dec-18

Better Public Transport – Integrated bus and light rail ticketing – One Ticket, One Fare, One Network

2,500 0 0 0 2,500 Jun-18

Better Public Transport – Trial of electric buses

600 0 0 0 600 Jun-18

Better Public Transport for Tuggeranong – Park and ride facility for Wanniassa

1,000 0 0 0 1,000 Jun-18

Better Road for Tuggeranong – Ashley Drive duplication – Stage 2

11,762 0 0 0 11,762 Jun-18

Better Roads for Belconnen – Aikman Drive duplication

5,500 0 0 0 5,500 Jun-18

Better Roads for Canberra – Stronger bridges to transport freight

2,800 1,800 0 0 4,600 Jun-19

Better Roads for Gungahlin – Gundaroo Drive duplication – Stage 1

12,000 0 0 0 12,000 Jun-17

Better Roads for Gungahlin – Horse Park Drive duplication (Mulligans Flat Road to the Federal Highway)

25,000 28,000 0 0 53,000 Jun-19

Better Roads for Tuggeranong – Ashley Drive duplication (Ellerston Avenue to Johnson Drive)

3,000 0 0 0 3,000 Jun-18

Better Roads for Weston Creek – Cotter Road duplication (Tuggeranong Parkway to Yarralumla Creek)

11,450 9,000 0 0 20,450 Dec-18

Better Services – Improved asset management

1,000 500 205 0 1,705 Dec-19

Better Services – Improving libraries – self service check out and improved access

1,900 200 0 0 2,100 Dec-18

City to the Lake Arterial Roads Concept Design

1,336 0 0 0 1,336 Jun-17

Civic to Gungahlin Corridor Improvements

2,500 0 0 0 2,500 Jun-17

Enhancement of library collections 2,063 2,063 2,063 2,063 8,252 ongoing Expansion of the rapid bus network 21,870 21,930 0 0 43,800 Jun-19 Improving Our Suburbs – Green bins

pilot program 227 0 0 0 227 Jun-18

Light Rail – Stage 1 – Procurement and delivery

17,211 9,884 0 0 27,095 Jun-19


Project 2017-18 $’000

2018-19 $’000

2019-20 $’000

2020-21 $’000


$’000

Physical Completion

Date1

Lyneham Sports Precinct Redevelopment – Stage 3

490 0 0 0 490 Jun-18

Narrabundah Ball Park – Stage 2 – Design

200 0 0 0 200 Aug-17

Narrabundah Ballpark Upgrade – Best little ballpark in Australia

3,500 1,000 0 0 4,500 Jun-19

Roads to Recovery Program (Federal Funding)

7,266 1,286 6,375 6,375 21,302 Jun-21

Transport for Canberra – Business system upgrade

1,200 0 0 0 1,200 Jun-18

Transport for Canberra – Real Time Passenger Information System

2,274 0 0 0 2,274 Jun-18

Urban Renewal Program – Erindale Group Centre – Gartside Street (south) – Stage 1

250 0 0 0 250 Jun-17

Urban Renewal Program – Phillip Oval upgrade

4,100 0 0 0 4,100 Jun-18

Urban Renewal Program – Phillip trade service area parking management

150 0 0 0 150 Jan-18

Urban Renewal Program – Weston Group Centre – Brierly Street and Trenerry Square upgrades

300 0 0 0 300 Sep-17

West Belconnen Resource Management Centre Rehabilitation of Landfill Cells

200 0 0 0 200 Jun-18

Total 144,789 75,663 8,643 8,438 237,533 Total 2017-18 Capital

Works-in-Progress 712,977 308,966 36,389 24,999 1,083,331

Note: 1. Projects that are physically completed retain funding while in the defects liability period of the project.

2017-18 Budget Paper No.3 365 Consolidated financial statements – Public Trading Enterprises

APPENDIX F

CONSOLIDATED FINANCIAL STATEMENTS – PUBLIC TRADING ENTERPRISES



APPENDIX F: CONSOLIDATED FINANCIAL STATEMENTS – PUBLIC TRADING ENTERPRISES

Table F.1 Australian Capital Territory Public Trading Enterprises

Operating Statement


$’000 $’000 $’000 % $’000 $’000 $’000

Revenue

172,362 Controlled Recurrent Payments 174,960 187,486 7 191,857 197,297 204,322 Grants Revenue

767 Commonwealth Grants 1,464 1,464 - 767 767 767 13,585 Gains from Contributed Assets 11,485 18,612 62 18,237 18,586 18,756

Sales of Goods and Services Revenue

73,163 Revenue from Associates and Joint Ventures

78,824 77,943 -1 95,172 90,448 95,761

436,829 Other Sales of Goods and Services

412,678 426,774 3 439,124 452,567 466,637

8,160 Interest Income 9,512 8,380 -12 7,861 6,328 5,639 Other Revenue

489,800 Land Revenue (Value Add Component)

449,223 436,522 -3 438,886 471,547 476,936

9,333 Other Revenue 15,307 13,228 -14 10,092 9,625 9,821 1,203,999 Total Revenue 1,153,453 1,170,409 1 1,201,996 1,247,165 1,278,639

Expenses

190,061 Employee Expenses 174,521 178,258 2 183,550 185,278 195,102 23,898 Other Superannuation Expenses 23,655 25,226 7 25,776 25,774 26,785 92,919 Depreciation and Amortisation 93,134 115,244 24 94,881 85,752 88,451 78,744 Interest Expense 74,392 78,775 6 76,420 77,452 78,346

125,551 Other Property Expenses (Income Tax Expense)

140,343 137,001 -2 114,287 112,398 114,115


225,681 Supplies and Services 204,664 235,604 15 235,701 234,124 237,163 101,182 Other Operating Expenses 46,232 163,780 254 126,207 234,691 208,091 130,359 Grants and Purchased Services 113,385 58,283 -49 81,274 71,950 121,055 968,395 Total Expenses 870,326 992,171 14 938,096 1,027,419 1,069,108

235,604 UPF Net Operating Balance 283,127 178,238 -37 263,900 219,746 209,531


Table F.1 (cont.) Australian Capital Territory Public Trading Enterprises

Operating Statement


$’000 $’000 $’000 % $’000 $’000 $’000

Other Economic Flows – Included in the Operating Result

88,591 Land Revenue (Market Gains on Land Sales)

70,564 123,936 76 106,585 16,881 49,363

-78,924 Net Gain/(Loss) on Sale/(Disposal) of Non Financial Assets

-84,906 -49,405 -42 -152,679 -11,390 -31,273

312 Net Gain/(Loss) on Financial Assets or Liabilities at Fair Value

312 312 - 312 312 312

-2,612 Doubtful Debts -2,618 -2,464 -6 -2,469 -2,483 -2,494 242,971 Operating Result 266,479 250,617 -6 215,649 223,066 225,439

Other Economic Flows – Other Comprehensive Income



115,860 150,933 30 55,088 134,758 142,635

351,324 Total Comprehensive Income 382,339 401,550 5 270,737 357,824 368,074

235,604 UPF Net Operating Balance 283,127 178,238 -37 263,900 219,746 209,531 less Net Acquisition of


172,070 Payments for Non-Financial Assets 182,149 219,181 20 183,667 151,399 130,227 -33,551 Sales of Non-Financial Assets -86,278 -37,600 -56 -38,625 -39,650 -40,675 -90,172 Land Revenue (Net Cash Receipts) -65,928 -134,053 103 -89,966 -8,588 -49,363 -92,919 Depreciation and Amortisation -93,134 -115,244 24 -94,881 -85,752 -88,451 -99,476 Other Movements in Non-Financial

Assets -82,993 -27,547 -67 -50,108 -40,052 -88,552

-144,048 Total Net Acquisition of Non-Financial Assets

-146,184 -95,263 -35 -89,913 -22,643 -136,814

379,652 Net Lending /(Borrowing) 429,311 273,501 -36 353,813 242,389 346,345

235,604 UPF Net Operating Balance 283,127 178,238 -37 263,900 219,746 209,531

235,604 HEADLINE NET OPERATING BALANCE

283,127 178,238 -37 263,900 219,746 209,531



Balance Sheet


$’000 $’000 $’000 % $’000 $’000 $’000 Financial Assets

239,114 Cash and Deposits 287,795 263,396 -8 187,591 101,106 114,193 31,185 Investments and Loans 30,000 30,000 - 30,000 30,000 30,000

143,225 Receivables 149,169 149,097 .. 151,288 149,127 149,699 969,207 Equity – Investments Accounted

for Using the Equity Method 997,694 1,047,579 5 1,045,840 1,054,725 1,078,007

1,382,731 Total Financial Assets 1,464,658 1,490,072 2 1,414,719 1,334,958 1,371,899 Non-Financial Assets

Produced Assets


3,615,702 3,734,032 3 3,817,464 3,871,820 3,918,082

10,111 Investment Properties 9,615 10,596 10 11,577 12,558 13,539 23,297 Intangibles 2,251 2,099 -7 1,972 1,972 1,972

383,712 Inventories 298,433 334,486 12 458,390 491,918 362,014 3,180 Assets Held for Sale 63,332 38,174 -40 3,016 3,285 3,554

178,021 Capital Works-in-Progress 167,145 177,790 6 194,425 214,350 216,544 Non-Produced Assets


3,567,318 3,802,676 7 3,882,382 3,983,127 4,090,451

Other Non-Financial Assets

28,167 Deferred Tax Assets 28,463 28,463 - 28,463 28,463 28,463 7,789,573 Total Non-Financial Assets 7,752,259 8,128,316 5 8,397,689 8,607,493 8,634,619 9,172,304 Total Assets 9,216,917 9,618,388 4 9,812,408 9,942,451 10,006,518

Liabilities

1,712,335 Advances Received 1,650,512 1,739,412 5 1,790,855 1,839,468 1,888,543 57,998 Employee Benefits 60,526 59,569 -2 60,316 61,782 62,937

533,165 Other Provisions 188,114 182,882 -3 188,586 190,296 192,079 59,362 Payables 169,571 144,736 -15 265,090 103,083 95,372

Other Liabilities

80,232 Current Tax Liability 35,336 34,225 -3 29,447 29,932 25,895 37,848 Deferred Tax Liability 428,561 428,561 - 428,561 428,561 428,561

248,209 Other Liabilities 165,123 256,671 55 193,331 308,154 215,650 2,729,149 Total Liabilities 2,697,743 2,846,056 5 2,956,186 2,961,276 2,909,037



Balance Sheet


$’000 $’000 $’000 % $’000 $’000 $’000

6,443,155 Net Assets 6,519,174 6,772,332 4 6,856,222 6,981,175 7,097,481 2,519,577 Accumulated Funds 2,485,849 2,571,029 3 2,492,578 2,504,773 2,500,444 3,913,738 Asset Revaluation Surplus 4,023,505 4,191,483 4 4,353,824 4,466,582 4,587,217

9,840 Other Reserves 9,820 9,820 - 9,820 9,820 9,820 6,443,155 Net Worth 6,519,174 6,772,332 4 6,856,222 6,981,175 7,097,481

-1,346,418 Net Financial Worth -1,233,085 -1,355,984 10 -1,541,467 -1,626,318 -1,537,138 1,442,036 Net Debt 1,332,717 1,446,016 9 1,573,264 1,708,362 1,744,350



Statement of Changes in Equity


$’000 $’000 $’000 % $’000 $’000 $’000 Opening Equity

2,416,190 Opening Accumulated Funds 2,430,210 2,485,849 2 2,571,029 2,492,578 2,504,773 3,769,474 Opening Asset Revaluation Surplus 3,871,734 4,023,505 4 4,191,483 4,353,824 4,466,582

9,840 Opening Other Reserves 9,820 9,820 - 9,820 9,820 9,820 6,195,504 Opening Balance 6,311,764 6,519,174 3 6,772,332 6,856,222 6,981,175



242,971 Operating Result for the Period 266,479 250,617 -6 215,649 223,066 225,439 Included in Asset Revaluation

Surplus:


115,860 150,933 30 55,088 134,758 142,635

351,324 Total Comprehensive Income 382,339 401,550 5 270,737 357,824 368,074

Other

-35,911 Transfer to/(from) Accumulated Funds

-35,911 -17,045 -53 -107,253 22,000 22,000

35,911 Movement in the Asset Revaluation Surplus

35,911 17,045 -53 107,253 -22,000 -22,000


Transactions Involving Owners Affecting Accumulated Funds


21,855 Capital Injections 25,867 36,370 41 41,930 19,888 5,000 -78,367 Capital Distributions -83,671 -39,549 -53 -136,995 - - 236,400 Increase/(Decrease) in Net Assets

Received from the GGS 197,934 164,956 -17 165,389 - -

-283,561 Dividends Approved -315,059 -310,169 -2 -257,171 -252,759 -256,768 -103,673 Total Transactions Involving

Owners Affecting Accumulated Funds

-174,929 -148,392 -15 -186,847 -232,871 -251,768

Closing Equity

2,519,577 Closing Accumulated Funds 2,485,849 2,571,029 3 2,492,578 2,504,773 2,500,444 3,913,738 Closing Asset Revaluation Surplus 4,023,505 4,191,483 4 4,353,824 4,466,582 4,587,217

9,840 Closing Other Reserves 9,820 9,820 - 9,820 9,820 9,820 6,443,155 Balance at the End of the

Reporting Period 6,519,174 6,772,332 4 6,856,222 6,981,175 7,097,481



Cash Flow Statement



Activities

Cash Receipts

1,061,496 Receipts from Sales of Goods and Services

984,969 1,022,668 4 998,063 981,797 1,050,277

172,231 Grants/Subsidies Received 171,476 183,878 7 187,425 192,735 199,760 7,520 Interest Receipts 9,457 6,282 -34 5,930 5,789 5,632

142,790 Other Receipts 102,852 108,211 5 138,494 111,723 109,278 1,384,037 Total Cash Received from

Operating Activities 1,268,754 1,321,039 4 1,329,912 1,292,044 1,364,947

Cash Payments

-206,342 Payments for Employees -189,957 -203,464 7 -209,420 -210,125 -221,362 -250,219 Payments for Goods and Services -244,232 -251,377 3 -235,237 -248,182 -248,442

-24,949 Grants/Subsidies Paid -24,917 -23,008 -8 -23,328 -23,855 -24,436 -84,954 Interest Paid -79,180 -85,441 8 -82,229 -83,895 -83,010

-382,689 Other Payments -237,989 -279,627 17 -392,812 -383,848 -266,661 -949,153 Total Cash Paid from Operating

Activities -776,275 -842,917 9 -943,026 -949,905 -843,911


492,479 478,122 -3 386,886 342,139 521,036



33,551 Sales of Non-Financial Assets 86,278 37,600 -56 38,625 39,650 40,675 -172,070 Payments for Non-Financial Assets -182,149 -219,181 20 -183,667 -151,399 -130,227 -138,519 Net Cash Flows from Investments



Cash Receipts

21,855 Capital Receipts from Government Agencies

25,867 36,370 41 41,930 19,888 5,000

21,855 Total Cash Received from Investment in Financial Assets for Policy Purposes

25,867 36,370 41 41,930 19,888 5,000



Cash Flow Statement


$’000 $’000 $’000 % $’000 $’000 $’000 Cash Payments

-145,716 Dividends – Market Gains on Land Sales

-49,395 -86,755 76 -74,609 -11,817 -34,554

- Distributions to Government -58,359 -66,252 14 - -152,168 - -145,716 Total Cash Paid from Investment in

Financial Assets for Policy Purposes

-107,754 -153,007 42 -74,609 -163,985 -34,554

-123,861 Net Cash Flows from Investments in Financial Assets for Policy Purposes

-81,887 -116,637 42 -32,679 -144,097 -29,554


302,106 Sales of Investments 491 12,867 # 34,447 15,602 1,487 -349,516 Payments for Investments -22,583 -34,212 51 -7,605 - -

-47,410 Net Cash Flows from Investments in Financial Assets for Liquidity Purposes

-22,092 -21,345 -3 26,842 15,602 1,487


-199,850 -319,563 60 -150,879 -240,244 -117,619


Cash Receipts

123,300 Borrowings 68,300 409,300 499 74,300 289,300 45,800 123,300 Total Cash Received from

Financing Activities 68,300 409,300 499 74,300 289,300 45,800

Cash Payments

-75,380 Borrowings -24,135 -320,962 # -23,314 -240,981 -5,043 -184,516 Dividends Paid -229,659 -133,184 -42 -243,733 -124,788 -312,935 -125,829 Other Financing -192,754 -138,112 -28 -119,065 -111,911 -118,152 -385,725 Total Cash Paid from Financing

Activities -446,548 -592,258 33 -386,112 -477,680 -436,130

-262,425 Net Cash Flows from Financing Activities

-378,248 -182,958 -52 -311,812 -188,380 -390,330


-85,619 -24,399 -72 -75,805 -86,485 13,087

406,129 Cash and Cash Equivalents at the Beginning of Reporting Period

403,414 317,795 -21 293,396 217,591 131,106


317,795 293,396 -8 217,591 131,106 144,193



Cash Flow Statement


$’000 $’000 $’000 % $’000 $’000 $’000 Key Fiscal Aggregates

434,884 Net Cash from Operating Activities 492,479 478,122 -3 386,886 342,139 521,036 -138,519 Net Cash Flows from Investments


-310,345 Distributions Paid -422,413 -271,296 -36 -362,798 -236,699 -431,087 -13,980 Cash Surplus (+)/Deficit (-) -25,805 25,245 -198 -120,954 -6,309 397



-13,980 Cash Surplus (+)/Deficit (-) -25,805 25,245 -198 -120,954 -6,309 397 - Acquisitions Under Finance Leases

and Similar Arrangements(a) - - - - - -

-1

-13,980 ABS GFS Cash Surplus (+)/Deficit (-) Including Finance and Similar Arrangements

-25,805 25,245 -198 -120,954 -6,309 397


2017-18 Budget Paper No.3 375 Consolidated financial statements – Total Territory

APPENDIX G

CONSOLIDATED FINANCIAL STATEMENTS – TOTAL TERRITORY



APPENDIX G: CONSOLIDATED FINANCIAL STATEMENTS – TOTAL TERRITORY

Table G.1 Australian Capital Territory Consolidated Total Territory

Operating Statement


$’000 $’000 $’000 % $’000 $’000 $’000 Revenue

1,594,720 Taxation Revenue 1,639,170 1,712,302 4 1,844,940 1,946,192 2,054,030 Grants Revenue

2,088,018 Commonwealth Grants 2,052,432 2,177,949 6 2,230,789 2,280,967 2,366,426 63,981 Gains from Contributed Assets 86,413 130,951 52 185,879 223,558 214,671

Sales of Goods and Services

73,163 Revenue from Associates and Joint Ventures

78,824 77,943 -1 95,172 90,448 95,761

840,832 Other Sales of Goods and Services

823,144 863,560 5 885,645 908,180 932,860

44,099 Interest Income 58,488 48,305 -17 41,691 43,139 41,639 36,391 Distributions from Financial

Investments 34,738 36,851 6 45,265 48,089 51,568

50,990 Dividend Income 51,043 52,255 2 51,333 54,536 58,481 Other Revenue

456,725 Land Revenue (Value Add Component)

436,826 388,522 -11 388,886 417,547 392,936

135,456 Other Revenue 151,494 160,161 6 142,687 140,718 145,530 5,384,375 Total Revenue 5,412,572 5,648,799 4 5,912,287 6,153,374 6,353,902

Expenses

2,082,086 Employee Expenses 2,074,292 2,141,456 3 2,166,989 2,203,072 2,246,230 Superannuation Expenses

315,534 Superannuation Interest Cost 293,498 367,684 25 381,208 394,123 406,389 426,099 Other Superannuation Expenses 461,385 296,091 -36 291,083 286,115 285,535 465,599 Depreciation and Amortisation 461,294 494,846 7 509,061 520,544 518,953 185,918 Interest Expense 182,404 194,304 7 209,733 229,544 229,022


1,225,846 Supplies and Services 1,133,275 1,270,903 12 1,276,746 1,331,411 1,441,934 187,123 Other Operating Expenses 130,353 270,571 108 235,842 347,432 323,911 866,927 Grants and Purchased Services 926,497 943,650 2 962,518 1,062,218 1,116,027

5,755,132 Total Expenses 5,662,998 5,979,505 6 6,033,180 6,374,459 6,568,001

-370,757 UPF Net Operating Balance -250,426 -330,706 32 -120,893 -221,085 -214,099


Table G.1 (cont.) Australian Capital Territory Consolidated Total Territory

Operating Statement


$’000 $’000 $’000 % $’000 $’000 $’000

Other Economic Flows – Included in the Operating Result

88,591 Land Revenue (Market Gains on Land Sales)

70,564 123,936 76 106,585 16,881 49,363

94,092 Net Land Revenue (Undeveloped Land Value)

112,559 68,695 -39 59,548 40,281 35,246

-80,437 Net Gain/(Loss) on Sale/(Disposal) of Non-Financial Assets

-57,325 -51,934 -9 -156,148 -15,829 -36,731

163,878 Net Gain/(Loss) on Financial Assets or Liabilities at Fair Value

226,242 171,834 -24 180,581 192,896 206,826

-9,499 Doubtful Debts -9,498 -9,482 .. -9,608 -9,742 -9,894

-114,132 Operating Result 92,116 -27,657 -130 60,065 3,402 30,711

Other Economic Flows – Other Comprehensive Income


11,300 Capital Distributions - 11,300 100 - - - 3,815,947 Superannuation Actuarial

Gain/(Loss) 4,959,486 - -100 - - -

- Prior Year Adjustment 2,154 46 -98 178 169 169 889 Other Movements -1,202 -521 -57 2,010 -3,142 -4,120


187,587 272,729 45 44,549 98,898 115,690


-370,757 UPF Net Operating Balance -250,426 -330,706 32 -120,893 -221,085 -214,099 less Net Acquisition of


1,057,457 Payments for Non-Financial Assets 1,005,843 1,071,191 6 828,063 754,593 654,888 -333,444 Sales of Non-Financial Assets -400,558 -367,692 -8 -235,141 -158,134 -192,512 -125,559 Land Revenue (Net Cash Receipts) -100,957 -149,859 48 -124,671 -49,136 -100,738 -465,599 Depreciation and Amortisation -461,294 -494,846 7 -509,061 -520,544 -518,953

55,934 Other Movements in Non-Financial Assets

33,726 95,471 183 113,296 95,490 49,055

188,789 Total Net Acquisition of Non-Financial Assets

76,760 154,265 101 72,486 122,269 -108,260

-559,546 Net Lending / (Borrowing) -327,186 -484,971 48 -193,379 -343,354 -105,839



Operating Statement


$’000 $’000 $’000 % $’000 $’000 $’000

-370,757 UPF Net Operating Balance -250,426 -330,706 32 -120,893 -221,085 -214,099 163,566 Superannuation Return Adjustment 170,812 171,522 .. 180,269 192,584 206,514

-207,191 HEADLINE NET OPERATING BALANCE

-79,614 -159,184 100 59,376 -28,501 -7,585



Balance Sheet

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est.


$’000 $’000 $’000 % $’000 $’000 $’000 Financial Assets

565,926 Cash and Deposits 579,654 571,568 -1 502,300 423,703 443,834 67,541 Advances Paid 69,377 66,877 -4 64,377 61,877 59,377

4,226,591 Investments and Loans 4,639,266 4,563,337 -2 4,792,607 5,144,116 5,478,699 738,553 Receivables 606,608 477,197 -21 423,166 317,192 181,256 969,207 Equity – Investments Accounted

for Using the Equity Method 997,694 1,047,579 5 1,045,840 1,054,725 1,078,007

6,567,818 Total Financial Assets 6,892,599 6,726,558 -2 6,828,290 7,001,613 7,241,173


Produced Assets

15,335,844 Property, Plant and Equipment 15,378,946 16,049,760 4 17,108,512 17,529,708 17,770,912 12,711 Investment Properties 15,025 16,006 7 16,987 17,968 18,949

122,295 Intangibles 119,072 226,606 90 301,321 343,895 340,351 399,446 Inventories 321,555 358,255 11 482,349 516,067 386,353

3,230 Assets Held for Sale 189,447 119,289 -37 10,775 24,489 3,555 1,151,188 Capital Works-in-Progress 1,027,368 873,466 -15 761,025 584,030 556,406

Non-Produced Assets

6,602,336 Property, Plant and Equipment 6,452,734 6,768,504 5 6,857,650 6,962,662 7,081,252 262,332 Loose-fill Asbestos Insulation

Eradication Scheme Land 148,914 3,778 -97 1,372 - -

26,514 Biological Assets 26,514 26,514 - 26,514 26,514 26,514 2 Other Non-Financial Assets - - - - - -

23,915,898 Total Non-Financial Assets 23,679,575 24,442,178 3 25,566,505 26,005,333 26,184,292 30,483,716 Total Assets 30,572,174 31,168,736 2 32,394,795 33,006,946 33,425,465

Liabilities

15,694 Deposits Held - - - - - - 1,134,617 Advances Received 1,134,617 1,075,931 -5 1,017,155 958,325 849,434

Borrowings

3,292 Finance Leases 3,465 110,964 # 490,213 478,024 463,058 3,606,518 Other Borrowings 3,539,733 3,584,532 1 4,093,063 4,393,824 4,550,068 6,253,642 Superannuation 6,130,227 6,369,631 4 6,599,353 6,817,718 7,024,928

691,445 Employee Benefits 710,369 738,082 4 766,466 795,617 826,596 844,740 Other Provisions 399,333 349,586 -12 369,046 383,867 360,436 477,614 Payables 513,546 543,991 6 557,509 579,091 608,964

4,655 Other Liabilities 19,099 18,337 -4 17,506 16,669 15,720 13,032,217 Total Liabilities 12,450,389 12,791,054 3 13,910,311 14,423,135 14,699,204



Balance Sheet


$’000 $’000 $’000 % $’000 $’000 $’000 17,451,499 Net Assets 18,121,785 18,377,682 1 18,484,484 18,583,811 18,726,261

7,779,499 Accumulated Funds 8,113,670 8,079,793 .. 8,034,793 8,057,222 8,105,982 9,661,660 Asset Revaluation Surplus 9,997,495 10,287,269 3 10,439,071 10,515,969 10,609,659

10,340 Other Reserves 10,620 10,620 - 10,620 10,620 10,620

17,451,499 Net Worth 18,121,785 18,377,682 1 18,484,484 18,583,811 18,726,261

-6,464,399 Net Financial Worth -5,557,790 -6,064,496 9 -7,082,021 -7,421,522 -7,458,031 7,433,606 Net Financial Liabilities 6,555,484 7,112,075 8 8,127,861 8,476,247 8,536,038

-99,937 Net Debt (including Superannuation Related Investments)

-610,482 -430,355 -30 241,147 200,477 -119,350

3,522,214 Net Debt (excluding Superannuation Related Investments)

3,079,234 3,447,174 12 4,320,189 4,574,522 4,571,298



Statement of Changes in Equity

2016-17 2016-17 2017-18 2018-19 2019-20 2020-21 Budget Est.


$’000 $’000 $’000 % $’000 $’000 $’000 Opening Equity

4,101,406 Opening Accumulated Funds 3,097,027 8,113,670 162 8,079,793 8,034,793 8,057,222 9,467,873 Opening Asset Revaluation

Surplus 9,773,997 9,997,495 2 10,287,269 10,439,071 10,515,969

10,340 Opening Other Reserves 10,620 10,620 - 10,620 10,620 10,620 13,579,619 Opening Balance 12,881,644 18,121,785 41 18,377,682 18,484,484 18,583,811



-114,132 Operating Result for the Period 92,116 -27,657 -130 60,065 3,402 30,711 11,300 Capital Distributions - 11,300 100 - - -

3,815,947 Superannuation Actuarial Gain/(Loss)

4,959,486 - -100 - - -

- Prior Year Adjustment 2,154 46 -98 178 169 169 889 Other Movements -1,202 -521 -57 2,010 -3,142 -4,120

Included in Asset Revaluation Surplus:

157,876 Increase/(Decrease) in Asset Revaluation Surplus

187,587 272,729 45 44,549 98,898 115,690


Other

-35,911 Transfer to/(from) Accumulated Funds

-35,911 -17,045 -53 -107,253 22,000 22,000

35,911 Movement in the Asset Revaluation Surplus

35,911 17,045 -53 107,253 -22,000 -22,000


Closing Equity

7,779,499 Closing Accumulated Funds 8,113,670 8,079,793 .. 8,034,793 8,057,222 8,105,982 9,661,660 Closing Asset Revaluation Surplus 9,997,495 10,287,269 3 10,439,071 10,515,969 10,609,659

10,340 Closing Other Reserves 10,620 10,620 - 10,620 10,620 10,620 17,451,499 Balance at the End of the

Reporting Period 18,121,785 18,377,682 1 18,484,484 18,583,811 18,726,261



Cash Flow Statement



Activities

Cash Receipts

1,601,274 Taxes Received 1,645,725 1,720,026 5 1,851,038 1,953,279 2,061,112 1,378,932 Receipts from Sales of Goods and

Services 1,340,522 1,389,352 4 1,398,036 1,371,133 1,420,557

2,096,517 Grants/Subsidies Received 2,060,652 2,213,491 7 2,234,126 2,284,943 2,373,372 42,879 Interest Receipts 61,428 45,490 -26 38,526 41,028 39,720 36,391 Distributions from Financial

Investments 34,738 36,851 6 45,265 48,089 51,568

51,699 Dividends 51,847 53,023 2 52,089 55,339 59,342 502,880 Other Receipts 470,763 501,024 6 509,344 487,309 466,499

5,710,572 Total Cash Received from Operating Activities

5,665,675 5,959,257 5 6,128,424 6,241,120 6,472,170

Cash Payments

-2,437,075 Payments for Employees -2,430,508 -2,553,984 5 -2,598,020 -2,652,586 -2,718,843 -1,111,962 Payments for Goods and Services -1,109,601 -1,234,874 11 -1,222,386 -1,290,726 -1,407,317

-873,743 Grants/Subsidies Paid -842,959 -867,298 3 -846,979 -898,602 -913,933 -192,669 Interest Paid -186,606 -200,413 7 -212,733 -234,163 -231,387 -750,324 Other Payments -664,928 -633,119 -5 -779,187 -748,061 -630,960

-5,365,773 Total Cash Paid from Operating Activities

-5,234,602 -5,489,688 5 -5,659,305 -5,824,138 -5,902,440


431,073 469,569 9 469,119 416,982 569,730



333,444 Sales of Non-Financial Assets 400,558 367,692 -8 235,141 158,134 192,512 -1,057,457 Payments for Non-Financial

Assets -1,005,843 -1,071,191 6 -828,063 -754,593 -654,888

-724,013 Net Cash Flows from Investments in Non-Financial Assets

-605,285 -703,499 16 -592,922 -596,459 -462,376


Cash Receipts

308 Repayment of Loans 291 2,727 # 2,677 2,677 2,677 11,300 Capital Distributions - 11,300 100 - - - 11,608 Total Cash Received from

Investment in Financial Assets for Policy Purposes

291 14,027 # 2,677 2,677 2,677



Cash Flow Statement


$’000 $’000 $’000 % $’000 $’000 $’000 Cash Payments

-62 Issue of Loans - - - - - - -62 Total Cash Paid from Investment

in Financial Assets for Policy Purposes

- - - - - -

11,546 Net Cash Flows from Investments in Financial Assets for Policy Purposes

291 14,027 # 2,677 2,677 2,677


891,915 Sales of Investments 18,917 573,533 # 47,176 33,376 19,598 -719,447 Payments for Investments -287,603 -346,092 20 -67,387 -174,506 -143,733 172,468 Net Cash Flows from

Investments in Financial Assets for Liquidity Purposes

-268,686 227,441 -185 -20,211 -141,130 -124,135


-873,680 -462,031 -47 -610,456 -734,912 -583,834


Cash Receipts

110,308 Borrowings 49,992 45,100 -10 508,831 301,062 156,544 110,308 Total Cash Received from

Financing Activities 49,992 45,100 -10 508,831 301,062 156,544

Cash Payments

-66,086 Borrowings -9,821 -60,724 # -436,762 -61,729 -122,309 -66,086 Total Cash Paid from Financing

Activities -9,821 -60,724 # -436,762 -61,729 -122,309

44,222 Net Cash Flows from Financing Activities

40,171 -15,624 # 72,069 239,333 34,235


-402,436 -8,086 -98 -69,268 -78,597 20,131

776,609 Cash and Cash Equivalents at the Beginning of Reporting Period

1,025,493 623,057 -39 614,971 545,703 467,106


623,057 614,971 -1 545,703 467,106 487,237



Cash Flow Statement


$’000 $’000 $’000 % $’000 $’000 $’000 Key Fiscal Aggregates

344,799 Net Cash from Operating Activities

431,073 469,569 9 469,119 416,982 569,730

-724,013 Investments in Non-Financial Assets

-605,285 -703,499 16 -592,922 -596,459 -462,376

-379,214 Cash Surplus (+)/Deficit (-) -174,212 -233,930 34 -123,803 -179,477 107,354



-379,214 Cash Surplus (+)/Deficit (-) -174,212 -233,930 34 -123,803 -179,477 107,354 -99 Acquisitions Under Finance

Leases and Similar Arrangements(a)

-99 -871 # -376,950 -2,197 -4,349

-379,313 ABS GFS Cash Surplus (+)/ Deficit (-) including Finance and Similar Arrangements

-174,311 -234,801 35 -500,753 -181,674 103,005



2017-18 Budget Paper No.3 387 General Government Sector – Key aggregates history

APPENDIX H

GENERAL GOVERNMENT SECTOR – KEY AGGREGATES HISTORY



APPENDIX H: GENERAL GOVERNMENT SECTOR – KEY AGGREGATES HISTORY

Year Headline Net Operating

Balance $m

Net Debt1

$m

Net Financial Liabilities

$m

Net Worth

$m 2006-07 89.0 -555.9 N/A 11,181.6 2007-082 298.1 -933.3 512.1 13,305.2 2008-09 -26.5 -992.3 1,739.4 14,486.5 2009-10 147.9 -941.8 2,246.3 15,414.2 2010-11 22.9 -735.9 2,526.1 15,875.6 2011-12 43.8 -473.2 5,472.0 13,792.5 2012-13 -273.8 109.8 4,840.7 15,198.8 2013-14 -187.8 312.7 5,559.0 14,879.9 2014-15 -479.3 909.6 7,002.7 14,284.9 2015-16 -173.7 1,646.5 9,665.9 12,408.5 2016-173 -73.9 1,746.5 4,768.7 17,701.0 2017-183 -83.4 2,001.1 5,107.1 18,002.3 2018-193 9.8 2,746.9 5,879.6 18,168.7 2019-203 27.9 2,866.1 6,057.4 18,344.8 2020-213 63.3 2,826.9 6,092.3 18,578.1

Notes: 1. Net Debt excludes superannuation related investments. 2. The ACT did not measure Net Financial Liabilities until 2008-09. The amount for 2007-08 reflects the amount

presented in the 2008-09 Loan Council Allocation Outcome Report for comparative purposes. 3. Reflects current estimates in the 2017-18 Budget.


2017-18 Budget Paper No.3 391 Loose-fill Asbestos Insulation Eradication Scheme

APPENDIX I

LOOSE-FILL ASBESTOS INSULATION ERADICATION SCHEME



APPENDIX I: LOOSE-FILL ASBESTOS INSULATON ERADICATION SCHEME

On 28 October 2014, the Government announced a voluntary buyback and demolition program for all ACT houses affected by loose-fill asbestos insulation.

The legacy of loose-fill asbestos insulation has directly affected 1,023 homeowners and their families across 56 suburbs. Tens of thousands of neighbours and residents of these suburbs have been indirectly affected.

The decision to eradicate loose-fill asbestos from dwellings in the ACT recognises the significant health, social, practical and financial impacts it has had on owners of affected houses and the wider community. The ACT Asbestos Response Taskforce (the Taskforce) advised the Government in August 2014 that demolition of all affected properties was the only enduring solution to resolve the problem for good.

Under the Loose-fill Asbestos Insulation Eradication Scheme (the Asbestos Eradication Scheme), the Government has offered to acquire and demolish all affected houses. Remediated blocks are being resold to defray some of the overall financial impact on the budget. Remediated blocks are being offered to their former owner (the First Right Holder) in the first instance, and then to the wider public through auctions.

The Scheme also includes emergency financial assistance and relocation support, as well as Stamp Duty concessions to support affected owners purchase another house in the ACT, or to support the purchase of their remediated block.

Progress to date

There are 1,023 houses in the ACT eligible for the Asbestos Eradication Scheme. This comprises 1,018 private and five government-owned houses. A newly discovered ‘missed’ house in Downer was added to the Affected Residential Premises Register in December 2016.

The costs associated with the financial assistance, purchase and demolition phases of the Scheme are largely known. The costs for demolitions to date indicate that the demolition phase is manageable within budget; however, some financial risk remains.

The sales phase of the Scheme has only recently commenced. The market response to this unique land offering has been broadly consistent with expectations. However, around three quarters of the sales are yet to occur, and actual sale prices and real estate market conditions will significantly influence the overall costs of delivering this complex and costly program.


As at 25 May 2017:

989 homeowners had accepted offers to sell affected properties to the Government;

926 houses had been purchased at a total cost of $660 million – with individual property costs ranging from $361,000 to $3 million;

over 650 owners had exercised Stamp Duty concessions to the value of $15.9 million;

$11.4 million had been paid in emergency financial support to homeowners;

$1.4 million had been paid for asbestos assessments of houses; and

985 relocation assistance grants had been paid.

The Taskforce has engaged licensed asbestos assessors and removalists, and demolition contractors to safely demolish affected houses. The bulk of the demolition task is expected to be completed by the end of the 2017 calendar year. WorkSafe ACT is monitoring demolition work as part of its regulatory function.

The demolition program continues to run efficiently, with 701 houses demolished as at 25 May 2017.

The Taskforce continues to work closely with industry and regulators to ensure affected properties are demolished safely, and land is remediated efficiently and effectively.

Safety is the key overarching consideration, particularly in relation to the health and wellbeing of workers and the wider community.

Demolitions are being scheduled in a coordinated and efficient way to reduce costs and community disruption. This includes geographical grouping of demolitions – although this is changing as the number available for demolition declines.

The sale of remediated blocks commenced in April 2016.

As at 25 May 2017, 26 auctions had been held. Of the 408 blocks released for sale, 293 blocks have been sold.

In addition to the properties sold at auction, 31 former owners who held first refusal rights have accepted the purchase price to buy back their remediated blocks.

Auction sales prices have ranged from $340,000 to $1.9 million.

Budget estimates

The Government has updated the budget estimates associated with the Asbestos Eradication Scheme to reflect the outcomes achieved to date. Overall, the revised budget indicates that the net cash cost has improved from the 2016-17 Budget estimate of $366 million (excluding contingency) to $307 million. A summary of the budget adjustments is shown below.


Total cash payments estimated over the life of the Asbestos Eradication Scheme (excluding contingency) are $911 million. This is $18 million lower than the 2016-17 Budget estimate of $929 million. This is mainly due to a $16 million decrease in anticipated demolition and remediation costs.

The 2017-18 Budget estimates assume that the owners of 50 properties will choose not to participate in the Scheme. As at 25 May 2017, owners of 27 affected properties had decided not to participate. The anticipated number of other properties impacted (ie those connected to affected properties) is 11.

The demolition schedule has been accelerated over initial plans and sales have been re-profiled to account for year-to-date sales activity for 2016-17, and in broad terms, bring forward sales from the outyears to match the availability of inventory. Compared to the 2016-17 Budget, the estimated number of properties to be sold has:

decreased by 23 in 2016-17;

increased by 55 in 2017-18 and 10 in 2018-19;

decreased by 40 in 2019-20; and

increased by three in 2020-21.

Overall Scheme net sales revenue is anticipated to increase by $40.8 million from the 2016-17 Budget estimate of $563 million to $604 million primarily as a result of the rising market.

The average actual direct cost to the Government is approximately $275,000 per block over the first 150 completed sales. This net cost includes actual assistance grants plus acquisition costs, holding costs and demolition costs less actual sale revenue. These figures exclude Asbestos Response Taskforce costs and regulatory costs. This cost includes an estimate for final disposal and selling costs.

Tables I.1 and I.2 show the net cash flow and headline net operating balance (HNOB) movements as compared to the 2016-17 Budget.

The Commonwealth Government provided the Territory with a loan to support the financing of the Asbestos Eradication Scheme. The total loan of $1 billion was provided in two tranches: $750 million in January 2015 at a fixed interest rate of 2.605 per cent, and $250 million in July 2015 at a fixed interest rate of 3.015 per cent. The weighted cost of the loan is 2.708 per cent. The loan term is 10 years, from January 2015 to 30 June 2024.

Repayments of principal will commence on 30 June 2018 and are paid annually until 30 June 2024. Repayments of the principal are to be paid as follows:

$50 million at the end of June each year from 2018 to 2020;

$100 million at the end of June each year from 2021 to 2023; and

$550 million at the end of June 2024.


Loan interest to be paid to the Commonwealth in 2017-18 is estimated to be $27.1 million.

The expected financial impacts of the program are presented in the tables below. Note that these tables do not include the financial implications of stamp duty waivers exercised by affected homeowners.

Table I.1: Asbestos Eradication Scheme cash flow impact excluding contingency

2016-17 2017-18 2018-19 2019-20 2020-21 $'000 $'000 $'000 $'000 $'000

2016-17 Budget

Payments

Financial Assistance Package 2,000 0 0 0 0 Purchase Costs1 23,103 4,896 3,172 18,269 0 Demolition and Remediation 47,709 49,135 28,689 476 3,963 Other Costs2 9,862 5,978 5,887 4,534 4,534 Total Payments 82,674 60,009 37,747 23,278 8,496 Receipts Net Sales Revenue 223,624 201,611 87,455 27,005 14,673 Total Receipts 223,624 201,611 87,455 27,005 14,673 Net Cash Flow 140,949 141,602 49,708 3,726 6,177

2017-18 Budget

Payments

Financial Assistance Package 1,510 400 20 80 0 Purchase Costs1 22,122 6,168 824 19,238 200 Demolition and Remediation 55,751 61,753 889 127 3,492 Other Costs2 8,909 8,821 4,527 4,489 4,397 Total Payments 88,292 77,141 6,260 23,934 8,089 Receipts Net Sales Revenue 238,396 242,504 97,262 4,255 16,379 Total Receipts 238,396 242,504 97,262 4,255 16,379 Net Cash Flow3 150,104 165,363 91,001 (19,679) 8,290

Notes: Numbers may not add due to rounding. 1. Includes purchase of house and land, purchase transaction costs, board-up costs and holding costs. 2. Mainly comprises Asbestos Response Taskforce costs. 3. The 2015-16 cash flow impact was $214 million excluding financing costs.


Table I.2: Asbestos Eradication Scheme HNOB impact1

2016-17 2017-18 2018-19 2019-20 2020-21 $'000 $'000 $'000 $'000 $'000

2016-17 Budget

Financial Assistance Package -2,000 0 0 0 0 Other Costs -9,912 -6,028 -5,936 -4,557 -4,534 Purchase Costs -2,561 -2,008 -1,006 -221 0 Contingency -3,509 0 0 0 -19,884 Total HNOB Impact (including contingency) -17,981 -8,036 -6,942 -4,778 -24,417

2017-18 Budget

Financial Assistance Package -2,256 -400 -20 -80 0 Other Costs -8,985 -8,910 -4,877 -4,481 -4,488 Purchase Costs -1,486 -1,114 -102 -154 -200 Contingency 0 -1,265 -1,265 -1,265 -8,856 Total HNOB Impact (including contingency) -12,728 -11,690 -6,264 -5,980 -13,545

Notes: Numbers may not add due to rounding. 1. The 2015-16 HNOB impact was $65 million excluding financing costs.

Table I.3: Asbestos Eradication Scheme cumulative cash flow impact including financing costs

2014-15 2015-16 2016-17 2017-18 2018-19 $'000 $'000 $'000 $'000 $'000

Net Cash Flow – Cumulative -488,822 -702,503 -552,399 -387,037 -296,035 Indicative Annual Interest Cost1,2,3 -6,619 -16,131 -16,991 -12,720 -9,249 Total Cost (including financing costs) -495,441 -718,634 -569,391 -399,756 -305,284

2019-20 2020-21 2021-22 2022-23 2023-24 $'000 $'000 $'000 $'000 $'000

Net Cash Flow - Cumulative -315,714 -307,424 -307,424 -307,424 -307,424 Indicative Annual Interest Cost1,2,3 -8,283 -8,437 -8,325 -8,325 -8,325 Total Cost (including financing costs) -323,997 -315,861 -315,749 -315,749 -315,749

Notes: Numbers may not add due to rounding. 1. The indicative interest cost is calculated on the cumulative net cash flow from the Scheme each year but interest is

not cumulative. The interest cost is met from the total Territory budget not the budget for the Scheme. 2. Indicative interest cost is calculated assuming an equal spread of payments/receipts across the year. 3. The interest rate use is based on the weighted cost of the loan of 2.708 per cent.


2017-18 Budget Paper No.3 399 Safer Families

APPENDIX J

SAFER FAMILIES



APPENDIX J: SAFER FAMILIES

The 2017-18 Budget allocates an additional $2.2 million over four years to Safer Families initiatives, announced in the 2016-17 Budget, to help address family violence. This brings the total Safer Families package for the 2017-18 Budget to $23.5 million over four years.

The Safer Families package supports the implementation of the commitments made in the ACT Government Response to Family Violence. Released in June 2016, the ACT Government Response to Family Violence detailed 38 separate commitments related to three separate reports commissioned by the ACT Government in 2015 and 2016:

The Report of the Inquiry: Review into the system level responses to family violence in the ACT by Laurie Glanfield AM;

Findings and recommendations from the review of domestic and family violence deaths in the Australian Capital Territory by the Domestic Violence Prevention Council; and

ACT domestic violence service system final gap analysis report by the Community Services Directorate.

The ACT Government introduced a Safer Families Levy on 1 July 2016 as part of 2016-17 Budget. The $30 per year levy is applied to all residential and rural properties. The levy funds $19.4 million of the $23.5 million investment in safer families initiatives.

The focus of the package is a more integrated response to individuals and families dealing with violence. It delivers initial investments to address the increase in reporting of domestic and family violence and demand for support across policing, prosecutions and crisis services.

Progress to date

Significant progress has been achieved by the Government against the commitments it made in 2016. An injection of funding to frontline services is making a real difference to the lives of those experiencing family violence. Legislative and cultural reform in a number of areas across government and the community is being implemented.

Additional funding has enabled the Domestic Violence Crisis Service and the Canberra Rape Crisis Centre to increase direct service provision to people experiencing family violence and sexual assault. Telephone and outreach services have included practical support, information, advocacy and counselling.


The Safer Families grants program has been established to provide financial assistance to women leaving violence to establish a private rental tenancy. The Tara Costigan Foundation established a free caseworker service to support victims as they rebuild their lives and break the cycle of violence. In addition to the $20,000 funded through the Safer Families package, a further $20,000 was provided from the Confiscated Assets Trust Fund. Room4Change, a therapeutic residential behaviour change program for perpetrators, commenced in April 2017. This innovative program is supporting women and children to stay safely in the home whilst providing therapeutic interventions for perpetrators.

A Case Analysis team has been established within the Child and Youth Protection Services to provide independent advice on individual cases at key decision-making points. This analysis will inform training priorities and development of new policies and procedures.

An injection of funding to the Trauma Understanding and Sensitive Teaching project has enabled an expansion of the program. Twenty five ACT public schools are now applying the Trauma Understanding and Sensitive Teaching principles, which recognise the impacts of adversity and trauma on behaviour, mental health and wellbeing, and school retention.

In addition to the Safer Families package, $850,000 was approved for the Justice Reinvestment Trial, which was launched in partnership with Winnunga Nimmityjah Aboriginal Health Services to deliver a family focused approach to reducing the over-representation of Aboriginal and Torres Strait Islander people in the justice system.

The Government has commenced a number of initiatives to help the justice system respond better to incidents of family violence. Two new Family Violence Order Liaison Officers at ACT Policing are assisting members of the public to apply for, and obtain, Family Violence Orders. Legal Aid ACT has received an increase in funding to enable more victims of family violence to access legal services, with an additional 100 victims supported in the first three quarters of 2016-17 compared to the same period in the prior year. Criminal justice responses have been strengthened enabling the Director of Public Prosecutions to improve its ability to respond to criminal matters related to domestic and family violence. Support for non-English speakers seeking assistance through the court process has improved through the provision of additional translating and interpreting services.

In recognition of the complex relationship between family violence and alcohol and other drug use, the Government allocated funding to build capacity to deliver programs that integrate best practice in family violence prevention. The Alcohol, Tobacco and Other Drug Association ACT is leading a pilot project, which is now in the design phase.

The Government launched the Family Violence Toolkit for ACT Government employees to provide awareness and support for employees with a personal experience of family violence.


The first full-time Coordinator-General for Safer Families commenced work on 31 October 2016. The Coordinator-General’s role is to drive cultural change, lead reform and provide accountability. The Safer Families team was also established within the Justice and Community Safety Directorate. The Coordinator-General and Safer Families team have led key strategic and service development initiatives, including:

the release of an Issues Paper: Information Sharing to Improve the Response to Family Violence in the ACT in September 2016 and management of a community consultation process;

oversight of a co-design process to inform the development of a Family Safety Hub to improve service integration and coordination;

a scoping exercise to inform the introduction of a risk assessment tool; and

research and consultation across government to inform the introduction of family violence training to frontline workers.

The new Family Violence Act 2016 was introduced, broadening the definition of family violence in the ACT to include the full range of coercive, controlling and abusive behaviours. Funding enabled the introduction of new registry procedures, major modifications to the Integrated Courts Management System and updating of information products to support the introduction of the Family Violence Act 2016. Additionally, legislation has been passed to establish a Reportable Conduct Scheme – Reportable Conduct and Information Sharing Legislation Amendment Act 2016 – to improve the oversight of how organisations respond to allegations of child abuse.

Table J.1 below shows the estimated expenditure against items funded in the 2016-17 Budget.


Table J.1: Funding and expenditure of Safer Families initiatives

2016-17 2016-17 Safer Families Initiatives Budget Est

Outcome $’000 $’000

Safer Families – Additional resources for the Canberra Rape Crisis Centre 100 100 Safer Families – Additional resources for the Domestic Violence Crisis Service 200 200 Safer Families – Contribution to the Tara Costigan Foundation 40 40 Safer Families – Early assistance for families at risk of violence 228 228 Safer Families – Enhanced child protection case management and coordination 863 863 Safer Families – Enhancing access to justice for non-English speakers 255 39 Safer Families – Implementation of the Joint Australian Law Reform Commission

and NSW Law Reform Commission Report on Family Violence 383 383

Safer Families – Improved access to Legal Aid 313 313 Safer Families – Improving information sharing for government and service

delivery agencies 15 15

Safer Families – Integrated case management 360 74 Safer Families – Reportable conduct scheme for employees 473 473 Safer Families – Risk assessment tool 50 50 Safer Families – Safer families team 873 873 Safer Families – Stronger criminal justice responses 355 355 Safer Families – Stronger police support for family violence victims 281 281 Safer Families – Support and referral through specialist drug and alcohol

treatment services 500 292

Safer Families – Support for women and children to leave violence 30 30 Safer Families – Training in domestic violence for frontline workers 250 0 Safer Families – Trauma Understanding and Sensitive Teaching (TRUST) Project 60 60

Total 5,629 4,6691,2 Safer Families Levy Offset -4,700 -4,700

Notes: 1. Funding of $602,000 will be reprofiled into 2017-18 to continue the Safer Families initiatives. 2. Unspent funds of $358,000 will be reprofiled into 2017-18 to offset new initiatives.


Looking forward: 2017-18 and beyond

The significant reforms underway across the ACT to address family violence will be further strengthened in 2017-18 with additional funding of $2.2 million being allocated to progress the development of the Family Safety Hub.

The Family Safety Hub will link existing support and services in the ACT for matters around family violence to ensure that clients receive seamless, integrated and holistic support from the Government and community services.

Development and piloting of the Family Safety Hub will continue to inform development of a model for integrated case coordination and subsequently the roll-out of funding for case management services to support the goals of the Hub. Additionally, work will be undertaken to scope ICT systems required to support the goals of the Family Safety Hub.

To ensure a sustainable approach to frontline worker training into the future, the Government will develop a comprehensive capability framework. This will include drawing together the core capability requirements across a range of Government roles and exploring options for embedding these capabilities into existing workforce structures.

The Reportable Conduct Scheme will come into effect on 1 July 2017. The need for such a Scheme arose from evidence before the Royal Commission into Institutionalised Child Sexual Abuse that showed systematic failure across Australia by employers, organisations and institutions to protect children and young people, and to follow up on allegations of child abuse by their employees.

The new oversight role of the ACT Ombudsman will provide assurance to the community that investigations into allegations of abuse by employees are independently reviewed. Work will continue across the ACT Government to support the roll-out of the Scheme.

The 2017-18 Budget provides additional funding ($0.6 million over four years) to the Public Advocate’s Office to better protect children and young people, and deliver enhanced monitoring of the provision of statutory services. The Review into the system level responses to family violence in the ACT – the Glanfield inquiry – identified the high demand on the oversight functions of the Public Advocate for children and young people in families at risk, and in the care and protection system.

The Government will also continue the Justice Reinvestment Trial, in partnership with the Winnunga Nimmityjah Aboriginal Health Service, to deliver a family-focused approach to reducing the over-representation of Aboriginal and Torres Strait Islanders in the justice system.

Table J.2 below shows the funding allocated to Safer Families initiatives through the 2017-18 Budget.


Table J.2: Safer Families initiatives in the 2017-18 Budget

2017-18 2018-19 2019-20 2020-21 Total Safer Families Initiatives Budget Estimate Estimate Estimate

$’000 $’000 $’000 $’000 $’000 Better support when it matters – Family Safety Hub1 455 466 627 638 2,186 Safer Families – Additional resources for the Canberra

Rape Crisis Centre 103 105 108 111 427

Safer Families – Additional resources for the Domestic Violence Crisis Service

205 210 215 220 850

Safer Families – Early assistance for families at risk of violence

351 385 0 0 736

Safer Families – Enhanced child protection case management and coordination

642 481 485 497 2,105

Safer Families – Enhancing access to justice for non-English speakers2

380 323 331 339 1,373

Safer Families – Implementation of the Joint Australian Law Reform Commission and NSW Law Reform Commission Report on Family Violence

347 358 369 378 1,452

Safer Families – Improved access to Legal Aid 296 300 305 313 1,214 Safer Families – Integrated case management3 1,027 772 733 751 3,283 Safer Families – Reportable conduct scheme for

employees 282 288 293 300 1,163

Safer Families – Safer families team 719 732 746 765 2,962 Safer Families – Stronger criminal justice responses 366 318 324 332 1,340 Safer Families – Stronger police support for family

violence victims 295 300 304 312 1,211

Safer Families – Support and referral through specialist drug and alcohol treatment services

500 500 500 513 2,013

Safer Families – Support for women and children to leave violence

85 100 100 103 388

Safer Families – Training in domestic violence for frontline workers4

507 263 0 0 770

Safer Families – Trauma Understanding and Sensitive Teaching (TRUST) Project

60 0 0 0 60

Total 6,620 5,901 5,440 5,571 23,532

Notes: 1. This initiative is partially offset by funds reprofiled from 2016-17. 2. Funding for this initiative includes $66,000 in 2017-18 which has been reprofiled from the 2016-17 financial year. 3. Funding for this initiative includes $286,000 in 2017-18 which has been reprofiled from the 2016-17 financial year. 4. Funding for this initiative includes $250,000 in 2017-18 which has been reprofiled from the 2016-17 financial year.

2017-18 Budget Paper No.3 407 Statement of risks

APPENDIX K

STATEMENT OF RISKS



APPENDIX K: STATEMENT OF RISKS

The ACT Government monitors current and emerging risks to the Territory’s economy and balance sheet as a whole, as well as in specific policy areas. We stand ready to respond to these risks to protect services and the wellbeing of the Canberra community, as we have done through past events such as the Global Financial Crisis and the Loose-fill asbestos insulation problem.

Economic risks

Commonwealth Government policy decisions remain a significant risk to the ACT economy, as does the possibility of the relocation of segments of the Australian Public Service. The implications of any significant correction in national house prices and flow-on effects to economic activity and financial market stability also represent a risk to the outlook for household consumption and private investment activity in the ACT.

External risks to the national outlook are centred primarily on China’s transition toward a more consumption-orientated economy, notwithstanding general improvements in the global economic outlook in recent months. Global political and financial sector instability also represent downside risks to the national outlook.

Fiscal risks

Loose-fill Asbestos Insulation Eradication Scheme

The Government is delivering the Loose-fill Asbestos Insulation Eradication Scheme (the Scheme) to buy back, demolish and remediate all houses in the ACT affected by loose-fill asbestos insulation. The remediated blocks of land are being sold to defray some of the overall Scheme costs. The financial impacts of the Scheme have been modelled using a range of assumptions, together with the best available estimates.

As the buyback phase is effectively complete, and the demolition and sales phases are well underway, the risks for these phases have significantly diminished.

There remain risks regarding the extent to which sales proceeds will offset the cost of the buyback and remediation activities. Market absorption and take up rates could affect land sales prices.

Public Private Partnerships

During 2015-16, the ACT Government contracted two projects through Public Private Partnership (PPP) arrangements: the ACT Law Courts and Light Rail – Stage 1.


These projects are being delivered as PPPs in accordance with The Partnerships Framework and the National PPP Policy and Guidelines. By undertaking these projects as PPPs, the Territory seeks to achieve better value for money by capturing the expertise and efficiencies of the private sector in designing, financing, building and maintaining infrastructure projects and providing services on a whole-of-life basis.

The risk allocation adopted for these PPP projects is consistent with The Partnerships Framework and the National PPP Policy and Guidelines. Specifically, the Territory seeks to achieve value for money by allocating risks to the party best able to manage them.

By adopting a service focus and paying only for services received after construction completion, the private party bears certain risks associated with designing, building and operating the infrastructure. To achieve value for money, the Government retains those risks that it can manage for less than it would have to pay the private party to bear them.

The party with greatest control of a particular risk has the best opportunity to reduce the likelihood of the risk eventuating, and to control the consequences if it does. This process ensures that the cost of managing risk is minimised on a whole-of-life and whole-of-project basis, and results in various risks being:

retained by the Territory;

transferred to the private sector; or

shared between the parties.

Retained risks are those risks or parts of a risk that government proposes to bear itself under a PPP arrangement. The scope of retained risk reflects the nature of the specific project and the output specification.

Risks that are commonly retained or shared by the public sector include:

adverse site conditions that are not known or reasonably foreseeable;

artefacts and heritage claims;

Native Title claims;

obtaining specified planning approvals;

changes in the price of the utilities;

changes in law and policy which impact on the project;

patronage risk;

refinancing risk; and

force majeure for specified unforeseen events which impact on the project.


The Project Agreement and associated documents establish the obligations of each party in managing these risks. Project documentation, including the Project Agreement, for the ACT Law Courts and Light Rail – Stage 1 projects is available at: www.procurement.act.gov.au/contracts.

Under The Partnerships Framework, the Territory also publishes contract summaries of PPP projects providing a description of key project features and contract elements. This includes a broad overview of the project, a summary of the tender process and value for money assessment, the main parties and their general obligations, the broad allocation of risk between the public and private sectors, and the treatment of various key project issues.

Land release program

The ACT Government’s land release program remains an important source of revenue for the Territory, as well as contributing to social and environmental objectives. The program is susceptible to risks related to the capacity of the ACT residential property market to grow and sustain the sale of all released land at forecast prices. Lower than expected demand or sale prices would reduce the revenue for the Government. Other risks to the program include achieving statutory clearances, the capacity of industry to deliver infrastructure and estate works, and the capacity of the market to absorb the additional supply offered through the Asset Recycling Initiative.

Renewable Energy Certificates

The 2017-18 Budget reflects the expense and revenue components of Large-scale Generation Certificates, which are credits received for the generation of renewable electricity under the Commonwealth Government’s large-scale renewable energy target. The ACT creates the certificates from its investments in renewable electricity generation projects to meet its target of 100 per cent renewable electricity by 2020.

Once created and recognised, Large-scale Generation Certificates can be sold and transferred to other individuals and businesses, with their price being determined through the open market. As such, the value of a Large-scale Generation Certificates held by the ACT Government will be subject to price fluctuations arising from supply and demand within the market. Further, the impact estimates contained in the 2017-18 Budget are subject to risk in that they have been entered into the budget on the assumption that the original value for the certificates hold, and that they are not re-valued between when they are recognised and when they are surrendered.

Commonwealth Government funding

Although the recent Commonwealth Budget has given increased funding certainty in some sectors, in many instances the new arrangements are subject to further negotiations or the successful passage of legislation in the Federal Parliament.


More generally, an inquiry into the impact on the national economy of Australia’s system of horizontal fiscal equalization has introduced uncertainty to that system going forward. The absence of a clear or comprehensive pathway for reform and renewal within the realm of Commonwealth Government funding also created longer-term risks to the Territory fiscal sustainability.

GST

As the GST is a broad-based consumption tax, GST revenue collections are subject to consumer confidence and the state of the economy at the national level. Changes in these factors can lead to variations in the size and growth of the national GST pool, and therefore in funding for the states and territories.

GST revenue grants to the ACT are also subject to annual revisions of state and territory GST relativities by the Commonwealth Grants Commission. There is potential for change to the ACT’s share of the GST pool from Grants Commission updates over the forward estimates. This risk is increased by the Productivity Commission inquiry into Horizontal Fiscal Equalisation, which may result in significant changes to the distribution of GST from 2018-19.

National Disability Insurance Scheme

Under current arrangements, the states contribute 59.1 per cent of National Disability Insurance Scheme (NDIS) costs until the scheme is fully rolled out in 2019-20, and 49 per cent of scheme costs from 2019-20. In 2017-18, the ACT will contribute approximately $130 million, which increases to $167 million in 2019-20.

While the Heads of Agreement with the Commonwealth on the NDIS clearly outlines that the Commonwealth will fund 100 per cent of the risk for the launch and transition period (2014-15 until 2018-19), the Commonwealth has asked the ACT to renegotiate the Bilateral Agreement to increase the required ACT contribution for 2016-17 to 2018-19, based on higher indicative participant numbers than those in the original agreement.

Originally, to assist States in meeting the additional costs associated with the transition to the NDIS, the Commonwealth established the DisabilityCare Australia Fund. While notional allocations are agreed, discussions regarding access to the Fund are ongoing between States and the Commonwealth.

The Commonwealth has also put pressure on States to accept changes to the governance of the NDIS and/or increase their risk by withholding access to DisabilityCare Australia Fund funding, a move strongly opposed by the States. The ACT is currently owed $42.5 million in funding through the DisabilityCare Australia Fund.

The Heads of Agreement also states that the Commonwealth will assume 100 per cent of the risk for the full scheme in the ACT from 2019-20, but caveats that this is subject to the Productivity Commission’s review of NDIS Costs – noting that the ACT may be required to assume up to 25 per cent of risks. This review is currently in progress and its findings are due in September 2017.


The ACT Government has made a submission to this review in which we strongly opposed extending risk sharing to the States and Territories. The States and Territories have little ability to control the parameters of the NDIS, and also retain significant responsibilities for disability services, including services that were originally thought to be covered by the NDIS and for people not deemed eligible for an NDIS package.

State and Territory Governments have limited ability to raise additional revenue to fund potential increases in costs. By comparison, the Commonwealth’s 2017-18 Budget decision to increase the Medicare Levy by 0.5 per cent is expected to raise an additional $3.55 billion in 2019-20 and has increased the available Commonwealth funding for NDIS activities by more than 50 per cent.

The 2017-18 Commonwealth Budget includes an estimated payment of $42.5 million to the ACT in 2016-17 from the DisabilityCare Australia Fund, and approximately $15.2 million (indexed) per year thereafter. The ACT Budget does not match the Commonwealth Budget in 2016-17 or 2017-18 on the basis that the Commonwealth has not made any payments to date and the ACT therefore considers it unlikely that the full payment of $42.5 million will be made in 2016-17.

Specific Purpose Payments

Health

In March 2017, the Commonwealth and the States signed an addendum to the National Health Reform Agreement. This interim agreement continues Commonwealth funding for public hospitals at a growth rate capped at 6.5 per cent a year nationally from 1 July 2017 for three years. In the event that a State exceeds a state-specific ‘soft cap’ of 6.5 per cent growth in a year, that jurisdiction would be entitled to receive a share of remaining national funding if the national cap has not been breached. The state specific ‘soft cap’ on growth shifts funding risk onto states if activity levels grow faster than the 6.5 per cent. At the current time, ACT Health is anticipating its growth will be close to, but remain within, the Territory’s ‘soft cap’ of 6.5 per cent a year over the forward estimates.

The interim agreement also integrates quality and safety into the pricing and funding of public hospitals. This means there is a risk funding to the States may be revised downwards through non-payment for particular hospital service activities that involve:

sentinel events (procedures involving the wrong patient or body part resulting in death or major permanent loss of function) from 1 July 2017;

hospital acquired complications from 1 July 2018; and

avoidable re-admissions if or when a price adjustment model for these is agreed.

Under the new interim agreement, an amount not less than 10 per cent of funding will be withheld from States which fail to provide data to the Commonwealth within defined timeframes. Withheld funds would be paid at the next monthly payment once the required data is received.


The interim agreement is scheduled to expire in June 2020, with the Commonwealth Government to work with states to develop a new long-term agreement in 2018.

Education

The Commonwealth has announced it will introduce a Quality Schools SPP to cover a ten year period of transition to a consistent Commonwealth share of the needs-based Schooling Resource Standard. This would see the Commonwealth contribute 20 per cent of the standard for government schools and 80 per cent for non-government schools. Conditions of this funding are yet to be fully detailed and considered, and so changes in funding as outlined in the 2017-18 Commonwealth Budget have not been flowed through to the 2017-18 ACT Budget.

Housing and homelessness

The Commonwealth has established a Housing and Homelessness package that establishes ongoing and indexed funding for both housing and homelessness services. This funding is included in the 2017-18 ACT Budget but, as final details are yet to be provided by the Commonwealth, there remains risks around this funding.

Skills and workforce development

The Commonwealth has announced a Skilling Australians Fund (the Fund) to replace the National Skills Reform National Partnership Agreement which ceases on 30 June 2017. From 2018-19, funding will be based on amounts paid into the Fund from a national levy on foreign workers on certain skilled visas. The 2017-18 ACT Budget reflects a notional allocation of funding through to 2020-21, consistent with amounts published in the 2017-18 Commonwealth Budget. However, funding for states is likely to depend on meeting eligibility criteria defined by the Commonwealth which are currently underfunded.

National Partnership Payments

There is a risk to the ACT Budget in forward years relating to the uncertainty over Commonwealth funding for National Partnership agreements beyond their current expiry dates. Accordingly, the ACT does not budget for NPPs beyond amounts published in the 2017-18 Commonwealth Budget. Expiring National Partnership Agreements (NPAs) include:

Specialist Disability Services for over 65s;

The National Outcome Standards for Perpetrator Interventions;

The Independent Public Schools Initiative;

Trade Training Centres in Schools – Government Schools;

Infrastructure Growth Package – Asset Recycling Fund – New Investments;

National Bushfire Mitigation; and

National Register for Foreign Ownership.


National Partnership Agreements are generally entered into for a fixed period of time, reflecting the nature of the project, service or reform involved. Payments may be aligned with the achievement of milestones and be made after States have achieved the outcomes or outputs specified in the relevant agreement. There is inherent uncertainty in the funding estimates and this is particularly the case where agreements are under development, where state allocations are yet to be finalised, or where notional allocations may have been published by the Commonwealth. Where noteworthy, such instances are indicated in the Federal Financial Relations Chapter in the footnotes or text relating to each agreement.

Government investments and borrowings

Investment returns and borrowing costs

The budget is susceptible to the performance of global financial markets and changes in interest rates. Investment returns below those estimated will have a negative impact on revenues and, in respect of the Superannuation Provision Account, may impact on the Government’s fiscal objective of fully funding the defined benefit superannuation liability by 2030. Higher interest rates will result in higher borrowing costs for new borrowings while lower interest rates reduce new borrowing costs.

Defined benefit employer superannuation liabilities

The value of accrued superannuation liabilities is calculated as the present value of the future payment of benefits that have actually accrued in respect of service at the calculation date. Due to the complex nature of this liability, small variations to the long-term financial or demographic assumptions can lead to large impacts on the accrued liability valuation estimate for the Territory. The valuation of the liability is most sensitive to the discount rate (referenced to the yield on a suitable long-term Commonwealth bond), inflation, wages growth, rates of retirement and resignation, investment returns, benefit stream election, and mortality rates.

Other commitments

Contingent liabilities

Contingent liabilities are liabilities resulting from uncertain timing or amounts. They arise from past events which are not recognised because their outflow of economic benefit is not probable or the liability cannot be measured reliably. Contingent liabilities can also occur when a liability is contingent on the outcome of an event outside the Territory’s control, such as the outcome of a court case.

Under the Financial Management Act 1996, it is the responsibility of the Government to identify contingent liabilities that may affect the budget estimates.

The types of claims lodged against the Territory include property damage, contract disputes, economic loss, personal injury and tax-related claims. Details of the Territory’s contingent liabilities are identified in the ACT Consolidated Annual Financial Statements, which are available online.


Payments on repeal or amendment of the Electricity Feed-in (Large Scale Renewable Energy Generation) Act 2011

ACT large-scale renewable energy projects are supported by Feed-in Tariffs (FiT). The Territory has given undertakings to pay compensation to various parties contracted to deliver renewable energy projects, should the Government change the Feed-in Tariffs scheme or particular associated legislation, in certain specified ways that adversely affect the recipient of the entitlement. The undertakings compensate the recipient for direct losses, costs and expenses up to a capped amount. A cap applies each year from commencement.

As at the date of the budget, undertakings have been provided for the renewable energy projects listed in Table K.1. The maximum caps operate from the date the entitlement is granted for these projects until an agreed date. All compensation agreements expire before the end of the 20-year entitlement period. The Territory’s potential commitment as a result of these undertakings also declines over the life of the agreements.

Table K.1: Details of Contracted Renewable Energy Projects

Renewable energy project FiT entitlement granted 20 year FiT entitlement begins Royalla Solar Farm September 2012 March 2014 Ararat Wind Farm February 2015 April 2017 Coonooer Bridge Wind Farm February 2015 February 2016 Hornsdale Wind Farm (Stage 1) February 2015 February 2017 Hornsdale Wind Farm (Stage 2) January 2016 December 2018 Sapphire Wind Farm March 2016 May 2018 Crookwell 2 Wind Farm August 2016 September 2018 Hornsdale Wind Farm (Stage 3) August 2016 October 2019

Outstanding claims liability

The value of insurance liabilities is the present value of the future claim for payments that have accrued at the calculation date. This approach is required under Australian Accounting Standard 1023 General Insurance Contracts.

Accounting for insurance claims is complex and actuarial assumptions are required to estimate the ACT Insurance Authority’s obligations and claims expense. There is uncertainty in the estimate of the liability and this can result in actuarial gains or losses when the claims experience differs from the estimates. The liabilities are discounted to allow for the time value of money as claims may be settled many years after the claim is incurred.


Sensitivity to discount rate

The outstanding claims liability is calculated by reference to expected future payments. These payments are discounted to adjust for the time value of money. Australian Accounting Standard 1023 General Insurance Contracts requires the outstanding claims liabilities to be valued using a ‘risk free’ rate of return, which is generally accepted to be the discount rate derived from market yields on Commonwealth Government Bonds. The discount rates adopted match the weighted term to maturity of insurance claims. The long-term nature of the projected cash flows from the liability means that small changes in the discount rate adopted can lead to significant variations in the liability valuations and the claims expense.

The outstanding claims provision as at 31 December 2016 was $240.088 million net of Reinsurance Recoveries. Variations in the discount rate of +/- one percentage point results in an estimated change to the liability of between a $11.8 million decrease and a $12.7 million increase, equivalent to a change of between -4.9 per cent and 5.3 per cent.


2017-18 Budget Paper No.3 419 Statement of sensitivity of budget estimates

APPENDIX L

STATEMENT OF SENSITIVITY OF BUDGET ESTIMATES



APPENDIX L: STATEMENT OF SENSITIVITY OF BUDGET ESTIMATES

This statement of sensitivity is made pursuant to sub-section 11(1)(c) of the Financial Management Act 1996.

Sensitivity of Budget estimates

The following sensitivity analysis has been applied to economic parameters used in the formulation of the revised forward estimates.

Territory revenues are sensitive to changes in economic conditions, both in the ACT and nationally – for example, through Goods and Services Tax (GST) revenues.

Territory expenses are less sensitive to economic conditions. However, over time, changes in demographic variables may affect the demand for government services. In response, policy decisions may be taken to vary expenditure levels to accommodate the change in demand.

Sensitivity of economic assumptions

Consumer Price Index

A change in the Consumer Price Index (CPI) will affect revenue forecasts and generate cost changes for agencies.

If the CPI were to increase by 1 percentage point more than the forecast in each year of the budget period, own-source taxation revenue and expenses would increase by the amounts shown in Table L.1.

Table L.1: Impact of a 1 percentage point increase in CPI on General Government Sector (GGS) revenue and expenses

2017-18 2018-19 2019-20 2020-21 $’000 $’000 $’000 $’000

Revenue

Commercial Conveyances 675 1,367 2,047 2,675 Sales of goods and services,

Commonwealth Government grants1 and other revenue2

- 10,692 21,645 33,118

Total Revenue 675 12,059 23,692 35,793 Expenses 0 28,392 60,610 97,062 Net Impact 675 -16,333 -36,918 -61,269

Notes: 1. Refers to Specific Purpose Payments only. 2. Other revenue includes fines, superannuation contribution, rents and commutation, contributions and other

miscellaneous revenue.


Wage Price Index

Various fees are indexed to the Wage Price Index (WPI). If WPI increased by 1 percentage point more than the forecast in each year of the budget period, forecast revenue would increase by the amounts shown in Table L.2.

Table L.2: Impact of a 1 percentage point increase in WPI on GGS revenue

2017-18 2018-19 2019-20 2020-21 $’000 $’000 $’000 $’000

Revenue

Payroll Tax 4,454 9,174 14,248 19,693 Ambulance Levy 211 446 708 1,000 Utilities (Network Facilities) Tax - - - 393 Sales of goods and services and other revenue1 - 5,220 10,711 16,500 Total Revenue 4,665 14,840 25,667 37,586

Note: 1. Other revenue includes fines, superannuation contribution, rents and commutation, contributions and other

miscellaneous revenue.

Interest

Investment interest from investment portfolios and cash holdings of the Territory Banking Account are affected by interest rate variations. The estimated impact of a 1 percentage point variation in the amounts forecast in the budget estimates for interest revenue is shown in Table L.3.

Table L.3: Impact of a 1 percentage point increase in interest rates on interest revenue

2017-18 2018-19 2019-20 2020-21 $’000 $’000 $’000 $’000

Territory Banking Account1 8,688 7,096 7,414 7,736

Note: 1. A decrease of 1 percentage point is estimated to reduce interest revenue by equivalent amounts.

The estimated impact of a 1 percentage point variation in the assumptions used to calculate the interest costs on the Territory’s variable rate borrowing exposures is shown in Table L.4.

Table L.4: Impact of a 1 percentage point increase in interest rates or CPI on borrowing costs

2017-18 2018-19 2019-20 2020-21 $’000 $’000 $’000 $’000

Territory Banking Account1 7,394 8,109 8,183 8,508

Note: 1. A decrease of 1 percentage point is estimated to reduce borrowing costs by equivalent amounts.


Defined Benefit superannuation liability

Table L.5 outlines the impact to the Commonwealth Superannuation Scheme (CSS)/Public Superannuation Scheme (PSS) defined benefit superannuation liability valuation from a 1 per cent decrease in the discount rate from the long-term budget assumption of 6 per cent.

Table L.5: Impact of a 1 percentage point decrease in the discount rate on the superannuation liability

2017-18 2018-19 2019-20 2020-21 $’000 $’000 $’000 $’000

Superannuation Provision Account 1,083,000 1,105,000 1,125,000 1,141,000

Superannuation Expenses

Table L.6 outlines the impact on the CSS/PSS defined benefit superannuation expense from a 1 per cent decrease in the discount rate from the long-term budget assumption of 6 per cent.

Table L.6: Impact of a 1 percentage point decrease in the discount rate on superannuation expense

2017-18 2018-19 2019-20 2020-21 $’000 $’000 $’000 $’000

Superannuation Provision Account 26,000 23,000 20,000 17,000


2017-18 Budget Paper No.3 425 Whole of government staffing

APPENDIX M

WHOLE OF GOVERNMENT STAFFING



APPENDIX M: WHOLE OF GOVERNMENT STAFFING

Table M.1 below lists the number of full-time equivalents (FTEs), based on the estimated outcome for the 2016-17 financial year, and the 2017-18 Budget.

Table M.1: Whole of Government Staffing Movements – 2017-18 Budget

2015-16 Actual

2016-17 Budget

2016-17 Estimated Outcome

2017-18 Budget

Directorate/Agency

ACT Executive 55 54 54 54 ACT Insurance Authority 16 16 17 19 ACT Public Cemeteries Authority 16 18 14 17 ACTION 819 867 859 891 Auditor-General 38 39 39 37 Canberra Institute of Technology 702 733 693 688 Chief Minister, Treasury and Economic Development

Directorate 2,423 2,431 2,376 2,342

City Renewal Authority n/a n/a n/a 20 Community Services Directorate 727 652 583 594 Cultural Facilities Corporation 93 82 90 90 Education Directorate 5,138 5,151 5,268 5,309 Electoral Commissioner 12 13 12 9 Environment, Planning and Sustainable Development

Directorate 307 497 567 690

Health Directorate 6,324 6,572 6,462 6,533 Housing ACT 244 256 250 256 Independent Competition and Regulatory Commission 6 6 9 9 Justice and Community Safety Directorate 1,616 1,601 1,657 1,659 Legal Aid Commission (ACT) 73 78 77 77 Office of the Legislative Assembly 50 53 52 55 Public Trustee and Guardian 49 51 54 56 Suburban Land Agency n/a n/a n/a 77 Superannuation Provision Account 4 4 4 4 Transport Canberra and City Services Directorate 972 809 835 879 Discontinued Agencies Land Development Agency 97 127 122 0 Total Government Agencies 19,781 20,110 20,094 20,365 Government Business Enterprises

CIT Solutions Pty Ltd 108 100 121 121 Icon Water Limited 389 392 388 419 Total Government Business Enterprises 497 492 509 540

Total Government Agencies and Business Enterprises 20,278 20,602 20,603 20,905


Consistent with recent Administrative Arrangements, a number of ACT Government agencies have been affected by staffing movements since the 2016-17 Budget. Table M.2 below provides details in terms of these revised staffing arrangements.

Table M.2: Staffing Movements associated with Administrative Arrangements

Original Agency Rationale for Movement

Receiving Agency FTE Movement

Land Development Agency Dissolution of agency City Renewal Authority 20 Suburban Land Agency 77 Environment, Planning and


30


Transfer of land management functions

City Renewal Authority 7


47

Transfer of functions associated with Asbestos Response Taskforce


44

Transfer of functions associated with sportsground operations

Transport Canberra and City Services Directorate

24

The most material movements since the 2016-17 Budget and their explanations are:


The increase of 193 FTEs is the net effect of:

- the transfer of personnel associated with the Asbestos Response Taskforce from the Chief Minister, Treasury and Economic Development Directorate (CMTEDD), in accordance with Administrative Arrangements;

- the transfer of staff following the dissolution of LDA in accordance with Administrative Arrangements; and

- additional FTEs arising from new initiatives, particularly in support of the Light Rail – Stage 2 project, and the establishment of the Community Transport Coordination Centre (associated with the Better services in your community – Investing in community transport initiative).



The FTE increase of 158 is a result of:

- additional positions associated with the recruitment of additional School Assistants (associated with the Better schools for our kids - More support for teachers new initiative);

- the half-year impact of the enrolment adjustment and other enrolment-related impacts; and

- additional positions for school psychologists (associated with the Better schools for our kids – School psychologists new initiative).

THE LAND DEVELOPMENT AGENCY

The FTE decrease of 127 arises from the Administrative Arrangement which creates two new agencies – the City Renewal Authority and the Suburban Land Agency – with the balance transferring to the Environment, Planning and Sustainable Development Directorate (EPSDD). The staff will be divided between the Authority (20 FTEs), the Agency (77 FTEs) and EPSDD (30 FTEs).


The FTE decrease of 89 is the net effect of:

- the transfer of personnel associated with the Asbestos Response Taskforce to EPSDD, in accordance with Administrative Arrangements;

- the transfer of personnel associated with land functions out of the CMTEDD into EPSDD and the new land agencies;

- the transfer of personnel associated with sportsground operations to TCCS;

- an increase in FTEs associated with the establishment of The Office for LGBTIQ Affairs, Community Engagement, additional Worksafe ACT inspectors, Land Agency Governance Reform, and the centralisation of property custodianship; and

- an increase in FTEs resulting from the conversion from labour hire contracts to ACT public service employees.



The FTE increase of 70 is a result of:

- additional positions associated with the Light Rail – Stage 2 project;

- a transfer of functions associated with sportsground operations from CMTEDD;

- a minor increase in FTEs associated with the rollout of Green Bins (announced as part of the 2016 Pre-Election Budget Update); and

- recruitment to previously vacant positions.


The FTE decrease of 58 is a result of responsibilities formerly undertaken by Disability ACT and Therapy ACT transferring to the National Disability Insurance Scheme.


The FTE increase of 58 is the net effect of:

- new initiatives, including: More frontline firefighters – Modernising emergency services call-taking, Reducing alcohol-fuelled violence, and Reducing prisoner reoffending; and

- recruitment to previously vacant positions.

CANBERRA INSTITUTE OF TECHNOLOGY

The FTE decrease of 45 is a consequence of fewer staff (predominantly casual teaching staff) being engaged, as training demand has eased throughout the year.

HEALTH DIRECTORATE

The FTE decrease of 39 reflects lower than expected growth in employment due to efficiencies achieved through the Health Directorate’s System Innovation Program, offset by the impact of new initiatives.


ACTION

The FTE increase of 24 represents the net effect of:

- the employment of additional personnel associated with the implementation of the Rapid Bus Network (announced as part of the 2016 Pre-Election Budget Update);

- an increase in FTEs associated with the transfer of personnel from the Special Needs Transport program; and

- a reduction in FTEs associated with efficiencies resulting from the introduction of the new ACTION network/timetable.


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