Department of Treasury and Finance Is Efficient Delivery of Outputs to Customers

Library : Departments of Premier & Cabinet Treasury & Finance DEPARTMENT OF Level 5, 1 Macarthur St East Melbourne, VIC 3002 DX 210759 TREASURY AND FINANCE Ph: 03 9651 5660 Fax: 03 9651 5659 ANNUAL REPORT 2002-03 Email: [email protected] Intranet: http://library.dtf.vic.gov.au^ ^ ttt.: I-HE > Q = > -a = = 00 lo , a : |N rUI ' cu : ! Qi 9 TERNIE ISÈSS CONTENTS THE YEAR IN REVIEW 3 THE DEPARTMENT 11 2002-03 PERFORMANCE 17 FINANCIAL STATEMENTS 45 APPENDICES 89 ABOVE LEFT TO RIGHT: SUZIE BRYANT, ED CHAN. 1 •' • • • • •••.. ROBERTiMCMIQWN IB .s, SECRETARY'S REPORT For all of its 164-year history, the Department In response to these demands, DTF of Treasury and Finance (DTF) has had a single continues to evolve from a more conventional reason for its existence: the future prosperity of guardian of the exchequer to one of a the State of Victoria. So as Victoria's economy pathfinder to Victoria's future prosperity. evolved from nineteenth century land and gold Today, DTF's vision remains a prosperous rushes to twentieth century agriculture and future for all Victorians. The realisation of this manufacturing, DTF transformed Itself to meet vision demands innovative, expert advice to the challenges of the time. deliver economic, social and environmental The challenges facing Victoria into the future goals within a framework of responsible are no less daunting and complex than those financial management. This focus is reflected faced by our forebears more than a century in DTF's operational objectives. and a half ago. The pace of globalisation, technological development and social change demand pioneering and innovative solutions. DTF'S OBJECTIVES Providing sound financial management of the State's fiscal resources with an emphasis on maintenance of a substantial budget surplus. Guiding Government actions to best increase living standards for all Victorians through the provision of innovative policy advice. Championing an integrated whole-of-government approach to ensure optimal service delivery and provision of world class infrastructure to benefit all Victorians. i DEPARTMENT OF TREASURY 8 FINANCE ANNUAL REPORT 2002-03 OBJECTIVE 1 : PROVIDING SOUND FINANCIAL MANAGEMENT OF THE STATE'S FISCAL RESOURCES WITH AN EMPHASIS ON MAINTENANCE OF A SUBSTANTIAL BUDGET SURPLUS KEY ACHIEVEMENTS FOR THE YEAR INCLUDE: Supported the Government in budget Delivered the 2003-04 State Budget, which financed the Government's election commitments and financial management and provided an operating surplus greater than the $100 million minimum targeted by Government. Developed a new business management system (BMS) for whole-of-government budget development and management during 2002-03. The BMS was used in the preparation of the 2003-04 State Budget. Developed the Financial Management Compliance Framework for implementation across the Victorian Public Service (VPS). This included a complete plain English rewrite of the Standing Directions of the Minister for Finance, the introduction (from 1 July 2003) of a certification process—based on Australian Quality Standards—and the provision of an information and assistance website. Introduced legislation to amend the Audit and Financial Management Acts to strengthen the role of the Auditor-General. The amendments enhance the independence of the Auditor-General and provide greater scope in the Auditor-General's powers to promote sound financial management of the State. Conducted 11 output evaluation and price reviews across all government departments, focussing on opportunities to improve output performance measures, resource allocation and governance. Achieved confirmation of the State's Triple-A international credit rating. Reviewed and assessed the corporate plans of 19 Government Business Enterprises (GBE) and negotiated 20 GBE dividend returns to the Government. Updated the prudential framework for public sector superannuation funds. Took a lead role in reviewing Released the final report of the Garnaut-Fitzgerald Review of Commonwealth-State Funding Commonwealth-State financial in August 2002. The Government's response to the Report was prepared and discussed at arrangements Heads of Treasuries meetings. Produced regular financial reports Delivered the Annual Financial Report and Mid-Year Financial Report for the State of Victoria as well as four quarterly reports for the General Government Sector to Parliament and the public in accordance with legislative requirements. Produced the Pre-election Budget Update, following the announcement of the State Election in 2002. This was in addition to the normal requirement to produce the Budget Update in January each year and was a first for Victoria. MAINTAINING A SUBSTANTIAL BUDGET SURPLUS • May 2003 Budget projection of future budget surpluses • $100m minimum surplus targeted by Government DEPARTMENT OF TREASURY& FINANCE ANNUAL REPORT 2002-03 OBJECTIVE 2: GUIDING GOVERNMENT ACTIONS TO BEST INCREASE LIVING STANDARDS FOR ALL VICTORIANS THROUGH THE PROVISION OF INNOVATIVE POLICY ADVICE KEY ACHIEVEMENTS FOR THE YEAR INCLUDE: Delivered innovative and accurate Released the discussion paper Shaping a Prosperous Future, which provides 40-year projections advice on a range of economic, social of Victorian economic and fiscal trends and seeks to stimulate broad debate about the long-term and environmental issues policy challenges and choices facing governments and communities. Also released was the Labour Market Survey ofAnsett Workers and the Fire Services Funding Review. Prepared over one thousand briefs for DTF Ministers, Cabinet and Cabinet Committees on budget, economic and resource management issues. Implemented an Innovation Strategy whereby all DTF leaders undertook training in innovation and a team of employees was specially trained to be innovation facilitators to champion innovative activity. Responded to the changing insurance Finalised the Government's response to the Ipp Report on negligence law. environment within Victoria Led the development and introduction of legislation to enhance the availability and affordability of insurance in the areas of public liability and medical indemnity. Introduced proportionate liability for economic loss affecting professional indemnity insurance. Coordinated and chaired national meetings on insurance issues. In conjunction with the Victorian Managed Insurance Authority (VMIA), provided tailored insurance solutions for sectors of the economy faced with particular insurance problems. Implemented full retail contestability in Following extensive development and consultation, full retail contestability in the Victorian gas the Victorian gas market market was introduced from 1 October 2002. As a result, gas consumers have the ability to choose their gas retailer. Implemented environmental reporting Developed an environmental reporting framework in partnership with the Department of Sustainabillty and Environment and the Environment Protection Authority. Under the framework, all government departments will be required to report annually to Parliament on the management of their office-based environmental impacts. DTF is leading the way by reporting against the framework a year ahead of its mandatory commencement. VICTORIA: THE PLACE TO BE D Net interstate migration (left scale) - Business investment, Australia (right scale) — Business Investment, Victoria (right scale) DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 7 OBJECTIVE 3: CHAMPIONING AN INTEGRATED WHOLE-OF-GOVERNMENT APPROACH TO ENSURE OPTIMAL SERVICE DELIVERY AND PROVISION OF WORLD CIJ\SS INFRASTRUCTURE TO BENEFIT ALL VICTORIANS KEY ACHIEVEMENTS FOR THE YEAR INCLUDE: Assisted major infrastructure project Progressed a number of major Partnerships Victoria infrastructure projects during the year, development across Victoria, including under including the execution of contracts for the Spencer Street Redevelopment, new Berwick the Government's public-private partnerships Community Hospital, Enviro Altona Wastewater project, Film and Television Studios, policy, Partnerships Victoria Echuca/Rochester Wastewater Treatment Plant and the Mobile Data Network project. In addition, Expression of Interest documentation was released for the Mitcham-Frankston Freeway. Prepared and released new Partnerships Victoria guidance material: Public Sector Comparator Supplementary Technical Note, Use of Discount Pate in the Partnerships Victoria Process and Contract Management Policy and Guide. Developed the Gateway Initiative for major infrastructure delivery, to ensure better asset investment outcomes across the Victorian budget sector, and improved 'cradle-to-grave' framework for major asset delivery. Relocated the head office of the Rural Successfully relocated the Rural Finance Corporation head office to Bendigo, with the new Finance Corporation to Bendigo office officially opened by the Treasurer in December 2002. Finalised arrangements to lease office As an integral element to the Government's city accommodation planning, the Department accommodation to be provided on the successfully managed one of the largest office tender programs in Australia to consolidate over former Southern Cross Hotel site 100 000 square metres of public sector office accommodation from fifteen to just two locations in Melbourne's CBD. This project included the finaiisation of arrangements pre-committing to long- term leasehold offices on the former Southern Cross Hotel site. Achieved the first year of operation of the March 2003 marked the one-year anniversary of operations for the new State Revenue

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