State Transit Authority of NSW Annual Report 2006/2007
Contents
Letter to the Minister...... 1 CEO’s and Chairman’s Foreword...... 2 About State Transit...... 3 Network Maps ...... 5 Performance Highlights ...... 8 Year in Review ...... 11 Customer Service...... 12 Safety and Security...... 19 People...... 22 Competitive Business...... 27 Western Sydney Buses ...... 31 Financial Statements...... 33 State Transit Authority of New South Wales...... 33 State Transit Authority Division...... 79 Western Sydney Buses Division...... 101 Appendices...... 123 Index...... 155
State Transit Authority of NSW Corporate Head Office Level 1, 219 - 241 Cleveland Street Strawberry Hills NSW 2010
PO Box 2557 Strawberry Hills NSW 2012 ABN 51 750 635 629
Tel: (02) 9245 5777 Fax: (02) 9245 5612
This publication is available online at: www.sta.nsw.gov.au
State Transit Authority of New South Wales - Annual Report 2006-2007 II State Transit Authority of New South Wales - Annual Report 2006-2007 Letter to the Minister
The Hon John Watkins MP Deputy Premier Minister for Transport Level 30 Governor Macquarie Tower 1 Farrer Place Sydney NSW 2000
31 October 2007
Dear Mr Watkins
On behalf of the State Transit Authority of New South Wales, it is our pleasure to present to you the Annual Report for the year ended 30 June 2007. This report has been prepared in accordance with the Annual Reports (Statutory Bodies) Act 1984 and the Public Finance and Audit Act 1983. The financial statements have been audited by the NSW Audit Office and the Auditor-General’s report is included.
We wish to thank you for your support and guidance during the past year and we look forward to continuing to grow the business and improve our services to offer an attractive and efficient public transport service to the people of NSW.
Yours sincerely
Peter Rowley Barrie Unsworth Acting Chief Executive Chairman
State Transit Authority of New South Wales - Annual Report 2006-2007 CEO’s & Chairman’s Foreword
Under the new Metropolitan Bus System Contracts for The Board maintained its strategic focus on ensuring the four operating regions in Sydney and the Outer for the future growth of Sydney Buses with depot Metropolitan Bus System Contract for Newcastle Buses developments commencing at Leichhardt, Brookvale and State Transit has had a very successful year with strong Ryde to meet capacity demands. patronage growth and major reinvestment made in fleet renewal. The Board would like to record its thanks to John Lee for his leadership and inspiration during his period as Chief 2006/07 saw strong growth in patronage on public Executive of State Transit prior to taking the position of transport with all major corridors experiencing Director General of the Department of Commerce later increasing demand in peak periods for services. State in 2007. Transit responded vigorously to this increased demand introducing additional services on 22 routes across our four operating regions.
State Transit maintained its strong focus on safety and security. Workplace safety results showed the renewed Peter Rowley Barrie Unsworth attention to detail with Lost Time Injuries falling by a Acting Chief Executive Chairman further 12.5% during the year. Safe driving practices were fostered under the Driver Skills Maintenance Program providing every driver with two days refresher training using State Transit’s award winning Vanguard Vigil technology providing compelling feedback to the driver on their safe driving performance. New digital CCTV systems with five cameras on board are currently being fitted to the entire State Transit fleet. The first of the new Volvo Euro 5 buses went into operation at Randwick and Burwood Depots under the largest investment in new buses since State Transit starting operating in 1989 with contracts on foot for the acquisition of 505 new environmentally friendly buses over five years.
The consolidated end of year financial result was a surplus of $32.7M on revenue of $513M under the funding model applied under the Metropolitan Bus System Contracts based on contract payment for fixed and variable costs and for patronage and performance incentive payments.
State Transit through its Western Sydney Buses subsidiary Peter Rowey Barrie Unsworth continued its strong patronage growth on the Liverpool- Acting Chief Executive Chairman Parramatta Transitway with patronage increasing by 13%. State Transit Authority of NSW State Transit Authority of NSW
State Transit Authority of New South Wales - Annual Report 2006-2007 About State Transit
Boasting the largest bus fleet in Australia and also one of Safety the most modern, State Transit manages one of the largest bus operations of any city in the world. The highest priority is placed on security and safety; all buses are fitted with CCTV, door safety systems and Operating three businesses: Sydney Buses, Newcastle special school bus warning systems, and all buses are in Bus and Ferry Services and Western Sydney Buses (the radio contact with the State Transit control room in the Liverpool Parramatta Transitway), State Transit services Sydney Traffic Management Centre. around 200 million passengers every year. Passenger Information Bus Fleet Individual timetables for every bus service are available At 30 June 2007, State Transit’s bus fleet totalled 1,978 from the State Transit information kiosks at central buses, points in the City, selected ticket agencies, off the web at www.131500.com.au or by phoning the Transport 1,100 buses are air-conditioned, Infoline on 131 500 or by accessing the 131500 mobile 936 buses are low floor design, service. Handy route information is also available at bus 838 buses are fully wheelchair accessible, stops and ferry wharves. 401 buses are CNG powered, Check out our website www.sta.nsw.gov.au which is 320 buses have Euro 3 diesel engines, and linked to: www.sydneybuses.nsw.gov.au 40 buses have Euro 5 diesel engines. www.newcastle.sta.nsw.gov.au Patronage Tourism Services State Transit carried 201 million passengers in 2006/07. State Transit operates the Explorer tourist buses, in the Every working day State Transit operates more than 15,000 services carrying more than 600,000 passengers Sydney CBD and in the Eastern Beaches. to their destinations.
Turnover $513M in 2006/07.
Employees Over 4,500 employees.
Routes Sydney Buses operates approximately 300 routes in the Sydney metropolitan area, extending to Parramatta in the west. Newcastle Buses operates 29 routes over a large part of the cities of Newcastle and Lake Macquarie. Newcastle Ferries operates a service across Newcastle Harbour to Stockton. Every year Sydney Buses travel around 83 million kilometres, Newcastle Buses travel around 8 million kilometres and Newcastle Ferries travel 24 thousand kilometres. More than 106,000 timetabled services are operated every week, 99,000 services by Sydney Buses and 7,000 services by Newcastle Buses and 1,000 services by Western Sydney Buses.
State Transit Authority of New South Wales - Annual Report 2006-2007 About State Transit
Legislation State Transit is established under the Transport Administration Act 1988 and operates, as do all NSW bus operators, within the regulatory framework of the Passenger Transport Act 1990.
How we design our services At State Transit we design our bus routes and timetables so that they are simple to understand, frequent, direct, reliable and accessible to the majority of the community. Our experience shows that these characteristics provide the community with better bus services that match their travel demands. Bus services are well patronised when they are designed to serve a number of purposes. Buses take people to work, school, university and TAFE, shopping, entertainment, hospitals and to visit friends. People use buses to connect with trains, ferries and other buses as part of the transport network. All routes are designed to provide local communities with connections to their regional centres and district centres. These principles were derived after conducting considerable research of travel demand, customer feedback and examining other successful bus services operated by State Transit.
State Transit Authority of New South Wales - Annual Report 2006-2007 Network Maps
Sydney Service Area
State Transit Authority of New South Wales - Annual Report 2006-2007 Network Maps
Newcastle Service Area
State Transit Authority of New South Wales - Annual Report 2006-2007 Network Maps
Liverpool - Parramatta T-Way Route Map
State Transit Authority of New South Wales - Annual Report 2006-2007 Performance Highlights
Prepay Services Reduction in Changeovers In October 2006 the new 333 cashless bus service was Sydney Buses recorded one of its lowest changeover rates launched by the Minister – the new Bondi Bendy. ever for both mechanical and traffic changeovers.
This was the first of these services introduced anywhere in During the year, Sydney Buses Recorded 12.9 mechanical Australia. Cashless bus services have been very successful changeovers per 100,000 kms, an improvement of 20% in London and other major cities in Europe. over the last 5 years.
The service has been very popular with passengers and Lang Park Solution cashless services have now been rolled out across the major corridors in State Transit’s network. Our solution to fixing the conga line of buses coming into York Street at the southern end of the Harbour Bridge was New Buses for State Transit’s Fleet a great success. The 2006/07 financial year saw the addition of 100 new The changes to the stopping patterns in York Street with buses to the State Transit fleet. some buses no longer stopping at the intermediate stop at Lang Park almost instantly fixed the problem. Travel 40 of these new buses were Volvo Euro 5 diesel with State times for passengers were improved by up to 16 minutes Transit being among the first operators in the world to in the morning peak for their trip across the Harbour operate these new environmentally friendly buses to Bridge coming into Carrington Street Wynyard. greatly lower our greenhouse gas emissions. These new buses are part of the $250 million contract to replace Patronage Growth more than a quarter of its bus fleet over the next five years. More than 189 million passengers used State Transit The delivery of 30 new articulated buses brought our services in Sydney 2006/07 with strong growth on all current articulated fleet to a total of 80 of these high major corridors. capacity buses helping to meet the growth in demand on State Transit’s major corridors in the Eastern, Northern and Since the Liverpool-Parramatta T-Way began operations Western Regions. on 16 February 2003, there has been a strong and steady growth in patronage.
Driver Skills Maintenance Program Patronage increased by 13% in 2006/07 with 2.279 million State Transit is leading the way in maintaining the skills of passengers travelling on T-Way buses. bus operators with the Driver Skills Maintenance Program a two-day program designed to ensure that existing Bus Operators receive annual, structured professional development, with Bus Operators attending both workshop-based and depot components.
At the end of the last financial year 2639 experienced bus operators had attended Skills Maintenance training.
State Transit Authority of New South Wales - Annual Report 2006-2007 Performance Highlights
Additional Buses To Meet Peak Growth State Transit responded to demand, introducing 170 additional services during the peak of the peak periods in February and March 2007 on 22 busy routes to cater for the increase in patronage.
The additional buses support the growth during peak periods on strategic bus corridors including Epping Road, Military Road, the Pittwater corridor, Eastern Valley Way, Glebe Point Road, Anzac Parade and Victoria Road.
Newcastle OMBSC Contract State Transit signed the new 7-year service contract for Newcastle Buses with the Ministry of Transport providing certainty for the future of services under the new funding model. Newcastle Buses is now appropriately funded and is no longer cross-subsidised by profitable services run by Sydney Buses
Volvo Agreements Volvo chose State Transit as one of 3 major bus companies around the world to start a new partnership to test and develop the quality of the world bus (the others are in London and in Mexico) as part of their new Dedicated Quality Teams project.
Volvo build about 10,000 buses for the world market every year. State Transit is relatively a small part of that in world terms, but Volvo in Sweden is impressed by the quality of the State Transit team and the work done here to make us one of only 3 around the world to join them in this new partnership.
Volvo also signed a new environmental partnership with State Transit to work together in developing and trialling the latest in environmentally friendly technology on buses.
State Transit Authority of New South Wales - Annual Report 2006-2007 10 State Transit Authority of New South Wales - Annual Report 2006-2007 Review of Operations YEAR IN REVIEW Customer Service
Key Objective State Transit, as a Registered Training Organisation is committed to ensuring that it appropriately identifies, To serve our customers in a friendly manner trains and assesses all staff in line with State Transit’s service standards for reliability, convenience, efficiency, Key Benefit customer service, comfort, and security and safety. Delivering a positive customer experience PrePay Key Performance Indicators In October 2006, State Transit launched its first PrePay only service in an initiative to speed up boarding times for Increased customer satisfaction passengers and increase the reliability of bus services. Increased community advocates/supporters The Route 333 service from North Bondi to Circular Quay Increased patronage was the first of nine PrePay only routes to be introduced in 2006/07 with customers enjoying a faster and more Performance reliable bus trip. Customer service is the key component that allows State Transit to deliver what the community wants. In order The PrePay Only campaign was designed to reduce boarding times at bus stops and improve on-time to deliver services to meet these desires, State Transit reliability by maximising prepaid ticket sales. A prepaid employees need to have skills in the areas of interpersonal ticket takes a quarter of the time to validate than it does to skills, cultural awareness, communication, conflict purchase a ticket from the driver. resolution, service awareness and negotiation.
12 State Transit Authority of New South Wales - Annual Report 2006-2007 Customer Service
The launch of the 333 Prepay Only service followed the Overall, the positive effects of PrePay have extended successful trial of cashless boarding at Neutral Bay which saw across the network to services cash sales drop from 12 per cent to 4 per cent, and average loading times reduce from 50 seconds to 36 seconds. The PrePay Only campaign will be extended in the second half of 2007 to include an additional 15 Prepay Only The Route 333 corridor is one of Australia’s most popular bus services on seven major bus corridors in Sydney. routes carrying about nine million passengers each year. The PrePay Only services have been so popular that even The limited stopping pattern and the elimination of on standard routes, which sell cash tickets, an extra X per cash sales on the 333 PrePay only service has resulted in cent of passengers have now converted to prepaid tickets. a reduction in travel time of 10 minutes for passengers compared to the alternative Route 380 service. Comments received from passengers of the PrePay Only services are overwhelmingly favourable and those below Designated new articulated buses have been placed on are an indication: the Route 333 cashless service, offering increased capacity with almost 50 per cent more seats than regular buses. “Bravo to whoever launched the PrePay bus to Bondi. This is fantastic and it should be on more buses. Passengers have embraced the Route 333 cashless service, Recently I noticed a lot more Sydney commuters using enjoying the benefits of PrePay. cards.”
Since the launch of the service, Route 333 has carried “I’d like to say that the new 333 service from Bondi to over 2.4 million passengers with patronage on the Bondi Circular Quay is brilliant. (I get an extra 10 minutes in Corridor increasing by almost 4 per cent compared to the bed, which is sheer bliss!)” same period in the previous year. “I love to get the 333 Bondi Bendy because it is always The benefits of PrePay have had a flow on effect to other running to timetable, there is always somewhere to sit, services on the Bondi Corridor with the proportion on it is super fast, and it stops at all the places I need to passengers paying cash on the corridor reduced to X per go, and none of the places that I don’t.” cent in comparison to the same period last year. “The new 333 is the best improvement in Sydney Following the success of the Route 333 PrePay only public transport in a long time! I hope it won’t be long service, an additional eight services have been converted before all the buses are PrePay only - it is just so much to PrePay Only including: faster.” Route 297 – Denistone East to City (via the Lane Cove Tunnel) “The new 297 PrePay route (from Denistone to the Route L38 – Abbotsford to City City) is brilliant! And it was introduced very well, with staff on the bus regularly to explain what is happening.” Route E65 – South Curl Curl to Wynyard Route E70 – Manly to City Routes E86/E87/E88/E89 – Pittwater to Central Ticket Vending Machines Expresses Ticket Vending Machines have been installed at Bondi The Route 297 Denistone East to the City via the Lane Junction Interchange to complement the Route 333 Cove Tunnel, was launched on 16 April and has proven PrePay-Only service. popular with commuters, saving more than 10 minutes on each peak hour journey. The two machines operate 24/7 giving customers additional access to single ride, TravelTen and Pension Since the launch of the service, more than 28,000 Excursion tickets. passengers have used the service with the proportion of passengers paying cash falling significantly on the Ticket Vending Machines are also in use at the Wynyard alternative service during the morning and afternoon TransitShop for passengers boarding at Carrington Street, peak hours. to encourage the pre-purchase of tickets before boarding the bus.
State Transit Authority of New South Wales - Annual Report 2006-2007 13 Customer Service
Expanding The Ticket Reseller Network Other Information sources include: To complement the PrePay campaign, State Transit has Bus stop signage: Stop specific timetables are available expanded the ticket reseller network to make purchasing at many bus stops with additional information on a prepaid ticket more convenient. display at major stops. Printed timetables: Printed timetable booklets can be In 2006/07, more than 60 additional ticket resellers came picked up from a TransitShop or selected newsagent on board bringing the total number of ticket resellers along routes and are also available to download from across the State Transit network to more than 700. the Sydney Buses website. TransitShops – Customers can visit one of four Sydney A review of sales to ticket resellers for 2006/07 revealed an city-based TransitShops for face-to-face contact with increase in total sales over 2005/06 by $10.7 million or 9.25%. State Transit staff. Each store carries the full range of State Transit is looking to further expand the ticket reseller timetables and maps and can answer queries about network in 2007/08 and is currently in negotiations with Sydney Buses services. Three out of four TransitShops 7-Eleven with the view of expanding the ticket reseller sell tickets as well. network to include all 7-Eleven outlets. Website - State Transit manages a number of websites that guide the public in the best way to use the Passenger Information services it operates. These sites provide comprehensive information about routes and timetables for both Passenger information is available through a wide range standard and tourist services; information on fares of channels to cater to a wide range of people. Customers’ and ticketing; updates on service changes; route and level of familiarity with our network may influence the terminal maps; fleet details and more that may be of information source they choose and in most cases more use to passengers. There are also links to the Transport than one source is chosen. Infoline website at www.131500.info. 131500 Transport Infoline: The Transport Infoline is part of the Integrated Transport Information Service In the 2006/07 financial year more than 3.6 million people (ITIS) that State Transit participates in. It provides visited State Transit or associated websites, downloading three information channels for customers to find over 2.5 million regular route timetables and over 2.1 million out information about buses, trains and ferries in the maps from the Sydney Buses and Newcastle Buses sites. Greater Sydney Area bounded by Newcastle, the Blue Mountains and Wollongong. Services include Trip A new service was also introduced on the Sydney Buses Planning, timetables, news and special events. and Newcastle Buses sites, providing school students – Website – www.131500.info - available 24 hours a with access to school route timetables in HTML and PDF day and receiving 450,000 visitors per month. as well as maps for every bus route in PDF. Timetables can be searched via school or route number and since – Mobile Website – mobile.131500.info available on December 2006, more than 196,000 visits have been web-enabled mobile phones and offering: made to the sites with over 42,000 timetables viewed - Late breaking news and 39,555 maps downloaded. - Next service timetables - Train, Bus or Ferry - Transit stop timetables Infoline - Highlight events Of the total calls answered by the Infoline, 23.62% were - Service changes related to Sydney Buses, Newcastle Buses & Ferries or – Infoline – This incorporates the 131500 Infoline Western Sydney Buses matters. Of these, 86.8% of calls (call centre) for timetables, travel plans, ticket and related to next service, timetable or trip planning requests. fare information and “Your Say Line” (YSL) which The remainder of calls concerned fares, ticketing and encourages passengers to register their feedback general information. over the phone (131500) or online. State Transit relies on this information to take corrective action The top five issues for our customers were late buses, staff to improve those aspects of its service quality that being rude/unhelpful, buses failing to stop, poor driving attract complaints and to congratulate exceptional and early buses. staff. Customers can call the Transport Infoline between 6.00am and 10.00pm seven days a week; interactive voice response (IVR) 24 hours a day.
14 State Transit Authority of New South Wales - Annual Report 2006-2007 Customer Service
Bus Stop Information Traffic congestion in Sydney CBD and on the major arterial roads in Sydney such as Victoria Road, Epping Road and Bus stop information continued to be improved Military Road can affect the on-time running performance throughout the financial year. of Sydney Buses’ services.
New plinth signage was introduced along the Bondi Road Speeding Up Travel On Major Bus Corridors corridor, and at Manly Wharf. An additional 461 new plinth signs will be installed along several major corridors The Victoria Road corridor continues to experience in the 2007/2008 financial year. The locations include patronage growth (0.6% growth on the previous year). Pittwater Road, Military Road, Anzac Parade, Victoria Road State Transit is working with the RTA and local Councils and Parramatta Road. Features of the new bus stop signs to introduce bus priority on Victoria Road. Proposals will include clear timetable information, detailed bus route include a section of morning bus lane between Iron Cove descriptions, and will show the locations of the nearest Bridge and Darling Street, and an AM peak tidal bus lane ticket retailers. arrangement between Westbourne Street and Lyons Road. A number of bus priority projects are currently being An upgrade of passenger information for Sydney Buses implemented or planned for the section of Victoria Road services at the Bondi Junction Interchange was completed between Gladesville and Parramatta. in October 2006. New wayfinding and directional signage was introduced, along with larger timetable displays. The Impact of the Lane Cove Tunnel works were done in conjunction with the new Route 333 The opening of the Lane Cove Tunnel, has improved PrePay Only service to North Bondi and Circular Quay. reliability for Epping Road services. Furthermore, an upgraded digital voice announcement system was commissioned which provides general service The Lane Cove Tunnel will deliver the following bus and safety information to customers, which is particularly priority projects: useful for those using the Interchange for the first time. Extension of a bus only lane on Epping Road; Destination signage on board buses in Sydney and Longueville Road Bus Interchange; Newcastle has also been part of a continual improvement Longueville Road to Pacific Highway B-Light; program. Standardisation of electronic signs on our newer Falcon Street / Warringah Freeway Bus Ramp; buses was completed in June 2007. 49 buses are currently receiving new electronic destination signs to improve the Military Road, Warringah Freeway to Big Bear Bus visibility of destination information. This program will be Lane; and continue into the 2007/2008 financial year. Gore Hill Freeway Transit Lane.
Service Delivery Stage 2 of the Lane Cove Tunnel Project included bus lanes on Epping Road. The RTA is currently investigating Service Reliability other bus priority measures as part of the Lane Cove Traffic conditions in Sydney are a major challenge to Tunnel including bus lanes on the Pacific Highway and reliability of bus services. State Transit actively pursues Falcon Street. a number of strategies to maintain and improve the reliability of services under all operating conditions.
In 2006/07, State Transit continued its good record for service reliability.
Sydney Buses recorded an improvement in reliability with 95.2% of services running to time and excellent service reliability with 99.4% of timetabled services operating over the year.
Newcastle Buses recorded a 98.2% on-time service performance with 99.94% of services operating over the year.
State Transit Authority of New South Wales - Annual Report 2006-2007 15 Customer Service
Patronage results Bus Fleet Total patronage for State Transit in 2006/07 was 201.733 100 new buses were delivered in 2006/07. million trips, which was higher than the previous year. State Transit’s operating contracts with the Ministry of Sydney Buses’ patronage was 186.999 million trips up by Transport issued under the Passenger Transport Act 1990 more than 1 million trips on the previous year. Newcastle require an average fleet age of not more than 12 years. State Buses and Ferry Services had 12.455 million trips, largely in Transit’s average fleet age improved over the year reaching line with the previous year. 12.6 at 30 June 2007.
Patronage on the new Liverpool-Parramatta T-Way The average age of the fleet will continue to fall as new continued to show strong growth since beginning buses arrive under the 505 buses supply contract and the services in February 2003. Patronage on the T-way older buses are retired. reached 2.279 million trips, up 264,000 trips on 2005/06. State Transit continues to lead the nation in terms of the Future patronage issues quality and presentation of its bus fleet and the operation of dedicated wheelchair accessible bus services, now The new Metropolitan Bus System Contracts (MBSC), timetabled on 166 bus routes across Sydney. State Transit signed by State Transit on 1 July 2005 significantly is five years ahead of the targets in the Commonwealth changed State Transit’s role in generating patronage Disability Discrimination Act. growth on its services. All new buses acquired by State Transit feature kneeling The MBSC provides a Patronage Change (Incentive) suspension for level entry and a flat no-step floor Payment for operators to ‘grow’ patronage. In 2006/07 to make it easier for the elderly and less mobile; an State Transit achieved an incentive payment of $1.45M for extending wheelchair ramp and accommodation for the amount by which actual farebox revenue exceeded two wheelchairs; additional priority seating for less benchmark expectations. mobile passengers; high visibility handrails, increased interior lighting and improved destination signs; and, air Additional Services conditioning. In 2006/07 State Transit experienced major growth across the network carrying over a million additional passengers Timetabled wheelchair bus services now operate on all by June 2007 compared to the same period last year. main corridors and cross regional routes. Many of these services provide links to accessible CityRail stations to Overall patronage increased with significant growth in the increased opportunities for multi-modal travel. A full list morning peak period in particular. of wheelchair accessible services can be found on www. sydneybuses.info. In response to the increased demand, State Transit allocated additional trips on major corridors across Sydney, New Bus Contract coinciding with the busiest commuting period - the In April 2006, State Transit signed a $250 million contract February-March back to school rush. to replace more than a quarter of its bus fleet over the five years to follow. The additional services operated on Anzac Parade, Pittwater Road, Eastern Valley Way, Ryde Secondary This order was for 505 new buses, made up of 250 Euro 5 College, Hunters Hill High School, Epping Road, Harris Volvo diesel buses and 255 Compressed Natural Gas (CNG) Street (Ultimo), Parramatta Road, Victoria Road and King Mercedes buses. The first delivery of these commenced in Street (Newtown). February 2007. These additional services are on top of the extra trips that were introduced in August 2006 on 22 busy routes along strategic bus corridors.
16 State Transit Authority of New South Wales - Annual Report 2006-2007 Customer Service
The investment is the biggest ever investment in new As buses average about 40-60,000km per annum, these buses in NSW history and also the biggest capital buses are designed as heavy-duty vehicles. Many of investment by any one bus company in Australian history. the important components are replaced during the life The Euro 5 Diesel engine is the latest in environmental of the bus such as the engine, gearboxes, suspension technology offering the greatest benefits both components, brakes. For example, a diesel engine will environmentally and operationally. last for around 600,000 - 700,000km and then be rebuilt. Although the bus may be 20-25 years old, many of the In 2006/07, 40 Euro 5 buses were delivered to State Transit, components will have been replaced in recent years. operating out of Randwick and Burwood Depots.
Roll out of new Articulated Buses In 2006/07, 30 new articulated buses were delivered completing the order of 80 new articulated buses.
The new articulated buses are now in service on the major corridors operated by Mona Vale, Brookvale, Ryde and Waverley Depots.
The new articulated buses – built on the Volvo B12BLE platform by Custom Coaches have a range of additional features including: Euro3 emissions – compliant 12.1 litre turbocharged diesel engine Video screens and cameras to provide the driver with a view of the central door Rear mounted reversing camera Passenger door safety systems and roll away protection Capacity for 65 seated and a legal standing capacity of 24 passengers Electronic destination signs on the front, side and rear Front and rear ABS brakes
All new buses are wheelchair friendly and air-conditioned to ensure a safe and comfortable ride for all passengers.
The high capacity buses offer potential cost savings, especially for labour costs, provided that their capacity is fully utilized (i.e. More passenger trips per driver).
Bus Refurbishment State Transit tenders require a 20-year minimum design life with a 15-year warranty. Manufacturers supply buses to State Transit on that basis. Manufacturers do not stipulate maximum kilometres for the vehicle.
State Transit then refurbishes the buses at 14-17 years of age which is well within the minimum design life and which gives the buses a further 10 years of life. State Transit therefore operates buses up to 25 years old. All buses are regularly assessed by qualified persons to see if they can remain in service. New Blade sign at Randwick
State Transit Authority of New South Wales - Annual Report 2006-2007 17 Customer Service
Service Network Customer Satisfation Survey State Transit designs its bus routes and timetables so that Early in the 2006-7 year, a Customer Satisfaction Survey they are simple to understand, frequent, direct, reliable of focus groups showed that public transport users and accessible to the majority of the community. considered Sydney Buses as one of the best passenger service operators. In particular, customers said that Service changes proposals are based on regional research Sydney Buses was doing well with personal security on and analysis of internal and external data including buses; had services that operated to desired destinations; transport data, demographic data, ticket data, market made use of bus priority lanes; and, was good value for research, local and regional land use planning strategies money. While acknowledging our efforts they also said we and service performance data. needed to do more to improve punctuality and number of buses during the commuter peak-hours; and improve Consultation with a range of stakeholders and the comfort at bus stops. The survey identified a strong community is a key element of the State Transits service demand for real time information at bus stops similar to development strategy. Considerable care is taken to ensure the CityRail train signs at stations. that the final structure reflects the needs and wishes of the greatest number of passengers and residents.
State Transit developed a program of adjustments to the timetables of selected bus routes throughout its operating area, which were implemented in 2006/07. These adjustments are intended to ensure that bus service timetables reflect the needs of customers, match current levels of demand, ensure reliability of service, and correspond to operational agreements negotiated between Management and Unions.
Special Events State Transit, on behalf of the Ministry Of Transport does the scheduling for the regional route network for sporting events at Sydney Olympic Park (SOP). This includes the Royal Easter Show, Rugby Union, State Of Origin Rugby League, NRL Grand Final and Swans Fixtures.
State Transit also provides the contracted services via route 4 Maroubra to SOP and route 1a Warriewood to SOP.
18 State Transit Authority of New South Wales - Annual Report 2006-2007 Safety and Security
Key Objectives Performance Providing a safe and healthy workplace for employees, Safety Performance contractors, clients and members of the public The key safety indicator for safety is the Lost Time Injury Building an organisational culture of environmental Frequency Rate (LTIFR). responsibility The LTIFR result for the financial year 2006/07 was 22.2. Key Benefits This result has continued a trend in the reduction of the rate of injury, by 12.5% from 2005/06 and by 23% since A safe and healthy workplace for all 2004/05. To complement the reduction in lost time Improved air quality and less congestion injures, there was also a 19.9% reduction in the number of Optimised energy efficiency days lost due to injury from 2005/06.
Key Performance Indicators Drug & Alcohol Testing State Transit continued regular random testing for alcohol Reduced staff incidents and other drugs through 2006/07. For the period, more Reduced customer incidents than 1,760 breath alcohol tests and nearly 500 drug tests Increased safety culture were conducted out. Of these, the majority were drug and Environmentally sustainable bus services at affordable alcohol free and compliant with the Regulation, however prices 1 employee returned a positive breath alcohol test result and 4 employees returned a positive result for drugs.
State Transit Authority of New South Wales - Annual Report 2006-2007 19 Safety and Security
Drug & Alcohol Testing (continued) Fitness For Work State Transit also conducted reasonable cause and State Transit has progressed in the development and incident testing. There no positive breath alcohol or urine implementation of a health risk management program. drug tests as a result of a reasonable cause test. This has involved the review of inherent requirements, associated health attributes and relevant medical Those employees who returned positive tests were standards. This process has involved task analyses, immediately removed from safety duties pending the ergonomic assessments, medical opinion covering all outcome of a formal investigation. In addition, State forms of transport safety work in State Transit, improving Transit also offered counselling and/or rehabilitation for process and enhancing linkages with interfacing the employees. programs. An assessment was also conducted of the applicability of the national standard applied in the rail Programs industry in relation the inherent requirements of a bus operator. Safety Programs State Transit has continued the Safer Garages program Transport Safety initiated in 2005. The program is arranged around key areas in the workplace to identify and manage Driver Distraction improvement, namely Workshops, Depot Yards & On-Road The second phase of the driver distraction study was Operations. completed in 2007 by the Monash University Accident Research Centre. This involved a targeted review of what Safer Garages has become a model for the remaining two is known about the effects of driver distraction on driving parts of the program. This has involved the development performance, crash risk and crash involvement. This has of a model garage that can be used to identify issues followed on from the initial stages of the study, which and improve work practices, and has involved intensive involved an assessment of risk deriving from distractions. employee consultation. This included an assessment of the current exposure to potential and actual distractions and the potential for Following a similar approach, Safer Yards was begun to those to degrade driving performance and increase risk. continue to improve the safety and general operation of heavy vehicle movements and general work practices of Coroners Inquest depot yard related activities. On 30 June 2006, Deputy State Coroner Dorelle Pinch Fatigue Management handed down her findings and recommendations following the inquest into the deaths of two elderly The University of New South Wales was engaged to passengers on State Transit buses. conduct a study of existing roster patterns with regard to the level of risk of fatigue while driving and, consequently, Ms Pinch handed down five recommendations to the the level of accident risk, while a further study of rostering Minister of Transport to improve safety on board State for new employees was also conducted. A working group Transit buses. These recommendations included the has been formed to evaluate the recommendations implementation of warning signs and bells to signal when of these studies, and to develop strategies for risk the bus will be moving from the bus stop, improved minimisation. bus operator training, safety hints to seniors on how to minimise movement within buses and the removal of the passenger seat situated in the blind spot behind the bus operator. State Transit is also examining the interior layout of all new buses to determine what improvements can be made to reduce the risk of passenger falls
State Transit has implemented the recommendations with the exception of the warning bells which is being trialled.
20 State Transit Authority of New South Wales - Annual Report 2006-2007 Safety and Security
OTSI Investigations ordinating the implementation of safety strategies, plans and programs as well as and the provision of safety advice The Office of Transport Safety Investigation (OTSI) has to depot management and staff. The injury management finalised 3 investigations involving State Transit. These function was expanded to include return to work and include a collision between two buses in the Eastern health promotion activities. Distributor, Bus Blind Spots and a Bus collision on Spit Road.
State Transit has carefully examined and implemented Driver Safety recommendations from these reports. Actions taken in Security Screens respect of the findings include: State Transit has continued the trial of bus security screens. This has included the quarter screen and the development Emergency Response processes – State Transit has of designs for other configurations such as half and full undertaken further work to ensure that responses to security screens. emergencies are effectively coordinated. Video Surveillance – Installation of new on board Half screen variations have been included on all new digital CCTV equipment has begun. buses entering the fleet. A retrofit of the existing fleet Bus Operator Skills Monitoring – The Driver Skills is also being undertaken, with trials conducted for most Maintenance program has been implemented for all appropriate screen by bus type. drivers. This includes a state of the art system called Vigil Vanguard being used as an on board simulator for CCTV drivers. State Transit has also continued the upgrade on bus CCTV OTSI have also commenced one further investigation with systems. respect to pedestrian incidents. Following the issue of an Expression Of Interest in 2005, Structure a full trial of digital camera systems was completed. A Tender was awarded in 2007. As part of State Transit’s Regional and Depot restructuring, the safety function was reviewed. Following a corporate The on bus CCTV system includes four cameras that cover restructure that saw a split between system and audit and the entire interior of the bus as well as one forward facing investigation functions, Depot and Regional functions camera. Specifications of the design and use of the on were also split. bus CCTV system have address recommendations made in the OTSI investigation into the bus collision on Spit Road. In place of a single role that covered injury management and safety responsibilities, two separate roles were The digital camera systems are installed in all new buses created. The safety function was moved to a regional introduced into the fleet, and the retrofitting of the level, with a Regional Safety Officer responsible for co- existing fleet is well underway.
State Transit Authority of New South Wales - Annual Report 2006-2007 21 People
Key Objective ensuring that our drivers achieve competencies to the national industry standard. To inspire, develop and support each other Certificate III in Transport and Distribution (Road Transport) Key Benefit is a critical element of our Driver Training Program where all new Bus Operators are required to undertake a two- Developing productive and motivated staff year traineeship. State Transit also offers the qualification to longer-term Bus Operators through the Existing Worker Key Performance Indicators Traineeship Program. Improved staff retention In the past financial year 371 new trainees and 72 existing Improved staff job satisfaction workers are enrolled in the program and a total of 263 Bus Improved staff learning Operators successfully completed the full 2 years of the Improved willingness to make tough decisions traineeship.
Performance Driver Skills Maintenance Program State Transit has implemented an industry-leading Driver Training program to maintain the skills and knowledge of bus Traineeships operators. The two-day Driver Skills Maintenance Program State Transit aims for excellence in training our Bus Drivers. targets existing bus operators not currently undertaking As a Registered Training Organisation State Transit is able a traineeship and is the second key component of State to provide accredited, job-based training and assessment Transit’s Driver Training Program.
22 State Transit Authority of New South Wales - Annual Report 2006-2007 People
This program maintains driver’s currency of skills and Graduate Program knowledge in the following aspects of their role: State Transit has a long-term objective of fostering quality Road rules and driving skills candidates for management roles, and continues to Hazards and risks expand the graduate program to achieve this goal. In Customer comfort and safety 2006-2007 the graduate intake included graduates in operations, marketing, safety, engineering, and human Radio Communication resource disciplines. The graduate program provides for Driver health and wellbeing wide exposure to all aspects of the organisation through structured placements and rotation, and project work. A highly innovative approach is taken to improving driving skills, using state of the art computer based driver diagnosis Registered Training Organisation and assessment system. The VIGIL Vanguard system monitors and visually records the driver’s traffic decisions State Transit Authority is accredited as a Registered and positioning, acceleration, braking and cornering activity Training Organisation (RTO) by the NSW Vocational whilst driving. The system is also aligned to international Education & Accreditation Board (VETAB) to deliver and RTA competency standards. Drivers receive a nationally recognised training and qualifications, as part of comprehensive debriefing and analysis of their driving, and the National Training Framework. are supported with further training where required. There have been significant changes put in place by At the end of the last financial year 2639 experienced bus the State Transit RTO over the past year in response to operators had attended Skills Maintenance training. national reform of the vocational training sector and the requirements of the new Australian Quality Training Leadership Development Programs Framework (AQTF) standards. Management Development Program These changes in the standards focus on the outcomes State Transit continues to invest in developing the capability of training and improving performance at work. A key of managers and leaders at all levels. State Transit’s focus of improvements at State Transit RTO has been Management Development Program offers a variety of on the quality and consistency of training and ongoing developmental opportunities including formal training, development of our trainers. workshops, work-based projects, coaching, mentoring, and leadership forums. The State Transit RTO currently has the following qualifications in scope: A key component of the programs are the work-based Certificate III in Transport & Distribution (Road projects, focusing on business improvement and Transport), change which have resulted in improved safety, running Certificate IV in Business (Frontline Management) times and customer service. In the last financial year 39 managers graduated from the program, and a further 38 Workforce Change Culture and Equity commenced. Commitment to Equity and Diversity The program provides managers with opportunity to The Chief Executive Officer’s Equity and Diversity Steering gain a nationally recognised graduate certificate level Committee met three times during the reporting year to qualification. set and monitor the strategic direction for the Equity and Diversity Program within State Transit. Frontline Supervisor Program State Transit’s supervisor development program is the A key initiative has been the training of staff in equity and Certificate IV in Business (Frontline Management). The diversity issues through our mainstream training programs program focuses on building supervisor capability in the – Induction, Driver Skills Maintenance Program and key areas of People Management; Safety and Environment; Management Development Program. Planning and Operations; and Continuous Improvement. In the past financial year 64 supervisors have participated During the reporting year, State Transit became a member in the program. of the Australian Employers Network On Disability.
State Transit Authority of New South Wales - Annual Report 2006-2007 23 People
Action Plan for Women Bus Operator Recruitment A targeted recruitment campaign was conducted to Sydney Based Depots attract women to bus operator positions. It involved the 320 new Bus Operators were appointed during the development and distribution of brochures marketing the 12 months ending June 2007. During 2006/07 the availability of part time bus operator positions. establishment for Sydney based depots increased by 67 drivers. 60 women attended the State Transit Women’s Forum in October 2006 which provided opportunities for A more extensive and wide spread advertising campaign professional development, discussion of topics of interest, and feedback on issues that are important to women in has taken place during 2007 to ensure sufficient numbers State Transit. of suitable applicants are attracted to the job.
State Transit continued to implement the NSW Advertising media used: Government’s Spokeswomen’s Programme. In State Use of colour banner advertisements in metropolitan Transit, the Spokeswomen’s Programme is a specific and local press initiative for the development of women bus operators. Use of 2 variable message signs at sporting and cultural There are 13 Spokeswomen and their role is to provide events information and support to women bus operators within Use of bus tickets the organisation. Use of posters in the snap frames of buses Aboriginal and Torres Strait Islander Employment Use of Jobs.NSW front page banner State Transit continued to implement strategies designed On-going advertising on Jobs.NSW to attract Aboriginal and Torres Strait Islander people, Advertising on Seek and MyCareer however, progress towards a target of 2% representation Use of promotional leaflets in letter box drops has not been achieved. At present, representation is 0.9% and State Transit will continue its efforts to increase Banners outside bus depots representation through recruitment programs for bus Introduction of new web page highlighting the operators, graduates and apprentices. benefits of being a Bus Operator Use of blind advertisements in local press to attract Workers Compensation, Rehabilitation and greater number of visitors to the new bus operator web Injury Management page. As reported elsewhere in this report, lost time injury Use of the Australian Job Network Database frequency rates have reduced due to a range of safety initiatives. In addition, the Workers Compensation Unit Newcastle Depots has contributed to reduce the duration of lost time 3 new Bus Operators were appointed during the 12 injuries by implementing early intervention strategies to months ending June 2007. ensure injured workers receive the correct treatment by collaborating with the worker’s doctor. Health Services Officers ensure that suitable duties are provided to injured workers to ensure rehabilitation in the workplace, which leads to durable return to work outcomes.
The early intervention strategy together with the efforts made to accommodate injured workers returning to their normal duties following a workplace injury has resulted in a 32% reduction on the cost of closed claims.
24 State Transit Authority of New South Wales - Annual Report 2006-2007 People
Depot Online There was a healthy participation rate of 57% in the survey. The results indicated up to 69% Bus Operators State Transit has introduced ‘Depot Online’ facilities to all aged 55 years or older are potentially interested in part State Transit bus depots to provide staff with access to web and e-mail facilities within the workplace. Staff will time work or job sharing, and that, of these, up to 49% be able to access work-related information such as pay, may subsequently delay their retirement. leave, shift details and policy and procedures at their depot and from any off-site computer terminal that has Based on this level of interest, State Transit will develop access to the Internet. additional options for part time work and job sharing.
The ‘Depot Online’ facilities at each depot enable all Performance Agreements for Senior Officers State Transit employees’ access to the Internet and to A Project Group researched and developed a model and email facilities. This is particularly important for bus plan for introducing Performance Agreements for Senior operators, maintenance and cleaning staff that need Officers, which complies with the 2006 Salaried and Senior good communication facilities to help their working lives Officers Enterprise Agreement. as shift workers. The model is based on cyclical 12-month performance Enterprise Agreements agreements which include objectives and measurable Key During the reporting period State Transit had a number of Performance Indicators (KPI’s); formal progress reviews at enterprise bargaining agreements in place with a number 6 months and 12 months; and salary/increment results of unions, covering employees in the following categories: linked to annual assessments. Bus Operations Looking forward, 2007/08 will focus on completing Salaried and Senior Officers consultation on the program, and implementation. To Salaried Officers in Operational Support support the changes, Senior Officers and their managers will receive training and briefing, procedures will be Bus Maintenance staff finalised and published, a standard template will be used, Newcastle Ferry Master/Engineers and additional support such as sample Performance Agreements will be available. Wage outcomes for all classifications reflected NSW Government wages policy for the period, which implied Staff Recognition Scheme nominal pay rises of up to 2.5% per year, through negotiated settlements, with an additional 1.5% available The implementation of the Recognition Program for State in return for productivity offsets. Transit employees commenced in 2005, to celebrate success and achievement, and to support State Transit’s All major agreements negotiated during the period business directions. included clauses providing for various flexible leave and work arrangements, designed to assist State Transit The program is based on 3 ‘tiers’ of Recognition: (i) an employees to balance work and family commitments. It annual organization-wide program, culminating in a is envisaged that such initiatives will assist State Transit to formal annual awards function, (ii) regular Regional/Depot attract and retain valued staff, in addition to increasing the & Divisional activities conducted on a quarterly or monthly participation rate of women in State Transit’s workforce. basis, and (iii) day-to-day praise and feedback in the workplace to employees from managers and supervisors. Bus Operator Survey The Annual Awards function held in December 2006 A Retirement Intentions Survey of Bus Operators aged 55 recognised the outstanding contributions of 7 work years or older, and other associated research, was conducted. teams and 32 individuals. Randwick Depot was awarded This was to assist in workforce planning, by assessing levels of most improved depot of the year, and the Brookvale interest flexible work options, such as part time work or job Maintenance Workshop won the most improved sharing as a transition to retirement strategy. maintenance workshop award.
State Transit Authority of New South Wales - Annual Report 2006-2007 25 People
2006 Recognition Award Recipients Chief Executive Special Award – Peter Hammond The following work teams and individuals received Chief Executive Special Award – Nick Karam Recognition Awards for their outstanding contributions Transport Minister’s Award for Excellence - 333 to State Transit. These included awards presented to Project Team staff who contributed to State Transit’s four foundations Depot Maintenance Workshop Award – Brookvale Depot of success: Safety, Customer Service Quality, People and Competitive Business. Depot Award – Randwick Depot Safety – Madeleine Hopkins Golden Wheel - Depot of the Month Award Safety – Warren Singleton The Golden Wheel award recognises the best performing Safety – Ali Meslemani State Transit Depot for the month. This award is measured Safety – Joe Polis in relation to Key Performance Indicators. Safety - Richard Robinson Depots to receive the award during 2006/07 include: Safety - Nestor Cabalag July – Randwick Customer Service - Deanne Wilkie August – Randwick Customer Service - Zoran Jonoski September – Randwick Customer Service - John Nowlan October – Brookvale Customer Service – School, TAFE and Staff Passes Team November – Brookvale Customer Service - Margaret Pannell December - Leichhardt Customer Service - Sid Waters January – Port Botany Customer Service - Eddy Nelson February – Mona Vale Customer Service - Stephen Wolfe March – Leichhardt Customer Service - Roger Tregear June – Brookvale Competitive Business - David Martin Competitive Business - Juliet Payne Golden Spanner – Maintenance Section of Competitive Business – Corporate and Regional the Month Schedules Group The Golden Spanner award recognises the best Innovation - Matthew Haines performing State Transit Workshop for the month. A range Innovation - Bruno Sinatambou of indicators, including outstanding work orders, increased Innovation - Phil Ivey and Danial McCormack reliability and a reduction in changeovers are used to measure the award. Inspiring and Developing Others – Martin Walls Inspiring and Developing Others - Leanne Springer and Maintenance sections to receive the award during Jessica Willingham 2006/07 include: Leadership - Robert Rachwal July – Not awarded Traineeship Excellence – James Forsyth August – Burwood Traineeship Excellence – Sarah Young September – Burwood Traineeship Excellence – Allan Comben October – Newcastle Traineeship Excellence – Glen Swan November – Brookvale Traineeship Excellence - Frank Eccles December - Waverley Traineeship Excellence - Raymond Prisk January – Leichhardt Traineeship Excellence - Giovanni Montesano February – Willoughby Apprenticeship Excellence – Robbie Horgan March – Leichhardt Apprenticeship Excellence – Brad Starling June – Burwood Apprenticeship Excellence – Ranif Khan Apprenticeship Excellence – Wade Salameh
26 State Transit Authority of New South Wales - Annual Report 2006-2007 Competitive Business
Key Objective Operational revenue was up on last year by $13.4M to $513.3M. The main contributing factor was an increase of To build our competitiveness as a business $12M in operational revenue in Newcastle Bus Services To win the Metropolitan Bus Service Contract when it is resulting from entering into the Outer Metropolitan offered for renewal Bus System Contract on 1 July 2006 with the NSW Government. Key Benefit Operating expenditure of $508.4M was $31.7M (6.6%) Cleary demonstrating improved `value for money’ higher than previous year due to a reduction in the assessment of the defined benefit superannuation liability Key Performance Indicators that was $22.6M higher in previous year. Other labour costs Increasing profitability increases were due to a 4% increase in pay rates for bus Increasing investment to meet our future obligations maintenance, salaried and senior officers that added $3.3M to expenditure. Average fuel price increased by 4.53% and Maximising asset utilisation the impact on expenditure was an additional $1.74M to Performance overall running costs. Financial Review 2006/2007 The underlying operating surplus of $15.2M, having taken State Transit operating result for the financial year ended into account the above abnormal items in revenue and 30 June 2007 was a profit of $32.7M. expenditure, was 2.05% higher than last year.
State Transit Authority of New South Wales - Annual Report 2006-2007 27 Competitive Business
Capital Expenditure number of invoices received. Capital expenditure in 2006/07 was $65.8M being $14.4M Online ticket ordering and online payment for higher than last year. $48.7M was spent on bus fleet registered ticket re-sellers makes it easier to order and acquisition that was complemented by purchase of pay for ticket stock and improves availability of tickets onboard equipments and enhancement of $4.7M. The from these outlets. bus acquisition and replacement program will ensure the A network of information kiosks provides staff at depots average bus fleet age will be under 12 years by 2009 that is with access to a wide range of information, especially required under the MBSC contract with the Government. for those who work on shifts outside office hours. Any The average fleet age was 12.6 years as at 30 June 2007. staff member can access their pay and leave details. The kiosk also provides information about service State Transit has also embarked on its depot timetable changes, special events and other local redevelopment program to meet new fleet requirements depot news. and expansion. The estimated depots (Leichhardt, Ryde ‘Depot Online’ facilities at each depot enable all State and Brookvale) redevelopment capital expenditure for the Transit employees’ access to the Internet and to email following two years is $55.6M. facilities. This is particularly important for bus operators, maintenance and cleaning staff that need good Payment received from the NSW Government communication facilities to help their working lives as Net payment received from the NSW Government, shift workers. including those under the Metropolitan and Outer The new information kiosk and staff intranet Metropolitan Bus System Contracts, in 2006/07 was homepage will provide bus operators, maintenance $264.8M as compared to $256.8M in last year. The increase and cleaning staff through the Depot Online facility or is mainly due to Newcastle Bus Services entering into the through the Internet the ability to access information Outer Metropolitan Bus System Contract on 1 July 2006 currently available on the Information Kiosk as well as with the NSW Government. policy and procedures.
Financial Debt Position ISO 9001:2000 Certification Financial debt remains relatively uncharged at $75.8M State Transit successfully maintained its quality ($76.0M in 2005-06). certification under ISO 9001:2000 in 2006/07 following audits of its quality program by its external quality auditor, Equity SAI Global. State Transit’s net worth has improved by $47.2M to $274.6M from $227.4M in 2005-06. State Transit has redeveloped its Business Management System to provide easier access for staff by using the Electronic Service Delivery additional functionality provided by State Transit’s new Intranet system. In the second phase of the rollout of the In its pursuit of improved business processes, State Transit revised Business Management System in the coming year, continues to realise the many opportunities that are access will be extended to all staff including bus operators, available from electronic business systems, including: mechanics and cleaners using State Transit’s Internet café The passenger information service is now delivered by program in all depots. the Integrated Transport Information Service (ITIS) - 131 550 Transport Infoline. Risk Management and Insurance State Transit’s website guides the public in the best State Transit’s Risk Management Framework covers all way to use the services it operates. The site provides areas of business activities and statutory compliance comprehensive information about routes timetables through the governance and risk structure overseen by and fares the State Transit Board and its Audit Committee and Safety Annual reports, corporate plans, information about Committee. Continuous improvement under the ISO contracts awarded to tenderers amongst other 9001:2000 Quality Management System has enhanced matters of interest to stakeholders are also available compliance and therefore the control of risk exposures. on the website. Over 97.8% of the values of all payments to suppliers An enhanced insurance program provided financial are made by electronic means, or over 83% of the protection for the organisation during the year. The
28 State Transit Authority of New South Wales - Annual Report 2006-2007 Competitive Business
program spans: general property, personal injury, buses was approved by Leichhardt Council in 2006/07. consequential loss, motor, professional risks, general and Remediation of the site commenced and was expected marine liability. State Transits’ enhanced risk profile has to be finished before the end of 2007 with construction of yielded lower premium escalation than experienced over the new Depot to commence early in 2008. recent years by the insured community. State Transit has engaged the Carson Group to project State Transit has a contract with Willis Australia for manage the redevelopment and Woodhead International insurance brokerage, claims management and risk as Architects for the project. management services. Willis Australia has negotiated reductions in premium rates for State Transit, although the The $34.3 million project will see Leichhardt depot total cost remains similar to last year due to the increase in become home to Australia’s largest environmentally values of assets and turnover. friendly bus fleet. The state of the art redevelopment of the historic transport hub will cater to increased demand During the year State Transit refined its Emergency and from passengers for bus services in one of Sydney’s Operational Response Plans for Bus and Ferry Operations population hot spots. The “clean green” depot will: and developed and documented robust Business Improve bus services for passengers in the Inner West; Continuity Plans. A detailed review and revision of the Support the largest gas bus fleet in Australia; Crisis Management and Communications Framework has also been completed. Simulation exercises and training Protect the heritage buildings on the site; exercises have maintained staff preparedness. Minimise the impact of noise and light on its neighbours; State Transit has undertaken comprehensive risk Clean up residual site contamination; and studies for major infrastructure development and asset procurement such as the 505 buses supply contract. Use recycled water. Operationally an extensive program of bus route risk studies was conducted across the network in preparation The depot, which operates 15 bus routes, will remain open for the introduction of the new articulated buses on routes during the redevelopment to continue to meet the needs where are operating for the first time. The maturing of a of the local community. risk based OH&S regime has focussed staff on workplace hazards and appropriate risk treatments rather than a The Development Application for the redevelopment of reliance on risk financing. Brookvale Depot was approved in 2006/07. The project will deliver: Bus Depot Strategy The construction of efficient and modern, fit-for- purpose facilities (including staff car parking and an State Transit’s Depot Strategy is updated annually to administration building). investigate the adequacy of existing bus depot capacities, given anticipated patronage growth, the increase in actual Repositioning and updating of fuelling and cleaning bus length and the ability of the facilities to cater for future facilities. needs. State Transit’s Depot Strategy has identified that: Altering the bus parking and bus movement plan to Existing depots are strategically positioned and are provide increased capacity and increased efficiency. nearing capacity. Accommodation for longer Bus Fleet replacement and Buses are now 20% longer with a consequent increase 35 additional bus parking spaces. in depot parking space requirements. Patronage growth requires an ongoing expansion of depot capacity. There are limited “Greenfield” sites suitable for depot developments. The Depot Strategic Plan identified Leichhardt as the depot with the greatest potential for redevelopment with its location to the CBD and available land for expansion.
The Development Application for the redevelopment of Leichhardt Depot to support a fleet of up to 200
State Transit Authority of New South Wales - Annual Report 2006-2007 29 Competitive Business
Revenue Protection Unit Maintenance Reform There has been improvement in the level of revenue The implementation of State Transit’s Maintenance Reform enforcement activities on State Transit bus network. In Program was largely completed during the year. The 2006/07, State Transit checked nearly 700,000 passengers. new maintenance structure has enhanced the reliability 1.2% of those checked were issued with a fine and 1% and safety of State Transit services through improved were issued with a caution. productivity, work processes and staffing structure.
Since 2000 the number and total value of fines issued by The new management structure and the service regime State Transit has more than doubled. Last financial year, have been realigned to meet the requirements of the new there were 8,279 fines issued compared to only 3,888 in Metropolitan Bus Service Contracts. 2000. The total monies received from fines increased by 23% in the last financial year compared to the previous year. The Roads and Traffic Authority Heavy Vehicle Inspection Scheme first introduced in April 2006 as part of the reform State Transit does not believe that this indicates an agenda, was implemented across all depot sites during increase in the level of fare evasion on its services. Rather the year to enhance the roadworthiness and safety of the this reflects improved management of revenue protection State Transit fleet. and better deployment of resources. The implementation of the new maintenance structure Principally the nature of fare evasion on State Transit has yielded positive results for the financial year and network is one of overriding, that is, failing to pay the continues to be realised into the future. correct fare, rather than a failure to purchase a ticket. Metropolitan Bus System Contract (MBSC) State Transit has a dedicated revenue protection team State Transit provided its services for the second year deployed seven days a week to make sure those who under the new Metropolitan Bus System Contracts issued evade fares don’t get an advantage when almost every by the Ministry of Transport. other passenger behaves in an honest way. State Transit has four contracts for the Sydney region In the last few years, State Transit has improved covering Regions 6, 7, 8 and 9. These contracts enforcement and monitoring of fare evasion through: commenced on the 1 July 2005 for a term of seven Creation of a Revenue Protection Unit comprising 26 years. State Transit also has one Outer Metropolitan Bus dedicated Revenue Protection Officers. A further 4 System Contract for the operations of Newcastle Buses in positions have been approved. Newcastle. This contract commenced on 30 June 2006 Implementing a revenue protection policy and a five also for a period of seven years. year strategic plan for revenue protection. Under the contracts each Region stands alone with State Making greater use of data and intelligence on fare Transit paying fare revenue, a proportion of advertising evasion to deploy resources and determine appropriate (25%) and charter revenue (5.5%) for each region to the compliance strategies. Ministry of Transport. Better signage on buses and shelters and in timetables to inform passengers of the correct fare for the journey. The Ministry of Transport makes monthly payments to State Transit representing fixed costs, depreciation Revenue Protection Officers and joint police operations change payment, fuel cost payment, service payment, target commuter crime hot spots where there is more likely patronage benchmark, patronage change and new fleet to be fare evasion occurring. When joint operations and periodic payments. blitzes are carried out, Revenue Protection Officers are joined by police and Customer Service Co-ordinators, who are also authorised officers for the purposes of checking tickets.
30 State Transit Authority of New South Wales - Annual Report 2006-2007 Western Sydney Buses
Key Objectives Services are provided from 4.28am to 12.15am on weekdays, operating at an 8-10 minute frequency during The provision of high frequency, reliable services on the peak periods. On weekends and public holidays services Liverpool - Parramatta Transitway are provided from 5.18am to 12.15am, operating at a 20 minute frequency. Services operate for an extra hour on Key Benefits Friday and Saturday evenings. High speed services between Liverpool and Parramatta, the fastest growing CBD in Australia Patronage on the service increased by 13% to 2.279 million passenger trips in 2006/07. Comfortable Euro 3 diesel powered, air-conditioned, fully accessible Volvo Buses The Liverpool-Parramatta T-Way’s initial patronage was Real time information to passengers 10,000 per week. Currently, around 50,000 passengers travel on the T-Way each week. Key Performance Indicators To accommodate growing demand, a new timetable was Compliance with all contract targets set by the Ministry introduced in March 2006 to cater for further growth, of Transport adding seven new bus services to the timetable, offering commuters greater convenience, flexibility and reliability Performance when they travel. Since the Liverpool-Parramatta T-Way, began operations on 16 February 2003, there has been a steady growth in patronage. T-Way buses have carried around 8 million passengers since the services began.
State Transit Authority of New South Wales - Annual Report 2006-2007 31 Western Sydney Buses
The popularity of the Liverpool-Parramatta T-Way grows every day with more passengers joining these services each week.
This is a ringing endorsement for the bus only T-Way with more and more families and commuters across Western Sydney jumping on board every day.
The safety and security of T-Way services has required careful management since services commenced. Mobile security guards currently patrol the T-Way network while night services are operated.
32 State Transit Authority of New South Wales - Annual Report 2006-2007 State Transit Authority of New South Wales FINANCIAL STATEMENTS Contents
State Transit Authority of New South Wales Independent auditor’s report...... 35 Income statements...... 37 Balance sheets...... 38 Statements of changes in equity...... 39 Cash flow statements...... 40 Notes to and forming part of the financial statements 1 . Summary of significant accounting policies...... 41 2 . Income and expenses...... 50 3 . Income tax...... 52 4 . Cash and cash equivalents...... 53 5 . Receivables...... 54 6 . Inventories...... 55 7 . Non-current assets held for sale. . People...... 55 8 . Other assets...... 55 9 . Property, plant and equipment...... 56 10 . Losses on disposal of assets...... 58 11 . Intangibles ...... 58 12 . Deferred tax assets ...... 59 13 .Trade and other payables...... 59 14 . Financial liabilities ...... 59 15 . Provisions ...... 60 16 . Deferred tax liabilities...... 70 17 . Other liabilities...... 70 18 .Commitments ...... 70 19 . Western Sydney Buses...... 71 20 .Financial instruments...... 72 21 . Related parties...... 74 22 . Contingent liabilities...... 74 23 . Segment information...... 75 24 . Equity...... 76 25 . Events after the balance sheet date...... 77 Statement by members of the Board...... 78
34 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementIndependent ofby ChangesAuditor’sthe Division inReport Equity Head For the year ended 30 June 2007
People
State Transit Authority of New South Wales - Annual Report 2006-2007 35 StatementIndependent by Auditor’sthe Division Report Head For the year ended 30 June 2007
People
36 State Transit Authority of New South Wales - Annual Report 2006-2007 Start of Audited Financial Statements Income Statementsstatement For the year ended 30 June 2007
Economic Economic Parent entity Parent entity 2007 2007 2006 2006 Notes $’000 $’000 $’000 $’000 Income Operational revenue 2(a,b) 513,250 513,250 499,815 499,815 Other income 2(c) 27,778 27,778 23,971 23,971 Total income 541,028 541,028 523,786 523,786 Expenses Fleet running expenses 2(d) 80,204 80,204 82,249 82,249 Employee benefits 2(e) – 291,996 183,314 264,456 Personnel services 2(f) 314,613 – 88,553 – Finance costs 2(g) 5,545 5,545 5,871 5,871 People General operating expenses 2(h) 108,000 130,617 116,650 124,061 Total expenses 508,362 508,362 476,637 476,637 Gross profit from continuing activities before income tax 32,666 32,666 47,149 47,149 Income tax expense 3 – – – – Net profit from continuing activities 32,666 32,666 47,149 47,149 Net profit attributable to owners 32,666 32,666 47,149 47,149
The above statements should be read in conjunction with the accompanying notes
State Transit Authority of New South Wales - Annual Report 2006-2007 37 Balance Sheets As at 30 June 2007
Economic Economic Parent entity Parent entity 2007 2007 2006 2006 Notes $’000 $’000 $’000 $’000 Current Assets Cash and cash equivalents 4(b) 19,554 19,554 20,403 20,403 Trade and other receivables 5 17,253 17,253 9,538 9,538 Inventories 6 8,218 8,218 8,588 8,588 Non-current assets held for sale 7 150 150 203 203 Other 8 872 2,300 790 790 Total current assets 46,047 47,475 39,522 39,522 Non-Current Assets Receivables 5 72,859 72,859 30,877 30,877 Property, plant and equipment 9 437,717 437,717 420,007 420,007 Intangibles People 11 975 975 1,521 1,521 Deferred tax assets 12 62,477 62,477 74,878 74,878 Total non-current assets 574,028 574,028 527,283 527,283 Total assets 620,075 621,503 566,805 566,805 Current Liabilities Trade and other payables 13 112,471 42,726 104,051 35,101 Financial liabilities 14 21,247 21,247 18,266 18,266 Provisions 15 2,489 73,662 1,891 70,841 Other 17 10,279 10,279 10,787 10,787 Total current liabilities 146,486 147,914 134,995 134,995 Non-Current Liabilities Trade and other payables 13 70,852 – 83,025 – Financial liabilities 14 54,565 54,565 57,746 57,746 Provisions 15 182 71,034 165 83,190 Deferred tax liabilities 16 73,367 73,367 63,488 63,488 Total non-current liabilities 198,966 198,966 204,424 204,424 Total liabilities 345,452 346,880 339,419 339,419
Net assets 274,623 274,623 227,386 227,386 Equity Reserves 24 127,662 127,662 102,550 102,550 Accumulated funds 24 146,961 146,961 124,836 124,836 Total equity 274,623 274,623 227,386 227,386
The above statements should be read in conjunction with the accompanying notes
38 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementStatements of of Changes Changes in in Equity Equity ForFor the the year year ended ended 30 30 June June 2007 2007
Economic Economic Parent entity Parent entity 2007 2007 2006 2006 Notes $’000 $’000 $’000 $’000 Total equity at the beginning of the year 227,386 227,386 174,716 174,716 Financial instruments held for sale arising from first-time adoption of AASB 139 24 – – 3,069 3,069 Restated total equity at the beginning of the year 227,386 227,386 177,785 177,785 Increase in revaluation of property, plant and equipment 24 36,849 36,849 11,853 11,853 Recognition of deferred tax liability on the asset revaluation reserve 24 (10,762) (10,762) (3,166) (3,166) Transactions with owners as owners: Contribution of land 24 – – 8,235 8,235 Total income and expenses recognised directly in equity 26,087 26,087 16,922 16,922 Net profit for the year 24 32,666 32,666 47,149 47,149 People Impact of tax liability on current year operations 24 (11,516) (11,516) (14,470) (14,470) Total income and expenses recognised for the year 21,150 21,150 32,679 32,679
Total equity at the end of the year 274,623 274,623 227,386 227,386
The above statements should be read in conjunction with the accompanying notes
State Transit Authority of New South Wales - Annual Report 2006-2007 39 CASH FLOW STATEMENT For Cashthe year ended Flow 30 June 2007 Statements For the year ended 30 June 2007
Economic Economic Parent entity Parent entity 2007 2007 2006 2006 Inflows Inflows Inflows Inflows (outflows) (outflows) (outflows) (outflows) Notes $’000 $’000 $’000 $’000
Cash flows from operating activities Receipts from customers 518,017 518,017 489,707 489,707 Reimbursements from NSW Government 2,132 2,132 25,603 25,603 Other income 36,249 36,249 38,843 38,843 Interest received 4,974 4,974 1,059 1,059 Payments to suppliers (492,890) (192,753) (277,407) (193,314) Payments to employees – (300,137) (206,037) (290,130) Interest and other finance costs (5,772) (5,772) (6,222) (6,222) Net cash flows from operating activities 4(a) 62,710 62,710 65,546 65,546
Cash flows from investing activities Purchases of property, plant and equipment (65,807) (65,807) (51,395) (51,395) Proceeds from sale of property, plant and equipment 345 345 12,381 12,381 Net cash flows used in investing activities (65,462) (65,462) (39,014) (39,014)
Cash flows from financing activities Repayments of borrowings (305) (305) (10,989) (10,989) Proceeds from finance leases 2,208 2,208 358 358 Net cash flows from/(used in) financing activities 1,903 1,903 (10,631) (10,631) Net increase/(decrease) in cash and cash equivalents (849) (849) 15,901 15,901 Cash and cash equivalents at the beginning of the year 20,403 20,403 4,502 4,502 Cash and cash equivalents at the end of the year 4(b) 19,554 19,554 20,403 20,403
The above statements should be read in conjunction with the accompanying notes
40 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
1 . Summary of Significant Accounting Policies
(a) Reporting entity The State Transit Authority of New South Wales (“Authority”) is established by section 20 of the Transport Administration Act 1988. It is domiciled in New South Wales, Australia. The Authority is owned by the State of New South Wales. Western Sydney Buses (“WSB”) was incorporated on 12 July 2002 under the Transport Administration Act 1988 as a public subsidiary corporation of the Authority. It provides bus transport services in the western Sydney region. State Transit Authority Division (“STA Division”) and Western Sydney Buses Division (“WSB Division”), being special purpose entities, are Divisions of the NSW Government Service which commenced operations on 17 March 2006 pursuant to Part 2 of Schedule 1 to the Public Sector Employment and Management Act 2002. They assumed responsibility for the employees and employee-related liabilities of the former employers, the Authority and WSB, respectively. Their operations are controlled by the Authority. The assumed liabilities were recognised on 17 March 2006 together with offsetting receivables representing the related funding due from the Authority and WSB. The economic entity comprises the Authority, WSB, STA Division and WSB Division. In complying with the NSW Treasury’s accounting policy for distinguishing for-profit from not-for-profit entities, the Authority has self-assessed its objectives and activities and determined that it is a for-profit public entity from 1 July 2005. The Authority’s principal activities are the provision of bus services in metropolitan Sydney and bus and ferry services in Newcastle. The financial report was authorised for issue by the Board on 26 October 2007. The report will not be amended and reissued as it has been audited.
(b) Statement of compliance The financial statements of the Authority, including the notes, comply with Australian Accounting Standards and Interpretations, which include the Australian Equivalents to International Financial Reporting Standard (“AEIFRS”). The Australian Accounting Standards that have been amended or issued as at 30 June 2007 but are not yet effective have not been early adopted for the annual reporting period ending 30 June 2007. It is anticipated these amendments and standards will not have material impact on future accounting policies.
State Transit Authority of New South Wales - Annual Report 2006-2007 41 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
1 . Summary of Significant Accounting Policies (continued)
Applicable to annual reporting Standard/Amendment Affected standard(s) periods beginning on or after AASB 7 AASB 132 1 January 2007 AASB 8 AASB 114 1 January 2009 2007-3 AASB 102; AASB 107; AASB 119; 1 January 2009 AASB 127; AASB 136 2007-4 AASB 5; AASB 7; AASB 102; AASB 107; 1 July 2007 AASB 108; AASB 110; AASB 112; AASB 114; AASB 116; AASB 117; AASB 118; AASB 119; AASB 120; AASB 127; AASB 132; AASB 136; AASB 137; AASB 138; AASB 139 2007-6 AASB 101; AASB 107; AASB 116; 1 January 2009 AASB 138
(c) Basis of preparation The financial statements have been prepared as a general purpose financial report in accordance with the requirements of the Public Finance and Audit Act 1983, the Public Finance and Audit Regulation 2005, Australian Accounting Standards, Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and applicable Treasurer’s Directions and Treasury Circulars. Where there are inconsistencies between the requirements, the legislative provision prevailed. The financial statements have been prepared on an accrual accounting basis using historical costs except for certain non-current assets, which are recorded at fair value. For some classes of non-current assets, the fair value is the historical cost. Other classes use market value or depreciated replacement cost. The financial statements have been prepared on a going concern basis which assumes that repayment of debts will be met as and when they fall due, without any intention or necessity to liquidate assets or otherwise winding up the operations.
(d) Basis of consolidation The consolidated financial statements of the economic entity comprise the Authority and its controlled entities. Controlled entities include special purpose entities where the Authority has control over their financial and operating policies. The financial statements include the information and results of each controlled entity from the date on which the Authority obtains control and until such time as the Authority ceases to control the entity. In preparing the consolidated financial statements, the effects of all transactions between entities of the economic entity have been eliminated. The financial statements of controlled entities have been prepared for the same reporting period as the parent entity, using consistent accounting policies. For clarity of presentation, on some pages where the notes of the parent entity and the economic entity are the same, only the notes of the economic entity are reported.
42 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
1 . Summary of Significant Accounting Policies (continued)
(e) Revenue recognition Revenue is recognised when the Authority has transferred to the buyer the significant risks and rewards of ownership of the assets or when services are provided. It must also be probable that the economic benefits will flow to the Authority and that any costs incurred, or amount of revenue gained, in respect of the transaction can be measured reliably. The following specific measurement criteria also apply: (i) Operational revenue Operational revenue is recognised as revenue when it can be reliably measured, based on passengers travelled or services provided. Refer note 2(i) for more details. (ii) Government grants Grants are recognised as revenues when the Authority obtains control over the assets. Usually control is obtained upon the receipt of cash. Unspent grants are accounted for as liabilities if there is an in- substance contractual obligation to refund the unspent amounts. (iii) Investment income Interest income is recognised on a time proportion basis using the effective interest method. Operating lease income derived from commercial properties is recognised on a straight-line basis over the lease term.
(f) Cash and cash equivalents Cash and cash equivalents are carried at principal amount and is subject to an insignificant risk of changes in value. They include cash-on-hand, in the bank and investment in NSW Treasury Corporation’s Hour-Glass Cash facility. Investment in the Hour-Glass Cash facility is represented by a number of units of a managed investment pool, which are redeemable at short notice. The value of the investment can decrease as well as increase depending upon market conditions. The value that best represents the maximum credit risk exposure is the net fair value.
(g) Receivables Receivables are recognised initially at fair value and subsequently measured at amortised cost less a provision for impairment. Prepayments represent amounts paid in advance for services where the benefit will be realised in a subsequent period. In relation to trade receivables, the Authority minimises concentrations of credit risk by undertaking transactions with a large number of customers. The majority of customers are concentrated in New South Wales in the newsagency business. All prospective trade debtors are assessed for credit risks in granting appropriate credit limits. In general, the settlement term is set at no more than 21 days. The collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off as bad debts.
(h) Inventories Inventories are stated at the lower of the weighted average cost and net realisable value.
State Transit Authority of New South Wales - Annual Report 2006-2007 43 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
1 . Summary of Significant Accounting Policies (continued)
(i) Non-current assets held for sale These assets are recognised at the lower of carrying amounts and fair values less selling costs and are no longer being depreciated.
(j) Property, plant and equipment The following policies apply to property, plant and equipment: (i) Basis of valuation The Authority has applied AASB 116 Property, Plant and Equipment in accordance with NSW Treasury Policy and Guidelines which require that non-current assets be measured at fair value. The fair value of an asset is determined having regard to existing use and highest and best use on the basis of current market selling prices for the same or similar assets. Where market selling price is not available, the asset’s fair value is valued at depreciated replacement cost. Depreciated replacement cost is determined by reference to the most appropriate modern, depreciated equivalent replacement asset that provides similar economic benefits. Each non-current physical asset is revalued at least every five years to ensure that the carrying amount of each asset in the class does not differ materially from its fair value at reporting date. Non- specialised assets with short useful lives are measured at depreciated historical cost, as a surrogate for fair value. When revaluing non-current physical assets, the gross amount and the related accumulated depreciation are separately restated. Where an asset’s carrying amount is increased as a result of a revaluation, the increase is credited directly to the asset revaluation reserve. However, the increase is recognised in the income statement to the extent that it reverses a revaluation decrease of the same asset previously recognised in the income statement. Where an asset’s carrying amount is decreased as a result of a revaluation, the decrease is recognised in the income statement. However, the decrease is debited directly to the asset revaluation reserve to the extent of any credit balance existing in the asset revaluations reserve in respect of that asset. Where an asset that has previously been revalued is disposed, any balance remaining in the asset revaluation reserve in respect of that asset is transferred to accumulated funds. (ii) Depreciation/Amortisation Property, plant and equipment and intangibles, excluding freehold land and work-in-progress, are depreciated/amortised over their estimated useful lives as follows:
Asset class Useful life Method Freehold buildings and wharves 40 years Straight line Plant and equipment 3 to 20 years Straight line Intangibles 2 to 3 years Straight line Buses 15 to 20 years In line with the pattern of consumption of economic benefits Ferries 45 years Straight line
The assets’ residual values, useful lives, amortisation and depreciation methods are reviewed, and adjusted if appropriate, at the end of each reporting period. Where some buses operate for a period exceeding 20 years, their depreciation rates are adjusted accordingly.
44 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
1 . Summary of Significant Accounting Policies (continued)
(j) Property, plant and equipment (continued) (iii) Capitalisation policy Property, plant and equipment are recorded at the cost of acquisition. Cost is determined as the fair value of the assets given up at the date of acquisition plus costs incidental to the acquisition. Property, plant and equipment costing $5,000 or more individually is capitalised. (iv) Work-in-progress Costs relating to property, plant and equipment, including buses, under construction are shown in the financial statements as capital work-in-progress and are not depreciated. (v) Leasehold improvements The cost of leasehold improvements is amortised over the unexpired period of the lease or the estimated useful life of the improvement, whichever is the shorter. (vi) Repairs & maintenance The costs of routine maintenance and repairs are charged as expenses as incurred, except where they relate to the replacement of a component of an asset that increases the service potential of the asset, in which case the costs are capitalised and depreciated in accordance with note 1(j)(ii).
(k) Intangibles Intangible assets, comprising computer software, which have finite lives, are recognised at cost and are amortised as amortisation of intangible assets expense, on a straight-line basis over the period during which the benefits are expected to arise.
(l) Impairment The carrying values of assets are reviewed annually for impairment where objective evidence, or changes in circumstances, indicate the carrying values may not be recoverable or the assets previously impaired may be reversible. If any such indication exists and where the carrying values exceed the estimated recoverable amounts, the impaired assets would be written down to their recoverable amounts. Where the recoverable amounts exceed the values of the impaired assets, a reversal is made to the extent of the previous write downs.
(m) Payables Liabilities for trade creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method.
(n) Financial liabilities Borrowings are recognised initially at fair value. After initial recognition, borrowings are measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the income statement when the liabilities are derecognised or through the amortisation process.
State Transit Authority of New South Wales - Annual Report 2006-2007 45 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
1 . Summary of Significant Accounting Policies (continued)
(o) Provisions Provisions are recognised when the Authority has a present legal, equitable or constructive obligation to make a future sacrifice of economic benefits to other entities as a result of past transactions or events and a reliable estimate of the amount of the obligation can be made.
(p) Employee benefits (i) Salaries and wages, sick leave and on-costs Liability for salaries and wages is recognised and measured as the amount unpaid at the reporting date at current pay rates in respect of employees’ service up to that date. The outstanding amounts of payroll tax, workers’ compensation and fringe benefits tax, which are consequential to employment, are recognised as liabilities and expenses where employee entitlements to which they relate have been recognised. (ii) Annual leave and long service leave Provision has been made for benefits accruing to employees in relation to annual leave and long service leave estimated to be payable to employees on the basis of statutory and contractual requirements. Annual leave entitlements, that are recognised as current liabilities, are measured at their nominal amounts based on remuneration rates expected to be paid when the entitlements are settled. Long service leave obligations that are not expected to be settled within twelve months are assessed at present value by independent actuaries. The unconditional component of the long service leave entitlements, for those employees currently employed for nine or more years at the reporting date, are classified as current liabilities. (iii) Superannuation The employees’ retirement benefits liability in respect of three defined benefit superannuation funds is recognised in full. The liability for employees’ retirement benefits is based on an actuarial assessment (refer note 15(b)). Actuarial gains and losses are recognised in the income statement in the year in which they occur. Contributions to the defined contribution plans are expensed when incurred.
(q) Reserves The asset revaluation reserve comprises revaluation increments/decrements recognised upon the revaluation of non-current physical assets. Upon disposal or retirement, any remaining revaluation increment of the asset at the time of disposal is transferred to accumulated funds.
(r) Insurance Appropriate insurances are purchased to cover material liability, physical damage, business interruption, and other exposures arising out of normal business operations. The Authority is a licensed self-insurer for workers’ compensation claims under the New South Wales Workers Compensation Act. Broker advice is maintained to ensure a proactive response to changes in the operating environment. Provisions are made for future costs associated with liability claims occurring in the financial year. These provisions are assessed at their present value by independent actuaries. Recoveries due under insurance arrangements are treated as receivables.
46 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
1 . Summary of Significant Accounting Policies (continued)
(s) Income tax The Authority is subject to the National Tax Equivalent Regime under which it is required to pay taxation equivalent to the NSW Government. Tax-effect accounting is applied using the balance sheet method. The income tax expense, or benefit, for the period is the tax payable on the current period’s taxable income adjusted by changes in deferred tax assets and liabilities attributable to amounts recognised as assets or liabilities and any unused tax losses. Deferred tax assets and liabilities are recognised for temporary differences between the assets and liabilities for accounting purposes and the tax bases of those assets and liabilities. A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised. Income taxes relating to items recognised directly in equity are recognised in equity, not in the income statement. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax laws that have been enacted, or substantively enacted, at the reporting date. The parent and its wholly owned/controlled entities elected to enter into tax consolidation effective 1 July 2002, with the Authority as the head entity of the tax-consolidated group. The tax expense/benefit, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidated group are recognised in the financial statements of the head entity, using the ‘single taxpayer’ approach.
(t) Accounting for Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except: – The amount of GST incurred that is not recoverable from the Australian Taxation Office is recognised as part of the cost of acquisition of an asset or as part of an item of expense. – Receivables and payables are stated with the amount of GST included. The net amount of GST receivable or payable from or to the Australian Taxation Office is included in the balance sheet as an asset or liability. Cash flows are reported in the cash flow statement on a gross basis. The GST components of cash flows arising from investing and financing activities are classified as operating cash flows.
(u) Finance costs Borrowing costs are expensed in the period in which they are incurred.
State Transit Authority of New South Wales - Annual Report 2006-2007 47 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
1 . Summary of Significant Accounting Policies (continued)
(v) Segment reporting Primary reporting: geographical segment: Sydney & Newcastle The Authority’s operational risks and returns are affected predominantly by the geographical areas in which it operates the bus and ferry services. The Authority operates mainly in the Sydney metropolitan areas; with a smaller service in the Newcastle area. It is considered the Authority has one geographical segment, comprising the Sydney metropolitan and Newcastle locations. Secondary reporting: business segment The Authority’s one business segment is the provision of bus and ferry services. Due to its relative small size, the ferry service is not considered a separate business segment. Segment accounting policies The assets, liabilities, revenue and expenses that are directly attributable, or can be reasonably allocated, to the segment are reported as segment information. The segment accounting policies are the same as the Authority’s accounting policies.
(w) Finance leases Where the Authority, as the lessor, transfers substantially all the risks and rewards of the buses to another entity, the leased assets are recognised as current and non-current receivables at amounts equal to the net investment in the leases. The lease receipt is recognised in two components, one as a reduction of the lease receivable and the other as finance income. The finance income is calculated according to the interest rate implicit in the leases.
(x) Comparatives Comparative figures are, where appropriate, reclassified to give a meaningful comparison with the current year.
(y) Rounding All amounts shown in the financial reports are expressed to the nearest thousand dollars, unless otherwise specified.
48 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
2 . Income and Expenses
Economic Economic Parent entity Parent entity 2007 2007 2006 2006 Notes $’000 $’000 $’000 $’000
(a) Operational revenue 2(i) 511,770 511,770 474,716 474,716 (b) Reimbursements from NSW Government: - free travel by school students 2(j)(i) 544 544 7,167 7,167 - concessional travel 2(j)(i) (17) (17) 8,783 8,783 - community service obligations 2(j)(ii) 953 953 9,149 9,149 Total operational income 513,250 513,250 499,815 499,815
(c) Other income Interest 2(k) 4,776 4,776 1,365 1,365 Other (includes rents, fines, advertising, training and management fees) 23,002 23,002 22,606 22,606 Total other income 27,778 27,778 23,971 23,971
Total income 541,028 541,028 523,786 523,786
State Transit Authority of New South Wales - Annual Report 2006-2007 49 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
2 . Income and Expenses (continued)
Economic Economic Parent entity Parent entity 2007 2007 2006 2006 Notes $’000 $’000 $’000 $’000
(d) Fleet running expenses Fuel, spare parts and other inventory consumed 60,105 60,105 61,488 61,488 Inventory write-down 11 11 106 106 Equipment maintenance 6,847 6,847 6,878 6,878 Other 13,241 13,241 13,777 13,777 Total fleet running expenses 80,204 80,204 82,249 82,249
(e) Employee benefits Salaries and wages – 249,554 166,552 239,651 Annual leave – 23,972 15,671 23,340 Long service leave – 8,156 3,348 4,701 Retirement benefits - defined benefits income 15(b)(iv) – (4,105) (11,900) (16,772) Retirement benefits - defined contributions – 14,419 9,643 13,536 Total employee benefits – 291,996 183,314 264,456 (f) Personnel services Services from STA Division & WSB Division 314,613 – 88,553 – Total personnel services 314,613 – 88,553 – (g) Finance costs Interest 5,545 5,545 5,871 5,871 Total finance costs 5,545 5,545 5,871 5,871
(h) General operating expenses Workers’ compensation – 5,904 4,034 6,706 Payroll tax – 16,271 10,569 15,216 Insurances 14,455 14,455 9,066 9,066 Depreciation 9(d) 33,570 33,570 31,692 31,692 Amortisation of intangible assets 11 641 641 273 273 Losses on disposal of assets 10 57 57 50 50 Minimum lease payments 2,980 2,980 2,812 2,812 Consultancy/professional services 3,538 3,538 2,546 2,546 Impairment (11) (11) (4) (4) Revaluation expense 580 580 8,047 8,047 Other 52,190 52,632 47,565 47,657 Total general operating expenses 108,000 130,617 116,650 124,061
Total expenses 508,362 508,362 476,637 476,637
50 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
2 . Income and Expenses (continued)
(i) Operational revenue consists of revenue derived from fares, charters, tourist services and from the operations of the Metropolitan Bus System Contracts and an Outer Metropolitan Bus System Contract.
(j) (i) Free & concessional travel Free and concessional travel is provided by Western Sydney Buses and Newcastle Ferries to a range of community groups. The extent to which these groups are entitled to free and concessional travel is determined by Government policy. Reimbursement by Government is provided for free school travel on the basis of percentage of the number of passes on issue in the current year. Pensioners pay an all-day concession ticket price of $2.50 and the Government pays the balance of the full fare for all estimated travel consumed. Other free and concessional travel is reimbursed on the basis of the Government paying the balance between the full fare applicable for each journey and the fare paid by the passenger. (ii) Community service obligations (CSO) Reimbursements were received from the NSW Government in accordance with the NSW Government’s social policy programs designed to promote the accessibility and availability of public transport services. CSO payments comprise pricing CSO and service level CSO in respect of the Newcastle ferry services. Service level CSO – Represents payments by the NSW Government to cover the Newcastle ferry services which are not commercially justifiable by normal industry benchmarks.
Economic Economic Parent entity Parent entity 2007 2007 2006 2006 $’000 $’000 $’000 $’000
(k) Interest income Hour-Glass Cash facility (distribution income) 981 981 737 737 Other Interest 3,795 3,795 628 628 Total interest income 4,776 4,776 1,365 1,365
(l) Audit fees Payable to the Audit Office of NSW for the audit of financial reports 192 222 188 240 Total audit fees 192 222 188 240
(m) Board members’ remuneration The amount of remuneration, including superannuation contributions, received or due and receivable by the non-executive members of the State Transit Authority Board for services in respect of all entities was $126,676 (2006: $158,774). There were no other benefits paid to the members of the Board.
State Transit Authority of New South Wales - Annual Report 2006-2007 51 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
3 . Income Tax
Economic Economic Parent entity Parent entity 2007 2007 2006 2006 $’000 $’000 $’000 $’000
(a) Income tax expense Current tax expense/(benefit) 8,887 8,887 7,529 7,529 Deferred tax expense/(benefit) (8,887) (8,887) (7,529) (7,529) Total income tax expense/(benefit) – – – – (b) Reconciliation between tax expense and accounting profit Prima facie tax on operating profit at 30% (2006: 30%) 9,800 9,800 14,145 14,145 Tax effect of expenses that are not deductible in determining taxable income 1,501 1,501 188 188 Partial recognition of tax losses (11,301) (11,301) (14,333) (14,333) Income tax attributable to tax profit – – – –
52 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
4 . Cash and Cash Equivalents
Economic Economic Parent entity Parent entity 2007 2007 2006 2006 $’000 $’000 $’000 $’000
(a) Reconciliation of operating results after tax to net cash from operating activities Net profit after income tax 32,666 32,666 47,149 47,149 Non-cash adjustments to reconcile net operating result to net cash from operating activities Amortisation of intangible assets 641 641 273 273 Depreciation 33,570 33,570 31,692 31,692 Net loss on disposal of non-current assets 57 57 50 50 Revaluation expense 580 580 8,047 8,047 Realised gains on financial instruments – – 3,437 3,437 Other non-cash items 2,717 2,717 (204) (204) Changes in assets and liabilities (Increase)/decrease in receivables (4,845) (4,845) 5,013 5,013 (Increase)/decrease in inventory 361 361 (704) (704) (Increase)/decrease in Goods and Services Tax (807) (807) 249 249 (Increase)/decrease in other assets (1,710) (1,710) 63 63 Increase/(decrease) in payables (889) 9,323 (5,556) 2,591 Increase/(decrease) in employee benefits – (10,212) (18,664) (26,811) Increase/(decrease) in revenue received in advance (501) (501) 605 605 Increase/(decrease) in other provisions 870 870 (5,904) (5,904) Net cash flows from operating activities 62,710 62,710 65,546 65,546
State Transit Authority of New South Wales - Annual Report 2006-2007 53 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
4 . Cash and Cash Equivalents (continued)
Economic entity 2007 2006 $’000 $’000
(b) Reconciliation of cash and cash equivalents For the purpose of the cash flow statement, cash includes cash-on-hand, in the bank and short-term deposits. Cash at the end of the year, as shown in the cash flow statement, is reconciled to the related items in the balance sheet as follows: Cash and cash equivalents 19,554 20,403 Total cash and cash equivalents 19,554 20,403
(c) Financing facility available Short-term standby credit facility 45,000 45,000 Facility unused at balance date 45,000 45,000
The short-term standby credit facility is to meet daily cash flow requirements which may arise from time to time. This facility is no longer restricted to a one-year term and its continuation is now at the discretion of NSW Treasury, in consultation with the Authority.
5 . Receivables Current Trade debtors 4,397 5,190 Allowance for impairment (63) (18) 4,334 5,172 Sundry debtors 8,422 2,902 Allowance for impairment (2,242) (2,297) 6,180 605 Goods and services tax 1,042 235 Finance leases 3,302 1,331 Prepayments 2,395 2,195 6,739 3,761 Total current receivables 17,253 9,538
Non-current Finance leases 72,859 30,877 Total non-current receivables 72,859 30,877
54 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
5 . Receivables (continued)
Economic entity 2007 2006 $’000 $’000 Finance leases as the lessor Receipts for new buses acquired under the Metropolitan Bus System Contracts from 1 July 2005, and the Outer Metropolitan Bus System Contract from 1 July 2006, are recognised as finance lease receipts from the Ministry of Transport for terms of 15 years. Gross investment in the leases Not later than one year 8,398 3,445 Later than one year and not later than five years 33,592 13,778 Later than five years 77,183 33,497 Total gross investment 119,173 50,720 Present value of minimum lease receipts Not later than one year 3,302 1,331 Later than one year and not later than five years 15,699 6,306 Later than five years 57,160 24,571 Total present value of minimum lease receipts 76,161 32,208 Reconciliation Total gross investment 119,173 50,720 Unearned finance income (43,012) (18,512) Total present value of minimum lease receipts 76,161 32,208
6 . Inventories Mechanical and electrical spares 5,544 5,511 Distillate 1,409 1,846 Tyres and tubes 332 285 Other 933 946 Total inventories 8,218 8,588
7 . Non-Current Assets Held for Sale Buses 130 203 Land 20 – Total non-current assets held for sale 150 203 The buses and land held for sale are surplus to requirements. They are to be disposed by way of auctions and trade sales.
8 . Other Assets Current Retirement benefits 15(b)(i) 1,428 – Other 872 790 Total current other assets 2,300 790
State Transit Authority of New South Wales - Annual Report 2006-2007 55 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
9 . Property, Plant and Equipment (a) Carrying amounts of each class of property, plant and equipment at the beginning and at the end of the reporting period are set out below:
Economic entity 2007 2006 Accumulated Accumulated Capital depreciation/ Fair Capital depreciation/ Fair value remediation value value remediation value Class of property, plant and equipment $’000 $’000 $’000 $’000 $’000 $’000 Land 126,382 (3,530) 122,852 104,926 (2,384) 102,542 Buildings 116,909 (60,810) 56,099 88,975 (46,206) 42,769 Wharves 670 (167) 503 249 (85) 164 Plant and equipment 63,779 (52,869) 10,910 61,766 (50,982) 10,784 Motor vehicles (other than buses) 940 (598) 342 878 (589) 289 Buses 740,015 (519,654) 220,361 755,541 (506,856) 248,685 Ferries 5,000 (3,303) 1,697 5,000 (3,194) 1,806
Work-in-progress 24,953 – 24,953 12,968 – 12,968 Total 1,078,648 (640,931) 437,717 1,030,303 (610,296) 420,007
Valuations (b) Property, plant and equipment were revalued in accordance with the basis of valuation set out in note 1(j)(i). (c) The following non-current assets were independently valued by registered valuers:
Class of assets Basis of valuation Date of valuation Registered valuers Rodney Hyman Buses Market-based 30 June 2006 Asset Services Depreciated Rodney Hyman Ferries replacement cost 30 June 2004 Asset Services Freehold commercial Aon Valuation land and buildings Market-based 30 June 2007 Services Market-based, Operating land Depreciated Aon Valuation and buildings replacement cost 30 June 2007 Services Depreciated Aon Valuation Wharves replacement cost 30 June 2007 Services
56 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
9 . Property, Plant and Equipment (continued) (d) Reconciliation of carrying amounts of each class of property, plant and equipment at the beginning and at the end of the reporting period are set out below:
Economic entity 2007
Class of property, Opening Disposals / Held Closing plant and balance transfers Additions Other for sale Revaluation Depreciation balance equipment $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Freehold operating land 101,882 (9) – – – 20,367 – 122,240 Freehold commercial land 660 – – (1,146) (20) 1,118 – 612 Total land 102,542 (9) – (1,146) (20) 21,485 – 122,852 Buildings 42,769 – 1,140 – – 14,437 (2,247) 56,099 Wharves 164 – – – – 347 (8) 503 Plant and equipment 10,784 (31) 3,248 – – – (3,091) 10,910 Motor vehicles 289 – 124 – – – (71) 342 Owned buses 248,685 (353) – – 73 – (28,044) 220,361 Owned ferries 1,806 – – – – – (109) 1,697 Work-in-progress 12,968 (55,236) 67,221 – – – – 24,953 Total 420,007 (55,629) 71,733 (1,146) 53 36,269 (33,570) 437,717
Economic entity 2006
Class of property, Opening Disposals / Held Closing plant and balance transfers Additions Other for sale Revaluation Depreciation balance equipment $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Freehold operating land 93,482 – 8,400 – – – – 101,882 Freehold commercial land 825 – – (165) – – – 660 Total land 94,307 – 8,400 (165) – – – 102,542 Buildings 41,554 (3) 3,288 – – 100 (2,170) 42,769 Wharves 173 – – – – – (9) 164 Plant and equipment 10,110 (79) 4,663 (566) – – (3,344) 10,784 Motor vehicles 253 (1) 103 – – – (66) 289 Owned buses 260,367 (1,068) 43,602 (31,999) 71 3,706 (25,994) 248,685 Owned ferries 1,915 – – – – – (109) 1,806 Work-in-progress 14,482 (54,598) 53,084 – – – – 12,968 Total 423,161 (55,749) 113,140 (32,730) 71 3,806 (31,692) 420,007
State Transit Authority of New South Wales - Annual Report 2006-2007 57 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
9 . Property, Plant and Equipment (continued) (e) The historical costs of each revalued class of property, plant and equipment at the beginning and at the end of the reporting period are set out below:
Economic entity 2007 2006 Accumulated Accumulated Capital depreciation/ Fair Capital depreciation/ Fair value remediation value value remediation value Class of property, plant and equipment $’000 $’000 $’000 $’000 $’000 $’000 Land 24,816 (3,530) 21,286 27,349 (2,384) 24,965 Buildings 56,512 (22,763) 33,749 52,778 (21,524) 31,254 Wharves 180 (45) 135 180 (40) 140 Buses 495,539 (294,054) 201,485 500,572 (277,539) 223,033 Ferries 2,400 (1,586) 814 2,400 (1,533) 867 Total 579,447 (321,978) 257,469 583,279 (303,020) 280,259
10 . Losses on Disposal of Assets
Economic entity 2007 2006 $’000 $’000 Proceeds from disposal 345 1,101 Carrying amount of assets disposed 402 1,151 Total losses on disposal of assets (57) (50)
11 . Intangibles
Capital Accumulated Carrying value Disposals Additions amortisation Amortisation amount Economic entity 2007 $’000 $’000 $’000 $’000 $’000 $’000 Software 2,238 – 95 (1,358) (641) 975 Total 2,238 – 95 (1,358) (641) 975
Capital Accumulated Carrying value Disposals Additions amortisation Amortisation amount Economic entity 2006 $’000 $’000 $’000 $’000 $’000 $’000 Software 660 – 1,578 (717) (273) 1,521 Total 660 – 1,578 (717) (273) 1,521
58 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
12 . Deferred Tax Assets
Economic Economic Parent entity Parent entity 2007 2007 2006 2006 $’000 $’000 $’000 $’000 Provision for employee benefits 35,466 35,466 38,956 38,956 Provision for insurances 7,599 7,599 7,680 7,680 Tax losses 17,325 17,325 26,427 26,427 Other 2,087 2,087 1,815 1,815 Total deferred tax assets 62,477 62,477 74,878 74,878
13 . Trade and Other Payables Current Trade creditors 16,938 16,938 14,107 14,107 Payables - STA & WSB Divisions 82,192 – 79,321 – Other creditors and accruals 11,592 11,716 8,685 8,814 Accrued salaries, wages and on-costs – 12,323 – 10,242 Accrued interest payable 1,749 1,749 1,938 1,938 Total trade and other payables 112,471 42,726 104,051 35,101 Non-current Payables - STA & WSB Divisions 70,852 – 83,025 – Total non-current payables 70,852 – 83,025 –
14 . Financial Liabilities Current Borrowings secured by NSW Government guarantee 21,247 21,247 18,266 18,266 Total current interest-bearing liabilities 21,247 21,247 18,266 18,266 Non-current Borrowings secured by NSW Government guarantee 54,565 54,565 57,746 57,746 Total non-current interest-bearing liabilities 54,565 54,565 57,746 57,746
(a) Payable Not later than 1 year 21,247 21,247 18,266 18,266 Later than 1 year and not later than 5 years 29,043 29,043 25,022 25,022 Later than 5 years 25,522 25,522 32,724 32,724 Total interest-bearing liabilities 75,812 75,812 76,012 76,012
State Transit Authority of New South Wales - Annual Report 2006-2007 59 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
15 . Provisions
Economic Economic Parent entity Parent entity 2007 2007 2006 2006 Notes $’000 $’000 $’000 $’000 Current Employee benefits – 66,738 – 64,464 Workers’ compensation 15(a) – 4,435 – 4,486 Others 15(a) 2,489 2,489 1,891 1,891 Total current provisions 2,489 73,662 1,891 70,841 Non-current Employee benefits – 4,927 – 4,615 Retirement benefits 15(b)(i) – 46,557 – 59,353 Workers’ compensation 15(a) – 19,368 – 19,057 Others 15(a) 182 182 165 165 Total non-current provisions 182 71,034 165 83,190
(a) Movements in each class of provisions during the year, other than employee benefits, are set out below: Economic entity - 2007 Workers’ comp CTP Others
Carrying amount at the beginning of the year 23,543 – 2,056 Additions to provisions recognised, including increases to existing provisions 5,684 – 3,004 Amounts used during the year (5,424) – (2,389) Carrying amount at the end of the year 23,803 – 2,671 Current 4,435 – 2,489 Non-current 19,368 – 182 23,803 – 2,671
Economic entity - 2006 Workers’ comp CTP Others Carrying amount at the beginning of the year 22,867 5,500 3,097 Additions/(reduction) to provisions recognised, including increases/(decreases) to existing provisions 6,522 (5,710) 2,261 Amounts used during the year (5,846) 210 (3,302) Carrying amount at the end of the year 23,543 – 2,056 Current 4,486 – 1,891 Non-current 19,057 – 165 23,543 – 2,056
60 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
15 .Provisions (continued)
(b) Retirement benefits The defined benefit schemes relating to employees of the Economic entity are as follows: (a) SASS State Authorities Superannuation Scheme (b) SANCS State Authorities Non-Contributory Superannuation Scheme (c) SSS State Superannuation Scheme These schemes are part of the pooled fund, the trustee of which is SAS Trustee Corporation (Trustee). The funds actuary, Mercer Human Resource Consulting Pty Ltd, appointed by the Trustee, has calculated the financial liability. At least a component of the final benefit is derived from a multiple of a member’s salary and years of membership. All of the above schemes were closed to new employees since 1992. All the funds are invested by the Trustee at arm’s length through independent fund managers. The economic assumptions that have been used in the calculation are:
2007 2006 % pa % pa Discount rate 6.4 5.9 Expected return on fund assets as at 30 June 7.6 7.6 Expected rate of salary increases 4.0 to 2008 and 4.0 to 2008 and 3.5 thereafter 3.5 thereafter Expected rate of increase in consumer price index 2.5 2.5
The expected return on assets assumption is determined by weighting the expected long-term return for each asset class by the target allocation of assets to each class. The returns used for each class are net of investment tax and investment fees. The Projected Unit Credit (PUC) valuation method was used to determine the present value of the defined benefit obligations and the related current service costs. This method sees each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. (i) Reconciliation of the assets and liabilities recognised in the balance sheet:
SASS SANCS SSS Total Economic entity $’000 $’000 $’000 $’000
As at 30 June 2007 Gross liability 281,088 25,115 10,887 317,090 Reserve balance (245,528) (14,118) (12,315) (271,961) Total unfunded liability 35,560 10,997 (1,428) 45,129
As at 30 June 2006 Gross liability 272,090 25,149 11,158 308,397 Reserve balance (225,272) (13,124) (10,648) (249,044) Total unfunded liability 46,818 12,025 510 59,353
State Transit Authority of New South Wales - Annual Report 2006-2007 61 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
15 . Provisions (continued)
(b) Retirement benefits (continued) (ii) Reconciliation of the present value of the defined benefit obligation:
SASS SANCS SSS Total Economic entity $’000 $’000 $’000 $’000
As at 30 June 2007 Present value of partly funded defined benefit obligations at beginning of the year 272,090 25,149 11,158 308,397 Current service cost 6,116 1,438 97 7,651 Interest cost 15,486 1,407 651 17,544 Contributions by fund participants 3,592 – 89 3,681 Actuarial (gains)/losses 5,952 (535) (1,230) 4,187 Benefits paid (22,148) (2,344) 122 (24,370) Present value of partly funded defined benefit obligations at end of the year 281,088 25,115 10,887 317,090
As at 30 June 2006 Present value of partly funded defined benefit obligations at beginning of the year 271,970 26,605 12,365 310,940 Current service cost 6,803 1,490 148 8,441 Interest cost 15,887 1,308 681 17,876 Contributions by fund participants 3,738 – 104 3,842 Actuarial (gains)/losses (4,217) (2,075) (1,737) (8,029) Benefits paid (22,091) (2,179) (403) (24,673) Present value of partly funded defined benefit obligations at end of the year 272,090 25,149 11,158 308,397
(iii) Reconciliation of the fair value of fund assets:
As at 30 June 2007 Fair value of fund assets at beginning of the year 225,272 13,124 10,648 249,044 Expected return on fund assets 16,683 956 805 18,444 Actuarial gains/(losses) 13,716 817 508 15,041 Employer contributions 8,413 1,565 143 10,121 Contributions by fund participants 3,592 – 89 3,681 Benefits paid (22,148) (2,344) 122 (24,370) Fair value of fund assets at end of the year 245,528 14,118 12,315 271,961
62 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
15 . Provisions (continued)
(b) Retirement benefits (continued) (iii) Reconciliation of the fair value of fund assets: (continued)
SASS SANCS SSS Total Economic entity $’000 $’000 $’000 $’000
As at 30 June 2006 Fair value of fund assets at beginning of the year 202,848 11,853 9,684 224,385 Expected return on fund assets 14,889 851 733 16,473 Actuarial gains/(losses) 17,208 985 395 18,588 Employer contributions 8,680 1,614 135 10,429 Contributions by fund participants 3,738 – 104 3,842 Benefits paid (22,091) (2,179) (403) (24,673) Fair value of fund assets at end of the year 225,272 13,124 10,648 249,044
(iv) Defined benefits fund expense/(income) for the year:
Ending 30 June 2007 Current service cost 6,116 1,438 97 7,651 Interest cost 15,486 1,407 651 17,544 Expected return on fund assets (16,683) (956) (805) (18,444) Net actuarial losses/(gains) recognised (7,765) (1,352) (1,739) (10,856) Total included in retirement benefits expense (2,846) 537 (1,796) (4,105)
Ending 30 June 2006 Current service cost 6,803 1,490 148 8,441 Interest cost 15,887 1,308 681 17,876 Expected return on fund assets (14,889) (851) (733) (16,473) Net actuarial losses/(gains) recognised (21,425) (3,060) (2,131) (26,616) Total included in retirement benefits expense (13,624) (1,113) (2,035) (16,772)
(v) Actual return on fund assets for the year:
Economic entity Ending 30 June 2007 31,992 1,773 1,558 35,323 Ending 30 June 2006 30,122 1,837 1,513 33,472
Parent
Ending 30 June 2007 – – – – Ending 30 June 2006 21,374 1,303 1,074 23,751
State Transit Authority of New South Wales - Annual Report 2006-2007 63 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
15 . Provisions (continued)
(b) Retirement benefits (continued) (vi) Historical information:
SASS SANCS SSS Total Economic entity $’000 $’000 $’000 $’000
As at 30 June 2007 Present value of defined benefit obligation 281,088 25,115 10,887 317,090 Fair value of fund assets (245,528) (14,118) (12,315) (271,961) Total unfunded liability 35,560 10,997 (1,428) 45,129 Experience adjustments – fund liabilities 5,952 (535) (1,230) 4,187 Experience adjustments – fund assets (13,716) (817) (508) (15,041)
As at 30 June 2006 Present value of defined benefit obligation 272,090 25,149 11,158 308,397 Fair value of fund assets (225,272) (13,124) (10,648) (249,044) Total unfunded liability 46,818 12,025 510 59,353 Experience adjustments – fund liabilities (4,217) (2,075) (1,737) (8,029) Experience adjustments – fund assets (17,208) (985) (395) (18,588)
(vii) Expected employer contributions:
As at 30 June 2007 7,901 1,561 142 9,604 As at 30 June 2006 8,223 1,584 166 9,973
(viii) The percentage invested in each asset class at the reporting date:
2007 2006 Economic entity % % Australian equities 33.6 37.4 Overseas equities 26.5 27.9 Australian fixed interest securities 6.8 9.9 Overseas fixed interest securities 6.4 6.8 Property 10.1 8.6 Cash 9.8 5.0 Other 6.8 4.4
64 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
15 . Provisions (continued)
(b) Retirement benefits (continued) (ix) A summary of the financial position of the fund calculated in accordance with AAS 25 Financial Reporting by Superannuation Plans as supplied by the Trustee:
SASS SANCS SSS Total Economic entity $’000 $’000 $’000 $’000
As at 30 June 2007 Accrued benefits 276,875 24,842 9,835 311,552 Net market value of the fund assets (245,528) (14,118) (12,315) (271,961) Net (surplus)/deficit 31,347 10,724 (2,480) 39,591
As at 30 June 2006 Accrued benefits 261,149 23,902 9,347 294,398 Net market value of the fund assets (225,272) (13,124) (10,648) (249,044) Net (surplus)/deficit 35,877 10,778 (1,301) 45,354
SASS SANCS SSS Multiple of Multiple of Recommended contribution member % member member (x) rates for the year ending contributions salary contributions 30 June 2007 2.2 2.5 1.6 30 June 2006 2.2 2.5 1.6
At the last actuarial review, the Aggregate Funding method was used to determine the employer contribution recommendations. The method adopted affects the timing of the cost to the employer. Under the Aggregate Funding method, the employer contribution rate is determined so that sufficient assets will be available to meet benefit payments to existing members, taking into account the current value of assets and future contributions. (xi) The economic assumptions adopted for the last actuarial review of the fund were:
2007 2006 Economic entity % pa % pa
Weighted-average assumptions Expected rate of return on fund assets backing current defined benefit liabilities 7.7 7.7 Expected rate of return on fund assets backing other liabilities 7.0 7.0 Expected salary increase rate 4.0 4.0 Expected rate of CPI increase 2.5 2.5 (xii) If a surplus exists in the employer’s interest in the fund, the employer may be able to reduce the required contribution rate, subject to the fund’s actuarial advice. Where a deficiency exists, the employer is responsible for any difference between the employer’s share of the fund assets and the defined benefit obligation.
State Transit Authority of New South Wales - Annual Report 2006-2007 65 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
15 . Provisions (continued)
(b) Retirement benefits (continued) (xiii) Demographic assumptions - as at 30 June 2007 The demographic assumptions as at 30 June 2007 are those being used for the (current) 2007 triennial actuarial valuation. A selection of the most financially significant assumptions is shown below. (i) SASS contributors The number of SASS contributors expected in any one year (out of 10,000 members), at the ages shown, to leave the fund as a result of death, disability, resignation, retirement and redundancy. Promotional salary increase rates are also shown.
Number of members expected in any one year, out of 10,000 members at the age shown, to leave the fund as a result of : Additional Total & Retirement Resignation Redundancy promotional Age nearest Permanent salary increase birthday Deaths Disability Part 1 Part 3 Part 1 Part 3 Part 1 Part 3 rate % Males 30 4 8 – – 280 395 150 – 2.90 40 6 10 – – 150 285 150 – 1.80 50 11 30 – – 112 172 150 – – 60 30 – 1,400 950 – – 150 – – Females 30 2 2 – – 372 700 150 – 2.90 40 3 6 – – 175 320 150 – 1.80 50 7 28 – – 144 270 150 – – 60 18 – 1,500 1,500 – – 150 – – (ii) SSS contributors The number of SSS contributors expected in any one year (out of 10,000 members), at the ages shown, to leave the fund as a result of death, disability, resignation, retirement and preservation. Promotional salary increase rates are also shown.
Number of members expected in any one year, out of 10,000 members at the age shown, to leave the fund as a result of : Retirement Cash Preservation Age nearest Ill-health (R60 for Resignation (R60 for Additional promotional birthday Death Retirement females) (R60 for females) females) salary increase rate % Males 30 4 42 – 178 95 2.90 40 6 54 – 80 140 1.80 50 11 144 – 20 50 – 60 30 – 6,500 – – – Females 30 2 6 – 204 124 2.90 40 3 21 – 72 105 1.80 50 7 103 – 30 90 – 60 18 – 6,300 – – –
66 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
15 . Provisions (continued)
(b) Retirement benefits (continued) (xiii) Demographic assumptions - as at 30 June 2007 (continued) (iii) SSS commutation The proportion of SSS members assumed to commute their pension to a lump sum in any one year: Proportion of pension commuted Retirement Breakdown 0 .15 0 .20 Age Later of commencement or age 55 Widow Widower 55 0.2500 0.2500 65 0.5380 0.5800 75 0.4825 0.5160 85 0.3928 0.3728
(iv) SSS pensioner mortality The assumed mortality rates (in 2007/2008) for SSS pensioners (separately for normal retirement/ spouses and invalidity): Retirement Pensioners and Spouses and Widows Invalidity Pensioners Age Males Females Males Females 55 0.0025 0.0014 0.0081 0.0066 65 0.0070 0.0055 0.0112 0.0125 75 0.0194 0.0157 0.0505 0.0314 85 0.0945 0.0634 0.1134 0.1268
(v) SSS pensioner mortality improvements The assumed rates of mortality improvement for SSS pensioners per year: Improvement rates for years post 2006 Age Males Females 55 0.0152 0.0113 65 0.0101 0.0065 75 0.0087 0.0068 85 0.0052 0.0080
State Transit Authority of New South Wales - Annual Report 2006-2007 67 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
15 . Provisions (continued)
(b) Retirement benefits (continued) (xiii) Demographic assumptions - as at 30 June 2006 The demographic assumptions as at 30 June 2006 are those being used for the (current) 2006 triennial actuarial valuation. A selection of the most financially significant assumptions is shown below. (i) SASS contributors The number of SASS contributors expected in any one year (out of 10,000 members), at the ages shown, to leave the fund as a result of death, disability, resignation, retirement and redundancy. Promotional salary increase rates are also shown.
Number of members expected in any one year, out of 10,000 members at the age shown, to leave the fund as a result of: Additional Total & Retirement Resignation Redundancy promotional Age nearest Permanent salary increase birthday Deaths Disability Part 1 Part 3 Part 1 Part 3 Part 1 Part 3 rate % Males 30 4 8 – – 280 395 150 – 2.90 40 6 10 – – 150 285 150 – 1.80 50 11 30 – – 112 172 150 – – 60 30 – 1,400 950 – – 150 – – Females 30 2 2 – – 372 700 150 – 2.90 40 3 6 – – 175 320 150 – 1.80 50 7 28 – – 144 270 150 – – 60 18 – 1,500 1,500 – – 150 – – (ii) SSS contributors The number of SSS contributors expected in any one year (out of 10,000 members), at the ages shown, to leave the fund as a result of death, disability, resignation, retirement and preservation. Promotional salary increase rates are also shown.
Number of members expected in any one year, out of 10,000 members at the age shown, to leave the fund as a result of : Cash Retirement Resignation Preservation Age nearest Ill-health (R60 for (R60 for (R60 for Additional promotional birthday Death Retirement females) females) females) salary increase rate % Males 30 4 42 – 178 95 2.90 40 6 54 – 80 140 1.80 50 11 144 – 20 50 – 60 30 – 6,500 – – – Females 30 2 6 – 204 124 2.90 40 3 21 – 72 105 1.80 50 7 103 – 30 90 – 60 18 – 6,300 – – –
68 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
15 . Provisions (continued)
(b) Retirement benefits (continued) (xiii) Demographic assumptions - as at 30 June 2006 (continued) (iii) SSS commutation The proportion of SSS members assumed to commute their pension to a lump sum in any one year: Proportion of pension commuted Retirement Breakdown 0 .15 0 .20 Age Later of commencement or age 55 Widow Widower 55 0.2500 0.2500 65 0.5380 0.5800 75 0.4825 0.5160 85 0.3928 0.3728
(iv) SSS pensioner mortality The assumed mortality rates (in 2006/2007) for SSS pensioners (separately for normal retirement/ spouses and invalidity): Retirement Pensioners and Spouses and Widows Invalidity Pensioners Age Males Females Males Females 55 0.0025 0.0014 0.0081 0.0066 65 0.0070 0.0055 0.0112 0.0125 75 0.0194 0.0157 0.0505 0.0314 85 0.0945 0.0634 0.1134 0.1268
(v) SSS pensioner mortality improvements The assumed rates of mortality improvement for SSS pensioners per year: Improvement rates for years post 2006 Age Males Females 55 0.0152 0.0113 65 0.0101 0.0065 75 0.0087 0.0068 85 0.0052 0.0080
State Transit Authority of New South Wales - Annual Report 2006-2007 69 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
16 . Deferred Tax Liabilites
Economic entity 2007 2006 $’000 $’000 Assets held for sale 30 47 Retirement benefits 428 – Depreciation and revaluations 72,909 63,441 Total deferred tax liabilities 73,367 63,488
17 . Other Liabilites Current Revenue received in advance 10,279 10,781 Other – 6 Total current other liabilities 10,279 10,787
18 . Commitments (a) Operating lease commitments Payable Not later than 1 year 1,295 1,384 Later than 1 year and not later than 5 years 1,435 1,497 Later than 5 years 26 – Total operating lease commitments (including GST) 2,756 2,881 Operating leases exist in respect of office accommodation, motor vehicles, office equipment and wharves.
(b) Capital expenditure commitments* Payable Not later than 1 year 97,395 68,944 Later than 1 year and not later than 5 years 190,123 252,121 Total capital expenditure commitments (including GST) 287,518 321,065 * These capital expenditure commitments relate primarily to bus procurement contracts.
(c) Other expenditure commitments Aggregate other expenditure for the acquisition of goods and services at balance date and not provided for: Not later than 1 year 4,740 3,856 Total other expenditure commitments (including GST) 4,740 3,856 The commitment totals as shown above include Goods and Services Tax (GST) of $26.8M, which is recoverable from the Australian Taxation Office.
70 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
19 . Western Sydney Buses Western Sydney Buses (“WSB”) was incorporated on 12 July 2002 under the Transport Administration Act 1988 as a public subsidiary corporation of the State Transit Authority. WSB commenced operation from February 2003. WSB operates bus services along the corridor known as the Liverpool-Parramatta Transitway. Its operations have been incorporated into the Authority’s financial result. However, a separate account for WSB is maintained by the Authority, which recognised loans were advanced from and repayments received by the Authority. The Authority also levies management fees. WSB’s income statements are summarised as follows: 2007 2006 $’000 $’000 Revenue Passenger revenue 4,190 3,631 Reimbursements for concessional travel 173 498 Other 1 32 Total revenue 4,364 4,161 Expenses Wages, salaries and on-costs 3,189 2,948 Fleet running expenses 1,213 1,481 Other 1,697 1,546 Total expenses 6,099 5,975 Gross loss from continuing activities (1,735) (1,814)
WSB’s balance sheets are summarised as follows: Current Assets Cash and cash equivalents 60 22 Trade and other receivables 364 516 Other 37 63 Total current assets 461 601 Non-Current Assets Other 50 38 Total non-current assets 50 38 Total assets 511 639 Current Liabilities Trade and other payables 692 644 Borrowings from parent entity 11,066 9,514 Provisions 259 266 Total current liabilities 12,017 10,424 Non-Current Liabilities Provisions 55 41 Total non-current liabilities 55 41 Total liabilities 12,072 10,465 Net assets (11,561) (9,826)
All property, plant and equipment are leased from the Authority under an operating lease.
State Transit Authority of New South Wales - Annual Report 2006-2007 71 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
20 . Financial Instruments
(a) Interest rate risk Exposure to interest rate risk and the effective interest rates of financial assets and financial liabilities, both recognised and unrecognised at reporting date, are as follows:
Fixed interest rate maturing in Weighted average Floating Over More Non- effective interest interest 1 year or 1 to 5 than 5 interest rate rate less years years bearing Total Floating Fixed Economic entity - 2007 $’000 $’000 $’000 $’000 $’000 $’000 % %
Financial assets
Cash and cash equivalents 17,432 – – – 2,122 19,554 6.41 N/A Receivables – 3,302 15,699 57,160 13,951 90,112 N/A N/A Total financial assets 17,432 3,302 15,699 57,160 16,073 109,666
Financial liabilities
Trade creditors & accruals – – – – 42,726 42,726 N/A N/A Borrowings – 21,247 29,043 25,522 – 75,812 6.81 6.89 Total financial liabilities – 21,247 29,043 25,522 42,726 118,538
Economic entity - 2006
Financial assets
Cash and cash equivalents 18,166 – – – 2,237 20,403 5.69 N/A Receivables – 1,331 6,306 24,571 8,207 40,415 N/A N/A Total financial assets 18,166 1,331 6,306 24,571 10,444 60,818
Financial liabilities
Trade creditors & accruals – – – – 35,101 35,101 N/A N/A Borrowings – 18,266 25,022 32,724 – 76,012 6.49 6.81 Total financial liabilities – 18,266 25,022 32,724 35,101 111,113
72 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
20 . Financial Instruments
(b) Net fair values All financial assets and liabilities have been recognised at the reporting date at their net fair values except for the following:
Total carrying amount Total net fair value 2007 2006 2007 2006 Economic entity $’000 $’000 $’000 $’000 Financial liabilities Borrowings 75,812 76,012 74,609 76,370 Total financial liabilities 75,812 76,012 74,609 76,370
(c) Credit risk exposures The Authority’s maximum exposure to credit risk at reporting date in relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the balance sheet. In relation to financial instruments, credit risk arises from the potential failure of counterparties to meet their obligations under the contract. It is not expected that any counterparties will fail to meet their obligations given the Authority’s credit risk policy. The following table summarises the credit risk exposure on the financial instruments held at reporting date
Face value Market value 2007 2006 2007 2006 Economic entity $’000 $’000 $’000 $’000 Forward exchange contracts Not later than 1 year 26,406 16,965 23,182 16,374 Later than 1 year but not later than 5 years 33,798 44,197 25,893 36,938 Total 60,204 61,162 49,075 53,312
State Transit Authority of New South Wales - Annual Report 2006-2007 73 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
21 . Related Parties The Authority and its controlled entities engage in a variety of related party transactions in the ordinary course of business. These transactions are conducted on normal terms and conditions.
(a) Related party transactions and balances as at 30 June 2007: The Authority STA Division WSB WSB Division $’000 $’000 $’000 $’000
Personnel service income/(expense) (314,613) 311,421 – 3,192 Management fees/(expense) 138 – (138) – Receivables/(payables) - current (71,126) 81,853 (11,066) 339 Receivables/(payables) - non-current (70,852) 70,847 – 5 Operating lease income/(expense) 542 – (542) – Total (455,911) 464,121 (11,746) 3,536
(b) Related party transactions and balances as at 30 June 2006: The Authority STA Division WSB WSB Division $’000 $’000 $’000 $’000
Personnel service income/(expense) (88,611) 87,781 – 830 Management fees/(expense) 138 – (138) – Receivables/(payables) - current (69,807) 79,018 (9,514) 303 Receivables/(payables) - non-current (83,027) 83,024 – 3 Operating lease income/(expense) 533 – (533) – Total (240,774) 249,823 (10,185) 1,136
(c) Key management personnel compensation Economic Economic Parent entity Parent entity 2007 2007 2006 2006 $’000 $’000 $’000 $’000 Short-term employee benefits 2,490 2,490 1,789 2,475 Post-employment benefits 10 10 13 13 Termination benefits 187 187 – – Total 2,687 2,687 1,802 2,488
22 . Contigent Liabilities No significant contingent liabilities are anticipated, except for potential property and personal injury claims formerly managed by HIH Casualty & General Insurance Ltd.
74 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
23 . Segment Information Economic entity 2007 2006 $’000 $’000
Primary reporting: geographical segment: Sydney & Newcastle Segment income Operational revenue 512,009 482,067 Other income 20,481 33,399 Total segment income 532,490 515,466 Non-segment income 8,538 8,320 Total income 541,028 523,786
Segment expenses Amortisation & depreciation 33,423 30,548 Others 462,658 436,742 Total segment expenses 496,081 467,290 Non-segment expenses 12,281 9,347 Total expenses 508,362 476,637
Profit/(loss) Segment result 36,409 48,176 Non-segment result (3,743) (1,027) Income tax expense – – Net profit from continuing activities 32,666 47,149
Assets Segment assets 471,125 464,353 Non-segment assets 150,378 102,452 Total assets 621,503 566,805
Liabilities Segment liabilities 189,088 178,599 Non-segment liabilities 157,792 160,820 Total liabilities 346,880 339,419
Capital additions Acquisitions of property, plant & equipment 70,951 59,266
State Transit Authority of New South Wales - Annual Report 2006-2007 75 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
24 . Equity
Accumulated funds Reserves Total Equity 2007 2006 2007 2006 2007 2006 Economic entity $’000 $’000 $’000 $’000 $’000 $’000 Balance at the beginning of the year 124,836 79,553 102,550 95,163 227,386 174,716 Financial instruments held for sale arising from first-time adoption of AASB 139 – 3,069 – – – 3,069 Transactions with owners as owners: - Contribution of land – 8,235 – – – 8,235 Increment/(decrement) on revaluation of property, plant and equipment – – 36,849 11,853 36,849 11,853 Asset revaluation reserve balance transferred to accumulated funds on disposal/transfer of assets 975 5,146 (975) (5,146) – – Adjustment for individual asset revaluation history from adoption of for-profit status – (3,846) – 3,846 – – Recognition of deferred tax liability on the asset revaluation reserve for fixed assets – – (10,762) (3,166) (10,762) (3,166) Impact of tax liability on current year operations (11,516) (14,470) – – (11,516) (14,470) Net profit for the year 32,666 47,149 – – 32,666 47,149 Balance at the end of the year 146,961 124,836 127,662 102,550 274,623 227,386
76 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
25 . Events After the Balance Sheet Date There were no material events occurring after the balance sheet date.
End of Audited Financial Statements
Paul Dunn BCom, MBA, ACA GENERAL MANAGER - FINANCE & ADMINISTRATIVE SERVICES
SYDNEY
State Transit Authority of New South Wales - Annual Report 2006-2007 77 Statement by the Division Head For the year ended 30 June 2007
78 State Transit Authority of New South Wales - Annual Report 2006-2007 State Transit Division Authority
FINANCIAL STATEMENTS Contents
State Transit Authority Division Independent auditor’s report...... 81 Income statements...... 83 Balance sheets...... 84 Statements of changes in equity...... 85 Cash flow statements...... 86 Notes to and forming part of the financial statements 1 . Summary of significant accounting policies...... 87 2 . Receivables...... 90 3 . Payables...... 90 4 . Provisions...... 90 5 . Retirement benefits...... 91 Statement by the Division Head. . . .People ...... 100
80 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementIndependent ofby ChangesAuditor’sthe Division inReport Equity Head For the year ended 30 June 2007
People
State Transit Authority of New South Wales - Annual Report 2006-2007 81 StatementIndependent by Auditor’sthe Division Report Head For the year ended 30 June 2007
People
82 State Transit Authority of New South Wales - Annual Report 2006-2007 Start of Audited Financial Statements Income Statementsstatement For the year ended 30 June 2007
2007 2006 Notes $’000 $’000 Income Operational revenue 311,421 87,722 Others 30 59 Total income 311,451 87,781 Expenses Annual leave 23,808 7,663 Audit 30 59 Fringe benefits tax 439 89 Long service leave 8,141 1,349 Payroll tax 16,145 4,615 Retirement benefits - defined benefits 5(b)(vii) (4,097) (4,866) People Retirement benefits - defined contributions 14,236 3,840 Salaries and wages 247,065 72,379 Workers compensation 5,684 2,653 Total expenses 311,451 87,781 Surplus/(deficit) from continuing activities before income tax – – Total surplus/(deficit) attributable to owners – –
The above statements should be read in conjunction with the accompanying notes
State Transit Authority of New South Wales - Annual Report 2006-2007 83 Balance Sheets As at 30 June 2007
2007 2006 Notes $’000 $’000 Current Assets Receivables 2 81,853 79,017 Total current assets 81,853 79,017 Non-Current Assets Receivables 2 52,769 83,022 Total non-current assets 52,769 83,022 Total assets 134,622 162,039 Current Liabilities Payables 3 12,327 10,292 Provisions 4 69,526 68,725 Total current liabilities People 81,853 79,017 Non-Current Liabilities Provisions 4 52,769 83,022 Total non-current liabilities 52,769 83,022 Total liabilities 134,622 162,039
Net assets – – Equity Accumulated funds – – Total equity – –
The above statements should be read in conjunction with the accompanying notes
84 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementStatements of of Changes Changes in in Equity Equity ForFor the the year year ended ended 30 30 June June 2007 2007
2007 2006 $’000 $’000
Total equity at the beginning of the year – – Total surplus/(deficit) for the year – – Total equity at the end of the year – –
People
The above statements should be read in conjunction with the accompanying notes
State Transit Authority of New South Wales - Annual Report 2006-2007 85 CASH FLOW STATEMENT For Cashthe year ended Flow 30 June 2007 Statements For the year ended 30 June 2007
2007 2006 $’000 $’000
Net cash flows from operating activities – – Net cash flows from investing activities – – Net cash flows from financing activities – – Net increase/(decrease) in cash and cash equivalents – – Cash and cash equivalents at the beginning of the year – – Cash and cash equivalents at the end of the year – –
The above statements should be read in conjunction with the accompanying notes
86 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
1 . Summary of Significant Accounting Policies
(a) Reporting entity State Transit Authority Division (“STA Division”) is a Division of the NSW Government Service, established pursuant to Part 2 of Schedule 1 to the Public Sector Employment and Management Act 2002. It is a not- for-profit entity as profit is not its principal objective. It is consolidated as part of the NSW Total State Sector Accounts. It is domiciled in Australia and its principal office is at Level 1, 219-241 Cleveland Street, Strawberry Hills NSW 2010. STA Division’s objective is to provide personnel services to the State Transit Authority of New South Wales. STA Division commenced operations on 17 March 2006 when it assumed responsibility for the employees and employee-related liabilities of the former employer, the State Transit Authority of New South Wales. The assumed liabilities were recognised on 17 March 2006 together with an offsetting receivable representing the related funding due from the former employer. The financial report was authorised for issue by Mr Peter Rowley, Acting Division Head, on 26 October 2007. The report will not be amended and reissued as it has been audited.
(b) Basis of preparation This is a general purpose financial report prepared in accordance with the requirements of Australian Accounting Standards and Interpretations, the Public Finance and Audit Act 1983, the Public Finance and Audit Regulation 2005, and specific directions issued by the Treasurer. Generally, the historical cost basis of accounting has been adopted and the financial report does not take into account changing money values or current valuations. However, certain provisions are measured at fair value. See note 1(g). The accrual basis of accounting has been adopted in the preparation of the financial report, except for cash flow information. Management’s judgements, key assumptions and estimates are disclosed in the relevant notes to the financial report. All amounts are rounded to the nearest one thousand dollars and are expressed in Australian currency.
(c) Comparative information The comparative information was for the period commencing 17 March 2006 to 30 June 2006.
(d) Income Income is measured at the fair value of the consideration received or receivable. Revenue from the rendering of personnel services is recognised when the service is provided and only to the extent that the associated recoverable expenses are recognised.
(e) Receivables A receivable is recognised when it is probable that the future cash inflows associated with it will be realised and it has a value that can be measured reliably. It is derecognised when the contractual or other rights to future cash flows from it expire or are transferred. A receivable is measured initially at fair value and subsequently at amortised cost using the effective interest rate method, less any allowance for impairment. A short-term receivable with no stated interest rate is measured at the original invoice amount where the effect of discounting is immaterial. An invoiced receivable is due for settlement within thirty days of invoicing.
State Transit Authority of New South Wales - Annual Report 2006-2007 87 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
1 . Summary of Significant Accounting Policies (continued)
(e) Receivables (continued) If there is objective evidence at year end that a receivable may not be collectable, its carrying amount is reduced by means of an allowance for impairment and the resulting loss is recognised in the income statement. Receivables are monitored during the year and bad debts are written off against the allowance when they are determined to be irrecoverable. Any other loss or gain arising when a receivable is derecognised is also recognised in the income statement.
(f) Payables Payables include accrued wages, salaries, and related on costs (such as payroll tax, fringe benefits tax and workers’ compensation insurance) where there is certainty as to the amount and timing of settlement. A payable is recognised when a present obligation arises under a contract or otherwise. It is derecognised when the obligation expires or is discharged, cancelled or substituted. A short-term payable with no stated interest rate is measured at historical cost if the effect of discounting is immaterial.
(g) Employee benefit provisions and expenses Provisions are made for liabilities of uncertain amount or uncertain timing of settlement. Employee benefit provisions represent expected amounts payable in the future in respect of unused entitlements accumulated as at the reporting date. Liabilities associated with, but that are not, employee benefits (such as payroll tax) are recognised separately. Superannuation and leave liabilities are recognised as expenses and provisions when the obligations arise, which is usually through the rendering of service by employees. Long-term annual leave (ie that is not expected to be taken within twelve months) is measured at present value using a discount rate equal to the market yield on government bonds. Superannuation and long service leave provisions are actuarially assessed prior to each reporting date and are measured at the present value of the estimated future payments. The unconditional component of the long service leave entitlements, for those employees currently employed for nine or more years at the reporting date, are classified as current liabilities. All other employee benefit liabilities (ie for benefits falling due wholly within twelve months after reporting date) are assessed by management and are measured at the undiscounted amount of the estimated future payments. The amount recognised for superannuation and long service leave provisions is the net total of the present value of the defined benefit obligation at the reporting date, minus the fair value at that date of any plan assets out of which the obligations are to be settled directly. The amount recognised in the income statement for superannuation and long service leave is the net total of current service cost, interest cost, the expected return on any plan assets, and actuarial gains and losses. Actuarial gains or losses are recognised as income or expense in the year they occur. The actuarial assessment of superannuation and long service leave provisions uses the Projected Unit Credit Method and reflects estimated future salary increases and the benefits set out in the terms of the plan. The liabilities are discounted using the market yield rate on government bonds of similar maturity to those obligations. Actuarial assumptions are unbiased and mutually compatible and financial assumptions are based on market expectations for the period over which the obligations are to be settled.
88 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
1 . Summary of Significant Accounting Policies (continued)
(h) Accounting standards issued but not yet effective The Australian Accounting Standards that have been amended or issued as at 30 June 2007 but are not yet effective have not been early adopted for the annual reporting period ending 30 June 2007. It is anticipated these amendments and standards will not have material impact on future accounting policies.
Applicable to annual reporting Standard/Amendment Affected standard(s) periods beginning on or after AASB 7 AASB 132 1 January 2007 AASB 8 AASB 114 1 January 2009 2007-3 AASB 102; AASB 107; AASB 119; 1 January 2009 AASB 127; AASB 136 2007-4 AASB 5; AASB 7; AASB 102; AASB 107; 1 July 2007 AASB 108; AASB 110; AASB 112; AASB 114; AASB 116; AASB 117; AASB 118; AASB 119; AASB 120; AASB 127; AASB 132; AASB 136; AASB 137; AASB 138; AASB 139 2007-6 AASB 101; AASB 107; AASB 116; 1 January 2009 AASB 138
State Transit Authority of New South Wales - Annual Report 2006-2007 89 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
2 . Receivables
2007 2006 Notes $’000 $’000
Current Receivables from State Transit Authority 81,853 79,017 Total current receivables 81,853 79,017
Non-current Receivables from State Transit Authority 50,753 83,022 Retirement benefits 5(b)(i) 2,016 – Total non-current receivables 52,769 83,022
3 . Payables Accrued salaries, wages and on-costs 12,327 10,292 Total payables 12,327 10,292
4 . Provisions Current Employee benefits 65,092 64,240 Workers’ compensation 4,434 4,485 Total current provisions 69,526 68,725
Non-current Employee benefits 4,872 4,573 Retirement benefits 5(b)(i) 28,529 59,392 Workers’ compensation 19,368 19,057 Total non-current provisions 52,769 83,022
90 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits
(a) The Pooled Fund holds in trust the investments of the closed NSW public sector superannuation schemes: (a) SASS State Authorities Superannuation Scheme (b) SANCS State Authorities Non-Contributory Superannuation Scheme (c) SSS State Superannuation Scheme These schemes are all defined benefit schemes – at least a component of the final benefit is derived from a multiple of member salary and years of membership. All the schemes are closed to new members. All fund assets are invested by STC at arm’s length through independent fund managers.
(b) The principal actuarial assumptions that have been used in the calculation are:
2007 2006 % pa % pa Discount rate 6.4 5.9 Expected return on fund assets as at 30 June 7.6 7.6 Expected rate of salary increases 4.0 to 2008 and 4.0 to 2008 and 3.5 thereafter 3.5 thereafter Expected rate of increase in consumer price index 2.5 2.5
The Projected Unit Credit (PUC) valuation method was used to determine the present value of the defined benefit obligations and the related current service costs. This method sees each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. (i) The assessed liability and funds held in reserve account with the Trustee are as follows:
SASS SANCS SSS Total $’000 $’000 $’000 $’000
As at 30 June 2007 Gross liability 264,879 23,114 10,299 298,292 Reserve balance (245,377) (14,087) (12,315) (271,779) Total unfunded liability 1 9,502 9,027 (2,016) 26,513
As at 30 June 2006 Gross liability 255,897 23,149 10,570 289,616 Reserve balance (225,146) (13,097) (10,648) (248,891) Total unfunded liability 30,751 10,052 (78) 40,725
State Transit Authority of New South Wales - Annual Report 2006-2007 91 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) (ii) Reconciliation of the present value of the defined benefit obligation:
SASS SANCS SSS Total $’000 $’000 $’000 $’000
As at 30 June 2007 Present value of partly funded defined benefit obligations at beginning of the year 255,897 23,149 10,570 289,616 Current service cost 6,112 1,437 97 7,646 Interest cost 15,480 1,406 651 17,537 Contributions by fund participants 3,589 – 91 3,680 Actuarial (gains)/losses 5,946 (535) (1,232) 4,179 Benefits paid (22,145) (2,343) 122 (24,366) Present value of partly funded defined benefit obligations at end of the year 264,879 23,114 10,299 298,292
As at 30 June 2006 Present value of partly funded defined benefit obligations at beginning of the year 271,876 26,588 12,365 310,829 Current service cost 1,974 432 43 2,449 Interest cost 4,612 380 198 5,190 Contributions by fund participants 3,736 – 104 3,840 Actuarial (gains)/losses (4,212) (2,072) (1,737) (8,021) Benefits paid (22,089) (2,179) (403) (24,671) Present value of partly funded defined benefit obligations at end of the year 255,897 23,149 10,570 289,616 (iii) Reconciliation of the fair value of fund assets:
As at 30 June 2007 Fair value of fund assets at beginning of the year 225,146 13,097 10,648 248,891 Expected return on fund assets 16,673 954 805 18,432 Actuarial gains/(losses) 13,705 815 507 15,027 Employer contributions 8,409 1,564 142 10,115 Contributions by fund participants 3,589 – 91 3,680 Benefits paid (22,145) (2,343) 122 (24,366) Fair value of fund assets at end of the year 245,377 14,087 12,315 271,779
As at 30 June 2006 Fair value of fund assets at beginning of the year 202,746 11,830 9,684 224,260 Expected return on fund assets 14,881 849 733 16,463 Actuarial gains/(losses) 17,197 984 395 18,576 Employer contributions 8,675 1,613 135 10,423 Contributions by fund participants 3,736 – 104 3,840 Benefits paid (22,089) (2,179) (403) (24,671) Fair value of fund assets at end of the year 225,146 13,097 10,648 248,891
92 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) (iv) Reconciliation of the assets and liabilities recognised in the balance sheet:
SASS SANCS SSS Total $’000 $’000 $’000 $’000
As at 30 June 2007 Present value of partly funded defined benefit obligations at end of year 264,879 23,114 10,299 298,292 Fair value of fund assets at end of year (245,377) (14,087) (12,315) (271,779) Net liability/(asset) recognised in balance sheet at end of year 19,502 9,027 (2,016) 26,513
As at 30 June 2006 Present value of partly funded defined benefit obligations at end of year 255,897 23,149 10,570 289,616 Fair value of fund assets at end of year (225,146) (13,097) (10,648) (248,891) Net liability/(asset) recognised in balance sheet at end of year 30,751 10,052 (78) 40,725
(v) Historical information:
As at 30 June 2007 Present value of defined benefit obligation 280,972 25,100 10,886 316,958 Fair value of fund assets (245,378) (14,087) (12,314) (271,779) Total unfunded liability 35,594 11,013 (1,428) 45,179 Experience adjustments – fund liabilities 5,946 (534) (1,231) 4,181 Experience adjustments – fund assets (13,706) (815) (508) (15,029)
As at 30 June 2006 Present value of defined benefit obligation 271,990 25,134 11,158 308,282 Fair value of fund assets (225,145) (13,097) (10,648) (248,890) Total unfunded liability 46,845 12,037 510 59,392 Experience adjustments – fund liabilities (4,212) (2,072) (1,737) (8,021) Experience adjustments – fund assets (17,197) (984) (395) (18,576)
(vi) Expected employer contributions: As at 30 June 2007 7,896 1,560 142 9,598 As at 30 June 2006 8,218 1,583 166 9,967
State Transit Authority of New South Wales - Annual Report 2006-2007 93 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) (vii) Defined benefits fund expense/(income) for the period:
SASS SANCS SSS Total $’000 $’000 $’000 $’000
Ending 30 June 2007 Current service cost 6,112 1,437 97 7,646 Interest cost 15,480 1,406 651 17,537 Expected return on fund assets (16,673) (954) (805) (18,432) Net actuarial losses/(gains) recognised (7,760) (1,349) (1,739) (10,848) Total included in retirement benefits expense (2,841) 540 (1,796) (4,097)
Ending 30 June 2006 Current service cost 1,974 432 43 2,449 Interest cost 4,612 380 198 5,190 Expected return on fund assets (4,322) (247) (213) (4,782) Net actuarial losses/(gains) recognised (6,217) (887) (619) (7,723) Total included in retirement benefits expense (3,953) (322) (591) (4,866)
(viii) Actual return on fund assets for the period:
Ending 30 June 2007 Actual return on fund assets 31,974 1,769 1,558 35,301 Ending 30 June 2006 Actual return on fund assets 30,106 1,833 1,513 33,452
(ix) A summary of the financial position of the fund calculated in accordance with AAS 25 Financial Reporting by Superannuation Plans as supplied by the Trustee:
As at 30 June 2007 Accrued benefits 276,761 24,826 9,835 311,422 Net market value of the fund assets (245,378) (14,087) (12,314) (271,779) Net (surplus)/deficit 31,383 10,739 (2,479) 39,643
As at 30 June 2006 Accrued benefits 261,053 23,889 9,347 294,289 Net market value of the fund assets (225,145) (13,097) (10,648) (248,890) Net (surplus)/deficit 35,908 10,792 (1,301) 45,399
94 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) SASS SANCS SSS Multiple of Multiple of (x) Recommended contribution member % member member rates for the period ending contributions salary contributions 30 June 2007 2.20 2.50 1.60 30 June 2006 2.20 2.50 1.60
The method used to determine the employer contribution recommendations at the last actuarial review was the Aggregate Funding method. The method adopted affects the timing of the cost to the employer. Under the Aggregate Funding method, the employer contribution rate is determined so that sufficient assets will be available to meet benefit payments to existing members, taking into account the current value of assets and future contributions.
(xi) The weighted-average economic assumptions adopted for the last actuarial review of the fund were:
2007 2006 % pa % pa Expected rate of return on fund assets 7.7 7.3 Expected salary increase rate 4.0 4.0 Expected rate of CPI increase 2.5 2.5
(xii) The percentage invested in each asset class at the balance sheet date:
2007 2006 % pa % pa Australian equities 33.6 37.4 Overseas equities 26.5 27.9 Australian fixed interest securities 6.8 9.9 Overseas fixed interest securities 6.4 6.8 Property 10.1 8.6 Cash 9.8 5.0 Other 6.8 4.4
(xiii) If a surplus exists in the employer’s interest in the fund, the employer may be able to take advantage of it in the form of a reduction in the required contribution rate, depending on the advice of the fund’s actuary. Where a deficiency exists, the employer is responsible for any difference between the employer’s share of the fund assets and the defined benefit obligation.
State Transit Authority of New South Wales - Annual Report 2006-2007 95 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) (xiv) Demographic assumptions - as at 30 June 2007 The demographic assumptions as at 30 June 2007 are those being used for the (current) 2007 triennial actuarial valuation. A selection of the most financially significant assumptions is shown below: (i) SASS Contributors - the number of SASS contributors expected in any one year (out of 10,000 members), at the ages shown, to leave the fund as a result of death, disability, resignation, retirement and redundancy. Promotional salary increase rates are also shown. Number of members expected in any one year, out of 10,000 members at the age shown, to leave the fund as a result of : Additional Total & Retirement Resignation Redundancy promotional Age nearest Permanent salary increase birthday Deaths Disability Part 1 Part 3 Part 1 Part 3 Part 1 Part 3 rate % Males 30 4 8 – – 280 395 150 – 2.90 40 6 10 – – 150 285 150 – 1.80 50 11 30 – – 112 172 150 – – 60 30 – 1,400 950 – – 150 – – Females 30 2 2 – – 372 700 150 – – 40 3 6 – – 175 320 150 – – 50 7 28 – – 144 270 150 – – 60 18 – 1,500 1,500 – – 150 – –
(ii) SSS Contributors - the number of SSS contributors expected in any one year (out of 10,000 members), at the ages shown, to leave the fund as a result of death, disability, resignation, retirement and preservation. Promotional salary increase rates are also shown. Number of members expected in any one year, out of 10,000 members at the age shown, to leave the fund as a result of : Retirement Cash Preservation Age nearest Ill-health (R60 for Resignation (R60 for Additional promotional birthday Death Retirement females) (R60 for females) females) salary increase rate % Males 30 4 42 – 178 95 2.90 40 6 54 – 80 140 1.80 50 11 144 – 20 50 – 60 30 – 6,500 – – – Females 30 2 6 – 204 124 2.90 40 3 21 – 72 105 1.80 50 7 103 – 30 90 – 60 18 – 6,300 – – – Note: R60 stands for women who elected to retire at age 60 rather than age 55.
96 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) (xiv) Demographic assumptions - as at 30 June 2007 (continued) (iii) SSS Commutation - the proportion of SSS members assumed to commute their pension to a lump sum in any one year. Proportion of pension commuted Retirement Breakdown 0 .15 0 .20 Age Later of commencement or age 55 Widow Widower 55 0.2500 0.2500 65 0.5380 0.5800 75 0.4825 0.5160 85 0.3928 0.3728
(iv) SSS Pensioner Mortality - assumed mortality rates (in 2007/2008) for SSS pensioners (separately for normal retirement/spouses and invalidity). Retirement Pensioners and Spouses and Widows Invalidity Pensioners Age Males Females Males Females 55 0.0025 0.0014 0.0081 0.0066 65 0.0070 0.0055 0.0112 0.0125 75 0.0194 0.0157 0.0505 0.0314 85 0.0945 0.0634 0.1134 0.1268
(v) SSS Pensioner Mortality Improvements - per annum assumed rates of mortality improvement for SSS pensioners. Improvement rates for years post 2006 Age Males Females 55 0.0152 0.0113 65 0.0101 0.0065 75 0.0087 0.0068 85 0.0052 0.0080
State Transit Authority of New South Wales - Annual Report 2006-2007 97 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) (xiv) Demographic assumptions - as at 30 June 2006 The demographic assumptions as at 30 June 2006 are those being used for the (current) 2006 triennial actuarial valuation. A selection of the most financially significant assumptions is shown below: (i) SASS Contributors - the number of SASS contributors expected in any one year (out of 10,000 members), at the ages shown, to leave the fund as a result of death, disability, resignation, retirement and redundancy. Promotional salary increase rates are also shown. Number of members expected in any one year, out of 10,000 members at the age shown, to leave the fund as a result of : Additional Total & Retirement Resignation Redundancy promotional Age nearest Permanent salary increase birthday Deaths Disability Part 1 Part 3 Part 1 Part 3 Part 1 Part 3 rate % Males 30 4 8 – – 280 395 150 – 2.90 40 6 10 – – 150 285 150 – 1.80 50 11 30 – – 112 172 150 – – 60 30 – 1,400 950 – – 150 – – Females 30 2 2 – – 372 700 150 – 2.90 40 3 6 – – 175 320 150 – 1.80 50 7 28 – – 144 270 150 – – 60 18 – 1,500 1,500 – – 150 – – (ii) SSS Contributors - the number of SSS contributors expected in any one year (out of 10,000 members), at the ages shown, to leave the fund as a result of death, disability, resignation, retirement and preservation. Promotional salary increase rates are also shown. Number of members expected in any one year, out of 10,000 members at the age shown, to leave the fund as a result of : Retirement Cash Preservation Age nearest Ill-health (R60 for Resignation (R60 for Additional promotional birthday Death Retirement females) (R60 for females) females) salary increase rate % Males 30 4 42 – 178 95 2.90 40 6 54 – 80 140 1.80 50 11 144 – 20 50 – 60 30 – 6,500 – – – Females 30 2 6 – 204 124 2.90 40 3 21 – 72 105 1.80 50 7 103 – 30 90 – 60 18 – 6,300 – – – Note: R60 stands for women who elected to retire at age 60 rather than age 55.
98 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) (xiv) Demographic assumptions - as at 30 June 2006 (iii) SSS Commutation - the proportion of SSS members assumed to commute their pension to a lump sum in any one year. Proportion of pension commuted Retirement Breakdown 0 .15 0 .20 Age Later of commencement or age 55 Widow Widower 55 0.2500 0.2500 65 0.5380 0.5800 75 0.4825 0.5160 85 0.3928 0.3728
(iv) SSS Pensioner Mortality - assumed mortality rates (in 2006/2007) for SSS pensioners (separately for normal retirement/spouses and invalidity). Retirement Pensioners and Spouses and Widows Invalidity Pensioners Age Males Females Males Females 55 0.0025 0.0014 0.0081 0.0066 65 0.0070 0.0055 0.0112 0.0125 75 0.0194 0.0157 0.0505 0.0314 85 0.0945 0.0634 0.1134 0.1268
(v) SSS Pensioner Mortality Improvements - per annum assumed rates of mortality improvement for SSS pensioners. Improvement rates for years post 2006 Age Males Females 55 0.0152 0.0113 65 0.0101 0.0065 75 0.0087 0.0068 85 0.0052 0.0080
End of Audited Financial Statements
State Transit Authority of New South Wales - Annual Report 2006-2007 99 Statement by the Division Head For the year ended 30 June 2007
100 State Transit Authority of New South Wales - Annual Report 2006-2007 Western Sydney Buses Division
FINANCIAL STATEMENTS Contents
Western Sydney Buses Division Independent auditor’s report...... 103 Income statements...... 105 Balance sheets...... 106 Statements of changes in equity...... 107 Cash flow statements...... 108 Notes to and forming part of the financial statements 1 . Summary of significant accounting policies...... 109 2 . Receivables...... 112 3 . Payables...... 112 4 . Provisions...... 112 5 . Retirement benefits...... 113 Statement by the Division Head. . . .People ...... 122
102 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementIndependent ofby ChangesAuditor’sthe Division inReport Equity Head For the year ended 30 June 2007
People
State Transit Authority of New South Wales - Annual Report 2006-2007 103 StatementIndependent by Auditor’sthe Division Report Head For the year ended 30 June 2007
People
104 State Transit Authority of New South Wales - Annual Report 2006-2007 Start of Audited Financial Statements Income Statementsstatement For the year ended 30 June 2007
2007 2006 Notes $’000 $’000 Income Personnel services 3,192 830 Total income 3,192 830 Expenses Annual leave 164 6 Fringe benefits tax 3 3 Long service leave 15 3 Payroll tax 126 32 Retirement benefits - defined benefits 5(b)(vii) (7) (5) Retirement benefits - defined contributions 181 52 Salaries and wages 2,490 720 People Workers compensation 220 19 Total expenses 3,192 830 Surplus/(deficit) from continuing activities before income tax – – Total surplus/(deficit) attributable to owners – –
The above statements should be read in conjunction with the accompanying notes
State Transit Authority of New South Wales - Annual Report 2006-2007 105 Balance Sheets As at 30 June 2007
2007 2006 Notes $’000 $’000 Current Assests Receivables 2 339 304 Total current assets 339 304 Non-Current Assets Receivables 2 55 41 Total non-current assets 55 41 Total assets 394 345 Current Liabilities Payables 3 122 80 Provisions 4 217 224 Total current liabilities People 339 304 Non-Current Liabilities Provisions 4 55 41 Total non-current liabilities 55 41 Total liabilities 394 345
Net assets – – Equity Accumulated funds – – Total equity – –
The above statements should be read in conjunction with the accompanying notes
106 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementStatements of of Changes Changes in in Equity Equity ForFor the the year year ended ended 30 30 June June 2007 2007
2007 2006 $’000 $’000
Total equity at the beginning of the year – – Total surplus/(deficit) for the year – – Total equity at the end of the year – –
People
The above statements should be read in conjunction with the accompanying notes
State Transit Authority of New South Wales - Annual Report 2006-2007 107 CASH FLOW STATEMENT For Cashthe year ended Flow 30 June 2007 Statements For the year ended 30 June 2007
2007 2006 $’000 $’000
Net cash flows from operating activities – – Net cash flows from investing activities – – Net cash flows from financing activities – – Net increase/(decrease) in cash and cash equivalents – – Cash and cash equivalents at the beginning of the year – – Cash and cash equivalents at the end of the year – –
The above statements should be read in conjunction with the accompanying notes
108 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
1 . Summary of Significant Accounting Policies
(a) Reporting entity Western Sydney Buses Division (“WSB Division”) is a Division of the NSW Government Service, established pursuant to Part 2 of Schedule 1 to the Public Sector Employment and Management Act 2002. It is a not- for-profit entity as profit is not its principal objective. It is consolidated as part of the NSW Total State Sector Accounts. It is domiciled in Australia and its principal office is at Level 1, 219-241 Cleveland Street, Strawberry Hills NSW 2010. WSB Division’s objective is to provide personnel services to the State Transit Authority of New South Wales. WSB Division commenced operations on 17 March 2006 when it assumed responsibility for the employees and employee-related liabilities of the former employer, the State Transit Authority of New South Wales. The assumed liabilities were recognised on 17 March 2006 together with an offsetting receivable representing the related funding due from the former employer. The financial report was authorised for issue by Mr Peter Rowley, Acting Division Head, on 26 October 2007. The report will not be amended and reissued as it has been audited.
(b) Basis of preparation This is a general purpose financial report prepared in accordance with the requirements of Australian Accounting Standards and Interpretations, the Public Finance and Audit Act 1983, the Public Finance and Audit Regulation 2005, and specific directions issued by the Treasurer. Generally, the historical cost basis of accounting has been adopted and the financial report does not take into account changing money values or current valuations. However, certain provisions are measured at fair value. See note 1(g). The accrual basis of accounting has been adopted in the preparation of the financial report, except for cash flow information. Management’s judgements, key assumptions and estimates are disclosed in the relevant notes to the financial report. All amounts are rounded to the nearest one thousand dollars and are expressed in Australian currency.
(c) Comparative information The comparative information was for the period commencing 17 March 2006 to 30 June 2006.
(d) Income Income is measured at the fair value of the consideration received or receivable. Revenue from the rendering of personnel services is recognised when the service is provided and only to the extent that the associated recoverable expenses are recognised.
(e) Receivables A receivable is recognised when it is probable that the future cash inflows associated with it will be realised and it has a value that can be measured reliably. It is derecognised when the contractual or other rights to future cash flows from it expire or are transferred. A receivable is measured initially at fair value and subsequently at amortised cost using the effective interest rate method, less any allowance for impairment. A short-term receivable with no stated interest rate is measured at the original invoice amount where the effect of discounting is immaterial. An invoiced receivable is due for settlement within thirty days of invoicing.
State Transit Authority of New South Wales - Annual Report 2006-2007 109 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
1 . Summary of Significant Accounting Policies (continued)
(e) Receivables (continued) If there is objective evidence at year end that a receivable may not be collectable, its carrying amount is reduced by means of an allowance for impairment and the resulting loss is recognised in the income statement. Receivables are monitored during the year and bad debts are written off against the allowance when they are determined to be irrecoverable. Any other loss or gain arising when a receivable is derecognised is also recognised in the income statement.
(f) Payables Payables include accrued wages, salaries, and related on costs (such as payroll tax, fringe benefits tax and workers’ compensation insurance) where there is certainty as to the amount and timing of settlement. A payable is recognised when a present obligation arises under a contract or otherwise. It is derecognised when the obligation expires or is discharged, cancelled or substituted. A short-term payable with no stated interest rate is measured at historical cost if the effect of discounting is immaterial.
(g) Employee benefit provisions and expenses Provisions are made for liabilities of uncertain amount or uncertain timing of settlement. Employee benefit provisions represent expected amounts payable in the future in respect of unused entitlements accumulated as at the reporting date. Liabilities associated with, but that are not, employee benefits (such as payroll tax) are recognised separately. Superannuation and leave liabilities are recognised as expenses and provisions when the obligations arise, which is usually through the rendering of service by employees. Long-term annual leave (i.e. that is not expected to be taken within twelve months) is measured at present value using a discount rate equal to the market yield on government bonds. Superannuation and long service leave provisions are actuarially assessed prior to each reporting date and are measured at the present value of the estimated future payments. The unconditional component of the long service leave entitlements is classified as current liabilities. It relates to staff currently employed for nine or more years at the reporting date. All other employee benefit liabilities (i.e. for benefits falling due wholly within twelve months after reporting date) are assessed by management and are measured at the undiscounted amount of the estimated future payments. The amount recognised for superannuation and long service leave provisions is the net total of the present value of the defined benefit obligation at the reporting date, minus the fair value at that date of any plan assets out of which the obligations are to be settled directly. The amount recognised in the income statement for superannuation and long service leave is the net total of current service cost, interest cost, the expected return on any plan assets, and actuarial gains and losses. Actuarial gains or losses are recognised as income or expense in the year they occur. The actuarial assessment of superannuation and long service leave provisions uses the Projected Unit Credit Method and reflects estimated future salary increases and the benefits set out in the terms of the plan. The liabilities are discounted using the market yield rate on government bonds of similar maturity to those obligations. Actuarial assumptions are unbiased and mutually compatible and financial assumptions are based on market expectations for the period over which the obligations are to be settled.
110 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
1 . Summary of Significant Accounting Policies (continued)
(h) Accounting standards issued but not yet effective The Australian Accounting Standards that have been amended or issued as at 30 June 2007 but are not yet effective have not been early adopted for the annual reporting period ending 30 June 2007. It is anticipated these amendments and standards will not have material impact on future accounting policies.
Applicable to annual reporting Standard/Amendment Affected standard(s) periods beginning on or after AASB 7 AASB 132 1 January 2007 AASB 8 AASB 114 1 January 2009 2007-3 AASB 102; AASB 107; AASB 119; 1 January 2009 AASB 127; AASB 136 2007-4 AASB 5; AASB 7; AASB 102; AASB 107; 1 July 2007 AASB 108; AASB 110; AASB 112; AASB 114; AASB 116; AASB 117; AASB 118; AASB 119; AASB 120; AASB 127; AASB 132; AASB 136; AASB 137; AASB 138; AASB 139 2007-6 AASB 101; AASB 107; AASB 116; 1 January 2009 AASB 138
State Transit Authority of New South Wales - Annual Report 2006-2007 111 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
2 . Receivables
2007 2006 Notes $’000 $’000
Current Receivables from State Transit Authority 339 304 Total current receivables 339 304
Non-current Receivables from State Transit Authority 5 3 Retirement benefits 5(b)(i) 50 38 Total non-current receivables 55 41
3 . Payables Accrued salaries, wages and on-costs 122 80 Total payables 122 80
4 . Provisions Current Employee benefits 217 224 Total current provisions 217 224
Non-current Employee benefits 55 41 Total non-current provisions 55 41
112 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits
(a) The Pooled Fund holds in trust the investments of the closed NSW public sector superannuation schemes: (a) SASS State Authorities Superannuation Scheme (b) SANCS State Authorities Non-Contributory Superannuation Scheme (c) SSS State Superannuation Scheme These schemes are all defined benefit schemes – at least a component of the final benefit is derived from a multiple of member salary and years of membership. All the schemes are closed to new members. All fund assets are invested by STC at arm’s length through independent fund managers.
(b) The principal actuarial assumptions that have been used in the calculation are:
2007 2006 % pa % pa Discount rate 6.4 5.9 Expected return on fund assets as at 30 June 7.6 7.6 Expected rate of salary increases 4.0 to 2008 and 4.0 to 2008 and 3.5 thereafter 3.5 thereafter Expected rate of increase in consumer price index 2.5 2.5
The Projected Unit Credit (PUC) valuation method was used to determine the present value of the defined benefit obligations and the related current service costs. This method sees each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. (i) The assessed liability and funds held in reserve account with the Trustee are as follows:
SASS SANCS SSS Total $’000 $’000 $’000 $’000
As at 30 June 2007 Gross liability 116 16 – 132 Reserve balance (151) (31) – (182) Total over funded liability (35) (15) – (50) As at 30 June 2006 Gross liability 100 15 – 115 Reserve balance (126) (27) – (153) Total over funded liability (26) (12) – (38)
State Transit Authority of New South Wales - Annual Report 2006-2007 113 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) (ii) Reconciliation of the present value of the defined benefit obligation:
SASS SANCS SSS Total $’000 $’000 $’000 $’000
As at 30 June 2007 Present value of partly funded defined benefit obligations at beginning of the year 100 14 – 114 Current service cost 4 1 – 5 Interest cost 6 1 – 7 Contributions by fund participants 2 – – 2 Actuarial (gains)/losses 6 – – 6 Benefits paid (2) – – (2) Present value of partly funded defined benefit obligations at end of the year 116 16 – 132 As at 30 June 2006 Present value of partly funded defined benefit obligations at beginning of the year 102 16 – 118 Current service cost 1 – – 1 Interest cost 2 – – 2 Contributions by fund participants 2 – – 2 Actuarial (gains)/losses (5) (1) – (6) Benefits paid (2) – – (2) Present value of partly funded defined benefit obligations at end of the year 100 15 – 115 (iii) Reconciliation of the fair value of fund assets:
As at 30 June 2007 Fair value of fund assets at beginning of the year 126 26 – 152 Expected return on fund assets 10 2 – 12 Actuarial gains/(losses) 10 2 – 12 Employer contributions 5 1 – 6 Contributions by fund participants 2 – – 2 Benefits paid (2) – – (2) Fair value of fund assets at end of the year 151 31 – 182 As at 30 June 2006 Fair value of fund assets at beginning of the year 102 22 – 124 Expected return on fund assets 8 2 – 10 Actuarial gains/(losses) 11 2 – 13 Employer contributions 5 1 – 6 Contributions by fund participants 2 – – 2 Benefits paid (2) – – (2) Fair value of fund assets at end of the year 126 27 – 153
114 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) (iv) Reconciliation of the assets and liabilities recognised in the balance sheet:
SASS SANCS SSS Total $’000 $’000 $’000 $’000
As at 30 June 2007 Present value of partly funded defined benefit obligations at end of year 116 16 – 132 Fair value of fund assets at end of year (151) (31) – (182) Net liability/(asset) recognised in balance sheet at end of year (35) (15) – (50) As at 30 June 2006 Present value of partly funded defined benefit obligations at end of year 100 15 – 115 Fair value of fund assets at end of year (126) (27) – (153) Net liability/(asset) recognised in balance sheet at end of year (26) (12) – (38)
(v) Historical information:
As at 30 June 2007 Present value of defined benefit obligation 116 16 – 132 Fair value of fund assets (151) (31) – (182) (Surplus)/deficit in fund (35) (15) – (50) Experience adjustments – fund liabilities 6 – – 6 Experience adjustments – fund assets (10) (2) – (12) As at 30 June 2006 Present value of defined benefit obligation 100 15 – 115 Fair value of fund assets (126) (27) – (153) (Surplus)/deficit in fund (26) (12) – (38) Experience adjustments – fund liabilities (5) (3) – (8) Experience adjustments – fund assets (11) (2) – (13)
(vi) Expected employer contributions:
As at 30 June 2007 5 1 – 6 As at 30 June 2006 5 1 – 6
State Transit Authority of New South Wales - Annual Report 2006-2007 115 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) (vii) Defined benefits fund expense/(income) for the period:
SASS SANCS SSS Total $’000 $’000 $’000 $’000
Ending 30 June 2007 Current service cost 4 1 – 5 Interest cost 6 1 – 7 Expected return on fund assets (10) (2) – (12) Net actuarial losses/(gains) recognised (5) (2) – (7) Total included in retirement benefits expense (5) (2) – (7) Ending 30 June 2006 Current service cost 1 – – 1 Interest cost 2 – – 2 Expected return on fund assets (2) – – (2) Net actuarial losses/(gains) recognised (5) (1) – (6) Total included in retirement benefits expense (4) (1) – (5)
(viii) Actual return on fund assets for the period:
Ending 30 June 2007 Actual return on fund assets 19 4 – 23 Ending 30 June 2006 Actual return on fund assets 5 1 – 6
(ix) A summary of the financial position of the fund calculated in accordance with AAS 25 Financial Reporting by Superannuation Plans as supplied by the Trustee:
As at 30 June 2007 Accrued benefits 114 16 – 130 Net market value of the fund assets (151) (31) – (182) Net (surplus)/deficit (37) (15) – (52) As at 30 June 2006 Accrued benefits 95 13 – 108 Net market value of the fund assets (126) (27) – (153) Net (surplus)/deficit (31) (14) – (45)
116 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) SASS SANCS SSS Multiple of Multiple of Recommended contribution member % member member (x) rates for the year ending contributions Salary contributions
30 June 2007 1.90 2.50 – 30 June 2006 1.90 2.50 – The method used to determine the employer contribution recommendations at the last actuarial review was the Aggregate Funding method. The method adopted affects the timing of the cost to the employer. Under the Aggregate Funding method, the employer contribution rate is determined so that sufficient assets will be available to meet benefit payments to existing members, taking into account the current value of assets and future contributions. (xi) The weighted-average economic assumptions adopted for the last actuarial review of the fund were:
2007 2006 % pa % pa Expected rate of return on fund assets 7.7 7.3 Expected salary increase rate 4.0 4.0 Expected rate of CPI increase 2.5 2.5
(xii) The percentage invested in each asset class at the balance sheet date:
2007 2006 % pa % pa Australian equities 33.6 37.4 Overseas equities 26.5 27.9 Australian fixed interest securities 6.8 9.9 Overseas fixed interest securities 6.4 6.8 Property 10.1 8.6 Cash 9.8 5.0 Other 6.8 4.4
(xiii) If a surplus exists in the employer’s interest in the fund, the employer may be able to take advantage of it in the form of a reduction in the required contribution rate, depending on the advice of the fund’s actuary. Where a deficiency exists, the employer is responsible for any difference between the employer’s share of the fund assets and the defined benefit obligation.
State Transit Authority of New South Wales - Annual Report 2006-2007 117 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) (xiv) Demographic assumptions - as at 30 June 2007 The demographic assumptions as at 30 June 2007 are those being used for the (current) 2007 triennial actuarial valuation. A selection of the most financially significant assumptions is shown below: (i) SASS Contributors - the number of SASS contributors expected in any one year (out of 10,000 members), at the ages shown, to leave the fund as a result of death, disability, resignation, retirement and redundancy. Promotional salary increase rates are also shown. Number of members expected in any one year, out of 10,000 members at the age shown, to leave the fund as a result of : Additional Total & Retirement Resignation Redundancy promotional Age nearest Permanent salary increase birthday Deaths Disability Part 1 Part 3 Part 1 Part 3 Part 1 Part 3 rate % Males 30 4 8 – – 280 395 150 – 2.90 40 6 10 – – 150 285 150 – 1.80 50 11 30 – – 112 172 150 – – 60 30 – 1,400 950 – – 150 – – Females 30 2 2 – – 372 700 150 – 2.90 40 3 6 – – 175 320 150 – 1.80 50 7 28 – – 144 270 150 – – 60 18 – 1,500 1,500 – – 150 – – (ii) SSS Contributors - the number of SSS contributors expected in any one year (out of 10,000 members), at the ages shown, to leave the fund as a result of death, disability, resignation, retirement and preservation. Promotional salary increase rates are also shown. Number of members expected in any one year, out of 10,000 members at the age shown, to leave the fund as a result of : Retirement Cash Preservation Age nearest Ill-health (R60 for Resignation (R60 for Additional promotional birthday Death Retirement females) (R60 for females) females) salary increase rate % Males 30 4 42 – 178 95 2.90 40 6 54 – 80 140 1.80 50 11 144 – 20 50 – 60 30 – 6,500 – – – Females 30 2 6 – 204 124 2.90 40 3 21 – 72 105 1.80 50 7 103 – 30 90 – 60 18 – 6,300 – – – Note: R60 stands for women who elected to retire at age 60 rather than age 55.
118 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) (xiv) Demographic assumptions - as at 30 June 2007 (continued) (iii) SSS Commutation - the proportion of SSS members assumed to commute their pension to a lump sum in any one year. Proportion of pension commuted Retirement Breakdown 0 .15 0 .20 Age Later of commencement or age 55 Widow Widower 55 0.2500 0.2500 65 0.5380 0.5800 75 0.4825 0.5160 85 0.3928 0.3728
(iv) SSS Pensioner Mortality - assumed mortality rates (in 2007/2008) for SSS pensioners (separately for normal retirement/spouses and invalidity). Retirement Pensioners and Spouses and Widows Invalidity Pensioners Age Males Females Males Females 55 0.0025 0.0014 0.0081 0.0066 65 0.0070 0.0055 0.0112 0.0125 75 0.0194 0.0157 0.0505 0.0314 85 0.0945 0.0634 0.1134 0.1268
(v) SSS Pensioner Mortality Improvements - per annum assumed rates of mortality improvement for SSS pensioners. Improvement rates for years post 2006 Age Males Females 55 0.0152 0.0113 65 0.0101 0.0065 75 0.0087 0.0068 85 0.0052 0.0080
State Transit Authority of New South Wales - Annual Report 2006-2007 119 Notes to and Forming Part of the Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) (xiv) Demographic assumptions - as at 30 June 2006 The demographic assumptions at 30 June 2006 are those being used for the (current) 2006 triennial actuarial valuation. A selection of the most financially significant assumptions is shown below: (i) SASS Contributors - the number of SASS contributors expected in any one year (out of 10,000 members), at the ages shown, to leave the fund as a result of death, disability, resignation, retirement and redundancy. Promotional salary increase rates are also shown.
Number of members expected in any one year, out of 10,000 members at the age shown, to leave the fund as a result of: Additional Total & Retirement Resignation Redundancy promotional Age nearest Permanent salary increase birthday Deaths Disability Part 1 Part 3 Part 1 Part 3 Part 1 Part 3 rate % Males 30 4 8 – – 280 395 150 – 2.90 40 6 10 – – 150 285 150 – 1.80 50 11 30 – – 112 172 150 – – 60 30 – 1,400 950 – – 150 – – Females 30 2 2 – – 372 700 150 – 2.90 40 3 6 – – 175 320 150 – 1.80 50 7 28 – – 144 270 150 – – 60 18 – 1,500 1,500 – – 150 – – (ii) SSS Contributors - the number of SSS contributors expected in any one year (out of 10,000 members), at the ages shown, to leave the fund as a result of death, disability, resignation, retirement and preservation. Promotional salary increase rates are also shown. Number of members expected in any one year, out of 10,000 members at the age shown, to leave the fund as a result of : Cash Retirement Resignation Preservation Age nearest Ill-health (R60 for (R60 for (R60 for Additional promotional birthday Death Retirement females) females) females) salary increase rate % Males 30 4 42 – 178 95 2.90 40 6 54 – 80 140 1.80 50 11 144 – 20 50 – 60 30 – 6,500 – – – Females 30 2 6 – 204 124 2.90 40 3 21 – 72 105 1.80 50 7 103 – 30 90 – 60 18 – 6,300 – – – Note: R60 stands for women who elected to retire at age 60 rather than age 55.
120 State Transit Authority of New South Wales - Annual Report 2006-2007 StatementNotes to and Formingof Changes Part of in the Equity Financial Statements For the year ended 30 June 2007
5 . Retirement Benefits (continued)
(b) The principal actuarial assumptions that have been used in the calculation are: (continued) (xiv) Demographic assumptions - as at 30 June 2006 (continued) (iii) SSS Commutation - the proportion of SSS members assumed to commute their pension to a lump sum in any one year. Proportion of pension commuted Retirement Breakdown 0 .15 0 .20 Age Later of commencement or age 55 Widow Widower 55 0.2500 0.2500 65 0.5380 0.5800 75 0.4825 0.5160 85 0.3928 0.3728
(iv) SSS Pensioner Mortality - assumed mortality rates (in 2006/2007) for SSS pensioners (separately for normal retirement/spouses and invalidity). Retirement Pensioners and Spouses and Widows Invalidity Pensioners Age Males Females Males Females 55 0.0025 0.0014 0.0081 0.0066 65 0.0070 0.0055 0.0112 0.0125 75 0.0194 0.0157 0.0505 0.0314 85 0.0945 0.0634 0.1134 0.1268
(v) SSS Pensioner Mortality Improvements - per annum assumed rates of mortality improvement for SSS pensioners. Improvement rates for years post 2006 Age Males Females 55 0.0152 0.0113 65 0.0101 0.0065 75 0.0087 0.0068 85 0.0052 0.0080
End of Audited Financial Statements
State Transit Authority of New South Wales - Annual Report 2006-2007 121 Statement by the Division Head For the year ended 30 June 2007
122 State Transit Authority of New South Wales - Annual Report 2006-2007 State Transit Authority of New South Wales APPENDICES Contents
Statutory Information Operational Items 1 Summary of Land...... 125 23 Service Changes in Response to 2 Capital Works Expenditure...... 125 Community Consultation...... 143 3 Consolidated Income and 24 Customer Response...... 143 Expenditure Statements...... 126 25 Guarantee of Service...... 143 Organisational Items 26 Disability Plan ...... 143 4 Structure...... 127 Human Resource Items 5 State Transit Board members 27 Human Resource Statistics...... 144 2006/07...... 128 28 Equal Employment Opportunity...... 144 6 Legislation...... 130 29 Action Plan for Women ...... 145 Commercial Items 30 Ethnic Affairs Priorities Statement 7 Government and Social and Agreements...... 145 Program Payments ...... 131 31 EEO Target Groups...... 147 8 Implementation of 2006/07 32 Occupational Health, Safety Fares Determination...... 132 and Rehabilitation...... 148 9 Funds Granted to Non-Government 33 Code of Conduct and Protected Community Organisation...... 133 Disclosures...... 148 10 Liability Management Performance. . . . . 133 34 Privacy Management...... 148 11 Investment Management Performance. . . 133 35 CES/SES Bands...... 148 12 Account Payment Performance...... 133 36 Senior Executives’ Qualifications ...... 149 13 Risk Management and Insurance ...... 134 37 SES Performance Review and 14 Response to Matters Raised by Remuneration...... 149 Auditor General...... 134 Other 15 Overseas Travel...... 135 38 List of Publications...... 151 16 Freedom of Information...... 135 39 Annual Report Publication Details ...... 151 17 Consultancy and Professional Fees. . . . . 137 40 Electronic Service Delivery...... 151 18 Committees (Internal and External). . . . . 138 41 Key Performance Indicators...... 152 19 Annual Environment and 42 Contact Details...... 154 WRAPP Report...... 138 20 Government Energy Management Policy...... 142 21 Mobile Phones ...... 142 22 Credit Card Certification...... 142
124 State Transit Authority of New South Wales - Annual Report 2006-2007 Statutory Information
1 Summary of Land In accordance with Section 41B(1)(d) of the Public Finance and Audit Act, 1983, stated below is a summary of the Authority’s land holding as at 30 June 2007 according to actual use of the land .
Land Use Classification $000 Bus Depots 119,734 Minor Operational assets 2,505 Commercial properties 4,143 Total 126,382
Disposal of property During the year State Transit did not dispose of any properties .
2 Capital Works Expenditure
Major Works Completion Date $000
Bus Replacement Program 80 Articulated Bus Contract 30 Buses delivered Nov 06 11,095 30 Volvo Euro 3 Buses 30 Buses delivered April 07 12,412 250 Volvo Diesel Buses 40 Buses delivered June 07 22,898 255 Mercedes CNG Buses 6 Chassis delivered June 07 1,539
State Transit Authority of New South Wales - Annual Report 2006-2007 125 Statutory Information
3 Consolidated Income and Expenditure Statements Comparison Between Actual and Budget
For the year ended 30 June 2007 2005/06 2006/07 2006/07 2007/08 Acutal Acutal Budget Variance Variance Budget $’000 $’000 $’000 $’000 % $’000 Income Operational revenue 499,815 513,250 519,461 (6,211) (1 .2%) 531022 Interest 1,365 4,776 4,384 392 8 .9% 7,680 Other revenue 22,606 23,002 23,239 (237) (1 .0%) 22,232 Total Income 523,786 541,028 547,084 (6,056) (1.1%) 560,934 Expenditure Employee benefits 284,456 291,996 303,232 11,236 (3 .7%) 318,180 Depreciation and amortisation 31,965 34,211 32,451 (1,760) 5 .4% 36,050 Fleet running expenses 82,249 80,204 90,368 10,164 (11 .2%) 80,289 Borrowing costs 5,871 5,545 5,621 76 (1 .4%) 8,084 Other operating costs 92,096 96,406 91,219 (5,187) 5 .7% 91,194 Total Expenditure 476,637 508,362 522,891 (14,529) (2.8%) 533,797
Profit/(Loss) Before Tax 47,149 32,666 24,193 8,473 35.0% 27,137
2006-07 Financial Performance Overview 1 . Newcastle Bus Services entered into the Outer Metropolitan Bus System Contract on 1 July 2006 . Under the new contract the Government receives passenger revenue derived in Newcastle and pays agreed costs for operating services . The funding basis for Newcastle Ferry Services and Western Sydney Buses is unchanged . Under the new funding arrangements for Newcastle, operational revenue is $12 million higher than the previous year and more predictable . 2 . The operating result represents a decrease of $14 5million. compared with the $47 2. million profit in the previous year . The change was significantly influenced by a $22 6. million reduction in the assessment of the defined benefit superannuation gains as compared with the previous year . 3 . Revenue was below budget was due to the return of Fuel Excise Tax Credits and the payment of an efficiency dividend to the Ministry of Transport . 4 . Interest income was lower than budget resulting from lower new bus payments arising from delays in the delivery of new buses . 5 . Payroll and related costs were better than budget by $11 .2 million mainly as a result of a $10 .1 million reduction in the assessment of the defined benefits superannuation gains . 6 . Fleet Running Expenses were $10 .2 million lower than budget due to the Fuel Excise Tax Credits and a lower average price of fuel than budgeted . 7 . Other operating costs were higher than budget mainly due to the additional cost of remediation work at the site of the new Leichhardt depot .
126 State State TransitTransit Authority Authority of New of South New Wales South - Annual Wales Report - Annual 2006-2007 Report 2006-2007 Organisational Items
4 Structure*
Peter Rowley Acting Chief Executive
Operational Support Corporate Governance Michael Reardon Lindsay Lee Maintenance Reform Board Secretariat Prcurement, Corporate Planning, Corporate Counsel Depot Redevelopments Internal Audit, Quality Control, Risk
Service Delivery
Northern Region Southern Region Eastern Region Western Region Newcastle Bus & David Callahan Jamie Sinclair Martin Byaff Darren Carey Ferry Services (acting) David Witherdin Revenue Radio Fleet Use Protection Communications Special Events Management
Route Services Customer Service Maintenance Service Scheduling Charters OH&S Management Rehabilitation Management Incident Management Revenue Management Fleet Utilisation
Corporate Support
Safety and Standards Human Resources Finance & Planning Development Customer Relations & Terry Poynton Brian Hartmann Corporate Services Roger Wilson Communications Paul Dunn Frier Bentley
Safety policy/systems Recruitment Finance MBSC Service Development Media Engineering policy/systems Learning & Development Budget Network Analysis Marketing Bus Maint. policy/systems Employee Relations Insurance Traffic Planning Communications Fleet acquisition/warranties Equity & Diversity IT CBD Issues Management Passenger Information OH&S Policy & Systems HR Development MIMS Customer Relations Drug & Alcohol Policy Workers Compensation Properties Environment Policy Ticketing Systems Payroll Contracts & Tenders
* As at 31 October 2007
State Transit Authority of New South Wales - Annual Report 2006-2007 127 Organisational Items
5 State Transit Board members 2006/07
The Hon. Barrie Unsworth – Chairman Mr Unsworth was appointed as Chairman of the State Transit in March 2004 . Mr Unsworth is the former Premier of NSW, Transport Minister in the Wran Government, Secretary of the Labor Council and Nominated Commissioner of the Public Transport Commission . He is currently also Chairman of the Ambulance Service of NSW and until recently a Director of TAB Limited . He is a Director of RailCorp and Youth of the Streets Pty Ltd . In 2003/04 Mr Unsworth carried out a major review of bus services in NSW at the request of the then Minister for Transport Services . Mr Unsworth also sits as a member of the Audit Committee of the State Transit Board .
Margy Osmond Mrs Osmond was appointed to the Board in September 2003 . Mrs Osmond is the Chief Executive of the Australian National Retailers Association . She is a member of the NSW Industry Skills Forum and the NSW Major Events Board . Mrs Osmond’s background is in politics, corporate affairs and government relations . Mrs Osmond resigned from the Board in December 2006 .
Keith Todd Mr Todd was appointed to the Board in March 2004 . He is the former Chairman of the Bus Industry Confederation and President of the Bus and Coach Association of NSW . He is also the former owner of Glenorie Bus Company . He currently chairs the Transport Management Committee of the Parramatta Rail Link . He is a Director of Parkview Leasing Pty Ptd and Chairman of the Transport Management Committee of the Transport Infrastructure Development Corporation . Mr Todd has extensive experience in managing and operating bus companies . Mr Todd is the Chairman of the Audit Committee of the State Transit Board .
Matt Thistlethwaite Mr Thistlethwaite is the Deputy Assistant Secretary of Unions NSW (formerly the Labor Council of NSW) . He has experience in industrial relations and policy formulation in the public transport industry . Mr Thistlethwaite is a Member of the Racing Industry Advisory Council . Mr Thistlethwaite was appointed to the Board in July 2005 . Mr Thistlethwaite is a member of Safety Committee of the State Transit Board .
Jan McClelland Ms McClelland was appointed to the Board in March 2006 . Ms McClelland is a management consultant (Managing Director, Jan McClelland and Associates Pty Ltd) . Ms McClelland was previously the Director General of the Department of Education and Training and the Managing Director of the NSW TAFE Commission . Ms McClelland is the Chair of Buinesslink Pty Ltd and holds a number of directorships including the Boards of the Waste Recycling and Processing Corporation and the Festival Development Corporation . Ms McClelland is a member of Safety Committee of the State Transit Board .
Denis Fitzgerald Mr Fitzgerald was appointed to the Board in May 2007 . Mr Fitzgerald is a senior teacher in the public education system . Mr Fitzgerald has extensive experience in industrial relations matters being previously the head of the NSW Teachers Federation and then holding a number of senior management positions in the union movement before returning to the teaching profession in recent years . Mr Fitzgerald is a member of the Executive of the NSW Teachers Federation . Mr Fitzgerald is a member of the Safety Committee of the State Transit Board .
128 State Transit Authority of New South Wales - Annual Report 2006-2007 Organisational Items
John Lee - Chief Executive Mr John Lee joined the Board as the Chief Executive in March 2006 . Mr Lee was previously the Director General of the Ministry of Transport . Mr Lee has extensive public and private sector experience in the transport industry in the RTA and RailCorp . Mr Lee was previously the Managing Director of Westbus for National Express . Mr Lee left State Transit and the Board in September 2007 to take up the position of Director General of the Department of Commerce .
Peter Rowley – Acting Chief Executive Mr Rowley was appointed as Acting Chief Executive and as a Director of the State Transit Board in September 2007 .
Attendance at Board Meetings In 2006/07 the Board met on 11 occasions and attendance was as follows:
Name Meetings attended The Hon BJ Unsworth 11 Mr J Lee 9 Mr M Thistlethwaite 7 Mrs M Osmond (resigned 31 December 2006) 5 Mr K Todd 10 Ms Jan McClelland 11 Mr D Fitzgerald (appointed May 2007) 2
Audit Committee The Board has an Audit Committee to support it in fulfilling its responsibilities under the Transport Administration Act 1988 . The Audit Committee’s role set out in its Charter is to assure the independence of the audit function, monitor corporate risk assessment and internal controls, review financial and other practices, review the quality and integrity of financial reports and oversee the responsibilities of the Internal Audit Manager . The Audit Committee met on 5 occasions in 2006/07 . Committee members during 2006/07 were: Mr K Todd (Chairman) The Hon BJ Unsworth
Safety Committee In 2006/07 the Safety Committee met on 2 occasions . The State Transit Board received monthly briefings on all safety and security matters . Committee members during 2006/07 were: Mr M Thistlethwaite Mrs Margy Osmond (resigned December 2006) Ms Jan McCelland Mr D Fitzgerald
State Transit Authority of New South Wales - Annual Report 2006-2007 129 Organisational Items
6 Legislation The State Transit Authority is constituted as an operating body without policy or regulatory functions and is not charged with the administration of legislation . However, set out under is an overview of the legislation directly relevant to State Transit during the year under review:
Transport Administration Act The State Transit Authority is created as a corporation by the Transport Administration Act 1988 and operates pursuant to that Act and the regulations made under the Act .
Regulations The following regulations made under the Transport Administration Act 1988 had direct application to the State Transit Authority and were in force during the year under review; Transport Administration (Staff) Regulation 2005 Transport Administration (General) Regulation 2005
Orders Section 85 of the Transport Administration Act 1988 provides that the charges to be demanded by the State Transit Authority in respect of its bus or ferry services and/or any other purpose shall be as from time to time determined by order made by the State Transit Authority . See Item 8 - Implementation of 2006/2007 Fares Determination for details of the Fares Orders .
Passenger Transport Act 1990 State Transit, in common with other operators of public passenger services in New South Wales, is directly bound by the provisions of the Passenger Transport Act 1990 and relevant regulations made under the Act .
130 State Transit Authority of New South Wales - Annual Report 2006-2007 Commercial Items
7. Government Funding and Social Program
Government Funding and Social Program Government funding consisted of the following:
Bus Systems Contracts State Transit has entered into four separate Metropolitan Bus Systems Contracts (MBSC) and one Outer Metropolitan Bus Systems Contract (OMBSC) with the Ministry of Transport for the provision of bus services in Sydney and Newcastle . The term of each contract is seven years with the MBSCs commencing on 1 July 2005 and the OMBSC on 1 July 2006 .
Other Government Payments Newcastle Ferry Services and Western Sydney Buses continued to receive payments from Government for providing free and concessional fares in 2006/07 . Concession reimbursements were also received from Government in the categories of pensioner and senior citizens, school students, tertiary students, the unemployed, other welfare recipients and blind civilians . Additionally, State Transit’s Stockton ferry was deficit funded in 2006/07 .
State Transit Authority of New South Wales - Annual Report 2006-2007 131 Commercial Items
8 Implementation of 2006/2007 Fares Determination Under section 18(4) of the Independent Pricing and Regulatory Tribunal Act, State Transit is required, where there has been a determination by the Independent Pricing and Regulatory Tribunal, to include in its Annual Report particulars of how any such determination has been implemented . The following tables summarises the determinations made by the Independent Pricing and Regulatory Tribunal in relation to Sydney bus and Newcastle bus and ferry fares and the fare changes implemented by State Transit . 1) A change to State Transit’s fare scale, in accordance with the determination of the Independent Pricing & Regulatory Tribunal made in June 2006, was made by order published in Government Gazette No 83A of 30 June 2006 effective 2 July 2006 .
Ticket IPART Determination Implementation Bus/Rail/Ferry TravelPasses Bus/Rail/Ferry TravelPass fares will increase by $1 .00 for the All changes to Bus/Rail/Ferry TravelPass adults and $0 .50 for the concessions . fares were within the ribunal’s guidelines . DayTripper Ticket The price of the BusTripper ticket will increase by 40 cents for The change to the price of the DayTripper the adult and 20 cents for the concession . ticket was within the Tribunal’s guidelines .
2) A change in State Transit’s fare scale, in accordance with the determination of the Independent Pricing & Regulatory Tribunal made in December 2006, was made by order published in Government Gazette No 189 of 22 December 2006 effective 2 January 2007 .
Ticket IPART Determination Implementation Sydney single ride bus fares Price increases will apply to the following: All adult and concession single journey Adult 3-5 Sections $0 .10 bus fares increases were implemented . Adult 6-9 Sections $0 .20 Adult 10-15 Sections $0 .10 Adult 16+ Sections $0 .20 Concession 6-9 Sections $0 .10 Concession 10-15 Sections $0 .10 Concession 16+ Sections $0 .10 All other single ride adult and concession fares will remain unchanged . Sydney TravelTens Price increases will apply to the following: All changes to TravelTen fares were within dult 3-5 Sections $0 .80 the Tribunal’s guidelines . Adult 6-9 Sections $1 .60 Adult 10-15 Sections $0 .70 Adult 16+ Sections $0 .60 Concession 3-5 Sections $0 .40 Concession 6-9 Sections $0 .80 Concession 10-15 Sections $0 .40 Concession 16+ Sections $0 .30 All other TravelTen adult and concession fares will remain unchanged . TravelPass Tickets Adult Bus and Ferry TravelPasses will rise by either $1 00. or $2 00. . All changes to TravelPass fares were within Concession Bus and Ferry TravelPasses will rise by either $0 50. or the Tribunal’s guidelines . $1 00. . There will be no change to the Bus/Rail/Ferry TravelPass fares . BusTripper The price of the BusTripper ticket will increase by $0 .40 for the adult The change to the price of the BusTriper and $0 .20 for the concession . ticket was within the Tribunal’s guidelines . DayTripper The price of the DayTripper ticket will remain unchanged . No change was made to the price of the DayTripper ticket . Newcastle bus and ferry The prices of the adult and concession 1 hour, 4 hours and 23 hours All changes to bus and ferry fares in fares tickets will increase by between 10 and 30 cents The. price of the Newcastle were within the Tribunal’s TimeTen 1 hour ticket will increase by 90 cents for the adult and by guidelines . 50 cents for the concession The. price of the Stockton ferry single ride adult ticket will increase by 10 cents . The price of the Stockton ferry single ride concession ticket will remain unchanged . School Term Pass The price of the School Term Pass will increase to $41 .50 . The change to the price of the School Term Pass was within the Tribunal’s guidelines .
132 State Transit Authority of New South Wales - Annual Report 2006-2007 Commercial Items
9 Funds Granted to Non-Government Community Organisations Payments made by State Transit to Non Government community organisations for the year 2006/07 was:
Name of organisation Amount (‘000) Bus Museum 10 Prowl Community Development Foundation 8
10 Liability Management Performance In the year ended 30 June 2007, the ‘market value cost of funds’ of State Transit’s debt portfolio, which includes actual interest costs, accrued interest costs and the change in market capital value of the debt portfolio, was 3 .96% . This was also the benchmark portfolio market cost of funds .
11 Investment Management Performance State Transit invests its surplus short-term funds in NSW Treasury Corporation ‘Hour Glass’ Investment - Cash Facility . In the year ended 30 June 2007, State Transit’s weighted average rate of return on the investment was 6 .41% (net of fees and expenses) . The NSW Treasury Corporation ‘Hour Glass’ Investment - Cash Facility benchmark is the UBS Australian Bank Bill Index and the benchmark return was 6 .42% with no adjustment for fees and expenses .
12 Account Payment Performance
Performance in Paying Accounts State Transit’s performance in paying trade creditor accounts during the year is set out below, in accordance with the requirements of the Annual Reports (Statutory Bodies) Regulation 2005:
Amounts Paid on Time Total Amount Paid
Quarter Target % Actual % $000 $000
September 2006 85 95 84,250 89,106
December 2006 85 94 119,658 127,490
March 2007 85 92 121,754 132,988
June 2007 85 91 96,053 105,045
Of the total number of invoice processed during the year, 84% were paid within the trading terms . There were no penalty interest payments made under clause 18 of the Public Finance and Audit Regulation 2005 .
Aged Transactions by Quarter Total Amount Quarter Current 30-60 60-90+ $000
September 2006 31,537 312 137 31,986
December 2006 26,277 715 63 27,055
March 2007 26,096 1,107 360 27,563
June 2007 25,058 1,338 312 26,709
State Transit Authority of New South Wales - Annual Report 2006-2007 133 Commercial Items
13 Risk Managment and Insurance State Transit’s Risk Management Framework covers all areas of business activities and statutory compliance to protect Whole of Government exposures . This is achieved through the governance and risk structure emanating from the State Transit Board . Continuous improvement under the ISO 9001:2000 Quality Management System has enhanced compliance and therefore the control of risk exposures . Implementation of Metropolitan and Outer-Metropolitan Bus Systems Contracts has brought about an environment of significant change to the New South Wales bus industry . State Transit has responded to theses significant reforms implementing cost effective strategies to: Develop an organisational culture that optimises its ability to achieve business objectives while ensuring appropriate management of risks rather than taking un-managed risks, Identify, assess and treat the risks associated with State Transit’s activities with the objective to minimise losses and maximise the opportunities, Identify risk treatment options applicable to State Transit in all areas including Bus & Ferry Operations, Safety & Security, OH&S, Environment, Engineering Policy & Standards, Property, Information Technology, Treasury, Financial and Commercial Contracts, Fraud / Corruption, Financial Management, Business Continuity Management, and Provide objective information to decision-makers through all layers of the organisation . A cost effective insurance program provided financial protection for the organisation during the year . The program spans: General property, personal injury, consequential loss, motor, professional risks, general and marine liability . State Transits’ enhanced risk profile has yielded lower premium escalation than experienced over recent years by the insured community . During the year, State Transit has reviewed and revised its Emergency and Operational Response Plans, documented robust Business Continuity Plans and completed a detailed review and revision of its Crisis Management and Communications Framework . State Transit has also undertaken significant project risk studies for major infrastructure development and asset procurement . Operationally, an extensive program of bus route risk studies was conducted across the network . The maturing of a risk based OH&S regime has focussed staff on workplace hazards and appropriate risk treatments . Simulation and training exercises have maintained staff preparedness and tested both the context and robustness of operational recovery plans which are compliant with ISO and ISM Standards .
14 Response to Matters Raised by Auditor General There were no significant issues in the 2006/07 Outgoing Audit Report that required the Authority’s attention .
134 State Transit Authority of New South Wales - Annual Report 2006-2007 Commercial Items
15 Overseas Travel During the year, State Transit officers undertook the following overseas trips:
1. Mr Darren Carey - GM Western Region Date: 15 September - 1 October 2006 Destination: Mannhein/Hannover/ Gothenburg/Sweden Purpose: Visit with Prime contractors, Volvo, Daimier Chrysler to undertake technical review of 505 bus supply contracts
2. Mr Roger Wilson - GM Planning (i) Date: 22 - 28 October 2006 Destination: New York Purpose: UITP Board Meeting (ii) Date: 2 - 17 June 2007 Destination: Gothenburg/Stockholm/ Leeds/London Purpose: International Bus Bench- marking Annual Meeting
3. Mr John Lee - Chief Executive Date: 16 -27 May 2007 Destination: Sweden/Barcelona/London Purpose: UITP Congress & Study Tour
16 Freedom of Information During the financial year 2006/07, State Transit received 24 applications for information under the Freedom of Information Act 1989 .
Section A - FOI Applications
Personal Other Total New (including transferred in) 1 23 24 Brought forward (incomplete from last year) 0 5 5 Total to process 1 28 29 Complete 1 26 27 Transferred out 0 0 0 Withdrawn 0 0 0 Total processed 1 26 27 Unfinished (carried forward) 0 2 2
State Transit Authority of New South Wales - Annual Report 2006-2007 135 Commercial Items
Section B - Result of FOI Applications
Personal Other Total Granted in full 1 13 14 Granted in part 0 9 9 Refused 0 4 4 Deferred 0 0 0 Completed 1 26 27
Section C - Reason for not providing access
Personal Other Total S25(1)(a) - exempt 0 1 1 S28(1)(b) - documents not held 0 3 3 Total 0 4 4
Section D - Ministerial Certificates Nil
Section E - Formal Consultations Nil
Section F - Amendment of Personal Records Nil
Section G - Notation of Personal Records Nil
Section H - Costs
Assessed Costs Fees Received $58,000 $730 00.
Section I - Discount allowed on Fee Charged
Personal Other Financial Hardship - pensioner/child 0 0 Financial Hardship - non profit organisation 0 0 Other - Personnel records etc $10 0 Total $10 0
136 State Transit Authority of New South Wales - Annual Report 2006-2007 Commercial Items
Section J - Days to process
Elapsed Time Personal Other 0-21 days 1 3 22 - 30 days 0 4 31 - 45 days 0 7 46 + days 0 12 Total 1 26
Section K - Hours to process
Processing hours Personal Other 0-10 hours 0 0 11-21 hours 1 1 21-40 hours 0 3 40+ hours 0 22 Total 1 26
Section L - Reviews and Appeals
Personal Other 0 3
17 Consultancy and Professional Fees The following table is a summary of consultants and professional services fees incurred during the year . Expenditure of the nature of providing a high level specialist or professional advice to assist decision-making by management is classified as Consultancy Fee . Generally it is the advisory nature of the work that differentiates a consultancy fee from other professional services .
1. Consultancy Fees $’000 (a) Where Consultancy fees exceeded $30,000 Nil (b) Where consultancy fees paid were less than $30,000 Fees paid to 2 consulting agencies (Information Technology) 24
2. Professional Services 3,514
State Transit Authority of New South Wales - Annual Report 2006-2007 137 Commercial Items
18 Committees (Internal & External)
Internal Committees
Audit Committee
The Audit Committee established by the Board operates to support it in fulfilling its responsibilities under the Transport Administration Act 1988 .
Safety Committee The Safety Committee established by the Board oversees the safety program for workplace safety and operational safety for State Transit .
Direct Reports Committee The Direct Reports Committee is the senior management committee for State Transit examining all policies and procedures for the organisation . The Direct Reports Committee has 5 sub-committees examining performance in detail against State Transit’s priority areas; Safety Committee, Asset Management Committee, People Committee, Environment Committee and Quality Committee . The People Committee also oversees and directs the Ethnic Affairs Priorities Statement strategies . Direct Reports conducts a monthly business review of all operations in depots against the principals KPIs of the Corporate Plan .
19 Annual Environment and WRAPP Report
Environmental Policy and Environmental Management System State Transit’s Environment Policy, commits it to the objectives of legislative compliance, continuous improvement, best practice environmental standards, the prevention of pollution incidents, management of Environmental risks, and the promotion of staff and community awareness of the benefits of public transport in creating sustainable environments . The Environmental Management System aligned with ISO 14001 standards, provides the framework for State Transit to achieve its environmental policy objectives .
Executive Management Review The Environmental Direct Reports Committee has met on three occasions to review Environmental Management and address significant Environmental issues related to State Transit operations .
Environmental Notices During 2006/2007 State Transit received three Environmental Penalty Notices; two from the Department of Environment and Climate Change for motor vehicles emitting excessive air impurities, and one from a Local Council for littering . All vehicles subject to air impurity notices are referred to the responsible depot for investigation and servicing .
138 State Transit Authority of New South Wales - Annual Report 2006-2007 Commercial Items
Environmental Incidents A total of 13 environmental incidents for in-service operation of the Bus Fleet were reported to the Environment Office, compared with the 14 reported in the previous financial year . All reported incidents are reviewed to ensure that appropriate management of the issue is being undertaken by the responsible Depot . The Environmental Incident report rate is 0 07. incidents per million passengers carried .
Environmental Complaints Handling In the 2006/2007 financial year 153 public environmental complaints were referred to the 131 500 number for Sydney Buses operations . The Environmental Complaint rate for Sydney Buses is 0 .82 complaints per million passengers . The majority of these public complaints related to noise or smoke from buses . Newcastle Buses received 9 complaints, compared with 8 complaints for the previous year . The rate of Environmental Complaints for Newcastle Buses is 0 .83 complaints per million passengers . Complaints are recorded in categories of noise, smoke, spillage or littering from Bus and Depot Noise Pollution . Public environmental complaints recorded on the 131 500 number are referred to the responsible depot for investigation and response .
Environmental Licenses All State Transit Bus Depots, with the exception of Belmont Depot are licensed with the Department of Environment and Climate Change (DECC) for the storage and handling of class A, industrial or hazardous wastes . All annual returns for license renewals were completed within the required timeframe . In 2006/2007 both Randwick and Ryde Depots were subject to a DECC License Compliance Audit and Willoughby and Hamilton Depots to site visits by DECC inspectors . Corrective actions were taken to ensure compliance with license conditions as a result of these reviews and inspections . A copy of each Depot license, and their particular conditions, are available on the DECC public register, accessible on http://www .environment .nsw .gov .au/prpoeo/searchregister .aspx .
Dangerous Goods Licensing and Notification The majority of our Depots store notifiable quantities of Dangerous Goods, mainly diesel fuel storage, and therefore have notified Workcover of these and other dangerous goods related stores held on the premises . The risks of dangerous goods storage is managed via Emergency Management Plans, Dangerous Goods Manifest, placarding, MSDS’s, training and specialized dangerous goods stores .
Trade Waste Licenses All Sydney Bus Depots have at least one Trade Waste Agreement with Sydney Water for the discharge of wastewaters to sewer, from bus, chassis wash, and service pit cleaning processes . All discharges are metered, sampled and monitored according to Sydney Water’s agreement and acceptance conditions . In 2006/2007 State Transit received three default notices for exceeding Sydney Water’s acceptance conditions . Each exceedance was investigated and corrected to Sydney Waters requirements . Hunter Water’s acceptance conditions were exceeded on two occasions without default . Investigative and corrective actions were also taken . The coalescing plate separators which are an integral part of the Trade Waste Treatment System are subject to routine 3 monthly cleaning and maintenance to ensure their efficient and effective operation .
State Transit Authority of New South Wales - Annual Report 2006-2007 139 Commercial Items
Environmental Risks Safety and Environmental Risk Assessments were conducted at all bus depots for bulk diesel fuel tanker delivery and receipting of fuel into underground diesel fuel storage tanks . Diesel Fuel contractors BP Australia conducted Fuel System Compliance audits of all fuel storage and delivery assets and infrastructure at State Transit Bus Depots .
Media Based Reporting – Air & Emissions, Water, Noise, Lands, Energy and Waste
Air and Emissions. Delivery in 2006/07 of 40 new clean Euro 5 diesel buses with SCR technology, as the first part of the 505 new bus supply contract, has seen the beginning of an improved fleet emissions profile and its contribution to improved air quality in the Sydney region through the displacement of older Euro 2 bus emissions . State Transit conducted with Dieseltest Australia, comparative emissions testing of a Euro 3 and Euro 5 diesel bus, to establish baseline emissions performance over a typical drive cycle reflective of Sydney operating environment and conditions . Development of the new clean, environmentally friendly Leichhardt Depot Redevelopment was announced and received Development Approval through the year . Government agencies, State Transit, DECC and RTA are working together to explore initiatives that will benefit Sydney’s urban air quality and work towards achieving the goals of the Government’s Action for Air plan .
Water State Transit Bus Depot operations consumed some 67,000kL of potable water at an average of 17 .5kL per employee per annum . State Transit conserves potable water by the use of up to 80% recycled waters in its Bus Washes, with a 20% freshwater makeup to maintain clean bus wash waters . To comply with water restrictions State Transit’s cleaners utilise buckets and squeegie mops to clean internal and window bus surfaces .
Stormwater The prevention of stormwater pollution within Depot environments is managed by a combination of signage, daily yard scrubbing, spill kits and spill response, bunding of spill risk structures, stormwater containment via Penstock valves or stormwater isolation valves and spill risk assessment and control of diesel fuel delivery and fuelling procedures . For in-service prevention of spills, our Bus Operators contact the Radio Room for emergency assistance from the Fire Brigade and our fleet of customer service vehicles carry portable spill kits to enable a response to in-service spills in the event of an accident or mechanical failure .
Noise Extensive Interior and exterior (drive-by) bus noise testing assessments were conducted on our Bus Fleet at Bankstown Airport and Oran Park . Results indicate all models tested complied with ADR requirements for drive-by noise, while internal noise results indicated compliance with relevant American standards but with some tonal components being addressed in conjunction with our OEM Volvo Australia . During 2006/2007 a small number of Depot noise related complaints were recorded via the 131 500 public information access number, via written correspondence or via the phone . Depot based noise from bus start ups, public announcement systems and garage radios are monitored and controlled via operational measures including noise surveys, standard operating procedures, restricted hours of operation for noisy equipment, and staff education and awareness of the importance of minimising noise and potential nuisance to close neighbours .
140 State Transit Authority of New South Wales - Annual Report 2006-2007 Commercial Items
Lands Investigations into contamination at Burwood Bus Depot, as part of a Voluntary Remediation Agreement with the Department of Environment and Climate Change are continuing . A quantitative human health and environmental risk assessment of the site has been conducted to satisfy the Voluntary Remediation Agreement and to prove that the site does not present a significant risk of harm to human health or the environment . Concurrent voluntary remediation of the old Leichhardt Tram Depot, (Lot 10) along with the Department of Education and Training remediation and development of the Leichhardt Playing Field (Lot 11) has been completed as part of the joint Voluntary Remediation Agreement with DECC . A remediation action plan to remediate historical contamination on the Leichhardt Redevelopment Site, is currently being implemented under a voluntary audit regime, as a precursor to civil works .
Energy In 2006/2007 State Transit’s Energy Consumption in terms of Stationary and Mobile Energy Sources were calculated as:
Stationary Energy: HQ and Depot Electricity Consumption = 360 GJ
Transport Energy Diesel Bus Fleet = 1,350,000 GJ CNG Bus Fleet = 648,736 GJ Newcastle Ferries = 3,208 GJ Passenger Vehicles = 9,850 GJ
Fuel Systems State Transit underground diesel fuel storage assets are tested annually for their integrity and their associated Cathodic Protection Systems are surveyed annually to ensure there is sufficient protective current to protect those assets from corrosion . Cathodic Protection systems have been repaired, upgraded or replaced according to the recommendations of the survey .
Waste Over the past financial year, State Transit has continued to collect and recycle significant quantities of both solid and liquid waste, as generated by its Operational activities including office administration and garage workshop maintenance and repair facilities . A new forward purchase agreement has been entered into with Transpacific Industries Group to provide a Total Waste Management Service for the collection, recycling and/or disposal or all Depot generated licensed and non- licensed solid and liquid wastes .
WRAPP Report In accordance with Government requirements, State Transit has revised and updated its WRAPP for biannual reporting to the DECC . State Transit WRAPP for 2006/2007 indicates: WRAPP principles are built into organisational policies and procedures Forward purchase agreements provide for the selection and purchase of products with recycled content Waste avoidance and recycling systems including a Visy recycling program for Corporate Headquarters, mobile phone battery collection and recycling procedures, selected network printers and photocopiers for double sided printing and electronic communications including e-mail, chat and file sharing, for onscreen reading and communications Staff awareness raising through e-bulletins and Transit Times .
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WRAPP Report (continued) Indicative quantities of wastes recycled over the last year are: Waste Oil > 60,000 litres, Paper > 35 tonnes, Toner Cartridges > 500 units Aluminium > 3 tonnes, Bus Batteries > 600 items, Phone Batteries > 50 units, Steel > 60 tonnes, and Steel Drums > 200 items .
20 Government Energy Managment Policy Energy consumption for office - tenant services (Strawberry Hills) rose significantly (13%) Electricity consumption for other facilities (Bus Depots) decreased by 2 .6% yet the total cost increased by $100k or 17% CNG consumption increased 0 .5% and Automotive Diesel by 2 .8% for the fleet State Transit consumes 20 7MJ. of energy per km of distance travelled in its transport task This energy consumption per distance travelled has decreased by 2 .0% in the last financial year State Transit has increased its overall energy consumption (transport + Depots + Hq) by 1 .5% It is noted that all energy costs per unit of energy have increased in the last financial year .
21 Mobile Phones Procedures for issuing mobile telephones to staff are outlined in State Transit’s Telephone and Mobile Telephones Manual . The Chief Executive, General Managers and Depot Managers are responsible for the issuing of mobile telephones as and when a business need is demonstrated . In 2006/07 there were 242 (240 in 2005/06) mobile telephones in use .
22 Credit Card Certification This is to certify that Corporate Credit Cards are issued to State Transit’s staff for business purposes and used in accordance with the Premier’s Memoranda and Treasurer’s Directions .
Certified by: Peter Rowley, Acting Chief Executive
142 State Transit Authority of New South Wales - Annual Report 2006-2007 Operational Items
23 Service Changes in Response to Community Consultation Service adjustments were made in all regions to realign resources to better meet changes in demand in peak and off-peak periods .
24 Customer Response
Newcastle Buses Sydney Buses and Ferries T-Way Total Complaints 26,985 1508 229 28,722 Compliments 1,701 67 9 1,777 Query 673 52 15 740 Suggestion 608 26 4 638 Total 29,967 1,653 257 31,877
Main features of complaints were: service complaints, including late running, lack of accommodation in peak periods and early running . staff complaints, including poor driving, not stopping when signalled and rudeness . ticket and fare evasion disputes .
25 Guarantee of Service State Transit has renewed its commitment to raise performance standards on buses and ferries in Sydney and Newcastle . The commitment to customer service is supported by six main aims: To ensure that the service delivered reflects the travel needs of customers . To operate buses and ferries with excellent safety standards for the benefit of passengers, staff, the general public and their property . To provide bus and ferry services that meet high standards of frequency, timeliness, reliability and cleanliness . To provide customers with complete, easily understood and up-to-date service information . To develop a reputation for customer service through polite, courteous and helpful staff . To make services more accessible for all passengers . State Transit’s Guarantee of Service is published on its internet home page, including details of what to expect from bus and ferry services, how to use the services, contact details and how to make suggestions, commendations or complaints .
26 Disability Plans State Transit has a Disability Strategic Plan under Section 9 of the Disability Services Act 1993 to ensure accessible public transport . It is also committed to implementing the requirements of the Draft Disability Standards for Accessible Public Transport under the Commonwealth Disability Discrimination Act . Progress in this area for 2005/06 includes: Wheelchair accessible services have been timetabled on more than 166 routes across Sydney; Purchase of 100 new wheelchair accessible buses; Increase in the number of low floor buses in the fleet to 936 of which 838 are fitted with a ramp for wheelchair access (42%); Provision of disability awareness training to Bus Operators and other front-line staff .
State Transit Authority of New South Wales - Annual Report 2006-2007 143 Human Resource Items
27 Human Resource Statistics Comparison of State Transit’s staff by classification (full time equivalent) over the five year period from July 02 to June 07 2002/03 2003/04 2004/05 2005/06 2006/07 Operations 3,405 3,482 3,631 3,769 3,747 Maintenance 383 402 360 366 367 Administration 601 605 611 587 648 SES 13 13 13 13 14 Total 4,402 4,502 4,602 4,735 4,776 Full Time Equivalent 4,334 4,452 4,523 4,555 4,574 Casuals 94 78 82 69 54 Note: Figures are converted to FTEs for part time staff, and represent the average staffing levels for the year . Sydney Ferries’ staff is included in the above classifications up to 20 June 2004 . (These figures do not include overtime hours)
28 Equal Employment Opportunity Details of staff numbers by EEO group and income, as at June 2007 are set out below .
People People from whose Racial, language People with Ethnic, first a Disability Aboriginal Ethno- spoken requiring and Torres Religious as a child People Work Level Total Respon- Strait Minority was not with a related $ Staff dents Men Women Islanders Groups English Disbility adjustment <33910 17 17 17 _ 1 1 _ 2 2 33,910-44,537 3,573 2,758 3,245 328 24 651 717 86 86 44,538-49,781 185 133 132 53 2 27 34 3 3 49,792-63,006 535 282 469 66 2 69 64 11 11 63,007-81,476 126 85 88 38 _ 20 13 7 7 81,479-101,849 84 58 67 17 1 8 10 2 2 >101,849 non SES 57 39 51 6 _ 5 3 1 1 >101,849SES 14 _ 13 1 _ _ _ _ _ Total 4,591 3,372 4,081 510 40 1,061 1,136 153 153
Note: FTE includes all full time equivalent workforce at 30 June 2007 (includes paid ordinary hours and overtime)
144 State Transit Authority of New South Wales - Annual Report 2006-2007 Human Resource Items
28 Equal Employment Opportunity (continued) Percent of total staff by EEO group and income
People People from whose Racial, language People with Ethnic, first a Disability Aboriginal Ethno- spoken requiring and Torres Religious as a child People Work Level Total Respon- Strait Minority was not with a related $ Staff dents Men Women Islanders Groups English Disbility adjustment % % % % % % % % <33910 17 100 100 _ 5 .9 6 .0 _ 12 11 .8 33,910-44,537 3,573 77 91 9 0 .9 24 26 3 3 1. 44,538-49,781 185 72 71 29 1 .5 20 26 2 2 3. 49,792-63,006 535 53 88 12 0 .7 24 23 4 3 9. 63,007-81,476 126 67 70 30 _ 24 15 8 8 2. 81,479-101,849 84 69 80 20 1 .7 14 17 3 3 4. >101,849 non SES 57 68 89 11 _ 13 8 3 2 6. >101,849SES 14 _ 93 7 _ _ _ _ _ Total 4,591 74 89 11 0.9 23 25 3 3.3
29 Action Plan for Women See report on Action Plan for Women Initiatives in the People chapter of this Report .
30 Ethnic Affairs Priorities Statement and Agreements
Planning and Evaluation The Corporate Plan is now based on 4 key areas: Safety, Customer Service, People and Competitive Business . The EAP strategies have been integrated in the People and Customer Service areas of the Corporate Plan wit the key aim of developing equitable, inclusive and high performance services for all passengers and a service culture which is trained, resourced and managed to achieve this target . (Leadership) The People Committee, one of the main sub-committees of the Direct Reports Committee comprising of the Executive management team of the organisation leads, monitors and ensures the development and implementation of State Transit’s Ethnic Affairs Priority Statement strategies . (Leadership) During the reporting year the Chief Executive Officer’s Equity and Diversity Steering Committee was established to set the strategic direction for the Equity and Diversity Program within State Transit . (Leadership)
State Transit Authority of New South Wales - Annual Report 2006-2007 145 Human Resource Items
Program and Service Delivery State Transit engages in consultation with ethnic communities regarding the introduction of new or changed bus services . The consultation has consisted of community consultation with the use of interpreters as required . Brochures are also produced in the local ethnic languages of the areas where the service changes are to be implemented . Some of the languages included are Chinese, Italian, Assyrian and Armenian . (Access and Equity)
Staffing State Transit is a Registered Training Organisation . Since the implementation of the Traineeship Program in 2002, all new Bus Operators have been trained up to the Competency Certificate Level III in Transport and Distribution (Road Transport) . There are a couple of modules in this program which incorporate dealing with customers from a culturally diverse background . These modules include the following: Working effectively with others – forms of communication Working in a socially diverse environment All Bus Operators have been trained in these modules . (Harmony) State Transit’s Driver Skills Maintenance Program provides annual refresher training to existing bus operators to ensure that State Transit’s customer service standards are consistently met for all the passengers . A component of the program focuses on service requirements for customers of culturally diverse backgrounds . (Harmony) State Transit’s Management Development Program for managers and Certificate IV in Frontline Management for maintenance supervisory staff also provides staff with the skills and knowledge in fostering diversity and promoting equity in the workplace and in delivering State Transit’s services . (Harmony) A significant proportion (25%) of State Transit employees come from a Non English Speaking Background . Because of the culturally and linguistically diverse background of the staff, the Learning and Development Unit has all training materials and guides written in Plain English . (Access and Equity)
Communications The Transport Infoline website, www .131500 .com au,. jointly supported by State Transit, RailCorp and the MOT, has an introductory section translated into 10 major languages . These are Arabic, Chinese, Greek, Indonesian, Italian, Japanese, Korean, Spanish and Vietnamese . The TripPlanner on this website also gives an explanation of the facility in different languages. (Access and Equity)
Funded Services The company that runs the Your Say Line 131500 service for customers with comments, compliments or complaints which is contracted out by the MoT and supported by State Transit, has many staff who speak another language, including many of the Asian languages and Spanish, to assist customers who are unable to discuss their issues or concerns in English . (Access and Equity) State Transit is a client of the Department of Immigration and Multicultural Affairs which runs the Translating & Interpreting Services (TIS) for people who do not speak English and for English speakers needing to communicate with them . TIS provides both telephone and on-site interpreters for non-English speakers . Through the TIS a three way conversation can be arranged with a call centre agent, the caller and the interpreter . Interpreting service is paid for by State Transit . (Access and Equity) Since 2006, interpreter services for the Your Say Line have been made available through the above arrangement in the following languages: Arabic, Bosnia, Chinese, Croatian, French, German, Greek, Italian, Japanese, Korean, Macedonian, Polish, Serbian, Spanish, Turkish and Vietnamese . (Access and Equity)
146 State Transit Authority of New South Wales - Annual Report 2006-2007 Human Resource Items
31 EEO Target Groups The number of employees falling within Equal Employment Opportunity reporting categories are:
1 % of Total Staff Benchmark or Target 2004 2005 2006 2007 EEO Target Group % % % % % Women 50 11 10 10 11 Aboriginal people and Torres Strait Islanders 2 1 0 .9 0 .8 0 .9 People whose first language was not English 20 26 27 26 25 People with a Disability 12 4 4 4 3 People with a Disability Requiring Not Work-related Adjustment 7 available 4 3 .7 3 .3
June June June June June June EEO Target Group 2005 2005 2006 2006 2007 2007 No. % staff No. % Staff No % Staff Women 538 11 482 10 510 11 Aboriginal people and Torres Strait Islanders 30 1 .0 26 0 .8 40 0 .9 People whose first language was not English 842 26 822 26 1136 25 People with a Disability 128 4 118 4 153 3
1 Excludes Casual Staff
32 Occupational Health, Safety and Rehabilitation As reported elsewhere in this report, Lost Time Injury Frequency Rates reduced significantly as a consequence of a range of initiatives taken to improve safety performance . The Chief Executive accompanied by the General Manager, Safety and Standards continued a program of attending OH&S committees . The Workers Compensation Rehabilitation and Injury Management function continued to perform effectively delivering savings in workers compensation costs during the reporting period .
State Transit Authority of New South Wales - Annual Report 2006-2007 147 Human Resource Items
33 Code of Conduct and Protected Disclosures The Code of Conduct is printed in the Employee Folder which is a controlled document issued to all State Transit employees . The Handbook is an authoritative source document relied on by both management and employees alike . The Code of Conduct sets the standard of behaviour expected from employees . The review of the discipline policy referred to in the previous report proved more labor intensive than originally expected, and continued during the reporting period .
Protected Disclosures The subject matter of any allegation made as a protected disclosure is reported to the Audit Committee . The Protected Disclosure Reporting system is working effectively and training of senior staff has been completed . The Protected Disclosure Reporting System procedures are included in the Employee Handbook . This is designed to ensure all staff are aware of the standards required in order to maintain a fraud and corruption free work environment and how they will be protected when reporting known or suspected corrupt behaviour .
Ethics The focus of ensuring high ethical standards continued during the reporting period supported in particular by training on protected disclosures and publication of items in Transit Times focusing on ethical behavior .
34 Privacy Management In accordance with the Privacy and Personal Information Protection Act 1998, State Transit has implemented a Privacy Management Plan . A copy of the Privacy Management Plan has been lodged with the Privacy Commissioner . The Plan requires employees to keep personal information secure and ensures that the information is only used for the purposes for which it is collected . In accordance with the plan State Transit informs all individuals at the time of collecting personal information what the information is to be used for and to whom the personal information will pass . State Transit will continue to maintain and improve its current collection and storage of personal information to ensure it continues to satisfy the guidelines provided in the Act .
35 CES/SES Bands
Band Number June 2006 Number June 2007 Level 7 1 1 Level 5 1 1 Level 4 7 7 Level 3 2 5 Level 2 2 0 Total 13 14
148 State Transit Authority of New South Wales - Annual Report 2006-2007 Human Resource Items
36 Senior Executives’ Qualifications
Senior Executives at 30 June 2007
Name Position Qualification Frier Bentley Director, Customer Relations & Communications BA (Comms) David Callahan General Manager, Northern Region MBA, BA, DAIC, CTM Darren Carey General Manager, Western Region Dip Frontline Mgmt, CTM, CBM, GAICD Paul Dunn Gen . Manager, Finance & Services MBA, BComm, ACA Brian Hartmann General Manager Human Resources MComm, Grad Dip ER, BA, Dip Teaching John Lee Chief Executive BEd Lindsay Lee Manager Corporate Governance BA (Hons) Terry Poynton General Manager Safety & Standards MSc, MCommLaw, B Aero Eng Michael Reardon Director Operational Support CTM Peter Rowley General Manager Eastern Region MTM, CTM Reg Ryan Manager, Corporate Finance BCom FCPA Jamie Sinclair General Manager Southern Region Advanced Mgmt Cert, CTM Roger Wilson General Manager Planning MEngSc, BEng, CTM, MIE Aust David Witherdin General Manager Newcastle B Eng (Civil)
37 SES Performance Review and Remuneration
John Lee, Chief Executive SES Level 7
Period in position 1 July 2006 – 30 June 2007
Responsibilities The Chief Executive is responsible for delivering State Transit’s objectives: efficient, safe and reliable bus and ferry services; sound financial performance; social responsibility; contributions to ecologically sustainable development and regional development . The Chief Executive is responsible for developing and implementing State Transit’s strategies as detailed in its Corporate Plan to meet these objectives . Mr Lee managed State Transit effectively in 2006/07 and maintained Sydney and Newcastle Buses’ reputation as a reliable public transport provider: On-time running has consistently been 95% or better and reliability well over 99% . Significant improvements in mechanical reliability .
State Transit Authority of New South Wales - Annual Report 2006-2007 149 Human Resource Items
Key achievements for 2006/07 include: The negotiation and signing of the Outer Metropolitan Bus System Contract for Newcastle Buses . The maintenance of security in the post-9/11 environment . Significant patronage growth of 13% by Western Sydney Buses on the Liverpool Parramatta Transitway . Introduced 100 low floor fully wheelchair accessible buses . Meeting the demands of significant patronage growth on all major corridors in Sydney Buses operating area . Introduction of the new prepay cashless bus services across the Sydney network . 166 bus routes now have timetabled wheelchair-accessible services and State Transit is well ahead of the timetable set for introduction of low floor buses . ISO 9001:2000 Quality certification maintained for State Transit’s bus services . Award-winning training programs . Best-practice contracts and procurement systems . The Board of State Transit and the Minister for Transport have indicated that they are satisfied that the performance targets specified in Mr Lee’s performance contract have been achieved and exceeded .
SES Remuneration State Transit had two executives in the report period whose remuneration equals or exceeds the minimum for a Level 5 Senior Executive Service:
I. Chief Executive: John Lee Total Remuneration Package: $333,168 Performance Payment 2006/2007: State Transit policy specifies that no performance payments are made .
II. General Manager, Finance & Corporate Services: Paul Dunn Total Remuneration Package: $222,686 Performance Payment 2006/2007: State Transit policy specifies that no performance payments are made .
150 State Transit Authority of New South Wales - Annual Report 2006-2007 Other
38 List of Publications In 2006/2007 State Transit produced and distributed: 2005/2006 Annual Report 2006/2007 Corporate Plan Bus Timetables (various) Various brochures and flyers, including for a number of tourist products, new and special tickets, service changes, safety material and guides to Sydney Harbour, Newcastle and ferries Transit Times (24 editions)
39 Annual Report Publications Details The State Transit Annual Report was designed and produced in house . The Annual Report is designed as a website document (PDFs) able to be printed if required by individual users . To access this Annual Report and previous years Annual Reports please go to www .sta .nsw .gov .au/reports and publications php . Five hundred copies were also produced at a cost of $21 34. each .
40 Electronic Service Delivery The State Government made a commitment via the ESD program to ensure that NSW Government agencies have the systems to do business and provide customer-focused services electronically (eGovernment) by December 2001 . State Transit has implemented and continues to refine and expand its ESD program In the 2006/07 financial year more than 3 6. million people visited State Transit or associated websites, downloading over 2 5. million regular route timetables and over 2 1. million maps from the Sydney Buses and Newcastle Buses sites . The key customer-focused services provided electronically via the Internet include: 1) Extensive information on our services and products, including the facility to print personalised timetables . 2) Sophisticated travel planning system . 3) Employment opportunities . 4) Information of the School Student Transport Scheme . 5) Performance Reports . 6) Annual reports and corporate plan . State Transit does business electronically wherever appropriate: 1) Tenders are advertised on our website together with full documentation, and disclosure of contracts awarded are posted on our website . 2) Electronic procurement processes with major suppliers are in place and being extended wherever suppliers have the capability to do business electronically . 3) The new Intranet will provide staff with payroll, leave and FAQ electronic self service facilities .
State Transit Authority of New South Wales - Annual Report 2006-2007 151 Other
41 Key Performance Indicators
In 2006/07 Dollars 2002/03 2003/04 2004/05 2005/06 2006/07 Consolidated State Transit Total revenue (‘000) $492,631 $494,018 $515,354 $533,513 $535,959 Total expenses (‘000) $487,183 $471,558 $520,707 $485,092 $503,293 Patronage (‘000)* 199,037 200,002 200,274 200,568 201,733 Kilometres (‘000) 86,420 88,915 88,962 89,038 88,358 Staff 4,335 4,470 4,533 4,564 4,568 Total revenue per passenger $2 .48 $2 .47 $2 57 . $2 .66 $2.66 Total revenue per Km $5 .70 $5 .56 $5 79 . $5 .99 $6.07 Passengers per vehicle Km 2 .3 2 .3 2 .3 2 .3 2.3 Cost per passenger $2 .45 $2 .36 $2 60 . $2 .42 $2.49 Cost per vehicle Km $5 .64 $5 .30 $5 85 . $5 .45 $5.70 Passengers per employee 45,914 44,743 44,181 43,946 44,162 Vehicle Km per employee 19,935 19,891 19,625 19,509 19,343 Fleet size - buses 1,904 1,926 1,943 1,927 1,978 Fleet size - ferries 2 2 2 2 2 Sydney Bus Services Total revenue (‘000) $451,805 $452,255 $466,842 $490,029 $493,073 Total expenses (‘000) $427,474 $418,748 $462,007 $429,843 $441,763 Patronage (‘000)* 187,288 187,223 186,486 185,987 186,999 Kilometres (‘000) 77,426 78,593 78,993 79,117 78,290 Staff 3,642 3,775 3,854 3,820 3,920 Total revenue per passenger $2 .41 $2 .42 $2 50 . $2 .63 $2.64 Total revenue per Km $5 .84 $5 .75 $5 91 . $6 .19 $6.30 Passengers per vehicle Km 2 .4 2 .4 2 .4 2 .4 2.4 Cost per passenger $2 .28 $2 .24 $2 48 . $2 .31 $2.36 Cost per vehicle Km $5 .52 $5 .33 $5 85 . $5 .43 $5.64 Passengers per employee 51,424 49,595 48,393 48,688 47,704 Vehicle Km per employee 21,259 20,819 20,498 20,711 19,972 Changeovers per 100,000 Kms - mechanical 16 .15 16 .13 15 26 . 12 .94 12.92 - traffic 4 .41 4 .53 3 .98 4 .51 4.30 Average bus vehicle age 12 .2 13 .0 12 .8 12 .7 12.6 Bus service reliability (on time) 96% 96% 95% 95% 95% Fleet size - buses 1,704 1,729 1,745 1,733 1,790
* Prior year patronage numbers have been adjusted following the conclusion of audits of the impact of the fare free zone in Newcastle and the assimilation of Harris Park Bus Company Services in Region 7 for Sydney Buses .
152 State Transit Authority of New South Wales - Annual Report 2006-2007 Other
41 Key Performance Indicators (continued)
In 2006/07 Dollars 2002/03 2003/04 2004/05 2005/06 2006/07 Newcastle Bus & Ferry Services Total revenue (‘000) $34,972 $33,974 $34,201 $34,894 $44,992 Total expenses (‘000) $45,786 $45,160 $42,326 $41,661 $42,460 Patronage (‘000)* 11,465 11,480 12,101 12,566 12,455 Kilometres (‘000) 8,381 8,367 8,236 8,256 8,322 Staff 388 389 392 381 371 Total revenue per passenger $3 .05 $2 .96 $2 .83 $2 .78 $3.61 Total revenue per Km $4 .17 $4 .06 $4 15 . $4 .23 $5.41 Passengers per vehicle Km 1 .4 1 .4 1 .5 1 .5 1.5 Cost per passenger $3 .99 $3 .93 $3 50 . $3 .32 $3.41 Cost per vehicle Km $5 .46 $5 .40 $5 14 . $5 .05 $5.10 Passengers per employee 29,549 29,512 30,862 32,982 33,571 Vehicle Km per employee 21,601 21,509 21,005 21,669 22,431 Changeovers per 100,000 Kms - mechanical 10 .33 10 .95 12 26 . 8 .93 9.01 - traffic 2 .27 2 .28 2 .19 2 .24 2.37 Average bus vehicle age 14 .9 12 .6 12 .6 12 .8 13.6 Bus service reliability (on time) 96% 98% 98% 98% 98% Fleet size - buses 183 180 181 177 171 Fleet size - ferries 2 2 2 2 2 Western Sydney Buses Total revenue (‘000) $765 $3,219 $3,841 $4,273 $4,364 Total expenses (‘000) $3,161 $6,728 $6,593 $6,135 $6,098 Patronage (‘000) 284 1,299 1,687 2,015 2,279 Kilometres (‘000) 613 1,955 1,733 1,665 1,746 Staff 47 47 48 49 52 Total revenue per passenger $2 .69 $2 .48 $2 .28 $2 .12 $1.91 Total revenue per Km $1 .25 $1 .65 $2 22 . $2 .57 $2.50 Passengers per vehicle Km 0 .5 0 .7 1 .0 1 .2 1.3 Cost per passenger $11 .13 $5 .18 $3 .91 $3 .04 $2.68 Cost per vehicle Km $5 .16 $3 .44 $3 80 . $3 .68 $3.49 Passengers per employee 6,043 27,638 35,146 41,122 43,827 Vehicle Km per employee 13,043 41,596 36,098 33,980 33,577 Changeovers per 100,000 Kms - mechanical 8 .18 11 .72 9 .37 8.93 - traffic 6 .14 5 .37 2 .22 2.12 Average bus vehicle age 0 .0 1 .0 0 .0 1 .0 2.0 Fleet size - buses 17 17 17 17 17
State Transit Authority of New South Wales - Annual Report 2006-2007 153 Other
42 Contact Details
HOURS OF SERVICE WESTERN SYDNEY BUSES 8 .30am to 5 00pm,. Monday to Friday . Bonnyrigg Depot 02) 9610 7724
SYDNEY BUSES AND NEWCASTLE NEWCASTLE BUSES BUS & FERRY INFORMATION Belmont Depot (02) 4945 0333 131 500, 6 00am. to 10 .00pm daily . Hamilton Depot (02) 4974 1600
HEAD OFFICE NEWCASTLE FERRY SERVICES Level 1, 219-241 Cleveland Street, (02) 4974 1160 Strawberry Hills NSW 2010 . Telephone: (02) 9245 5777 WEBSITE ADDRESS
SYDNEY BUS DEPOTS www .sta nsw. .gov .au www .sydneybuses .nsw .gov .au Brookvale (02) 9941 5816 www .sydneybuses .info Burwood (02) 9582 4444 www .newcastle .sta nsw. .gov .au Kingsgrove (02) 9582 3015 Leichhardt (02) 9582 5915 Mona Vale (02) 9997 1258 North Sydney (02) 9245 5260 Port Botany (02) 9582 7614 Randwick (02) 9298 6714 Ryde (02) 9941 6814 Waverley (02) 9298 6623 Willoughby (02) 9941 9214
154 State Transit Authority of New South Wales - Annual Report 2006-2007 Index
A K Account payment performance...... 133 Key performance indicators ...... 152 Action plan for women initiatives ...... 145 L Annual environment and WRAPP report ...... 138 Legislation ...... 130 Annual report publication details...... 151 Letter to the Minister ...... 1 Appendices...... 123 Liability management performance ...... 133 B List of publications ...... 151 Board of Directors...... 128 Liverpool - Parramatta T-way route map ...... 7 Bus fleet...... 3 M C Mobile phones ...... 142 Capital expenditure...... 28 N Capital works expenditure...... 125 Newcastle service area ...... 6 CES/SES bands...... 148 O CNG consumption...... 142 Occupational health, safety Code of conduct and protected disclosures...... 148 and rehabilitation ...... 147 Committees (internal & external)...... 138 Overseas travel ...... 135 Complaints...... 143 P Competitive business...... 27 Passenger information ...... 3, 14 Consolidated income and expenditure statement...... 126 Patronage ...... 3 Consultancy and professional fees...... 137 People...... 22 Contact details...... 154 Privacy management ...... 148 Credit card certification ...... 142 R Customer response ...... 143 Response to matters raised by Customer service...... 12 Auditor General ...... 134 D Revenue Protection Unit ...... 30 Disability plans ...... 143 Risk management and insurance ...... 134 E Routes ...... 3 Enterprise Agreements ...... 25 S EEO target groups ...... 145 Safety ...... 3,19 Electronic service delivery ...... 28, 151 Safety policy ...... 19 Employees ...... 2 Safety programs ...... 20 Energy ...... 141 Senior executives qualifications ...... 149 Environmental complaints handling ...... 139 Service changes in response to community consultation ...... 143 Equal employment opportunity ...... 144, 145 Service delivery ...... 15 Ethnic affairs priorities statement and agreements ...... 145 SES performance review and remuneration ...... 149 F SES remuneration ...... 150 Financial statements ...... 33 Structure ...... 127 Freedom of information ...... 135 Summary of land ...... 125 Funds granted to non-government community organisation ...... 133 Sydney service area ...... 5 G T Government and social program payments ...... 131 Transport safety ...... 20 Government energy management policy ...... 142 Turnover ...... 4 Guarantee of service ...... 143 W H Western Sydney Bus Services...... 31 Human resource statistics ...... 144 WRAPP report ...... 141 I Implementation of 2005/06 fares determination ...... 132 Infoline ...... 14 Investment management performance ...... 133 ISO 9001:2000 certification ...... 28
State Transit Authority of New South Wales - Annual Report 2006-2007 155 www.sta.nsw.gov.au www.sydneybuses.info www.newcastle.sta.nsw.gov.au www.131500.com.au