Department of Treasury and Finance Annual Report 2019-2020

Treasur y

Annual Report 2019 – 20

Department of Treasury and Finance Department of Treasury and Finance Annual Report 2019–20 © Government of Tasmania 2020 Excerpts from this publication may be reproduced, with appropriate acknowledgement, as permitted under the Copyright Act 1968. An electronic version of this report is available at www.treasury.tas.gov.au

For further information please contact: Department of Treasury and Finance GPO Box 147 HOBART TAS 7001 Published October 2020 ISSN 1836-1277 (Print) ISSN 1836-1285 (Online) Department of Treasury and Finance

The Treasury Building 21 Murray Street, HOBART TAS 7000 GPO Box 147, HOBART, TAS 7001 Australia Telephone (03) 6166 4444 Email: [email protected] Web: www.treasury.tas.gov.au

Peter Gutwein MP Michael Ferguson MP Premier Minister for Finance Treasurer

Dear Ministers

In accordance with the requirements of section 36(1) of the State Service Act 2000 and section 42 of the Financial Management Act 2016, I am pleased to submit for presentation to Parliament, the 2019-20 Annual Report of the Department of Treasury and Finance.

Yours sincerely

TONY FERRALL Secretary 23 October 2020

Department of Treasury and Finance Annual Report 2019–20 1 Contents

1 OUR DEPARTMENT 4 Organisation structure 5 Governance 6 Functions and services 11 Associated entities 13

2 OUR PERFORMANCE 17 Corporate Direction – Priority 1 17 Corporate Direction – Priority 2 18 Corporate Direction – Priority 3 19 Corporate Direction – Priority 4 19 Corporate Direction – Priority 5 20 Corporate Direction – Priority 6 20 Key performance indicators 21

3 OUR PEOPLE 24 Staff in focus 24 People strategy 28

4 OUR FINANCES 31

5 OUR COMPLIANCE REPORT 146

6 INDEX 170 Compliance index 170 Contact us 175

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OUR OUR OUR OUR OUR INDEX DEPARTMENT PERFORMANCE PEOPLE FINANCES COMPLIANCE REPORT Message from the Secretary

2019-20 was extraordinary and I would also like to recognise unpredictable, with COVID-19 Treasury staff for their support in presenting a number of challenges undertaking our business-as-usual to Treasury. tasks over the past six months. I appreciate the responsible and As the COVID-19 situation professional way in which staff escalated, we were able to quickly continued to deliver our core adapt our business processes to services, from home workspaces, in enable our staff to work effectively a rapidly changing environment. from home workplaces. In 2020-21 we will continue to face Many staff were involved in many challenges. As a Department, the implementation of the we will need to continue to be Government’s stimulus measures, responsive and adaptable to and assisting people and businesses the changing needs of our key impacted by COVID-19. Establishing stakeholders whilst meeting the the systems to support these challenges of our environment. important initiatives required a significant amount of effort across As Secretary of the Department a number of branches. I would like of Treasury and Finance, I am to take this opportunity to thank all pleased to present the 2019-20 staff involved for the commitment, Annual Report. dedication and excellence demonstrated in supporting the community throughout the COVID-19 response.

TONY FERRALL Secretary 23 October 2020

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OUR OUR OUR OUR OUR APPENDICES DEPARTMENT PERFORMANCE PEOPLE FINANCES COMPLIANCE & INDEX REPORT Our department

The Department of Treasury and Our role Our values Finance is responsible for managing the Tasmanian Government’s Treasury works collaboratively with Treasury’s values are firmly financial resources and other agencies and stakeholders to: embedded and provide a shared implementing strategies to achieve sense of purpose and guide our – support the Government the Government’s economic, fiscal, decisions and behaviours. to deliver its economic and regulatory and property objectives. financial objectives; Integrity as it builds confidence, – improve Tasmania’s economic trust and self-respect and is the Our mission conditions; and foundation of open and honest communication. Treasury’s mission is to improve – deliver high quality efficient the wellbeing of Tasmanians by government services by Excellence as it challenges us providing: improving regulatory and to give our best and brings us administrative processes. recognition. – high quality advice and service delivery to the Premier/ Respect as it recognises the value Treasurer, Minister for Finance Our corporate plan of each of us and the contribution and our stakeholders; and we all make. Treasury’s Corporate Direction – effective and efficient is the key output from corporate Camaraderie as it builds administration of our financial, planning activities led by Treasury’s mutual trust and creates a fun and property and regulatory Executive Committee and supportive place to be. responsibilities. supported by senior managers. The Passion as it inspires us to achieve Corporate Direction identifies our great things. priorities, as well as our mission, key stakeholders and strategic risks. Performance against the Corporate Direction is reported in the Our Performance section of this Report.

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TONY FERRALL SECRETARY

ORGANISATIONAL STRUCTURE Treasury’s Executive team and organisational structure underwent changes during 2019-20. FIONA EMSADA JAMES JONATHON CALVERT BABIC CRAIGIE ROOT Anton Voss was appointed to DEPUTY DEPUTY DEPUTY DEPUTY the role of CEO, TASCORP in SECRETARY SECRETARY SECRETARY SECRETARY September 2019. As a result, the Economic and Corporate and Budget and Revenue, Gaming role of Deputy Secretary, Strategic Financial Policy Governance Finance Division and Licensing Energy Projects was abolished and Division Division Division responsibility for the development of KATE State-level policy options associated DEAN DAVID ANGELO BURGESS PATMORE BAILEY PAVLIDES with strategic energy matters was DIRECTOR ASSISTANT DIRECTOR DIRECTOR distributed within the Economic and Economic DIRECTOR Budget Revenue Financial Policy Division. ADRIAN CHRISTIAN Policy Office of the Management In November 2019, the role and DIRECTOR Secretary DEBORAH functions of the Project Management SECRETARIAT DAMIEN ELEANOR DAVIS NIKKI Office, Corporate & Governance Premier’s JARVIS PATTERSON ACTING Economic and ACTING KRUSHKA DIRECTOR DIRECTOR and Office of the Secretary ASSISTANT Social Recovery DIRECTOR Government Liquor and were reviewed and two separate DIRECTOR Advisory Council Inter- Finance and Gaming branches were established. They government Project Accounting are the Office of Secretary Branch and Financial Management and and the Project Management and Policy Governance ALLAN Governance Branch. WOOD JOY DIRECTOR The Premier announced the JODI WILLCOX CRANE Property establishment of the Premier’s DIRECTOR MANAGER Economic and Social Recovery Shareholder Human Advisory Council (PESRAC) in ABIGAIL Policy and Resources SHELLEY April 2020 to provide advice to Markets DIRECTOR the Government on strategies and ROB Procurement, initiatives to support the short CHRIS HIDDING Risk and DIRECTOR to medium and the longer term LOCK Contract recovery from the COVID-19 DIRECTOR Information Management pandemic. A dedicated unit has been Office of the and Technology created within Treasury to provide Tasmanian Services support for PESRAC. The PESRAC Economic Regulator Secretariat is led by Adrian Christian ASSOCIATED ENTITIES and includes staff from across a number of Government agencies. JUDITH KEITH Tasmanian Liquor and Tasmanian Economic ACTING Gaming Commission Regulator DIRECTOR Office of the Superannuation State Grants Superannuation Commission Commission Commission

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GOVERNANCE Commissioner for Licensing Our governance The Commissioner for Licensing is Treasury has a robust governance appointed under the Liquor Licensing arrangements framework that includes clear Act 1990. During 2019–20, the A range of governance committees accountabilities for effective office of Commissioner was held by and processes provide assurance leadership and decision-making. Jonathon Root, Deputy Secretary, that we effectively manage our Revenue, Gaming and Licensing resources and risks to deliver our Statutory office Division. Performance information key priorities. for the Division is available in the holders Our Performance section of this The Secretary is supported by the Report. Executive Committee comprising Secretary the Secretary, Deputy Secretaries Commissioner of State and invited rotating members The Secretary has overall who support diversity in senior responsibility for the performance Revenue decision-making. and management of Treasury The Commissioner of State and is accountable to both the Revenue is appointed under the Senior managers provide input Premier/Treasurer and Minister for Taxation Administration Act 1997. into the corporate planning Finance. The Secretary is a Head of During 2019–20, the office of process supporting the Executive Agency as defined by theFinancial Commissioner was held by Jonathon Committee to determine the Management Act 2016 and the State Root, Deputy Secretary, Revenue, business activities and projects to Service Act 2000 and pursuant to Gaming and Licensing Division. be undertaken each year to achieve the State Service Management Performance information for the the corporate priorities. Framework. Division is available in the Our The Secretary is responsible for Performance section of this Report. Executive reporting to the Treasurer and Parliament annually in accordance Committee with section 36(1) of the State The Executive Committee’s primary Service Act and section 42 of the functions are to drive the strategic Financial Management Act. direction of Treasury, and to This Report contains only a support the Secretary in providing brief outline of the functions of leadership and management of independent statutory entities our human, physical and financial that are subject to separate annual resources to achieve our corporate reporting requirements. Information priorities. The Committee provides on these statutory bodies is available a forum for overseeing the progress under the Associated Entities of legislation and major projects; heading in this Report. the consideration of internal and external policy direction; tracking Treasury has a small number of our corporate priorities; stakeholder statutory office holders that are engagement and supporting our not subject to annual reporting people and culture strategy. requirements to Parliament.

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Executive Committee Audit and Risk Information and representatives meet regularly with the Premier/Treasurer and Management Communication Minister for Finance to clarify policy Committee Technology and direction and ensure Treasury’s legislative agenda meets the The Audit and Risk Management Information Government’s priorities. Committee (ARMC) supports the Management Secretary in achieving high quality Executive Committee governance for Treasury’s audit Steering Committee membership as at and risk management activities and In September 2019, the Information 30 June 2020 responsibilities. The Committee Communication Technology and is responsible to the Secretary – Tony Ferrall, Chair (Secretary); Information Management (ICT for quality assurance outcomes & IM) Steering Committee was – Fiona Calvert (Deputy relating to financial management formed to replace the Strategic Secretary, Economic and and reporting, and the management Information Management and Financial Policy Division); of key risks. The ARMC oversees Technology Committee. The ICT a robust internal audit program for – James Craigie (Deputy & IM Steering Committee is a Treasury. Secretary, Budget and Finance subcommittee of the Executive Division); As at 30 June 2020, ARMC Committee. The primary role of the Steering Committee is to oversee – Jonathon Root (Deputy membership comprised: the ICT & IM strategy and initiatives Secretary, Revenue, Gaming – Richard Easther (Independent in the Department, including and Licensing Division); and Chair); providing executive oversight of the – Emsada Babic (Deputy – Emsada Babic (Deputy Department’s ICT & IM policies and Secretary, Corporate and Secretary, Corporate and strategy, alignment of associated Governance Division). Governance Division); operational plans and review any emerging risks. Invited Executive members – Damien Jarvis (Acting Director, during 2019–20 Intergovernment and Financial As at 30 June 2020, ICT & IM Policy); and Steering Committee membership – Judith Keith (Acting Director, comprised: Office of the Superannuation – Katherine Schaefer (external Commission); member). – Tony Ferrall (Secretary) – Danielle Harris (Assistant – Emsada Babic, Chair (Deputy Director, Budget Management Secretary, Corporate and Branch) Governance Division); and – Fiona McIntyre (Assistant – Jonathon Root (Deputy Director, Procurement, Risk and Secretary, Revenue, Gaming Contract Management); and Licensing Division). – James McAvoy (Assistant Director, Budget Management Branch).

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Procurement Review State Forecasting Financial Assets Committee Committee and Borrowings The Procurement Review Committee The State Forecasting Committee Management (PRC) analyses Treasury procurement (SFC) endorses macroeconomic Committee processes for all goods and services forecasts to be published in the and building and construction State Budget and associated financial The Financial Assets and Borrowings contracts valued at $50 000 or reports. The forecasts are also used Management Committee (FABMC) more to ensure the process is fair, as key inputs into the estimates of a is responsible for managing the equitable and consistent with the number of State revenue lines. The liquidity and funding risk associated principles outlined in the Treasurer’s Committee endorses and monitors with the Government’s State Instructions. The review is undertaken Budget and Forward Estimates Debt, financial assets and liabilities before a quotation/tender is accepted of State taxation, GST revenue, of the Public Account. The or a contract is awarded. government business returns, and FABMC makes debt issuance and other revenue. investment decisions, supported As at 30 June 2020, PRC by recommendations made by membership comprised: As at 30 June 2020, SFC the Tasmanian Public Finance membership comprised: – Emsada Babic, Chair (Deputy Corporation. Secretary, Corporate and – Tony Ferrall, Chair (Secretary); As at 30 June 2020, FABMC Governance Division); – Fiona Calvert (Deputy membership comprised: – Abigail Shelley (Director, Secretary, Economic and – Tony Ferrall, Chair (Secretary); Procurement, Risk and Financial Policy Division); and – Fiona Calvert (Deputy Contract Management Branch); – James Craigie (Deputy Secretary, Economic and – David Bailey (Director, Budget Secretary, Budget and Finance Financial Policy Division); and Management Branch); and Division). – James Craigie (Deputy – Eleanor Patterson (Director, Secretary, Budget and Finance Government Finance and Division). Accounting Branch).

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Work Health and Other internal Treasury Relocation Project Steering Committee and Safety Committee committees: Treasury Building Complex Divestment Project Steering The Work Health and Safety Future Gaming Market Committee aims to actively Committee promote safe working behaviour by Project Strategic Oversight Committee The Treasury Relocation Project providing advice and input regarding Steering Committee and the issues that impact on employee The Future Gaming Market Project Treasury Building Complex health, safety and wellbeing, as Strategic Oversight Committee Divestment Project Steering well as the development and provides high level strategic Committee were established to implementation of measures direction and oversight of the provide strategic direction and to improve WHS outcomes. Future Gaming Market Project oversight of the proposed sale of Membership comprises elected timelines and deliverables; critical the Treasury building complex and Health and Safety Representatives assessment and quick resolution of the relocation of Treasury staff from and key Corporate and Governance issues; and facilitates and expedites the complex to accommodation at Division employees. processes, negotiations and Kirksway Place (Hobart). discussions with key stakeholders and Government. In May 2020, the Tasmanian Government announced its decision As at 30 June 2020, FGM Project to defer the Treasury Relocation Strategic Oversight Committee Project to focus on its response Membership comprised: to COVID-19. Accordingly, the – Jonathon Root, Chair (Deputy Treasury building complex will Secretary, Revenue, Gaming continue to be occupied by the and Licensing Division); Department of Treasury and Finance. – Tony Ferrall (Secretary); and – James Craigie (Deputy Secretary, Budget and Finance Division).

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Project Management Diversity and Inclusion Cadet and Graduate Framework Governance Reference Group Committees Committee The role of the Diversity and The Cadet and Graduate The role of the Project Management Inclusion Reference Group is to Committees oversee the running Framework Governance Committee identify and support actions under and administration of Treasury’s is to provide support and guidance our Diversity and Inclusion Strategy Cadet Program and Finance to the Project Management Office and Action Plan 2018–20, in line Graduate Program and monitor the (PMO) in enhancing Treasury’s with the Tasmanian State Service work and academic performance of Project Management Framework, commitment to support workforce program participants. Membership and to provide advice to the diversity and inclusion. Areas of comprises a mix of branch heads, Executive Committee on project focus include supporting gender human resources staff and past/ management policies developed by equity in senior leadership, our current cadet supervisors. the PMO. target of 50/50 men and women in leadership roles by 2020 and As at 30 June 2020, PMF removing barriers for people with Governance Committee disabilities. Membership comprises membership comprised: representatives across Treasury. – Emsada Babic, Chair (Deputy Secretary, Corporate and Governance Division); – Allan Wood (Director, Property Branch); – Angelo Pavlides (Director, Revenue Branch); – Abigail Shelley (Director, Procurement, Risk and Contract Management Branch); and – Dean Burgess (Director, Economic Policy Branch).

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FUNCTIONS Employee full-time equivalents by division: AND SERVICES Treasury is the central agency responsible for managing the Tasmanian Government’s financial resources and for implementing strategies to achieve the Government’s economic, property, regulatory and fiscal objectives. 97 Our annual operating appropriation in 2019–20 was $58.927 million. Treasury comprises four divisions 73 and employs a range of specialist 67 66 policy, operational and corporate staff, who provide advice to Government to support delivery of its Budget and financial objectives, improve economic conditions and meet its regulatory responsibilities.

Budget and Corporate Economic Revenue, Finance and and Gaming and Governance Financial Licensing Policy

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Budget and Revenue, Gaming Corporate and Finance Division and Licensing Governance Division The Budget and Finance Division Division The Corporate and Governance is responsible for the preparation The Revenue, Gaming and Licensing Division supports the Secretary and and monitoring of the State Division primarily undertakes work corporate governance committees Budget, maintaining accounts, on behalf of statutory bodies and to lead and manage Treasury. preparing financial statements for officeholders. The Revenue Branch The Division provides internal the Public Account and providing assists the Commissioner of State support services within Treasury advice on financial management Revenue in collecting State taxation including: information management in the public sector. The Division revenue and administering grant and corporate communications; manages identified insurable risks programs. The Liquor and Gaming information systems and information of agencies (through the Tasmanian Branch supports the Commissioner technology infrastructure Risk Management Fund), common for Licensing and the Tasmanian management; corporate finance; use contracts, Government-owned Liquor and Gaming Commission in governance and secretariat services; and leased office accommodation, the administration and regulation and human resource management. property sales and strategic of liquor licensing and gambling in property site redevelopments. Tasmania and provides advice to the Government on liquor and Economic and gaming policy. Financial Policy Division The Economic and Financial Policy Division provides a wide range of policy advice on economic and financial issues, intergovernmental financial relations and State tax issues. The Division provides strategic advice, monitors the performance of government businesses and provides resources for the Tasmanian Economic Regulator, Superannuation Commission and State Grants Commission to carry out their statutory functions.

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ASSOCIATED Tasmanian The Regulator also investigates the pricing policies of certain ENTITIES Economic Regulator government monopolies, Treasury is responsible for providing The Tasmanian Economic Regulator investigates competitive neutrality resources to support a number is responsible for the regulation of complaints and monitors Tasmania’s of independent entities to carry various aspects of the electricity and energy security. out their responsibilities under gas supply industries and the water The Tasmanian Economic Regulator’s law including: the Tasmanian and sewerage sector. The Regulator Annual Report is available on the Economic Regulator; Tasmanian approves standing offer retail prices Office of the Tasmanian Economic Liquor and Gaming Commission; for small electricity customers on Regulator’s website Superannuation Commission; and mainland Tasmania and electricity (www.economicregulator.tas.gov.au) State Grants Commission. prices on the Bass Strait Islands and regulates water and sewerage prices.

Original date of Commencement Expiry date of Salary (incl Member appointment of current term current term allowances) Superannuation Total

Joe Dimasi, 9 Nov 2015 9 Nov 2015 8 Nov 20201 $81 321 $7 725 $89 046 Economic Regulator

1 On 15 July 2020 the Minister for Finance signed an Instrument of Appointment reappointing Joe Dimasi as Tasmanian Economic Regulator for a further five year term.

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Tasmanian Liquor of gambling activities in Tasmania Details of the Commission’s and is empowered to determine functions and strategic priorities can and Gaming licence applications referred to it by be found on the Liquor and Gaming Commission the Commissioner for Licensing in Branch’s website (www.treasury.tas. addition to hearing appeals against gov.au/liquor-and-gaming). The Tasmanian Liquor and Gaming decisions of the Commissioner The Commission held 11 meetings Commission was established by for Licensing. The Commission in 2019–20. the Gaming Control Act 1993 as the consists of Jenny Cranston (Chair), independent regulator overseeing David Hudson and Andrew Walker. the administration and regulation

Tasmanian Liquor and Gaming Commission membership in 2019-20:

Original date of Commencement Expiry date of Salary (incl Meetings Member appointment of current term current term allowances) Superannuation Total Attended

Jenny Cranston, 14 Mar 2016 14 Mar 2020 13 Mar 2024 $55 664 $5 267 $60 931 11 Chair David Hudson, 1 May 2019 1 May 2019 30 Apr 2023 $31 102 $2,955 $34 057 11 Member Andrew Walker, 29 Apr 2019 29 Apr 2019 28 Apr 2023 $31 102 $2,955 $34 057 11 Member

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Superannuation The Commission was established on The Commission held 12 meetings 1 April 2017, replacing the former in 2019–20. Commission Retirement Benefits Fund Board. The Tasmanian Superannuation The Superannuation Commission The Commission is established Commission’s Annual Report is administers the closed defined under the Public Sector available on the RBF website benefit superannuation schemes Superannuation Reform Act 2016, on (www.rbf.com.au) and associated investments as a appointment by the Treasurer, and result of the Government’s review is supported by the Office of the of the superannuation services to Superannuation Commission. State Service employees.

Superannuation Commission membership in 2019-20:

Original date of Commencement Expiry date of Salary (incl Meetings Member appointment of current term current term allowances) Superannuation Total Attended

Evelyn Horton, 1 Oct 2019 1 Oct 2019 30 Sep 2022 $58 699 $5 577 $64 276 8 Chair1 Kerry Adby, 1 Oct 2016 1 Oct 2016 30 Sep 2019 $21 447 $2 037 $23 484 4 Chair1 Leigh Mackey, Member2 (until 1 Apr 2017 1 Apr 2017 31 Mar 2020 $40 660 $3 863 $44 523 11 30 Sep 2020) Chris Bevan, Member2 (until 1 Apr 2017 1 Apr 2017 31 Mar 2020 $40 660 $3 863 $44 523 12 30 Sep 2020)

1 The Chair, Kerry Adby completed her term on 30 September 2019. The incoming Chair, Evelyn Horton commenced on 1 October 2019. 2 Under the provisions of the Acts Interpretation Act 1931, a person appointed to a statutory position may continue to exercise all of the powers and functions of that position for a period of six months following the expiry of the term of the position, if they are not reappointed and no other person has been appointed in their place. Ms Mackey and Mr Bevan agreed to continue in these positions for a further period of up to six months.

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State Grants Premier’s Economic Kym Goodes, Samantha Hogg, Leanne McLean, Paul Ranson, and Commission and Social Recovery Brett Torossi. Members are not The State Grants Commission is Advisory Council remunerated for their participation. an independent body established The Premier’s Economic and by the State Grants Commission Other entities Act 1976 Social Recovery Advisory Council . The primary function (PESRAC) has been established to of the Commission is to make Treasury undertakes the role provide advice to the Government of portfolio department for recommendations to the Treasurer on strategies and initiatives to support concerning the distribution the Tasmanian Public Finance the short to medium and the longer Corporation (TASCORP). of Australian Government term recovery from the COVID-19 financial assistance grants to local pandemic. PESRAC will provide TASCORP is established by the government under the provisions advice and recommendations on how Tasmanian Public Finance Corporation of the Australian Government Act 1985, as a statutory body Local Government to best mitigate the economic and legislation corporate. Its role is to develop (Financial Assistance Act 1995 social impacts of the pandemic and ). identify opportunities for economic and implement borrowing and The Commission held 11 meetings and social renewal. investment programs for the benefit in 2019–20. of Tasmanian state authorities. PESRAC is made up of individuals The State Grants Commission’s from across the business and The Treasurer is the portfolio Annual Report can be accessed community sectors and will leverage Minister and Shareholding Minister on the Treasury Website (www. the experience, knowledge and for TASCORP on behalf of the State treasury.tas.gov.au/state-grants- resourcefulness of these community of Tasmania. A Board of Directors commission/publications). leaders to advise the Premier on appointed by the Governor oversees the opportunities for economic and the operations of TASCORP. social initiatives to build a stronger As at 30 June 2020, TASCORP’s and more resilient Tasmanian Board of Directors comprised Tony community and to strengthen and Ferrall (Chair), Sandra Birkensleigh, renew the Tasmanian economy. Evelyn Horton and David Sietsma. PESRAC membership for TASCORP’s Annual Report is 2019-20 comprised Don Challen AM available on the TASCORP website (Chair), Professor Rufus Black, (www.tascorp.com.au/publications). Dale Elphinstone AO, Tim Gardner,

State Grants Commission membership in 2019-20:

Original date of Commencement Expiry date of Salary (incl Super- Meetings Member appointment of current term current term allowances) annuation Total Attended

David Hudson, Chair 3 Jan 2013 5 Feb 2019 4 Feb 2022 $39 394 $3 734 $43 128 11 Rod Fraser, Member 12 Aug 2014 12 Aug 2017 11 Aug 2020 $23 203 $2 184 $25 387 11 Greg Preece, Member 1 Jan 2018 1 Jan 2018 31 Dec 2020 $23 654 $2 184 $25 838 10

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OUR OUR OUR OUR OUR INDEX DEPARTMENT PERFORMANCE PEOPLE FINANCES COMPLIANCE REPORT Our performance

This section summarises Treasury’s CORPORATE – Supported the implementation key deliverables under each of the of two new Australian six priority areas identified in our DIRECTION Accounting Standards in the Corporate Direction for 2019–20. PRIORITY 1 2019-20 Financial Statements. Our performance indicators are The 2019-20 Preliminary also provided. Support the Outcomes Report was the first General Government Treasury’s Corporate Direction Government to Sector publication to be is directed at implementing prepared under new Australian the Government’s agenda and deliver its Fiscal Accounting Standards AASB 15 leveraging our internal capability. Strategy and Revenue from Contracts with Following the declaration of a Budget and financial Customers and AASB 16 Leases. Public Health Emergency and objectives – Published all whole of subsequent declaration of a State government financial and of Emergency by the Premier in – Published the Fiscal Sustainability statistical reports on or before March 2020 in response to the Report in October 2019 that the required date, and received COVID-19 pandemic, Treasury provided a perspective of the unqualified audit reports for each has provided additional support to State’s fiscal outlook beyond the of the audited financial reports. the Government in administering Budget and Forward Estimates – Prepared the 2020-21 Supply and delivering both the Tasmanian and examined long-term fiscal and Australian Government’s Bills (No.1 and 2) and 2019-20 sustainability under a number of Supplementary Appropriation announced social and economic different scenarios. stimulus measures. Bill, in response to COVID-19 – Ensured that the Government’s and the delay to the Our key achievements in 2019–20 commitment to cap regulated 2020-21 Budget. are highlighted over the following electricity prices in 2020-21 pages. – Prepared the Economic and was met. Fiscal Update Report released in – Prepared the 2019-20 Revised May 2020, to provide economic Estimates Report, February 2020. and financial information to the – Prepared various submissions community on the impact of the to the Commonwealth COVID-19 pandemic. Grants Commission (CGC) – Provided advice to Government 2020 Methodology Review, regarding the arrangements contributing to a favourable that could be implemented to outcome for Tasmania. ensure Government businesses The Review Final Report was had timely access to funds to published on 16 March 2020. respond to the COVID-I9 – Established a project team to pandemic if required. implement the Government’s – Continued to play a key role future gaming market policy, in the Parliament Square developed the financial redevelopment, overseeing the model for the hotel and club ongoing construction of the sector and released a public plaza, hotel works and further consultation paper detailing the office accommodation located proposed regulatory model. at 10 Murray Street, Hobart.

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– Successfully divested the CORPORATE originally introduced in the Crown-owned areas of the Taxation Related Legislation Elizabeth Street Pier in line DIRECTION (Housing Availability and Payroll with our asset management PRIORITY 2 Relief) Act 2018, to encourage responsibility. more people into the housing – Commenced the Technology Work collaboratively market and increase the rental Services Procurement Review with stakeholders to stock in Tasmania. to create more contemporary – Managed the administration practices for the procurement improve Tasmania’s of the Local Government of technology services. economic conditions Loans Scheme which approved $144.3 million in borrowing – Delivered the Government’s – Implemented a freeze on all commitment to introduce a applications from 21 Tasmanian fees subject to the Fee Units Act Councils to finance 283 projects point of consumption tax on 1997 for 2020-21. wagering in Tasmania. and initiatives. – Implemented the Government’s – Supported the Superannuation COVID-19 payroll tax and Commission to maintain land tax Social and Economic competitive investment returns Support Measures. for the assets of the RBF – Worked with the Australian defined benefit superannuation Government to introduce its schemes. HomeBuilder Grant in Tasmania – Developed and administered and supported passage of the stimulus measures, such as HomeBuilder Grants Act 2020 payroll tax waivers and rebates, prescribing both the Tasmanian and the deferment and waiver and Australian Government of Land Tax to assist the HomeBuilder grants for eligible Government in delivering its home builders and buyers. social and economic measures – Managed the extension of the in response to the COVID-19 First Home Owners Grant of pandemic. $20 000 until 30 June 2022 – Incorporated the State Fire through the Taxation and Commission’s major insurable Related Legislation (Miscellaneous risks into the Tasmanian Amendments) Act 2020. Risk Management Fund – Managed the increase in in collaboration with the the Foreign Investor Duty Department of Police Fire and Surcharge introduced in the Emergency Management. Duties Amendment Act 2019, and extended a number of housing taxation related measures,

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CORPORATE – Introduced SMS messages CORPORATE for overdue taxation debts DIRECTION to prompt earlier payment. DIRECTION PRIORITY 3 This assisted in improving PRIORITY 4 systems and processes that Improve regulatory enable greater productivity and Engage with our and administrative efficiency. stakeholders – Implemented new policies and processes to procedures to support the – Investigated a competitive deliver high quality inaugural year of the Financial neutrality complaint against Management Act 2016. the Tasmanian Health Service government services in compliance with National – Developed and implemented Competition Policy. more efficiently the Office Accommodation – Ensured the effective Fitout Guidelines (OAFG) to – Undertook a review into implementation of electricity manage planning and occupancy performance of Tasmania’s and water and sewerage bill across Tasmanian Government electricity network businesses to waivers for the first quarterly owned and leased office assess whether the reliability of bill received after 1 April 2020. portfolio. network services was satisfactory over the reporting period. – Supported the passing of the – Prepared the Public Works Public Sector Superannuation Committee Amendment Act 2019, – Participated in the Open House Reform Amendment Act 2019 to to streamline procurement Hobart Program in November address a number of matters planning for major projects. 2019 for the second year allowing that have impacted on the public access within the historic efficiency and effectiveness of Treasury building complex, with superannuation arrangements our staff hosting over 40 tours for public sector employees and that were attended by more than members of the Retirement 750 people. Benefits Fund. – Arranged for the preparation – Completed the project for of the necessary delegations, transitioning the provision of authorisations and briefings for outsourced superannuation the Minister for Finance and administration services for worked with his office to set in the RBF defined benefit place appropriate systems and superannuation schemes to processes. Australian Administration – Co-designed and published, in Services (Link). consultation with stakeholders, revised State Revenue Office web pages to enhance navigation and produce visually improved concise webpages (www.sro.tas.gov.au).

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CORPORATE – Unconscious bias in decision CORPORATE making courses were delivered DIRECTION and selection panel training DIRECTION PRIORITY 5 was delivered that included an PRIORITY 6 unconscious bias element. – Rolled out the ‘Check-in@ Build our people Treasury’ performance Grow business capacity management approach. capability – Following the escalation of the – Undertook business continuity – Seamlessly transitioned our COVID-19 pandemic, Treasury planning activities in response entire workforce to safely and took a pro-active approach by to COVID-19 pandemic productively working from home engaging Converge International planning and organisational during the staged COVID-19 (our EAP provider) to deliver a support. This included the restrictions. development of a COVID-19 confidential, phone-based support – Ensured key services were service to check-in with managers Safety Management Plan and guidelines. kept available through enacting to identify any potential areas of business continuity procedures, risk for themselves and/or within including enabling a remote digital their teams. mailroom solution which allowed – The Women in Leadership the continued processing of Action Plan 2017-20 was incoming hardcopy mail. completed and ongoing – Completed an accelerated initiatives have been transitioned rollout of Microsoft Teams to to business as usual activities. all staff as an improved way of – A series of COVID-19 health connecting and collaborating and wellbeing webinars delivered together while working remotely. by Converge International – Development of an were made available to staff organisation-specific Project to assist with the challenges of Management Framework COVID-19 and staff adjustment to enable us to manage our to a working from home projects better. environment. – Undertook further development of the new Budget Information Management System (BIMS).

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KEY PERFORMANCE INDICATORS Performance Information by Output Group Our performance against the key Budget outputs, assigned to Treasury in the 2019–20 Budget to achieve the Government’s policy objectives or outcomes is provided below.

Budget Output Group 1: Financial and Resource Management Services

Unit of Target Actual Actual Actual Performance measure Measure 2019–20 2017–18 2018–19 2019–20

Stakeholder satisfaction rating1 % >90 85 na na

Proportion of financial reports receiving an unqualified audit opinion2 % 100 100 100 100

Treasury-managed property vacancy rate3 % <1.5 1.4 0.7 na

State Service workers’ compensation contribution as a percentage % <90 91 95 104 of the average premium charged by private insurers4

Proportion of financial reports published by the required date5 % 100 100 100 100

Variance between Budget estimate and actual GBE/SOC returns6 % <5 8.2 5.4 2.9

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Budget Output Group 2: Economic and Fiscal Policy Advice

Unit of Target Actual Actual Actual Performance measure Measure 2019–20 2017–18 2018–19 2019–20

Stakeholder satisfaction rating1 % >90 92 na na

Variance between Budget estimate and actual taxation receipts7 % <5.0 2.8 1.3 3.7

Variance between Budget estimate and actual Australian % <5.0 3.5 2.6 2.2 Government payments8

Variance between Budget forecast and Australian Bureau of % pts <1 1.0 1.4 na Statistics estimate of Gross State Product growth9

Variance between Budget forecast and Australian Bureau of % pts <1 1.8 0.3 0.5 Statistics estimate of employment growth9

Budget Output Group 3: Revenue, Superannuation and Regulatory Management Services

Unit of Target Actual Actual Actual Performance measure Measure 2019–20 2017–18 2018–19 2019–20

Stakeholder satisfaction rating1 % >90 88 na na

Total overdue taxation debt as a percentage of total taxation % <0.8 1.1 1.1 1.2 revenue10

Percentage of formal recommendations accepted by the Tasmanian % >80 98 98 98 Liquor and Gaming Commission11

Percentage of objections in which the Commissioner of State % >80 68* 66 66 Revenue’s assessment or decision was confirmed12

Revenue Branch operating expenses as a percentage of taxation % <1.5 0.8 0.7 0.7 revenue13

Percentage of liquor applications submitted to the Commissioner % >95 91 92 91 for Licensing within 40 days of advertising14

Number of complaints received by the Superannuation No. <50 50 53 38 Commission15

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1 The satisfaction rating of the quality of 6 Returns from government businesses 10 The State Revenue Office seeks to Treasury's services is obtained from the and state-owned companies comprise ensure that taxpayers are well informed results of Treasury's Stakeholder Survey, dividends, income tax equivalent of their obligations and that tax debt which is completed approximately every payments, rate equivalent payments and stress and overdue taxation debts are two years. Treasury’s Stakeholder Survey guarantee fees. The actual end of year minimised. Accordingly, the target is for was most recently completed in August outcome for 2019-20 is consistent with overdue taxation debt to be a very small 2018 for 2017-18. the identified target. The information percentage of total taxation revenue. for this measure published in Treasury’s The proportions of debt in recent 2 An unqualified audit opinion from the 2018-19 Annual Report for 2018-19 was years have been influenced by better Auditor-General indicates that the based on the Preliminary Outcome, identification of overdue debt through financial reports are a true and accurate and has been revised to reflect the final systems improvements and a more reflection of the Government’s finances. outcome for 2018-19 as published in streamlined and consistent process for 3 The vacancy rate is the proportion the respective year’s Treasurer’s Annual moving unpaid amounts through to a of all owned and leased office space Financial Report. debtor management process. managed by Treasury that is currently 7 The accuracy of Treasury’s taxation 11 While recognising that the Tasmanian vacant and available for occupation. The receipts forecasts is determined by Liquor and Gaming Commission is Financial Management introduction of the comparing the State Budget estimate an independent statutory body, a Act 2016 and AASB 16 (Leases) has had with the actual end of year outcome. The measure of the quality of the services a significant impact on the size of the 2019-20 figure published in Treasury’s provided is the proportion of all portfolio managed by Treasury with the 2019-20 Annual Report is based on the formal recommendations contained in transfer of leases from agencies. Tenant Preliminary Outcomes Report 2019-20 decision papers that are accepted by the occupation and vacancy information is rather than the final audited outcome. Commission. currently being sought from agencies and The 2018-19 figure has been updated collated for 2019-20. to reflect the audited outcome from 12 Objections may be lodged against assessments issued to taxpayers or 4 The Tasmanian Risk Management Fund the latest Treasurer’s Annual Financial Report. decisions of the Commissioner, Deputy includes a self insurance scheme for Commissioner or a delegate of the the workers' compensation liabilities 8 The accuracy of Treasury’s Australian Commissioner. Treasury seeks to of participating agencies. An indication Government payments forecasts can ensure that the original assessments and of the Government’s management of be determined by comparing the State decisions are accurate. *The Department workers' compensation claims can be Budget estimate with the actual end of Treasury and Finance’s 2017-18 Annual obtained by comparing the workers' of year outcome. The 2019-20 figure Report incorrectly reported the 2017-18 compensation contributions paid by published in Treasury’s 2019-20 Annual figure as 59 per cent. An error in the agencies to the Fund with the workers' Report is based on the Preliminary original calculation of this figure was compensation premiums charged Outcomes Report 2019-20 rather identified. The correct figure for 2017-18 by private insurers. The measure is than the final audited outcome. was 68 per cent. calculated by comparing average agency The 2018-19 figure has been updated workers' compensation contributions, to reflect the audited outcome from 13 An indication of the efficiency of the as a proportion of salaries, with the the latest Treasurer’s Annual Financial revenue management services provided average premium rate of private insurers. Report. by Treasury can be gained by comparing Given the significant range of factors total taxation revenue collected with the impacting on both agency and private 9 The accuracy of Treasury’s Gross State operating costs required to administer insurance premiums, it can be subject Product and employment growth and collect that revenue. to fluctuation from year to year. The forecast for the financial years prior to Fund’s performance against the indicator 2019-20 are determined by comparing 14 Treasury assisted the Commissioner in 2019-20 has worsened, primarily due the relevant Budget forecast with the for Licensing by receiving applications to an increase in the Fund’s contribution most recent estimates of growth for the for licences, undertaking investigations rate. This increase may partly reflect financial year published by the Australian and providing information to the changes to the Workers Rehabilitation and Bureau of Statistics. Each November, Commissioner to assist in the Compensation Act 1988 that apply to the the ABS revises its estimates of growth determination of whether a licence public sector only. for past financial years. This has resulted applicant is qualified in accordance with Liquor Licensing in the 2017-18 Actual for variance to the requirements of the Act 1990 5 The whole-of-government financial GSP growth changing from 0.8 to 1.0. . reports published in 2019-20 were the The information published in Treasury's Preliminary Outcomes Report 2018-19, 15 The Superannuation Commission has 2018-19 Annual Report was based on a structured and formal complaint Treasurer's Annual Financial Report 2018- the previous ABS estimates. Information 19, September Quarterly Report 2019-20, mechanism, for which there is no charge on Gross State Product for 2019-20 from to members (details are available at December Quarterly Report 2019-20 and the Australian Bureau of Statistics was the March Quarterly Report 2019-20. www.rbf.com.au). External disputes of not available for inclusion in Treasury’s handling of complaints are addressed by 2019-20 Annual Report. the Tasmanian Ombudsman.

Department of Treasury and Finance Annual Report 2019–20 23 1 2 3 4 5 6

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STAFF IN FOCUS payroll and receiving salary as at Employment type 30 June 2020, including those on paid leave such as long service leave, We value permanent employment. annual leave and paid maternity Full Time As at 30 June 2020 permanent leave. Excluded from paid FTEs are employees represented 91 per Equivalents (FTEs) those employees who are absent on cent of our workforce, with the long-term unpaid leave, for example As at 30 June 2020, we employed remaining 9 per cent employed on unpaid parental leave, secondment 347 people (303 paid full-time fixed-term contracts (excluding or leave without pay but who have equivalents). Paid FTEs include Senior Executive Service officers). employees currently on the an expected return date.

Employee numbers by year:

As at 30 June Employees FTEs Paid FTEs

2012 315 294 283 2013 307 285 280 2014 306 284 272 2015 293 269 255 2016 297 273 262 2017 326 301 291 2018 337 311 301 2019 362 334 321 2020 347 319 303

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Age profile Age range by gender:

The average age of our employees Age range Female Male Total in 2019-20 was 44 years. Our average age has increased over the < 25 4 8 12 past ten years, reflective of changes in Tasmania's general age profile. 25-29 17 10 27 30-34 16 16 32 35-39 27 21 48 40-44 30 18 48 45-49 39 17 56 50-54 36 22 58 55-59 24 16 40 60-64 10 10 20 65 + 1 5 6 Total 204 143 347

35 Female Male 30

0 <25 25–29 30–34 35–39 40–44 45–49 50–54 55–59 60–65 65+

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Gender profile Year Females Males As at 30 June 2016, 57 per cent of our workforce was female. This 2016 169 128 has increased to 59 per cent of our 2017 190 136 workforce as at 30 June 2020. 2018 198 139 2019 217 145 2020 204 143

Employee gender by classification:

45 Female 40 Male 35

Trainee Cadet Grad B1 B2 B3 B4 B5 B6 B7 B8 B9 SES 1 SES 2 SES3 SES 4

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Employee gender by Senior executive staff by gender: classification: SES Classification 2016 2017 2018 2019* 2020* Band Females Males Gender F M F M F M F M F M Trainee 0 1 SES 1 0 6 0 5 0 4 2 4 2 4 Cadet 7 9 SES 2 1 5 3 7 2 7 3 6 4 6 Graduate 2 1 SES 3 0 1 0 1 0 1 0 1 0 1 Band 1 2 0 SES 4 1 1 1 1 0 1 1 2 1 1 Band 2 18 1 Total 2 13 4 14 2 13 6 13 7 12 Band 3 23 5

Band 4 46 25 *2019 and 2020 includes acting SES arrangements Band 5 22 21 SES Percentages 2020: Band 6 46 39

Band 7 10 15 Female Male Band 8 20 12 37% 63% Band 9 1 1 SES 1 2 4 SES 2 4 6 SES 3 0 1 SES 4 1 1 Secretary 0 1 Total 204 143

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PEOPLE STRATEGY Women in Leadership – asking our senior leaders Action Plan 2017–20 to discuss the Principles of Treasury is committed to improving Inclusive Leadership and identify Building a more gender equity, including increasing how they have contributed to diverse and inclusive the representation of women this strategy as part of their in senior leadership. We have own performance discussions; workforce continued to adopt a suite of and We have continued to deliver our strategies to help level the playing – various learning and Diversity and Inclusion Strategy field. These include: development pathways, 2018-20, focussed on our corporate including options for job – ongoing support for flexible rotation and study support. culture and embedding the work practices; principles of diversity and inclusion As at 30 June 2016, males held into our day-to-day work. – the requirement for gender balanced shortlists for all senior 72 per cent of senior roles (bands In early 2020 we undertook a roles at Band 7 and above; 8 and above) and 87 per cent of post-implementation review of our Senior Executive Service roles. – short form applications; short form application approach, Since establishing our gender since being adopted in mid-January – rotating positions on the target, we have increased the 2019 for all vacancies within Executive Committee; representation of women at band Treasury. – enhanced remote working 8 and above from 28 per cent at Treasury delivered the first of the capability provided through our 30 June 2016 to 53 per cent at Women Supporting Women in IT infrastructure; 30 June 2020. Leadership events for 2020 offering – online and regular face-to-face Over the same period, the a practical and reflective career training sessions that raise representation of women in senior mapping session in the north and awareness of unconscious bias executive roles has increased from the south of the state for women and strategies to mitigate this; 13 per cent to 37 per cent. across the State Service. – a regular check-in coaching Treasury is also participating in model to help managers the Tasmanian State Service have regular career planning School-based Traineeship program, discussions with staff; providing an opportunity for young people to combine work, training and education. Treasury’s new Bands 8 and above Bands 8 and above trainee commenced work within the Information Technology Services Women 28% Women 53% Branch in February 2020. as at 30 June 2016 as at 30 June 2020

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Disability Action Plan Preventing violence Building our Cadet 2018–2022 against women and Graduate Treasury’s Disability Action Plan reflects the commitments made to In August 2019 Treasury’s Human Programs support Accessible Island: Tasmania’s Resources Project Team completed The Cadet Program continues to Disability Framework for Action a comprehensive submission to flourish and is underpinned by a 2018–2021. During the past year: White Ribbon for further workplace suite of training courses referred re-accreditation. We were advised to as the ‘Cadet Fundamentals’. – Treasury has continued its shortly after the submission that commitment to identify one These fundamentals need to be White Ribbon had gone into completed by cadets over the first Graduate Financial Analyst administration. position targeted towards a two years of the program. This person with a disability. In the past year we have continued systematic development strategy is strongly supplemented by continued – In November 2019 Treasury to work in collaboration with observational, experiential and once again participated in the Engender Equality, a local on-the-job learning opportunities. ‘AccessAbility Day’ event with organisation that specialises in the theme of promoting the providing counselling to women The Graduate Program continues participation of persons with in abusive relationships, to roll to focus on developing practical disabilities and their leadership out refresher training to all of our accounting and financial skills potential. managers and supervisors. while participants complete their professional accounting studies. Encouraging our staff to work flexibly We have continued to support and encourage flexible work practices across Treasury on an ‘if not, why not’ basis. As a result of the COVID-19 pandemic Treasury staff worked entirely off site from late March to mid July. All of our operations were adapted to a remote working environment in order to sustain the delivery of outputs and services across our many varied branches.

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Leadership and Health and wellbeing Helping the career development Treasury has worked diligently community Our People Development to monitor and respond to the We recognise the importance of Framework outlines our 70/20/10 Government’s Directions and connecting with the community approach to building people Worksafe Tasmania’s guidelines in that we serve and helping charities capability which supports the relation to the COVID-19 worksafe in need. Prior to changes to our achievement of our Corporate requirements. A Workplace Safety working environment in light of Directions. We have continued Plan and Safety Guidelines have COVID-19, our staff raised over to focus on providing leadership, been completed to support the $2 700 for local charities through management and technical safety of employees both at home casual dress days and morning teas. development opportunities, drawing and in our Treasury workplaces. on a mix of internal and external programs and experiential activities. Building performance – Check-In Recruitment and We have been progressively attraction of staff implementing a new performance During 2019-20 we advertised 34 management approach called permanent, 31 fixed term roles Check-in @Treasury. This provides and three Senior Executive Officer for regular quality conversation vacancies. The total turnover rate between employees and managers increased this year to 12.2 per cent. at least once a month and utilises a real time coaching model to help We continue to seek to remove focus on an employee’s strengths any unintended barriers in the and engagement motivators. recruitment process and to attract a more diverse pool of applicants, encouraging people from outside of the State Service to apply. The two page application, plus resume requirement, significantly reduces the time commitment involved.

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CONTENTS

Statement of Certification ��32

Department of Treasury and Finance Statement of Comprehensive Income for the year ended 30 June 2020 ��33

Department of Treasury and Finance Statement of Financial Position as at 30 June 2020 ��34

Department of Treasury and Finance Statement of Cash Flows for the year ended 30 June 2020 ��35

Department of Treasury and Finance Statement of Changes in Equity for the year ended 30 June 2020 ��36

Notes to and forming part of the Financial Statements for the year ended 30 June 2020 ��37

Independent Auditor’s Report ��142

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STATEMENT OF CERTIFICATION

The accompanying Financial Statements of the Department of Treasury and Finance and related bodies are in agreement with the relevant accounts and records. The Financial Statements have been prepared in compliance with the Treasurer’s Instructions issued under the provisions of the Financial Management Act 2016 to present fairly the financial transactions for the year ended 30 June 2020 and the financial position as at the end of the year. At the date of signing, I am not aware of any circumstances which would render the particulars included in the Financial Statements misleading or inaccurate.

TONY FERRALL Secretary 5 October 2020

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STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020

Notes 2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Income from continuing operations Revenue from Government Appropriation revenue - operating 5.1 48 531 45 169 53 742 Appropriation revenue - capital 5.1 1 302 877 34 Other revenue from Government 5.1 … 1 061 1 680 Grants 5.2 … 16 … Fees and fines 5.3 8 435 6 705 8 910 Other revenue 5.4 1 158 1 437 1 917 Total revenue from continuing operations 59 426 55 264 66 284 Net gain/(loss) on non-financial assets 6.1 … (51) (3) Total income from continuing operations 59 426 55 213 66 281 Expenses from continuing operations Employee benefits 7.1 34 004 34 020 32 113 Depreciation and amortisation 7.2 1 391 1 234 1 257 Supplies and consumables 7.3 9 015 13 154 13 743 Grants and subsidies 7.4 5 831 5 117 16 030 Transfers to the Public Account 1 582 604 1 621 Other expenses 7.5 7 586 250 248 Total expenses from continuing operations 59 409 54 380 65 012 Net result from continuing operations 17 833 1 269 Net result 17 833 1 269 Other comprehensive income Change in heritage asset revaluation … … 11 Total other comprehensive income … … 11 Comprehensive result 17 833 1 280

This Statement of Comprehensive Income should be read in conjunction with the accompanying notes. Budget information refers to original estimates and has not been subject to audit. The Office of the Tasmanian Economic Regulator has been excluded from the above budget information. A reconciliation is provided in Note 18 .11 of the accompanying notes. Explanations of material variances between budget and actual outcomes are provided in Note 3 of the accompanying notes.

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STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020

Notes 2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Assets Financial Assets Cash and cash equivalents 12.1 6 495 8 491 9 451 Receivables 8.1 318 544 166 Other financial assets 8.2 453 382 355 Non-financial assets Leasehold improvements 8.3 … 106 137 Property, plant and equipment 8.3 996 750 601 Heritage assets 8.3 84 158 186 Intangible assets 8.4 9 160 8 418 8 324 Other assets 8.5 1 601 489 545 Total assets 19 107 19 338 19 766

Liabilities Payables 9.1 652 652 756 Lease liabilities 9.2 902 … … Employee benefit liabilities 9.3 8 318 8 412 7 811 Other liabilities 9.4 59 55 1 813 Total liabilities 9 931 9 119 10 380 Net assets 9 176 10 219 9 386

Equity Reserves 11.1 … 11 11 Accumulated funds 9 176 10 208 9 375 Total equity 9 176 10 219 9 386

This Statement of Financial Position should be read in conjunction with the accompanying notes. Budget information refers to original estimates and has not been subject to audit. The Office of the Tasmanian Economic Regulator has been excluded from the above budget information. A reconciliation is provided in Note 18 .11 of the accompanying notes. Explanations of material variances between budget and actual outcomes are provided in Note 3 of the accompanying notes.

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STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020

Notes 2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Cash flows from operating activities Cash inflows Appropriation receipts - operating 48 531 44 470 55 343 Appropriation receipts - capital 1 302 877 194 Fees and fines 8 418 6 371 9 009 GST receipts 1 600 1 577 1 790 Other cash receipts 1 158 1 397 1 841 Total cash inflows 61 009 54 692 68 177 Cash outflows Employee benefits (29 438) (29 722) (28 389) Superannuation (4 080) (3 697) (3 538) GST payments (1 600) (1 593) (1 626) Grants and subsidies (5 831) (5 117 ) (16 030) Supplies and consumables (9 014) (13 202) (13 578) Transfers to Public Account (1 582) (604) (1 621) Other cash payments (7 586) (248) (232) Total cash outflows (59 131) (54 183) (65 015) Net cash from / (used by) operating activities 12.2 1 878 509 3 162

Cash flows from investing activities Cash inflows Proceeds from the disposal of non-financial assets … 2 … Total cash inflows … 2 … Cash outflows Payments for acquisition of non-financial assets (1 723) (1 471) (1 201) Total cash outflows (1 723) (1 471) (1 201) Net cash from / (used by) investing activities (1 723) (1 470) (1 201)

Cash flows from financing activities Net Borrowing (451) … … Total cash outflows (451) … … Net cash from/(used by) financing activities (451) … … Net increase / (decrease) in cash held and cash equivalents (296) (961) 1 961 Cash and deposits at the beginning of the reporting period 6 791 9 451 7 490 Cash and cash equivalents at the end of the reporting period 12.1 6 495 8 491 9 451

This Statement of Cash Flows should be read in conjunction with the accompanying notes. Budget information refers to original estimates and has not been subject to audit. The Office of the Tasmanian Economic Regulator has been excluded from the above budget information. A reconciliation is provided in Note 18 .11 of the accompanying notes. Explanations of material variances between budget and actual outcomes are provided in Note 3 of the accompanying notes.

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STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020

Notes Reserves Accumulated Funds Total Equity $’000 $’000 $’000

Balance as at 1 July 2019 11 9 375 9 386 Net Result … 833 833 Other comprehensive income … … … Total comprehensive result … 833 833 Balance as at 30 June 2020 11 10 208 10 219

Notes Reserves Accumulated Funds Total Equity $’000 $’000 $’000

Balance as at 1 July 2018 … 8 106 8 106 Net Result … 1 269 1 269 Other comprehensive income 11 … 11 Total comprehensive result 11 1 269 1 280 Balance as at 30 June 2019 11 9 375 9 386

This Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020

NOTE 1: Administered Financial Statements 40 1.1 Schedule of Administered Income and Expenses ��40 1.2 Schedule of Administered Assets and Liabilities ��41 1.3 Schedule of Administered Cash Flows ��42 1.4 Schedule of Administered Changes in Equity �� 44 NOTE 2: Departmental Output Schedules 45 2.1 Output group information ��45 2.2 Reconciliation of total output groups comprehensive result to Statement of Comprehensive Income ��50 2.3 Reconciliation of total output groups net assets to Statement of Financial Position ��50 2.4 Administered Output Schedule ��51 2.5 Reconciliation of total administered output groups comprehensive result to Schedule of Administered Income and Expenses ��58 2.6 Reconciliation of total administered output groups net assets to Schedule of Administered Assets and Liabilities ��58 NOTE 3: Explanations of Material Variances between Budget and Actual Outcomes 59 3.1 Statement of Comprehensive Income �� 60 3.2 Statement of Financial Position ��61 3.3 Statement of Cash Flows ��62 NOTE 4: Underlying Net result 63 NOTE 5: Revenue 64 5.1 Revenue from Government �� 64 5.2 Grants �� 65 5.3 Fees and fines ��65 5.4 Other revenue ��65 NOTE 6: Net Gains/(losses) 66 6.1 Net gain/(loss) on non-financial assets �� 66 NOTE 7: Expenses 67 7.1 Employee benefits ��67 7.2 Depreciation and amortisation ��69 7.3 Supplies and consumables ��70 7.4 Grants and subsidies ��70 7.5 Other expenses ��71 NOTE 8: Assets 72 8.1 Receivables ��72 8.2 Other financial assets ��73 8.3 Property, plant and equipment ��74 8.4 Intangible assets ��77 8.5 Other assets ��77

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NOTE 9: Liabilities 78 9.1 Payables ��78 9.2 Lease liabilities ��78 9.3 Employee benefit liabilities ��79 9.4 Other liabilities ��79 NOTE 10: Commitments and Contingencies 80 10.1 Schedule of commitments ��80 10.2 Contingent assets and liabilities ��81 NOTE 11: Reserves 82 11.1 Reserves ��82 NOTE 12: Cash Flow Reconciliation 83 12.1 Cash and cash equivalents ��83 12.2 Reconciliation of Net Result to Net Cash from Operating Activities ��83 12.3 Acquittal of Capital Investment and Special Capital Investment Funds �� 84 NOTE 13: Financial Instruments 85 13.1 Risk exposures ��85 13.2 Categories of Financial Assets and Liabilities ��87 NOTE 14: Details of Consolidated Entities 87 14.1 List of entities ��87 NOTE 15: Notes to Administered Statements 88 15.1 Administered Expenditure under Australian Government Funding Arrangements �� 88 15.2 Explanations of Material Variances between Budget and Actual Outcomes �� 89 15.3 Administered Underlying Net result ��93 15.4 Administered Revenue from Government ��94 15.5 Administered Grants ��94 15.6 Administered State taxation ��96 15.7 Administered Sales of goods and services ��96 15.8 Administered Investment income ��96 15.9 Administered Other revenue ��97 15.10 Administered Net gain/(loss) on non-financial assets ��97 15.11 Administered Net gain/(loss) on financial instruments and statutory receivables/payables ��97 15.12 Administered Superannuation Expenses ��98 15.13 Administered Depreciation and amortisation ��98 15.14 Administered Supplies and consumables ��98 15.15 Administered Grants and subsidies ��99 15.16 Administered Finance costs ��101 15.17 Administered Receivables ��102 15.18 Administered Contract assets and liabilities ��103 15.19 Administered Equity investments ��104 15.20 Administered Other financial assets ��106

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15.21 Administered Assets held for sale ��106 15.22 Administered Property, plant and equipment ��108 15.23 Administered Right-of-use assets ��110 15.24 Administered Infrastructure ��110 15.25 Administered Other assets ��111 15.26 Administered Payables ��111 15.27 Administered Lease liabilities ��112 15.28 Administered Interest bearing liabilities ��113 15.29 Administered Superannuation ��113 15.30 Administered Other liabilities ��120 15.31 Tasmanian Risk Management Fund ��121 15.32 Schedule of Administered Commitments ��124 15.33 Schedule of Administered Quantifiable contingencies ��125 15.34 Schedule of Administered Unquantifiable Contingencies ��125 15.35 Administered Reserves ��126 15.36 Administered Cash and cash equivalents ��127 15.37 Reconciliation of net result to net cash from operating activities ��128 15.38 Reconciliation of Administered liabilities arising from financing activities ��128 15.39 Administered Financial instruments ��129 15.40 Categories of Administered Financial assets and liabilities ��133 15.41 Net fair value of Administered Financial assets and liabilities ��134 NOTE 16: Transactions and Balances Relating to a Trustee or Agency Arrangement 134 16.1 Activities undertaken under a trustee or agency arrangement ��134 NOTE 17: Events Occurring After Balance Date 135 NOTE 18: Other Significant Accounting Policies and Judgements 135 18.1 Objectives and funding ��135 18.2 Basis of accounting ��136 18.3 Reporting entity ��136 18.4 Functional and presentation currency ��136 18.5 Changes in accounting policies ��136 18.6 Foreign currency ��140 18.7 Comparative figures ��140 18.8 Rounding ��140 18.9 Departmental taxation ��140 18.10 Goods and services tax ��140 18.11 Budget Information ��140

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NOTE 1: ADMINISTERED FINANCIAL STATEMENTS

The Department administers, but does not control, certain resources on behalf of the Government as a whole. It is accountable for the transactions involving such administered resources, but does not have the discretion to deploy resources for the achievement of the Department’s objectives.

1.1 Schedule of Administered Income and Expenses

Notes 2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Administered revenue Revenue from Government Appropriation revenue - operating 15.4 646 905 635 263 604 819 Appropriation revenue - capital 15.4 12 334 2 334 20 097 Other revenue from Government 15.4 … 8 670 15 501 Grants 15.5 3 476 237 3 317 845 3 508 662 State taxation 15.6 1 095 923 1 144 058 1 081 973 Sales of goods and services 15.7 109 408 126 728 102 623 Investment income 15.8 542 403 549 493 466 822 Other revenue 15.9 108 664 113 069 121 454 Total revenue from continuing operations 5 991 874 5 897 461 5 921 952 Net gain/(loss) on non-financial assets 15.10 2 640 8 686 2 879 Net gain/(loss) on financial instruments and statutory receivables/payables 15 .11 7 571 (86 716) (131 012) Total income from continuing operations 6 002 085 5 819 430 5 793 819 Administered expenses Superannuation 15.12 399 954 336 179 366 224 Depreciation and amortisation 15.13 31 915 53 212 18 551 Supplies and consumables 15.14 118 951 101 696 114 163 Grants and subsidies 15.15 502 887 437 650 596 975 Finance costs 15.16 12 982 7 558 9 630 Transfers to the Public Account 5 275 624 5 387 196 4 980 067 Other expenses (50 000) … … Total administered expenses 6 292 313 6 323 490 6 085 611 Administered net result (290 228) (504 060) (291 792) Administered other comprehensive income Gain/(loss) on revaluation of equity instruments designated through 15.19 (227 627) (499 990) (350 365) other comprehensive income Net actuarial gains/(losses) on superannuation defined benefit plans 15.29 … (44 729) (1 816 032) Net actuarial gains/(losses) on Tasmanian Risk Management Fund liability 15.31 (6 661) (9 409) (911) Other movements taken directly to equity (210 788) … … Total administered other comprehensive income (445 076) (554 128) (2 167 308) Administered comprehensive result (735 304) (1 058 188) (2 459 101)

This Schedule of Administered Income and Expenses should be read in conjunction with the accompanying notes. Budget information refers to original estimates and has not been subject to audit. Explanations of material variances between budget and actual outcomes are provided in Note 15.2 of the accompanying notes.

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1.2 Schedule of Administered Assets and Liabilities

Notes 2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Administered assets Administered financial assets Cash and cash equivalents 15.36 1 025 395 1 212 540 1 261 008 Receivables 15.17 99 290 96 408 105 741 Equity investments 15.19 5 491 493 4 843 899 5 243 987 Other financial assets 15.20 1 046 796 518 633 775 683 Administered non-financial assets Assets held for sale 15.21 1 181 572 791 Property, plant and equipment 15.22 143 765 137 971 166 710 Right-of-use assets 15.23 153 311 279 591 … Infrastructure 15.24 31 888 21 747 14 853 Other assets 15.25 1 300 1 469 1 389 Total administered assets 7 994 419 7 112 831 7 570 163

Administered liabilities Payables 15.26 10 829 20 332 11 266 Lease liabilities 15.27 154 293 285 889 … Interest bearing liabilities 15.28 1 625 122 740 002 537 600 Contract liabilities 15.18 76 156 216 984 … Superannuation 15.29 7 007 790 10 265 615 10 172 007 Other liabilities 15.30 250 418 952 960 937 536 Total administered liabilities 9 124 608 12 481 781 11 658 409 Administered net assets (liabilities) (1 130 189) (5 368 951) (4 088 246)

Administered equity Asset Revaluation Reserve 15.35 27 010 10 592 27 010 Accumulated funds (1 157 199) (4 529 188) (3 764 891) Other reserves 15.35 … (850 355) (350 365) Total administered equity (1 130 189) (5 368 951) (4 088 246)

This Schedule of Administered Assets and Liabilities should be read in conjunction with the accompanying notes. Budget information refers to original estimates and has not been subject to audit. Explanations of material variances between budget and actual outcomes are provided in note 15.2 of the accompanying notes.

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1.3 Schedule of Administered Cash Flows

Notes 2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Administered cash flows from operating activities Administered cash inflows Appropriation receipts - recurrent 646 905 637 597 633 591 Appropriation receipts - capital 12 334 … … State Taxation 1 095 954 1 150 580 1 069 423 Grants 3 341 607 3 292 412 3 508 662 Sales of goods and services 109 408 110 575 103 627 GST receipts 13 500 26 239 24 661 Interest received 18 682 8 620 25 478 Dividends and tax equivalents received 511 539 595 464 503 201 Other cash receipts 108 664 135 598 122 355 Total administered cash inflows 5 858 593 5 957 084 5 990 998 Administered cash outflows Employee benefits (30 000) … … Superannuation (300 363) (285 554) (286 743) Finance costs (13 008) (6 302) (9 599) GST payments (13 500) (24 077) (26 483) Grants and subsidies (502 887) (430 268) (597 266) Supplies and consumables (118 951) (92 864) (101 324) Transfers to Public Account (5 275 624) (5 387 196) (4 980 067) Other cash payments 50 000 … … Total administered cash outflows (6 204 333) (6 226 262) (6 001 482) Administered net cash from / (used by) operating 15.37 (345 740) (269 178) (10 484) activities

Administered cash flows from investing activities Administered cash inflows Proceeds from the disposal of non-financial assets 42 381 44 813 17 857 Repayment of loans by other entities 8 487 470 9 308 Total administered cash inflows 50 868 45 283 27 164 Administered cash outflows Payments for acquisition of non-financial assets (45 371) (35 628) (77 124) Payments for investments (166 322) (141 639) (126 335) Total administered cash outflows (211 693) (177 267) (203 459) Administered net cash from / (used by) investing (160 825) (131 984) (176 295) activities

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1.3 Schedule of Administered Cash Flows (continued)

Notes 2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Administered cash flows from financing activities Administered cash inflows Proceeds from borrowings 455 895 740 002 380 000 Public Account cash collections 325 272 145 639 8 168 Total administered cash inflows 781 167 885 641 388 168 Administered cash outflows Repayment of borrowing (444 525) (380 000) (267 915) Repayment of leases (10 591) Public Account cash reimbursements … (142 357) 16 477 Total administered cash outflows (444 525) (532 948) (251 438) Administered net cash from / (used by) financing 336 642 352 694 136 730 activities

Net increase / (decrease) in administered cash and (169 923) (48 469) (50 049) cash equivalents held Administered Cash and cash equivalents at the 1 195 318 1 261 008 1 311 058 beginning of the reporting period Administered Cash and cash equivalents at the end of 15.36 1 025 395 1 212 540 1 261 008 the reporting period

This Schedule of Administered Cash Flows should be read in conjunction with the accompanying notes. Budget information refers to original estimates and has not been subject to audit. Explanations of material variances between budget and actual outcomes are provided in Note 15.2 of the accompanying notes.

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1.4 Schedule of Administered Changes in Equity

Notes Other Asset Accumulated Total Equity Reserves Revaluation Funds $’000 $’000 Reserve $’000 $’000

Balance as at 1 July 2019 (350 365) 27 010 (3 764 891) (4 088 246) Initial Recognition of Contract Liabilities … … (242 416) (242 416) under AASB15 Restated balance as at 1 July 2019 (350 365) 27 010 (4 007 307) (4 330 662) Net Result … … (504 060) (504 060) Other comprehensive income (499 990) … (54 138) (554 128) Total comprehensive result (499 990) … (558 198) (1 058 188) Transfer of disposed asset … (16 417) 16 417 … Transactions as owners Equity transfer received from Department of Primary Industries, Parks, Water and … … 50 000 50 000 Environment Equity transfer to the Department of Primary … … (30 100) (30 100) Industries, Parks, Water and Environment Total Transactions as owners … … 19 900 19 900 Balance as at 30 June 2020 (850 355) 10 592 (4 529 188) (5 368 951)

Notes Other Asset Accumulated Total Equity Reserves Revaluation Funds $’000 $’000 Reserve $’000 $’000

Balance as at 1 July 2018 … 27 010 (1 656 155) (1 629 145) Net Result … … (2 108 736) (2 108 736) Other comprehensive income … … … … Revaluation increment/(decrement) (350 365) … … (350 365) Total comprehensive result (350 365) … (2 108 736) (2 459 101)

Transactions as owners … … … … Total Transactions as owners … … … … Total (350 365) … (2 108 736) (2 459 101) Balance as at 30 June 2019 (350 365) 27 010 (3 764 891) (4 088 246)

This Schedule of Administered Changes in Equity should be read in conjunction with the accompanying notes. Withdrawal of equity relates to the Crown Lands Administration Fund.

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NOTE 2: DEPARTMENTAL OUTPUT SCHEDULES

2.1 Output group information Comparative information has not been restated for administrative restructures. Budget information refers to original estimates and has not been subject to audit Output group 1 – Financial and Resource Management Services

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Income from continuing operations Revenue from appropriation 11 040 9 747 9 562 Other revenue from Government … 901 450 Fees and fines 2 413 2 511 2 680 Other revenue 1 079 1 173 1 605 Total revenue from continuing operations 14 532 14 331 14 297 Net gain/(loss) on sale of non-financial assets … (14) (1) Total income from continuing operations 14 532 14 317 14 296 Expenses from continuing operations Employee entitlements 11 832 11 355 10 670 Depreciation and amortisation 396 368 352 Supplies and consumables 2 395 2 416 2 405 Grants … 1 1 Other expenses 79 85 81 Total expenses from continuing operations 14 702 14 225 13 509 Net result from continuing operations (170) 92 787 Net result (170) 92 787 Other comprehensive income Items that may be reclassified to net result in subsequent periods Gain/(loss) taken to equity … … 3 Total other comprehensive income … … 3 Comprehensive result (170) 92 790

Expense by output 1.1 Budget development and management 3 177 2 931 2 720 1.2 Financial management and accounting services 3 823 3 591 3 927 1.3 Shareholder advice on government businesses 2 986 2 921 2 601 1.4 Government property and accommodation services 1 911 1 993 1 838 1.5 Government procurement services 2 805 2 804 2 423 Total 14 702 14 240 13 510 Net assets Total assets deployed for Financial and Resource Management Services … 8 110 5 166 Total liabilities incurred for Financial and Resource Management Services … (2 903) (3 964) Net assets deployed for Financial and Resource Management Services … 5 207 1 202

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Output group 2 – Economic and Fiscal Policy Advice

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Income from continuing operations Revenue from appropriation 5 476 5 489 5 266 Other revenue 18 40 57 Total revenue from continuing operations 5 494 5 529 5 323 Net gain/(loss) on sale of non-financial assets … (8) … Total income from continuing operations 5 494 5 521 5 323 Expenses from continuing operations Employee entitlements 4 671 4 759 4 530 Depreciation and amortisation 217 184 201 Supplies and consumable 803 746 786 Other expenses 33 38 36 Total expenses from continuing operations 5 724 5 728 5 553 Net result (230) (207) (230) Other comprehensive income Items that may be reclassified to net result in subsequent periods Gain/(loss) taken to equity … … 2 Items that will not be reclassified to net result in subsequent periods Changes in property plant and equipment revaluation surplus … … 2 Total other comprehensive income … … 2 Comprehensive result (230) (207) (228)

Expense by output 2.1 Economic Policy Advice 1 356 1 357 1 067 2.2 Regulatory Advice 2 895 3 153 2 839 2.3 Intergovernmental Financial Matters 1 473 1 224 1 647 Total 5 724 5 734 5 553

Net assets Total assets deployed for Economic and Fiscal Policy Advice … 1 833 2 935 Total liabilities incurred for Economic and Fiscal Policy Advice … (1 192) (1 381) Net assets deployed for Economic and Fiscal Policy Advice … 641 1 554

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Output group 3 – Revenue, Superannuation and Regulatory Management Services

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Income from continuing operations Revenue from appropriation 29 900 27 818 26 607 Other revenue from Government … … 250 Fees and fines 1 872 735 2 050 Other revenue 61 216 255 Total revenue from continuing operations 31 833 28 769 29 162 Net gain/loss on sale of non-financial assets … (29) (2) Total income from continuing operations 31 833 28 740 29 160 Expenses from continuing operations Employee entitlements 17 501 17 861 16 912 Depreciation and amortisation 778 683 704 Supplies and consumables 5 207 9 961 10 547 Grants 2 2 2 Transfer 1 582 604 1 621 Other expenses 7 474 127 130 Total expenses from continuing operations 32 542 29 237 29 916 Net result from continuing operations (711) (497) (756) Net result (711) (497) (756) Other comprehensive income Items that may be reclassified to net result in subsequent periods Financial asset measured at fair value through other comprehensive income: Gain/(loss) taken to equity … … 6 Total other comprehensive income … … 6 Comprehensive result (711) (497) (749)

Expense by output 3.1 Tax administration and revenue collection 9 341 9 180 8 744 3.2 Regulation and administration of liquor and gaming 9 009 7 823 6 980 3.3 Office of the Superannuation Commission 14 194 12 264 12 573 Total 32 544 28 267 28 297

Net assets Total assets deployed for Revenue, Superannuation and Regulatory … 7 446 10 645 Management Services Total liabilities incurred for Revenue, Superannuation and Regulatory … (5 024) (4 870) Management Services Net assets deployed for Revenue, Superannuation and Regulatory … 2 422 5 775 Management Services

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Output group 4 – Community Assistance

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Income from continuing operations Revenue from appropriation 2 115 2 115 12 307 Fees and fines 4 150 3 459 4 180 Total revenue from continuing operations 6 265 5 574 16 487 Total income from continuing operations 6 265 5 574 16 487 Expenses from continuing operations Employee entitlements … 45 … Supplies and consumables 610 14 7 Grants and subsidies 5 829 5 114 16 027 Total expenses from continuing operations 6 439 5 174 16 034 Net result from continuing operations (174) 400 453 Net result (174) 400 453 Other comprehensive income Total other comprehensive income … … … Comprehensive result (174) 400 453

Expense by output 4.1 Bass Strait Islands Community Service Obligation … … 10 239 4.2 Public Trustee Community Service Obligation 2 115 2 115 2 068 4.3 Community Support Levy 4 324 3 059 3 727 Total 16 291 5 174 16 034

Net assets Total assets deployed for Community Assistance … 898 … Total liabilities incurred for Community Assistance … … … Net assets deployed for Community Assistance … 898 …

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Output group 89 – Government Maintenance Program – COVID-19 Response

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Income from continuing operations Grants … 16 … Total revenue from continuing operations … 16 … Other gains/(losses) … … … Total income from continuing operations … 16 … Expenses from continuing operations Supplies and consumables … 16 … Total expenses from continuing operations … 16 … Expense by output 89.1 – Government Maintenance Program COVID-19 Response … 16 … Total … 16 …

Net assets Total assets deployed for Government Maintenance … 16 … Program – COVID19 Response Total liabilities incurred for Government Maintenance … … … Program – COVID19 Response Net assets deployed for Government Maintenance … 16 … Program – COVID-19 Response

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Output group 92 – Capital Investment Program

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Income from continuing operations Revenue from appropriation … … 34 Revenue from Special Capital Investment Funds … 877 980 Other revenue from Government … 160 … Other revenue … 8 … Total revenue from continuing operations … 1 045 1 014 Total income from continuing operations … 1 045 1 014 Expenses from continuing operations Total expenses from continuing operations … … … Net result from continuing operations … 1 045 1 014 Net result … 1 045 1 014 Comprehensive result … 1 045 1 014 Expense by output 4.1 Budget Management Information Systems … … … Total … … … Net assets Total assets deployed for Capital Investment Program … 1 037 1 019 Total liabilities incurred for Capital Investment Program … … (165) Net assets deployed for Capital Investment Program … 1 037 854

2.2 Reconciliation of total output groups comprehensive result to Statement of Comprehensive Income

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Total Comprehensive result of Output Groups 17 833 1 280 Comprehensive result 17 833 1 280

2.3 Reconciliation of total output groups net assets to Statement of Financial Position

2020 Actual 2019 Actual $’000 $’000

Total net assets deployed for Output Groups 10 119 9 386 Net assets 10 119 9 386

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2.4 Administered Output Schedule Comparative information has not been restated for administrative restructures. Budget information refers to original estimates and has not been subject to audit. Output group 1 – Debt Servicing and Management

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Administered income Revenue from appropriation 23 015 4 132 7 366 Investment income … … 7 383 Total administered revenue 23 015 4 132 14 749 Total administered income 23 015 4 132 14 749 Administered expenses from continuing operations Finance costs 9 157 2 617 9 489 Total administered expenses 9 157 2 617 9 489 Administered net result 13 858 1 516 5 261 Administered comprehensive result 13 858 1 516 5 261

Administered expense by output 1.1 Debt Servicing 35 1 741 52 1.2 Interest on Sundry Deposits 2 089 876 2 053 1.3 Debt Management 7 033 … 7 383 Total 9 157 2 617 9 489

Administered net assets Total administered assets deployed for Debt Servicing 618 000 657 380 866 576 and Management Total administered liabilities incurred for Debt Servicing (1 230 862) (1 434 955) (1 226 774) and Management Administered net assets deployed for Debt Servicing (612 862) (777 575) (360 198) and Management

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Output group 2 – Employee Related Costs

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Administered income Revenue from appropriation 307 963 292 954 294 143 Investment income … … 5 Other revenue 102 848 109 238 108 048 Total administered revenue 410 811 402 192 402 196 Other gain/(loss) … … … Total administered income 410 811 402 192 402 196 Administered expenses from continuing operations Superannuation 369 954 336 133 366 224 Supplies and consumables 200 … 45 Total administered expenses 370 154 336 133 366 268 Administered net result 40 657 66 059 35 928 Administered other comprehensive income Administered items that will not be reclassified to net result in subsequent periods Net actuarial gains/(losses) on superannuation defined benefit plans … (44 729) (1 816 032) Total administered other comprehensive income … (44 729) (1 816 032) Administered comprehensive result 40 657 21 330 (1 780 105)

Administered expense by output 2.1 Superannuation and Pensions 370 154 336 133 366 268 Total 370 154 336 133 366 268

Administered net assets Total administered assets deployed for Employee Related Costs 31 782 8 532 48 215 Total administered liabilities incurred for Employee Related Costs (7 010 397) (10 269 802) (10 174 448) Administered net assets deployed for Employee Related Costs (6 978 615) (10 261 270) (10 126 233)

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Output group 3 – Government Businesses

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Administered income Revenue from appropriation 105 611 107 995 101 216 Other revenue from Government … 1 350 … Investment income 44 927 31 737 40 508 Total administered revenue 150 538 141 082 141 724 Other gain/(loss) … … … Total administered income 150 538 141 082 141 724 Administered expenses from continuing operations Grants and subsidies 14 836 29 014 59 216 Total administered expenses 14 836 29 014 59 216 Administered net result 135 702 112 069 82 508 Administered other comprehensive income Administered items that will not be reclassified to net result in subsequent periods Gain/(loss) on revaluation of equity investments (227 627) (499 990) (350 365) Total administered other comprehensive income (227 627) (499 990) (350 365) Administered comprehensive result (91 925) (387 921) (267 857)

Administered expense by output 3.1 Sustainable Timber Tasmania 2 000 2 000 3 515 3.2 State Fire Commission 12 836 27 014 54 138 3.4 Government Businesses … … 1 563 Total 14 836 29 014 59 216

Administered net assets Total administered assets deployed for Government Businesses 5 460 873 4 812 979 5 200 159 Administered net assets deployed for Government Businesses 5 460 873 4 812 979 5 200 159

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Output group 4 – Miscellaneous

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Administered income Revenue from appropriation 52 794 38 927 53 222 Other revenue from Government … 2 050 8 654 Grants 2 270 2 795 … Sales of goods and services 109 329 126 649 102 546 Other revenue 1 449 … 521 Total administered revenue 165 842 170 420 164 944 Net gain/(loss) of non-financial assets (22 360) 8 686 2 879 Total administered income 143 482 179 106 167 823 Administered expenses from continuing operations Other employee expenses 30 000 … … Depreciation and amortisation 31 915 53 212 18 551 Grants and subsidies 28 172 18 623 14 743 Finance costs 3 825 4 941 142 Supplies and consumables 118 563 101 550 113 874 Other expenses (50 000) … … Total administered expenses 162 475 178 325 147 310 Administered net result (18 993) 781 17 634 Administered items that will not be reclassified to net result in subsequent periods Net actuarial gains/(losses) on Tasmanian Risk Management Fund (6 486) (9 409) (911) Other movements taken directly to equity … … … Changes in physical assets revaluation surplus (2) … … Total administered other comprehensive income (6 488) (9 409) 1 968 Administered comprehensive result (25 481) (8 628) 19 602 Administered expense by output 4.1 Information and Communication Technology ... 13 773 ... 4.2 Treasurer’s Reserve 10 000 ...... 4.3 Miscellaneous 12 843 3 176 15 742 4.4 Payment to ATO GST Administration 13 399 13 591 12 640 4.5 Tasmanian Risk Management Fund 70 968 73 716 70 757 4.6 Fleet Management Services 15 726 14 943 16 395 4.7 Property Management Services 37 539 55 815 31 547 4.8 Infrastructure Investment Program Planning 2 000 317 229 4.9 Ex Gratia Assistance … 2 993 ... Total 162 475 178 325 147 310 Administered net assets Total administered assets deployed for Miscellaneous 590 455 700 268 434 791 Total administered liabilities incurred for Miscellaneous 402 603 547 474 (251 846) Administered net assets deployed for Miscellaneous 187 852 152 794 182 945

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Output group 89 – Public Building Maintenance Fund

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Administered income Revenue from appropriation … 6 451 … Total administered revenue … 6 451 ... Other gain/(loss) ... … ... Total administered income ... 6 451 ... Administered expenses from continuing operations Grants and subsidies ... 6 451 ... Total administered expenses ... 6 451 ... Administered net result ... … ... Administered comprehensive result ... … ...

Administered expense by output 89.1 Government Maintenance Program - COVID-19 … 6 451 … Total ... 6 451 ...

Administered net assets Total administered assets deployed for Public Building … … … Maintenance Fund Total administered liabilities incurred for Public Building … (3 057) … Maintenance Fund Administered net assets deployed for Public Building … (3 057) … Maintenance Fund

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Output group 90 – COVID-19 Response

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Administered income Revenue from appropriation … 787 … Total administered revenue … 787 … Other gain/(loss) … … … Total administered income … 787 … Administered expenses from continuing operations Grants and subsidies … 799 … Total administered expenses … 799 … Administered net result … (12) … Administered comprehensive result … (12) …

Administered expense by output 90.4 Small Business Electricity Waiver … 799 … Total … 799 …

Administered net assets Total administered assets deployed for COVID-19 Response … 50 000 … Total administered liabilities incurred for COVID-19 Response … … … Administered net assets deployed for COVID-19 Response … 50 000 …

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Output group 91 – Administered Payments

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Administered income Revenue from appropriation 157 522 184 017 148 871 Other revenue from Government … 689 5 894 Grants 394 192 245 876 437 807 Sales of goods and services 79 80 77 Total administered revenue 551 793 430 662 592 649 Total administered income 551 793 430 662 592 649 Administered expenses from continuing operations Supplies and consumables 188 185 223 Grants and subsidies 459 879 382 764 509 688 Total administered expenses 460 067 382 949 509 911 Administered net result 91 726 47 713 82 738 Administered other comprehensive income Administered items that will not be reclassified to net result in subsequent periods Gain/(loss) taken to equity (210 786) … … Total administered other comprehensive income (210 786) … … Administered comprehensive result (119 060) 47 713 82 738

Administered expense by output Extension of Pensioner Concessions 312 197 163 Energy Retailer Concession 44 899 41 964 40 506 Management of Australian Government Funding 302 517 193 406 354 453 Water and Sewerage Concessions and Subsidies 9 100 8 353 8 262 Payroll Tax Assistance 4 817 7 675 6 553 Payments under Local Government (Rates and Charges Remissions) Act 1991 18 432 23 017 17 155 Other Grants and Subsidies 9 034 5 178 21 718 Local Government Grants 44 317 82 903 45 383 First Home Owners Builders Assistance 12 720 13 713 12 387 Launceston Flood Levee … … 1 000 National Disaster Relief and Recovery 13 919 6 542 2 329 Total 460 067 382 949 509 911

Administered net assets Total administered assets deployed for Administered Payments 274 178 252 152 298 300 Total administered liabilities incurred for Administered Payments (87 285) (226 493) (5 301) Administered net assets deployed for Administered Payments 186 863 25 660 292 999

Department of Treasury and Finance Annual Report 2019–20 57 1 2 3 4 5 6

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Capital Investment Program

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Administered income Revenue from appropriation - capital 12 334 2 334 20 097 Other revenue from Government … 4 581 953 Total administered revenue 12 334 6 915 21 050 Total administered income 12 334 6 915 21 050 Administered expenses from continuing operations … … … Administered net result 12 334 6 915 21 050 Administered comprehensive result 12 334 6 915 21 050

Administered net assets Total administered assets deployed for Capital Investment Program 31 888 21 747 21 853 Total administered liabilities incurred for Capital Investment Program (953) … … Administered net assets deployed for Capital Investment Program 30 935 21 747 21 853

2.5 Reconciliation of total administered output groups comprehensive result to Schedule of Administered Income and Expenses

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Total administered net result of Output Groups (169 617) (319 503) (1 940 023) Reconciliation to administered net surplus (deficit) Finance - General Revenue 4 709 937 4 648 096 4 460 079 Less Transfer to the Public Account (5 275 624) (5 387 196) (4 980 067) Administered comprehensive result (735 304) (1 058 188) (2 454 823)

2.6 Reconciliation of total administered output groups net assets to Schedule of Administered Assets and Liabilities

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Total administered net assets deployed for Output Groups (1 724 924) (5 978 722) (4 785 831) Reconciliation to administered net assets Assets unallocated to Output Groups 594 735 609 772 722 484 Liabilities unallocated to Output Groups … … (41) Administered net assets/(liabilities) (1 130 189) 5 368 950 4 088 246

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NOTE 3: EXPLANATIONS OF MATERIAL VARIANCES BETWEEN BUDGET AND ACTUAL OUTCOMES

Budget information refers to original estimates as disclosed in the 2019–20 Budget Papers and is not subject to audit. The variance between 2019-20 Budget and 2020 Actual outcomes for Right-of-use asset and Lease liabilities is due to an alternative recognition methodology for major office accommodation and motor vehicle fleet. At the time of the 2020 Budget in May 2019, the recognition criteria for major office accommodation and motor vehicle fleet was under development, and Budget estimates were based on the best available information at that time. AASB16 Leases commenced on 1 July 2019, and the recognition methodology for major office accommodation and motor vehicle fleet has been finalised and adopted on this basis for the year ended 30 June 2020. Variances are considered material where the variance exceeds the greater of 10 per cent of Budget estimate or $50 000.

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3.1 Statement of Comprehensive Income

Notes Budget Actual Variance Variance $’000 $’000 $’000 %

Appropriation revenue - operating (a) 48 531 45 169 (3 362) (7) Appropriation revenue - capital (b) 1 302 877 (425) (33) Other revenue from Government (c) … 1 061 1 061 100 Fees and fines (d) 8 435 6 705 (1 730) (20) Other revenue (e) 1 158 1 437 279 24 Depreciation and amortisation (f) 1 391 1 234 (157) (11) Supplies and consumables (g) 9 015 13 154 4 139 46 Grants and subsidies (h) 5 831 5 117 (714) (12) Transfers to the Public Account (i) 1 582 604 (978) (62) Other expenses (j) 7 586 250 (7 336) (97)

Notes to Statement of Comprehensive Income variances (a) The decrease in Appropriation revenue - operating is due to salary savings and a reduction in Treasury operating costs. (b) The decrease in Appropriation revenue - capital is due to revised cash flows for the Budget Information Management System. (c) The increase in Other revenue from Government is due to the carry forward of unspent appropriation revenue from 2018-19. (d) The decrease in Fees and fines is a result of lower than expected liquor and gaming fees due to the impact of the COVID-19 Pandemic and the associated Government Social and Economic Support Package waiving most liquor licencing fees for 2020. (e) The increase in Other revenue is predominantly due to additional reimbursements for expenditure incurred on behalf of other entities. (f) The decrease in Depreciation and amortisation is due to the 2019-20 Budget recognising a right-of-use asset for Kirksway Place and the Government’s motor vehicle fleet, and the associated depreciation of those assets, in accordance with the requirements of Treasurers Instruction FC-19 Leases at that time. Since the development of the 2019-20 Budget, it has been determined that the arrangements between the Department and agencies for major office accommodation and the motor vehicle fleet do not meet the criteria of a lease contract for the purposes of AASB16 Leases. (g) The increase in Supplies and consumables is due to the classification of Superannuation fund administration fees as Other expenses. (h) The decrease in Grants and subsidies is due to the impact of COVID-19 public health restrictions on Community Support Levy fees collected as a result of temporary closure of venues. (i) The decrease in Transfers to the Public Account is a result of lower than expected liquor and gaming fees due to the impact of the COVID-19 pandemic and the associated Government Social and Economic Support Package waiving most liquor licencing fees for 2020. (j) The decrease in Other expenses is due to the classification of Superannuation fund administration fees expenditure as Supplies and consumables.

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3.2 Statement of Financial Position Budget estimates for the 2019–20 Statement of Financial Position were compiled prior to the completion of the actual outcomes for 2019–20. As a result, the actual variance from the Original Budget estimate will be impacted by the difference between estimated and actual opening balances for 2019–20. The following variance analysis therefore includes major movements between the 30 June 2019 and 30 June 2020 actual balances.

Notes Budget 2020 2019 Budget Actual $’000 Actual Actual Variance Variance $’000 $’000 $’000 $’000

Cash and cash equivalents (a) 6 495 8 491 9 451 1 996 (960) Receivables (includes tax assets) (b) 318 544 166 236 378 Heritage assets (c) 84 158 186 74 (28) Other assets (d) 1 601 489 545 (1 112) (56) Lease liabilities (e) 902 … … 902 … Other liabilities (f) 59 55 1 813 (4) (1 757)

Notes to Statement of Financial Position variances (a) The decrease in Cash and cash equivalents is primarily due to the change in the treatment of unspent funds under the Financial Management Act 2016. Previously, a Section 8A(2) carry forward was recognised against cash and other liabilities (revenue received in advance). Under the Financial Management Act 2016 unspent funds are rolled over and added to the agency’s annual appropriation and drawn down as expenditure is made. As at 30 June 2019, the Department had $1.76 million in Section 8A(2) carry forwards. (b) The increase in Receivables primarily due to the expected timing of receipt of Contract Management fees. (c) The increase in Heritage assets against budget is due to the revaluation and identification of assets. (d) The decrease in Other assets is due to the budget recognising a lease liability and right-of-use asset for Kirksway Place and the Government’s motor vehicle fleet. Since the development of the budget, it has been determined that the arrangements between the Department and agencies for major office accommodation and the motor vehicle fleet do not meet the criteria of a lease contract for the purposes of AASB16 Leases. (e) The decrease in Lease liabilities is due to the budget recognising a lease liability for major office accommodation and motor vehicle fleet in actual outcomes, as noted above. (f) The decrease in Other liabilities is primarily due to the change in the treatment of unspent funds under the Financial Management Act 2016. Previously, a Section 8A(2) carry forward was recognised against cash and other liabilities (revenue received in advance). Under the Financial Management Act 2016 unspent funds are rolled over and added to the agency’s annual appropriation and drawn down as expenditure is made. As at 30 June 2019, the Department had $1.76 million in Section 8A(2) carry forwards.

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3.3 Statement of Cash Flows

Notes Budget Actual Variance Variance $’000 $’000 $’000 %

Appropriation receipts - capital (a) 1 302 877 (425) (33) Fees and fines (b) 8 418 6 371 (2 047) (24) Other cash receipts (c) 1 158 1 397 239 21 Grants and subsidies (d) 5 831 5 117 (714) (12) Supplies and consumables (e) 9 014 13 202 4 188 46 Transfers (f) 1 582 604 (978) (62) Payments for acquisition of non-financial assets (g) 1 723 1 471 (252) (15) Other cash payments (h) 7 586 248 (7 338) (97)

Notes to Statement of Cash Flows variances (a) The decrease in Appropriation receipts - capital is due to revised cash flows for the Budget Information Management System. (b) The decrease in Fees and fines is a result of lower than expected liquor and gaming fees due to the impact of the COVID-19 Pandemic, and the associated Government Social and Economic Support Package waiving most liquor licencing fees for 2020. (c) The increase in Other cash receipts is primarily due to additional reimbursements for expenditure incurred on behalf of other entities. (d) The decrease in Grants and subsidies is due to the impact of COVID-19 public health restrictions on Community Support Levy fees collected due to the temporary closure of venues. (e) The increase in Supplies and consumables is due to the classification of Superannuation fund administration fees budget as Other expenses. (f) The decrease in Transfers is due to the lower than expected liquor and gaming fees as a result of the impact of the COVID-19 Pandemic, and the associated Government Social and Economic Support Package waiving most liquor licencing fees for 2020. (g) The decrease in Payments for acquisition of non-financial assets is due to the deferral of the relocation of Treasury staff and activities from the Treasury Building to Kirksway Place. (h) The decrease in Other cash payments is due to the classification of Superannuation fund administration fees expenditure as Supplies and consumables.

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NOTE 4: UNDERLYING NET RESULT

The Underlying Net result from continuing operations is a measure, which removes the distorting impact of one-off non-operational capital funding. Non-operational capital funding includes one-off Australian Government funding for specific capital projects and other non-operational capital related funding received from the Australian Government. There is no Non-operational capital funding for 2019–20.

Notes 2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Net result from continuing operations 17 833 1 269 Less impact of: Non-operational capital funding … … … Total … … … Underlying Net result from continuing operations 17 833 1 269

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NOTE 5: REVENUE

Income is recognised in the Statement of Comprehensive Income when an increase in future economic benefits related to an increase in an asset or a decrease of a liability has arisen that can be measured reliably. Until 30 June 2019, income is recognised in accordance with AASB 111 Construction Contracts, AASB 118 Revenue and AASB 1004 Contributions. From 1 July 2019, income is recognised in accordance with the requirements of AASB 15 Revenue from Contracts with Customers or AASB 1058 Income of Not-for-Profit Entities, dependent on whether there is a contract with a customer defined by AASB 15.

5.1 Revenue from Government Appropriations, whether operating or capital, are recognised as revenues in the period in which the Department gains control of the appropriated funds. Except for any amounts identified as carried forward, control arises in the period of appropriation. Revenue from Government included revenue from appropriations, appropriations carried forward under section 8A(2) of the Public Account Act 1986 and Items Reserved by Law. As a result of the commencement of the Financial Management Act, from 2020–21 Revenue from Government now includes revenue from appropriations, unexpended appropriations rolled over under section 23 of the Financial Management Act 2016 and Items Reserved by Law. Section 8A(2) of the Public Account Act allowed for an unexpended balance of an appropriation to be transferred to an Account in the Special Deposits and Trust Fund for such purposes and conditions as approved by the Treasurer. In the initial year, the carry forward was recognised as a liability, Revenue Received in Advance (refer note 9.4). The carry forward from the initial year was recognised as revenue in the reporting year, assuming that the conditions of the carry forward were met and the funds were expended. Section 23 of the Financial Management Act allows for an unexpended appropriation at the end of the financial year, as determined by the Treasurer, to be issued and applied from the Public Account in the following financial year. The amount determined by the Treasurer must not exceed five per cent of an Agency’s appropriation for the financial year. Rollover of unexpended appropriations under section 23 will be disclosed under the Financial Management Act for the first time in 2020–21. The Budget information is based on original estimates and has not been subject to audit.

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Continuing operations Appropriation revenue - operating Current year 48 531 45 169 53 742 48 531 45 169 53 742 Appropriation revenue - capital 1 302 877 34 Other revenue from Government Appropriation carried forward under section 8A(2) of the Public … 1 061 1 680 Account Act 1986 taken up as revenue in the current year Total revenue from Government from continuing operations 49 833 47 107 55 457

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5.2 Grants In 2018–19, Grants payable by the Australian Government were recognised as revenue when the Department gained control of the underlying assets. Where grants are reciprocal, revenue was recognised as performance occurred under the grant. Non-reciprocal grants were recognised as revenue when the grant was received or receivable. Conditional grants were reciprocal or nonreciprocal depending on the terms of the grant. From 2019–20, Grants revenue, where there is a sufficiently specific performance obligation attached, are recognised when the Department satisfies the performance obligation and transfers the promised goods or services. The Department typically satisfies its performance obligations when services have been completed and invoiced under contract terms. The Department recognises revenue associated with performance obligations using the output method based on direct measurement of the value of goods or services transferred to date in comparison with the remaining goods or services to be provided.

2020 Actual 2019 Actual $’000 $’000

Grants with sufficiently specific performance obligations Public Building Maintenance Fund 16 … Total 16 …

5.3 Fees and fines Revenue from fees and fines is recognised on an accrual basis.

2020 Actual 2019 Actual $’000 $’000

Fees Contract management fees 2 510 2 680 Community Support Levy 3 459 4 180 Liquor licensing revenue 607 1 614 Gaming regulation revenue 128 436 Total 6 705 8 910

5.4 Other revenue Revenue from miscellaneous sources is recognised when it is earned and controlled by the Department and can be deployed for the achievement of its objectives.

2020 Actual 2019 Actual $’000 $’000

Recovery of expenses 1 221 1 704 Board Fees 114 114 Other 102 99 Total 1 437 1 917

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NOTE 6: NET GAINS/(LOSSES)

6.1 Net gain/(loss) on non-financial assets Gains or losses from the sale of Non-financial assets are recognised when control of the assets has passed to the buyer. Key Judgement Impairment exists when the recoverable amount of an asset is less than its carrying amount. Recoverable amount is the higher of fair value less costs to sell and value in use. Specialised non-financial assets are not used for the purpose of generating cash flows, therefore their recoverable amount is expected to be materially the same as fair value, as determined under AASB 13 Fair Value Measurement. All other non-financial assets are assessed to determine whether any impairment exists, with impairment losses recognised in Statement of Comprehensive Income. Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the Estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

2020 2019 $’000 $’000

Net gain/(loss) on disposal of physical assets (51) (3) Total net gain/(loss) on non-financial assets (51) (3)

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NOTE 7: EXPENSES

Expenses are recognised in the Statement of Comprehensive Income when a decrease in future economic benefits related to a decrease in asset or an increase of a liability has arisen that can be measured reliably.

7.1 Employee benefits Employee benefits include, where applicable, entitlements to wages and salaries, annual leave, sick leave, long service leave, superannuation and any other post-employment benefits. (a) Employee expenses

2020 2019 $’000 $’000

Wages and salaries 26 780 25 228 Annual leave 2 065 1 986 Long service leave 564 542 Sick leave 422 410 Superannuation - defined contribution scheme 2 967 2 833 Superannuation - defined benefit scheme 758 706 Maternity leave 109 82 Other employee expenses 355 325 Total 34 020 32 113

Superannuation expenses relating to defined benefit schemes relate to payments into the Public Account. The amount of the payment is based on a department contribution rate determined by the Treasurer, on the advice of the State Actuary. The current department contribution is 12.95 per cent (2019: 12.95 per cent) of salary. Superannuation expenses relating to defined contribution schemes are paid directly to superannuation funds at a rate of 9.5 per cent (2019: 9.5 per cent) of salary. In addition, departments are also required to pay into the Public Account a “gap” payment equivalent to 3.45 per cent (2019: 3.45 per cent) of salary in respect of employees who are members of contribution schemes.

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(b) Remuneration of key management personnel

2020 Short-term benefits Long-term benefits

Salary Other Superannuation Other benefits Termination Total $’000 benefits $’000 & Long service benefits $’000 $’000 leave $’000 $’000

Key management personnel Tony Ferrall, Secretary 478 18 27 12 … 535 James Craigie, Deputy Secretary 235 17 22 57 … 331 Emsada Babic, Deputy Secretary 154 17 20 (5) … 186 Fiona Calvert, Deputy Secretary, appointed 30 March 2020 225 13 29 (5) … 262 Acting Deputy Secretary from 1 July 2019 – 29 March 2020 Jonathon Root, Deputy Secretary 214 17 20 1 … 252 Anton Voss, Deputy Secretary, ceased 70 9 7 … … 86 employment 27 September 2019 Total 1 376 91 125 60 … 1 652

2019 Short-term benefits Long-term benefits

Salary Other Superannuation Other benefits Termination Total $’000 benefits $’000 & Long service benefits $’000 $’000 leave $’000 $’000

Key management personnel Tony Ferrall, Secretary 472 18 25 (13) … 502 James Craigie, Deputy Secretary, 215 13 20 … … 248 appointed 9 July 2018 Emsada Babic, Deputy Secretary, 34 … 3 14 … 51 appointed 8 April 2019 Jonathon Root, Deputy Secretary 201 18 19 1 … 239 Anton Voss, Deputy Secretary 288 18 27 … … 333 Jane Beaumont, Deputy Secretary, ceased 126 16 12 … … 154 employment 17 January 2019 Acting key management personnel Fiona Calvert, Acting Deputy Secretary 81 15 10 3 … 109 From 29 January 2019 to 30 June 2019 Total 1 417 98 116 5 … 1 636

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Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the department, directly or indirectly. Remuneration during 2019–20 for key personnel is set by the State Service Act 2000. Remuneration and other terms of employment are specified in employment contracts. Remuneration includes salary, motor vehicle and other non-monetary benefits. Long term employee expenses include long service leave and superannuation obligations. Acting Arrangements When members of key management personnel are unable to fulfil their duties, consideration is given to appointing other members of senior staff to their position during their period of absence. Individuals are considered members of key management personnel when acting arrangements are for more than a period of one month. (c) Related party transactions There are no significant related party transactions requiring disclosure.

7.2 Depreciation and amortisation All applicable Non-financial assets having a limited useful life are systematically depreciated over their useful lives in a manner which reflects the consumption of their service potential. Land, being an asset with an unlimited useful life, is not depreciated. Key estimate and judgement Depreciation is provided for on a straight-line basis, using rates which are reviewed annually. Major depreciation periods are: Vehicles...... 2-5 years Plant and equipment...... 3-10 years Buildings...... 40 years Leasehold improvements...... 3-20 years Computer and office equipment...... 3-5 years In accordance with AASB 138 Intangible Assets, computer software intangible assets are amortised on a straight-line basis, as the pattern of consumption cannot be determined reliably. Major amortisation rates are: Computer software...... 3-10 years (a) Depreciation

2020 2019 $’000 $’000

Plant, equipment and vehicles 260 282 Total 260 282

(b) Amortisation

2020 2019 $’000 $’000

Intangible assets 944 944 Leasehold improvements 31 32 Total 975 976 Total depreciation and amortisation 1 234 1 257

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7.3 Supplies and consumables

2020 2019 $’000 $’000

Audit fees - financial audit 336 400 Audit fees - internal audit 77 107 Consultants 408 465 Maintenance and Property Services 1 725 1 705 Communications 427 443 Information technology 2 074 1 879 Travel and transport 295 346 Advertising and promotion 30 33 Other supplies and consumables 7 782 8 364 Total 13 154 13 743

Audit fees paid or payable to the Tasmanian Audit Office for the audit of the Department’s financial statements were $217 940 (2018–19, $217 940).

7.4 Grants and subsidies Grant and subsidies expenditure is recognised to the extent that: – the services required to be performed by the grantee have been performed; or – the grant eligibility criteria have been satisfied. A liability is recorded when the Department has a binding agreement to make the grants, but services have not been performed or criteria satisfied. Where grant monies are paid in advance of performance or eligibility, a prepayment is recognised.

2020 2019 $’000 $’000

Grants Community Support Levy grants 3 002 3 723 Community Service Obligations Bass Strait Islands Electricity Subsidy and Pensioner Concessions … 10 239 The Public Trustee 2 115 2 068 Total 5 117 16 030

Grant expenditure is represented by the distribution of the Community Support Levy to the Department of Communities Tasmania. Communities Tasmania provides administrative support for grant programs for: the provision of services to compulsive gamblers and for the benefit of charitable organisations; community education on gambling matters and activities in the category of other health services. The Department is responsible for Community Service Obligation payments in relation to: – the subsidised supply of electricity to Bass Strait Islands customers and the provision of concessions to pensioner customers on the Bass Strait Islands; funding is no longer received under the revised agreement. – the Public Trustee, which provides assistance in the administration of Absolute Estates, Continuing Trust and Life Tenancy Estates, Minor Trusts and Assets for Represented Persons.

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7.5 Other expenses Expenses from ordinary activities are recognised when it is probable that the consumption or loss of future economic benefits resulting in a reduction in assets and/or an increase in liabilities has occurred and the consumption or loss of future economic benefits can be measured reliably.

2020 2019 $’000 $’000

Salary oncosts Workers Compensation 250 248 Total 250 248

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NOTE 8: ASSETS

Assets are recognised in the Statement of Financial Position when it is probable that the future economic benefits will flow to the Department and the asset has a cost or value that can be measured reliably.

8.1 Receivables Receivables are initially recognised at fair value plus any directly attributable transaction costs. Trade receivables that do not contain a significant financing component are measured at the transaction price. Receivables are held with the objective to collect the contractual cash flows and are subsequently measured at amortised cost using the effective interest method. Any subsequent changes are recognised in the net result for the year when impaired, derecognised or through the amortisation process. An allowance for expected credit losses is recognised for all debt financial assets not held at fair value through profit and loss. The expected credit loss is based on the difference between the contractual cash flows and the cash flows that the entity expects to receive, discounted at the original effective interest rate. For trade receivables, a simplified approach in calculating expected credit losses is applied, with a loss allowance based on lifetime expected credit losses recognised at each reporting date. The Department has established a provision matrix based on its historical credit loss experience for trade receivables, adjusted for forward-looking factors specific to the receivable.

2020 2019 $’000 $’000

Receivables 544 166 Total 544 166

Tax assets 116 134 Other receivables 428 33 Total 544 166

Settled within 12 months 544 166 Total 544 166

For ageing analysis of the financial assets, refer to note 13.1.

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8.2 Other financial assets Other financial assets are classified and measured at amortised cost. Impairment losses are recorded in the Statement of Comprehensive Income. Any gain or loss arising on derecognition is recognised directly in net results and presented in other gains/(losses). The Department recognises an allowance for an expected credit loss for all debt financial assets not held at fair value through profit and loss is being recognised. The expected credit loss is based on the difference between the contractual cash flows and the cash flows that the entity expects to receive, discounted at the original effective interest rate.

2020 2019 $’000 $’000

Accrued revenue 382 355 Total 382 355

Settled within 12 months 382 355 Settled in more than 12 months … … Total 382 355

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8.3 Property, plant and equipment

Key estimate and judgement (i) Valuation basis Property, plant and equipment is recorded at fair value less accumulated depreciation. All other Non-current physical assets, including work in progress, are recorded at historic cost less accumulated depreciation and accumulated impairment losses. All assets within a class of assets are measured on the same basis. Cost includes expenditure that is directly attributable to the acquisition of the asset. The costs of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Fair value is based on the highest and best use of the asset. Unless there is an explicit Government policy to the contrary, the highest and best use of an asset is the current purpose for which the asset is being used or build occupied. (ii) Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Department and its costs can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of day to day servicing of property, plant and equipment are recognised in profit or loss as incurred. (iii) Asset recognition threshold The asset capitalisation threshold adopted by the Department is $5 000 exclusive of GST. Assets valued at less than the threshold amount are charged to the Statement of Comprehensive Income in the year of purchase (other than where they form part of a group of similar items which are material in total). (iv) Revaluations The Department has adopted a revaluation threshold of $50 000. Non-current assets measured at fair value are revalued with sufficient regularity to ensure the carrying amount of each asset does not differ materially from fair value at reporting date. Independent valuations are obtained at least every five years. Assets are grouped on the basis of having a similar nature or function in the operations of the Department. Heritage assets were last revalued on a fair value basis as at 30 June 2019. The revaluation was independently conducted by Ashmore Antiques Auctions. All assets held by Finance-General are disclosed in the Schedule of Administered Assets and Liabilities as administered assets, as Finance-General is responsible for administering whole-of-government activities. The Department’s administered Land and Buildings were last revalued by the Valuer-General, on a fair value basis, as at 30 June 2018.

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(a) Carrying amount

2020 2019 $’000 $’000

Leasehold improvements At cost 1 257 1 948 Less: Accumulated amortisation (1 151) (1 120) Less: Improvement disposals … (691) Total 106 137

Plant, equipment and vehicles At cost 1 982 1 871 Less: Accumulated depreciation (1 232) (1 270) Total 750 601

Heritage assets At fair value 158 186 Total 158 186 Total Property, plant and equipment 1 014 924

The revaluation of heritage assets as at 30 June 2019 was independently conducted. The valuer was A F Colman of Ashmore Antiques Auctions. The revaluation was based on an approximate cost based on knowledge and skills through Heritage collections within Tasmania. Revaluations are shown on a gross basis where a replacement cost basis of valuations has been used. Asset revaluations based on a market basis have been disclosed on a net basis.

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(b) Reconciliation of movements (including fair value levels) Reconciliations of the carrying amounts of each class of Property, plant and equipment at the beginning and end of the current and previous financial year are set out below. Carrying value means the net amount after deducting accumulated depreciation and accumulated impairment losses.

2020 Leasehold Plant, equipment Heritage assets Total improvements & vehicles Level 3 $’000 $’000 $’000 $’000

Carrying value at 1 July 137 601 186 924 Additions … 434 … 434 Depreciation and amortisation (31) (260) … (290) Loss on disposal … (25) (28) (53) Carrying value at 30 June 106 750 158 1 014

2019 Leasehold Plant, equipment Heritage assets Total improvements & vehicles Level 3 $’000 $’000 $’000 $’000

Carrying value at 1 July 169 699 84 952 Additions … 187 … 187 Fair value of assets recognised … … 91 91 Depreciation and amortisation (32) (282) … (314) Revaluation … … 11 11 Loss on disposal … (3) … (3) Carrying value at 30 June 137 601 186 924

Fair value Significant unobservable Possible alternative values for Sensitivity of fair value to changes in at 30 June inputs used in valuation Level 3 inputs Level 3 inputs $’000

A description and location Valuing these assets is an inexact The values are based on knowledge science and it is not likely, that and skill set of the valuer which are Heritage B approximate age 158 alternative values, applying likely to increase / decrease inputs. assets C values represent other inputs would result in a As a result, it is likely that values will an approximate materially different value. increase / decrease. cost

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8.4 Intangible assets An intangible asset is recognised where: – it is probable that an expected future benefit attributable to the asset will flow to the Department; and – the cost of the asset can be reliably measured. Intangible assets held by the Department are valued at fair value less any subsequent accumulated amortisation and any subsequent accumulated impairment losses where an active market exists. Where no active market exists, intangible assets are valued at cost less any accumulated amortisation and any accumulated impairment losses. (a) Carrying amount

2020 2019 $’000 $’000

Intangible assets with a finite useful life Software at cost 10 828 10 828 Less: Accumulated amortisation (4 467) (3 523) Work in progress (at cost) 2 056 1 019 Total 8 418 8 324

(b) Reconciliation of movements (including fair value levels)

2020 Total 2019 Total $’000 $’000

Carrying amount at 1 July 8 324 8 249 Work in progress at cost 1 037 1 019 Depreciation / amortisation expense (944) (944) Carrying amount at 30 June 8 418 8 324

8.5 Other assets

(a) Carrying amount

2020 2019 $’000 $’000

Other current assets Prepayments 489 545 Total 489 545

Recovered within 12 months 478 501 Recovered in more than 12 months 11 44 Total 489 545

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NOTE 9: LIABILITIES

Liabilities are recognised in the Statement of Financial Position when it is probable that an outflow of resources embodying economic benefits will result from the settlement of a present obligation and the amount at which the settlement will take place can be measured reliably.

9.1 Payables Payables, including goods received and services incurred but not yet invoiced, are recognised at amortised cost, which due to the short settlement period, equates to face value, when the Department becomes obliged to make future payments as a result of a purchase of assets or services.

2020 2019 $’000 $’000

Creditors (5) 16 Accrued expenses 656 736 Paid Parental Leave Scheme liabilities 1 4 Total 652 756

Settled within 12 months 652 756 Settled in more than 12 months … … Total 652 756

Settlement is usually made within 30 days.

9.2 Lease liabilities On 1 July 2019, a lease liability is measured at the present value of the lease payments that are not paid at that date. The discount rate used to calculate the present value of the lease liability is the rate implicit in the lease. Where the implicit rate is not known and cannot be determined the TASCORP indicative lending rate including the relevant administration margin is used. The Department has elected not to recognise right-of-use assets and lease liabilities arising from short-term leases, and rental arrangements for which Finance-General has substantive substitution rights over the assets and leases for which the underlying asset is of low-value. Substantive substitution rights relate primarily to office accommodation. An asset is considered low-value when it is expected to cost less than $10 000.

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9.3 Employee benefit liabilities

Key estimate and judgement Liabilities for wages and salaries and annual leave are recognised when an employee becomes entitled to receive a benefit. Those liabilities expected to be realised within 12 months are measured as the amount expected to be paid. Other employee entitlements are measured as the present value of the benefit at 30 June, where the impact of discounting is material, and at the amount expected to be paid if discounting is not material. A liability for long service leave is recognised, and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date.

2020 2019 $’000 $’000

Accrued salaries 503 254 Annual leave 2 398 2 132 Long service leave 5 425 5 362 Other - Purchased Leave Scheme 23 30 Other - SSALS Provision 64 33 Total 8 412 7 811

Expected to settle wholly within 12 months 3 761 3 246 Expected to settle wholly after 12 months 4 651 4 565 Total 8 412 7 811

9.4 Other liabilities

2020 2019 $’000 $’000

Revenue received in advance Appropriation carried forward from current and previous years under … 1 760 section 8A(2) of the Public Account Act 1986 Other liabilities Employee benefit liabilities – on-costs 55 53 Total 55 1 813

Settled within 12 months 23 1 768 Settled in more than 12 months 33 45 Total 55 1 813

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NOTE 10: COMMITMENTS AND CONTINGENCIES

10.1 Schedule of commitments In 2018–19, the Department had entered into a number of operating lease agreements for property, plant and equipment, where the lessors effectively retain all the risks and benefits incidental to ownership of the items leased. Equal instalments of lease payments were charged to the Statement of Comprehensive Income over the lease term, as this is representative of the pattern of benefits to be derived from the leased property. From 2019–20, leases are recognised as right of use assets and lease liabilities in the Statement of Financial Position, excluding short term leases and leases for which the underlying asset is of low value, which are recognised as an expense in the Statement of Comprehensive Income.

2020 2019 $’000 $’000

By type Lease commitments Short-term and/or low-value leases 3 17 Buildings … 1 542 Total lease commitments 3 1 559

Other commitments Community Service Obligation - Public Trustee 2 163 … Fifth Social and Economic Impact Study of Gambling in Tasmania 817 … Budget Management Information System Support 390 … Total other commitments 3 370 …

By maturity Operating lease commitments One year or less 3 188 From one to five years … 770 More than five years … 601 Total operating lease commitments 3 1 559

Other commitments One year or less 3 370 … From one to five years … … More than five years … … Total other commitments 3 370 … Total 3 373 …

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The Department occupies office accommodation at Parliament Square in Hobart, Kirksway Place in Hobart, Henty House in Launceston. Lease rentals are generally based on negotiated agreements that reflect the current market rent rates paid for comparable buildings within the precinct. There are no formal lease agreements in place and therefore they are not included in Commitments. The lease liability and right-of-use asset for major office accommodation above is recognised on the Finance-General Financial Position, on behalf of the Crown. The Department recognises the outgoings associated with the occupation of major office accommodation expenses. The commitment to the Public Trustee represents the Community Service Obligation agreement for the Public Trustee to provide administration services for the 2020-21 year. The commitment for the Fifth Social and Economic Impact Study of Gambling in Tasmania represents the tender awarded to undertake the study as required under the Gaming Control Act 1993 for the 2020-21 year. The commitment for the Department’s Budget Management System includes system licencing, hosting and support provided by Performa Software Pty Ltd.

10.2 Contingent assets and liabilities Contingent assets and liabilities are not recognised in the Statement of Financial Position due to uncertainty regarding any possible amount or timing of any possible underlying claim or obligation. (a) Quantifiable contingencies A quantifiable contingent asset is any possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. A quantifiable contingent liability is any possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or any present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation. To the extent that any quantifiable contingencies are insured, details provided below are recorded net. The Department has no quantifiable contingencies for year ended 30 June 2020. (b) Unquantifiable Contingencies The Department has no unquantifiable contingencies for the year ended 30 June 2020

Department of Treasury and Finance Annual Report 2019–20 81 1 2 3 4 5 6

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NOTE 11: RESERVES

11.1 Reserves

2020 Heritage & Total cultural assets $’000 $’000

Reserves Balance at beginning of financial year 11 11 Balance at end of financial year 11 11

Asset revaluation reserve Balance at beginning of financial year 11 11 Revaluation increments / (decrements) … … Balance at end of financial year 11 11

Nature and purpose of reserves Asset revaluation reserve The Asset revaluation reserve is used to record increments and decrements on the revaluation of Non-financial assets.

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NOTE 12: CASH FLOW RECONCILIATION

Cash means notes, coins, any deposits held at call with a bank or financial institution, as well as funds held in Specific Purpose Accounts, being short term of three months or less and highly liquid. Deposits are recognised at amortised cost, being their face value.

12.1 Cash and cash equivalents Cash and cash equivalents includes the balance of the Specific Purpose Accounts held by the Department, and other cash held, excluding those accounts which are administered or held in a trustee capacity or agency arrangement.

2020 2019 $’000 $’000

Specific Purpose Account balances T525 Operating Account1 … 4 848 T615 Contract Management Account1 … 4 097 T624 Community Support levy Account1 … 506 S525 Financial Management Account 8 490 … Total 8 490 9 451 Other cash held Cash Floats 1 1 Total 1 1 Total Cash and cash equivalents 8 491 9 451

1 Accounts transitioned as accounts within the Finance-General Financial Management Account from 1 July 2019 as part of the implementation of the Financial Management Act 2016.

12.2 Reconciliation of Net Result to Net Cash from Operating Activities

2020 2019 $’000 $’000

Net result 833 1 280 Depreciation and amortisation 1 234 1 257 (Gain) loss on non-financial assets 53 (98) Decrease (increase) in Receivables (395) (22) Decrease (increase) in Prepayments 56 141 Decrease (increase) in Accrued revenue (28) 129 Decrease (increase) in Tax assets 18 166 Increase (decrease) in Employee benefit liabilities 601 192 Increase (decrease) in Payables (104) 23 Increase (decrease) in Other liabilities (1 759) 94 Net cash from (used by) operating activities 509 3 162

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12.3 Acquittal of Capital Investment and Special Capital Investment Funds The Department received Capital Appropriation funding and revenues from Special Capital Investment Funds to fund specific projects. Cash outflows relating to these projects are listed below by category. Budget information refers to original estimates and has not been subject to audit. (a) Project expenditure

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Capital Investment Program Budget Information Management Systems 1 302 1 037 1 014 Total 1 302 1 037 1 014

(b) Classification of cash flows The project expenditure above is reflected in the Statement of Cash Flows as follows.

2020 2019 $’000 $’000

Cash outflows Payments for acquisition of assets 1 037 1 014 Total cash outflows 1 037 1 014

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NOTE 13: FINANCIAL INSTRUMENTS

13.1 Risk exposures

(a) Risk management policies The Department has exposure to the following risks from its use of financial instruments: – credit risk; – liquidity risk; and – market risk. The Accountable Authority has overall responsibility for the establishment and oversight of the Department’s risk management framework. Risk management policies are established to identify and analyse risks faced by the Department, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. (b) Credit risk exposures Credit risk is the risk of financial loss to the Department if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Financial Instrument Accounting and strategic policies (including recognition Nature of underlying instrument (including criteria, measurement basis and credit quality of significant terms and conditions affecting the instrument) amount, timing and certainty of cash flows)

Financial Asset Receivables/Other Receivables are recognised at the nominal amounts Credit terms are generally 30 days. financial assets due, less any provision for impairment. Other financial assets are recognised at the amount receivable. Collectability of debts is reviewed on a monthly basis. Provisions are made when collection of the debt is judged to be less, rather than more, likely. Cash and cash Cash and deposits are recognised at face value. Cash means notes, coins and any equivalents deposits held at call with a bank or It is a requirement for any changes in deposit strategy financial institution. to be approved by the Treasurer

The carrying amount of financial assets recorded in the Financial Statements, net of any allowances for losses, represents the Department’s maximum exposure to credit risk without taking into account of any collateral or other security. Expected credit loss analysis of receivables The simplified approach would be used to measure expected credit losses. This uses a lifetime expected loss allowance for all trade receivables. Expected credit losses for financial assets have not been recognised in the current year.

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(c) Liquidity risk Liquidity risk is the risk that the Department will not be able to meet its financial obligations as they fall due. The Department’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when they fall due.

Financial Instrument Accounting and strategic policies (including recognition criteria, Nature of underlying instrument measurement basis and credit quality of instrument) (including significant terms and conditions affecting the amount, timing and certainty of cash flows)

Maturity analysis for financial liabilities The following tables detail the undiscounted cash flows payable by the Department by remaining contractual maturity for its financial liabilities. It should be noted that as these are undiscounted, totals may not reconcile to the carrying amounts presented in the Statement of Financial Position:

2020 1 year 2 years 3 years 4 years 5 years 5+ years Undiscounted Carrying $’000 $’000 $’000 $’000 $’000 $’000 Total Amount $’000 $’000

Financial liabilities Payables 652 … … … … … 652 652 Total 652 … … … … … 652 652

2019 1 year 2 years 3 years 4 years 5 years 5+ years Undiscounted Carrying $’000 $’000 $’000 $’000 $’000 $’000 Total Amount $’000 $’000

Financial liabilities Payables 756 … … … … … 756 756 Total 756 … … … … … 756 756

(d) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The primary market risk, that the Department is exposed to, is interest rate risk. As at 30 June 2020, there is no interest rate exposure on controlled activities, as all financial instruments are non-interest bearing.

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13.2 Categories of Financial Assets and Liabilities

2020 2019 $’000 $’000

Financial assets Cash and cash equivalents 8 491 9 451 Financial assets measured at amortised cost 926 521 Total 9 417 9 972

Financial Liabilities Financial liabilities measured at amortised cost 652 756 Total 652 756

NOTE 14: DETAILS OF CONSOLIDATED ENTITIES

14.1 List of entities The Office of the Tasmanian Economic Regulator (OTTER) is not controlled by the Department and has not been consolidated. However, OTTER is included as an Output in the Departments budget figures disclosed in the 2019-20 Budget Papers.

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NOTE 15: NOTES TO ADMINISTERED STATEMENTS

15.1 Administered Expenditure under Australian Government Funding Arrangements

State Funding Australian Government Funding

2020 Actual 2019 Actual 2020 Actual 2019 Actual $’000 $’000 $’000 $’000

National Partnership Program Via appropriation Natural Disaster Relief - Floods 7 844 1 027 … … Australian Government Contribution for Extension of 197 163 … … Pension Concessions Agency Reimbursements by program type Health Community Services … … 198 209 Education … … 9 4 Health … … 58 115 113 215 Education Education … … 17 177 13 946 Finance-General Environment … … 15 000 … Local Government Grant Prepayment … … … 39 396 Disaster Resilience and Relief … … … 1 808 Communities Tasmania Housing … … 2 513 423 Community Services … … 425 10 367 Health … … 4 435 8 017 Justice Community Service … … 1 006 605 Other - Community Legal Centres … … 195 168 Other - Community Legal Services … … 8 220 7 311 Police, Fire and Emergency Management Environment … … 45 … Other - Disaster Resilience … … 872 1 172 Other - Bushfire Mitigation … … 143 147 Other - Provision of Fire Services … … 328 317 Other - Family Law Information Sharing … … 14 … Primary Industries, Parks, Water and Environment Environment … … 10 695 9 184 Other - Tourism Icon Package … … 200 …

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15.1 Administered Expenditure under Australian Government Funding Arrangements (continued)

State Funding Australian Government Funding

2020 Actual 2019 Actual 2020 Actual 2019 Actual $’000 $’000 $’000 $’000

State Growth Education … … … 698 Environment … … 731 … Health … … 340 … Infrastructure … … 64 326 135 694 Skills and Workforce … … 5 683 6 373 Other - Developing Demand Driver Infrastructure for … … … 1 419 the Tourism Industry Other - Regional Tourism Infrastructure and … … … 30 Investment Fund Total 8 041 1 190 190 669 353 501

15.2 Explanations of Material Variances between Budget and Actual Outcomes Budget information refers to original estimates as disclosed in the 2019–20 Budget Papers and is not subject to audit. Variances are considered material where the variance exceeds the greater of 10 per cent of budget estimate or $5 million. (a) Schedule of Administered Income and Expenses

Notes Budget Actual Variance Variance $’000 $’000 $’000 %

Appropriation revenue - capital (a) 12 334 2 334 (10 000) (81.08) Other revenue from Government (b) … 8 670 8 670 100 Grants (c) 3 476 237 3 317 845 (158 392) (4.56) State taxation (d) 1 095 923 1 144 058 48 135 4.39 Net gain/(loss) on non-financial assets (e) 2 640 8 686 6 046 229.01 Superannuation (f) 399 954 336 179 (63 775) (15.95) Depreciation and amortisation (g) 31 915 53 212 21 297 66.73 Supplies and consumables (h) 118 951 101 696 (17 255) (14.51) Grants and subsidies (i) 502 887 437 650 (65 237) (12.97) Finance costs (j) 12 982 7 558 (5 424) (41.78) Other expenses (k) (50 000) … 50 000 100 Net actuarial gain/(losses) on (l) … (44 729) (44 729) 100 superannuation liability Net gain/(loss) on Tasmanian Risk (m) (6 661) (9 409) (2 748) 41.26 Management Fund Gain/(loss) on revaluation of equity (n) (227 627) (499 990) (272 363) 119. 6 5 investments

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Notes to Schedule of Administered Income and Expenses variances (a) The decrease in Appropriation revenue - capital of $10 million primarily reflects the timing of cash flows associated with the Digital Transformation Priority Expenditure Program. (b) The increase in Other Revenue from Government of $8.7 million primarily reflects the Section 8A(2) Carry forwards for the Digital Transformation Priority Expenditure Program, Project Unify, Tasmanian Irrigation Renewable Energy Program, Statutory Maintenance and Office Works Program, Tasmanian Cycle Tourism Strategy and Energy Rebates for Business (c) The decrease in Grants Revenue of $158.4 million primarily reflects a decrease in revenue received from the Australian Government for GST and National Partnership Agreements. (d) The increase in State taxation of $48.1 million reflects an increase of $81.1 for Financial Transaction taxes which primarily reflects an increase in Conveyance duty. This increase is partially offset by a decrease of $36.1 million in Payroll tax. (e) The increase in the Net gain/(loss) of non-financial assets primarily reflects the gain on the sale of Crown property at Elizabeth Street Pier. (f) The decrease in Superannuation expenditure primarily reflects the latest advice provided by the State’s Actuary and a revised discount rate. (g) The increase in Depreciation and amortisation primarily reflects an increase in the depreciation associated with right- of-use assets under AASB 16. (h) The decrease in Supplies and consumables primarily reflects the full amortisation of the Treasurer’s Reserve of $10 million and a decrease of $3.1 million for Government Business Structural reviews. (i) The decrease in Grants and Subsidies expenditure of $65.2 million primarily reflects a reduction in expenditure relating to National Partnership Agreements. (j) The decrease in Finance costs of $5.4 million primarily reflects a reduction in expenditure associated with the Commonwealth State Housing Agreements. (k) The increase in Other Expenses of $50 million primarily reflects the reallocation of the Budget Savings Measures allocated to Finance-General to other Agencies. (l) The Net loss on superannuation liability reflects the latest advice provided by the State’s Actuary as to the total superannuation liability. (m) The increase in the Net loss on Tasmanian Risk Management Fund reflects the latest advice provided by the State’s Actuary. (n) The increase in the loss on revaluation of equity investments reflects the total net Assets of Government Businesses as at 30 June 2020.

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(b) Schedule of Administered Assets and Liabilities Budget estimates for the 2019–20 Schedule of Administered Assets and Liabilities were compiled prior to the completion of the actual outcomes for 2019–20. As a result, the actual variance from the Original Budget estimate will be impacted by the difference between estimated and actual opening balances for 2019–20. The following variance analysis therefore includes major movements between the 30 June 2019 and 30 June 2020 actual balances.

Notes Budget 2020 Actual 2019 Actual Budget Variance Actual Variance $’000 $’000 $’000 $’000 $’000

Receivables (a) 99 290 96 408 105 741 (2 882) (9 333) Equity investments (b) 5 491 493 4 843 899 5 243 987 (647 594) (400 088) Other financial assets (c) 1 046 796 518 633 775 683 (528 163) (257 050) Property, plant and equipment (d) 143 765 137 971 166 710 (5 794) (28 739) Infrastructure (e) 31 888 21 747 14 853 (10 141) 6 894 Right-of-use assets (f) 153 311 279 591 … 126 280 225 157 Interest bearing liabilities (g) 1 625 122 740 002 537 600 (885 120) 279 591 Other liabilities (h) 250 418 952 960 937 536 702 542 15 423 Lease liabilities (i) 154 293 285 889 … 131 596 285 889 Contract liabilities (j) 76 156 216 984 … 140 828 216 984

Notes to Schedule of Administered Assets and Liabilities variances Variances between Original Budget and 2020 Actual (a) The decrease in Receivables of $2.9 million primarily reflects a decrease in State taxation. (b) The decrease in Equity investments of $647.6 million reflects a decrease in the Net Assets of Government Businesses. (c) The decrease in Other Financial Assets of $528.2 million reflects a decrease in the Tax Assets associated with Government Businesses and the waiver of the Commonwealth State Housing Agreement Debt. (d) The decrease in Property, plant and equipment of $5.7 million primarily reflects an increase in depreciation expenditure associated with Leasehold improvements. (e) The decrease in Infrastructure Assets of $10.1 million primarily reflects a decrease in expenditure associated with the Digital Transformation Priority Expenditure Program. (f) The increase in Right-of-use assets of $126.3 million primarily reflects the inclusion of agency lease agreements to reflect the total Whole-of-Government leases. (g) The decrease in Interest bearing liabilities of $885.1 million primarily reflects the repayment of the Overnight Borrowings and the waiver of the Commonwealth State Housing Agreement Debt. (h) The increase in Other liabilities primarily reflects monies held on behalf of other agencies being reclassified from Interest bearing liabilities. (i) The increase in Lease liabilities of $131.6 million primarily reflects the inclusion of agency lease agreements to reflect the total Whole-of-Government leases. (j) The increase in Contract Liabilities reflects an increase in the revenue received in advance liability associated with National Partnership Agreements and reflects the timing adherence to the performance obligations associated with those Agreements.

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Variances between 2019 Actual and 2020 Actual (a) The decrease in Receivables of $9.3 million primarily reflects a decrease of $8.7 million in State taxation receivables. (b) The decrease in Equity investments of $400 million primarily reflects the Net Assets of Government Businesses. (c) The decrease in Other financial assets of $257 million primarily reflects the waiver of the Commonwealth State Housing Agreement Debt which was advanced to the Department of Communities Tasmania. (d) The decrease in Property, plant and equipment of $28.7 million primarily reflects the sale of the Elizabeth Street Pier. (e) The increase in Infrastructure of $6.9 million reflects capital expenditure associated with Project Unify and the Digital Transformation Priority Expenditure Program. (f) The increase in Right-of-use assets reflects the new requirements under AASB 16Leases for the 2019–20 financial year. (g) The increase in Interest bearing liabilities of $202.4 million primarily reflects an increase in total borrowings held with the Tasmanian Public Finance Corporation which is partially offset by the waiver of Commonwealth State Housing Debt. (h) The increase in Other liabilities primarily reflects an increase in the total Tasmanian Risk Management Fund liability as advised by the State’s Actuary. (i) The increase in Lease liabilities reflects the new requirements under AASB 16Leases for the 2019-20 financial year. (j) The increase in Contract liabilities reflects the new requirements under AASB 15Revenue from Contracts with Customers for the 2019-20 financial year. (c) Schedule of Administered Cash Flows

Notes Budget Actual Variance Variance $’000 $’000 $’000 %

State taxation (d) 1 095 954 1 150 580 54 626 4.98 Grants (c) 3 341 607 3 292 412 (49 195) (1.47) Superannuation (f) (300 363) (285 554) 14 809 4.93 Finance costs (j) (13 008) (6 302) 6 706 59.05 Grants and subsidies (i) (502 887) (430 268) 72 619 14.44

Notes to Schedule of Administered Cash Flows variances Explanations for all variances are provided in the explanations of variances for the Schedule of Administered Income and Expenses.

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15.3 Administered Underlying Net result The Underlying Net result is a measure which removes the distorting impact of one-off non-operational capital funding. Non-operational capital funding includes one-off Australian Government funding for specific capital projects and other non-operational capital related funding received from the Australian Government. There is no Non-operational capital funding for 2019–20.

Notes 2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Net result (290 228) (504 060) (291 792) Less impact of: Non-operational capital funding … … … Total (290 228) (504 060) (291 792) Underlying net result (290 228) (504 060) (291 792)

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15.4 Administered Revenue from Government For significant Accounting Policies relating to Administered Revenue from Government please refer to note 5.1.

2020 Budget 2020 Actual 2019 Actual $’000 $’000 $’000

Continuing operations Appropriation revenue - operating Current year 328 260 332 411 301 121 Items Reserved by Law Superannuation benefits payable under theSolicitor-General Act 1983 290 269 268 Payments under the Public Sector Superannuation Reform 1 017 966 967 (Parliamentary Superannuation) Regulations 2016 Superannuation benefits payable under theJudges ’ Contributory Pensions Act 1968 2 086 1 884 1 915 Payments to Municipalities under the Local Government (Rates and Charges Remissions) Act 1991 18 432 17 484 17 155 Superannuation benefits payable underthe Public Sector Superannuation Reform Act 2016 296 698 282 138 283 280 Superannuation benefits payable under theGovernor of Tasmania Act 1982 122 111 113 646 905 635 263 604 819 Appropriation revenue - capital 12 334 2 334 20 097 Other revenue from Government Appropriation carried forward under section 8A(2) of the Public … 8 670 15 501 Account Act 1986 taken up as revenue in the current year Total revenue from Government from continuing operations 659 239 646 267 640 417 Total revenue from Government 659 239 646 267 640 417

15.5 Administered Grants In 2018–19, Grants payable by the Australian Government were recognised as revenue when Finance-General gained control of the underlying assets. Where grants are reciprocal, revenue was recognised as performance occurred under the grant. Non-reciprocal grants were recognised as revenue when the grant was received or receivable. Conditional grants were reciprocal or non-reciprocal depending on the terms of the grant. From 2019–20, Grants revenue, where there is a sufficiently specific performance obligation attached, is recognised when the Department satisfies the performance obligation and transfers the promised goods or services. In 2019–20 payments that meet this requirement are those made from the Australian Government to the State under National Partnership Agreements (NPA). The Department recognises revenue as agencies achieve performance obligations or over time as agencies make progress towards the delivery of outputs as required under specific NPAs. Agencies are reimbursed in arrears after costs have been incurred and obligations have been met or progressed. Note 15.20 outlines the transaction price that is allocated to the performance obligations that have not yet been satisfied at the end of the year and when it is expected to be recognised as revenue. Grants revenue without a sufficiently specific performance obligation is recognised when the Department gains control of the asset (typically Cash).

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2020 Actual 2019 Actual $’000 $’000

Grants with sufficiently specific performance obligations National Partnership Payments Health services 62 890 ... Education 17 186 ... Community services 1 629 ... Housing 2 513 ... Infrastructure services 81 927 ... Environmental services 40 441 ... Skills and workforce development 5 031 ... Other services 34 259 ... Total 245 876 ... Grants without sufficiently specific performance obligations General Purpose Grants GST Revenue 2 401 924 … Specific Purpose Payments Grant to the State for Local Government 79 194 ... Education 521 542 ... Skills and workforce development 32 366 ... Disability services 28 ... Affordable housing 34 120 ... National Disaster Relief and Recovery Arrangements ... TRMF 2 795 ... Total 3 071 968 ... Continuing operations Grants from the Australian Government General Purpose Grants GST Revenue ... 2 445 126 Specific Purpose Payments Grant to the State for Local Government ... 77 656 Education ... 483 635 Skills and workforce development ... 32 125 Disability services ... 34 139 Affordable housing ... 33 026 National Partnership Payments Health services ... 40 252 Education ... 12 479 Community services ... 107 563 Infrastructure services ... 108 411 Environmental services ... 111 071 Skills and workforce development ... 5 460 Other services ... 17 720 Total 3 317 845 3 508 662

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15.6 Administered State taxation Revenue from State taxation is recognised upon the first occurrence of either: – receipt by the State of a taxpayer’s self-assessed taxes; or – the time the obligation to pay arises, pursuant to the issue of an assessment.

2020 Actual 2019 Actual $’000 $’000

Payroll tax 346 425 373 805 Land tax 124 860 107 663 Motor vehicle tax 101 058 93 866 Financial transactions tax 467 795 395 092 Gambling taxes 89 517 95 859 Guarantee fees 14 404 15 688 Total 1 144 058 1 081 973

15.7 Administered Sales of goods and services Amounts earned in exchange for the provision of goods are recognised when the significant risks and rewards of ownership have been transferred to the buyer. Revenue from the provision of services is recognised in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to surveys of work performed.

2020 Actual 2019 Actual $’000 $’000

Fleet management reimbursement from agencies 15 789 15 871 Risk management contributions from agencies 75 140 67 038 Property related income 35 800 19 714 Total 126 728 102 623

15.8 Administered Investment income Loan guarantee fees made by Government businesses are brought to account as they are received. Dividend and tax equivalent payments from Government businesses are recognised as administered revenue on the date that the right to receive payment is established.

2020 Actual 2019 Actual $’000 $’000

Dividends and tax equivalent income 453 667 354 951 Rates equivalents 4 573 4 425 Interest income 7 544 26 569 Mersey dividend 83 708 80 877 Total 549 493 466 822

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15.9 Administered Other revenue For significant Accounting Policies relating to Other revenue please refer to note 5.4.

2020 Actual 2019 Actual $’000 $’000

Superannuation contributions from agencies and authorities 109 238 108 048 Other 3 831 13 407 Total 113 069 121 454

15.10 Administered Net gain/(loss) on non-financial assets For significant Accounting Policies relating to Net gain/(loss) on non-financial assets please refer to note 6.1.

2020 2019 $’000 $’000

Net gain/(loss) on disposal of property, plant, equipment and vehicles 3 045 2 879 Net gain/(loss) on disposal of land and buildings 5 640 … Total net gain/(loss) on non-financial assets 8 686 2 879

15.11 Administered Net gain/(loss) on financial instruments and statutory receivables/payables Financial assets are impaired under the expected credit loss approach required under AASB 9 Financial Instruments. The expected credit loss is recognised for all debt instruments not held at fair value through profit or loss. Key Judgement An impairment loss using the expected credit loss method for all trade debtors uses a lifetime expected loss allowance. The expected loss rates are based upon historical observed loss rates that are adjusted to reflect forward looking macroeconomic factors. For other financial instruments that are not trade receivables, contract assets or lease receivables, the Department has measured the expected credit loss using a probability-weighted amount that takes into account the time value of money and forward-looking macroeconomic factors.

2020 2019 $’000 $’000

Impairment of statutory receivables 485 (115) Movement in deferred Income Tax Equivalents (87 201) (130 897) Total net gain/(loss) on financial instruments and statutory receivables (86 716) (131 012)

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15.12 Administered Superannuation Expenses

2020 2019 $’000 $’000

Employer service cost 156 185 122 885 Interest cost 213 918 298 131 Expected return on plan assets (33 963) (54 841) Other 39 49 Total 336 179 366 224

15.13 Administered Depreciation and amortisation For significant Accounting Policies relating to Depreciation and amortisation please refer to note 7.2.

2020 2019 $’000 $’000

Plant, equipment and vehicles 14 965 15 193 Buildings 1 097 765 Leasehold improvements 5 463 2 594 Right-of-use assets 31 687 … Total 53 212 18 551

15.14 Administered Supplies and consumables For significant Accounting Policies relating to Supplies and consumables please refer to note 7.3.

2020 2019 $’000 $’000

GST administration contribution 13 591 12 640 Tasmanian Risk Management Fund 73 686 70 753 Fleet management 1 161 1 202 Property management 12 776 28 075 Other 482 1 493 Total 101 696 114 163

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15.15 Administered Grants and subsidies For significant Accounting Policies relating to Grants and subsidies please refer to note 7.4.

2020 2019 $’000 $’000

Grants Special Capital Investment Fund grants … 12 203 National Partnership Payments 190 669 315 885 Local Government grants 79 194 77 581 First Home Builder Assistance 13 713 12 387 Natural Disaster Relief and Recovery 6 497 2 294 Payroll Tax assistance 7 675 6 553 Tasmanian Government Radio Network 13 242 11 850 State Fire Contribution 27 406 62 603 Energy Rebates for Business 3 942 13 232 Public Building Maintenance Program 9 508 … Other 10 412 12 921

Subsidies Water and Sewerage Community Service Obligation concessional payments 8 379 8 228 Energy Retailer Concession Community Service Obligation 41 825 40 318 Payments under the Local Government (Rates and Charges Remissions) Act 1991 23 017 17 155 Sustainable Timber Tasmania 2 000 2 504 Other 171 1 260 Total 437 650 596 975

Special Capital Investment Fund grants The former Hospitals Capital Fund and Infrastructure Tasmania Fund were transferred to the Department of Health in June 2019. The former Housing Fund was transferred to the Department of Communities Tasmania in June 2019. National Partnership Payments National Partnership Payments are time-limited agreements between the State and the Australian Government to support the delivery of specific outcomes or projects and/or facilitate the implementation or reward the delivery of national reforms. NPPs are conditional (tied) funding which must only be spent for purposes agreed with the Australian Government.

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Local Government Grants Local Government Financial Assistance Grants consist of two Australian Government funding components, general purpose (base grant) funding, and identified local road (road grant) funds. Under the Australian Government’s Local Government (Financial Assistance) Act 1995, the Australian Government each year provides financial assistance grants to the states for on passing as general purpose grants to local government. The base grant funding is distributed amongst states and territories based on population share, whereas the road grant funding is distributed amongst states and territories according to proportions historically agreed to by all jurisdictions. The financial assistance grant funds are distributed amongst councils on the basis of recommendations made by the State Grants Commission (the Commission) to the Treasurer and ultimately approved by the Australian Government Minister for Local Government. The Commission is required to make its recommendations for the distribution of the funds in accordance with the National Principles currently in force under the Australian Government Act. Six National Principles currently apply for determining the distribution of the base grant funding, including the three key principles of horizontal fiscal equalisation, effort neutrality and minimum grant. The National Principle for determining the distribution of the road grant funding is asset preservation. First Home Builder Assistance In line with changes to the First Home Owner Scheme (FHOS) principles in the Intergovernmental Agreement on Federal Financial Relations, the Government has chosen to target the FHOS to new homes only under the “Newly Constructed Scheme”. This focus is expected to support the creation and retention of skilled tradespeople in the Tasmanian building industry. The First Home Owner Grant was $20 000 in 2019-20. Natural Disaster Relief and Recovery This Scheme provides for payments to local government authorities that face the eligible costs of restoring or replacing essential public assets which have been damaged as a direct result of a disaster, to a pre-disaster standard. Disasters for which relief is available are determined at the national level and include any one of, or a combination of, the following natural hazards: bushfire; earthquake; flood; storm; cyclone; storm surge; landslide; tsunami; meteorite strike or tornado. Payroll Tax Assistance Payroll Tax Assistance Grants provide financial assistance to organisations subject to various eligibility criteria and include the targeted Payroll Tax Rebate for trainees, apprentices and youth employees. Tasmanian Government Radio Network The purpose of this Grant is to provide funding for the Tasmanian Government Radio Network upgrade, administered by the Department of Police, Fire and Emergency Management. State Fire Contribution The State Fire Commission received an annual appropriation of $12.8 million in 2019-20. An additional $14.6 million was provided for wildfire fighting costs, in particular, for the 2019-20 wildfire events. Energy Rebates for Business The Government provides funding to cushion businesses from the impact of continuing high wholesale electricity prices in the National Electricity Market. Public Building Maintenance Program The Government’s Public Building Maintenance Program provides funding for critical maintenance on public buildings and other publically owned assets. The Program is part of the Social and Economic Support Measures announced in 2019–20 in response to the COVID-19 pandemic. Other Grants Other grants expenditure primarily reflects support for Copper Mines of Tasmania, City Deal Launceston and the Tasmanian Cycle Tourism Strategy.

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Water and Sewerage Community Service Obligations Concession Payments Under the Water and Sewerage Industry (Community Service Obligation) Act 2009, concessions are made available to eligible low-income households and pensioners to assist them in meeting the cost of services provided by TasWater. Payments are made to TasWater which passes the benefit on to concession card holders as lower service charges. Persons eligible for the concession are current holders of a Health Care Card, Pensioner Concession Card or a Department of Veterans’ Affairs Repatriation Health Gold Card. Energy Retailer Concession In accordance with the provisions of the Electricity Supply Industry Act 1995, the Government entered into a community service obligation agreement with authorised electricity retailers to provide concessions to eligible low-income earners and pensioners to assist them in meeting the cost of electricity. Payments are made to electricity retailers, who pass the benefit on to eligible customers through lower service charges. Payments under the Local Government (Rates and Charges Remissions) Act 1991 In accordance with the provisions of the Local Government (Rates and Charges Remissions) Act 1991, local authorities are required to remit 30 per cent of council rates and charges levied on eligible pensioners, up to an annual maximum, for their principal place of residence. This is indexed annually by the Consumer Price Index. Local authorities are subsequently reimbursed from Finance-General. Eligible pensioners are residential property owners who must hold a current Australian Government Pensioner Concession Card. Sustainable Timber Tasmania During 2019-20, Sustainable Timber Tasmania was provided with a contribution of $2.0 million to maintain its firefighting capacity and assist with wildfire fighting costs.

15.16 Administered Finance costs All finance costs are expensed as incurred using the effective interest method. Finance costs include: – interest on bank overdrafts and short-term and long-term borrowings; – unwinding of discounting of provisions; – amortisation of discounts or premiums related to borrowings; – amortisation of ancillary costs incurred in connection with the arrangements of borrowings; and – finance lease charges.

2020 2019 $’000 $’000

Interest expense Interest on bank overdraft and loans 1 889 7 577 Interest on lease liabilities 4 793 … Other interest expense 876 2 053 Total 7 558 9 630

Department of Treasury and Finance Annual Report 2019–20 101 1 2 3 4 5 6

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15.17 Administered Receivables For significant Accounting Policies relating to Receivables please refer to note 8.1.

2020 2019 $’000 $’000

Receivables 97 424 107 243 Less: Expected credit loss (1 016) (1 501) Total 96 408 105 741

Contractual receivables User charges 333 693 Trade receivables 88 198 Accrued interest income 207 1 283 Other receivables 21 831 16 113 Total 22 459 18 286

Statutory receivables State taxes 73 374 84 329 GST 575 3 126 Total 73 949 87 455 Total 96 408 105 741

Settled within 12 months 96 408 105 741 Settled in more than 12 months … … Total 96 408 105 741

(a) Reconciliation of movement in expected credit loss for receivables

2020 2019 $’000 $’000

Carrying amount at 1 July 1 501 1 386 Amounts written off during the year … … Amounts recovered during the year … … Increase/(decrease) in provision recognised in profit or loss (485) 115 Carrying amount at 30 June 1 016 1 501

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15.18 Administered Contract assets and liabilities A Contract Liability relates to the Department’s obligation to transfer goods or services to a customer for which the Department has received consideration. The Administered contract liability relates solely to funding received under National Partnership Agreements which are administered on behalf of Agencies. Receipts from the Australian Government under these agreements are held within S722 Australian Government Funding Management Account. Agencies are reimbursed from this account in arrears after costs have been incurred and performance obligations have been met or progressed over time in accordance with specific NPAs. Payments to agencies from this Account result in a decrease to the Contract Liability.

Australian Government Funding $’000

Contract liabilities Balance at 1 July 2019 242 416 Balance at 30 June 2020 216 984

2020 $’000

Revenue from performance obligations met during the current period 245 876 Revenue from performance obligations partially satisfied in the current period …

Revenue paid under NPAs is recognised as performance obligations are met through the achievement of outputs, milestones and reimbursement of costs incurred. As this results in revenue being recognised over time, a specific transition price allocated to unsatisfied performance obligations as at 30 June 2020 is not required, as per AASB 15(120).

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15.19 Administered Equity investments Financial assets with cash flows that are not solely payments of principal and interest are generally classified and measured at fair value through profit or loss. However, the Department has elected to classify irrevocably its unlisted equity investments as designated at fair value through other comprehensive income. The Department has made this election as these unlisted equity investments are held as long-term strategic investments that are not expected to be sold in the short to medium term. These investments are carried at fair value with changes in fair value recognised in other comprehensive income. On disposal any balance in the financial asset reserve is transferred to accumulated funds and is not reclassified to profit or loss. Dividends associated with the equity investments are recognised in profit and loss when the right of payment has been established and it can be reliably measured.

2020 2019 $’000 $’000

State Owned Companies Aurora Energy Pty Ltd1 18 915 120 048 Metro Tasmania Pty Ltd 51 548 50 472 Tasmanian Ports Corporation Pty Ltd 244 284 249 993 Tasmanian Irrigation Pty Ltd 40 561 39 640 Tasmanian Railway Pty Ltd 124 495 90 536 Tasracing Pty Ltd 38 059 41 740 Tasmanian Networks Pty Ltd 1 012 615 957 664 TT-Line Company Pty Ltd 371 289 352 941

Statutory Authority Macquarie Point Development Corporation 67 710 71 139

Government Business Enterprises Sustainable Timber Tasmania 181 486 181 501 Hydro Tasmania 1 527 849 1 746 549 Motor Accidents Insurance Board 469 504 553 507 Port Arthur Historic Site Management Authority 36 607 38 436 Private Forests Tasmania 2 346 2 421 Tasmanian Public Finance Corporation 607 700 718 400 The Public Trustee 8 932 8 999

Other Tasmanian Water and Sewerage Corporation Pty Ltd 40 000 20 000 Total 4 843 899 5 243 987

1 The decline of $101.1 million for Aurora Energy is primarily due to the impact of COVID-19, together with the impact of a declining forward wholesale market, which has reduced the value of electricity derivatives. Equity investments represents the Government’s equity interest in Government owned businesses measured as the consolidated value of their net assets. An equity investment loss of $500 million is recognised in other comprehensive income in 2019-20 ($350.4 million loss in 2018-19).

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Unlisted Administered Equity investments designated as at fair value through other comprehensive income

Fair value at Dividend income 30 June 2020 recognised during $’000 2019–20 $’000

State Owned Companies Aurora Energy Pty Ltd 18 915 28 061 Metro Tasmania Pty Ltd 51 548 … Tasmanian Ports Corporation Pty Ltd 244 284 10 842 Tasmanian Irrigation Pty Ltd 40 561 … Tasmanian Railway Pty Ltd 124 495 … Tasracing Pty Ltd 38 059 … Tasmanian Networks Pty Ltd 1 012 615 28 907 TT-Line Company Pty Ltd 371 289 30 901

Statutory Authority Macquarie Point Development Corporation 67 710 …

Government Business Enterprises Sustainable Timber Tasmania 181 486 2 000 Hydro Tasmania 1 527 849 120 000 Motor Accidents Insurance Board 469 504 91 878 Port Arthur Historic Site Management Authority 36 607 … Private Forests Tasmania 2 346 … Tasmanian Public Finance Corporation 607 700 138 442 The Public Trustee 8 932 36

Other Tasmanian Water and Sewerage Corporation Pty Ltd 40 000 … Total 4 843 899 451 066

Department of Treasury and Finance Annual Report 2019–20 105 1 2 3 4 5 6

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15.20 Administered Other financial assets

(a) TASCORP Investment This reflects the TT-Line Vessel Replacement Fund which has been invested with TASCORP. (b) Advances – other Loans to agencies are valued at face value and recognised as an asset in the Schedule of Administered Assets and Liabilities. There is currently one existing interest free loan to agencies. (c) Deferred Income Tax assets Deferred income tax liabilities of Government Business Enterprises and State-owned Companies recognised in accordance with the National Taxation Equivalence Regime are recognised as an asset in the Schedule of Administered Assets and Liabilities.

2020 2019 $’000 $’000

TASCORP investment - TT-Line Vessel Replacement Fund 82 543 40 806 Advances - Commonwealth-State Housing Agreement … 157 600 Advances - other 3 290 3 760 Deferred income tax assets 432 800 573 517 Total 518 633 775 683

Settled within 12 months 83 013 49 293 Settled in more than 12 months 435 620 726 390 Total 518 633 775 683

15.21 Administered Assets held for sale Assets held for sale (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than continuing use are classified as held for sale. Immediately before classification as held for sale, fair value assets (or components of a disposal group) are remeasured in accordance with the Departmental policy. Thereafter, the assets (or disposal group) are measured at the lower of carrying amount and fair value less costs to sell. (a) Carrying value

2020 2019 $’000 $’000

Plant, equipment and vehicles 572 791 Total 572 791

Settled within 12 months 572 791 Total 572 791

Plant, equipment and vehicles held for sale represents the motor vehicles that were identified for disposal as at 30 June. Once identified for disposal, these vehicles are sent to auction for public sale.

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(b) Fair value measurement of assets held for sale (including fair value levels)

2020 Carrying value Fair value measurement at end of reporting period at 30 June $’000 Level 1 Level 2 Level 3 $’000 $’000 $’000

Plant, equipment and vehicles 572 … 572 … Total 572 … 572 …

2019 Carrying value Fair value measurement at end of reporting period at 30 June $’000 Level 1 Level 2 Level 3 $’000 $’000 $’000

Plant, equipment and vehicles 791 … 791 … Total 791 … 791 …

Plant, equipment and vehicles held for sale are valued at carrying amount. The process of acquisition and disposal in the market is managed by experienced fleet managers who set relevant depreciation rates to reflect the utilisation of the vehicles ensuring the carrying value of vehicles remains at fair value.

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15.22 Administered Property, plant and equipment For significant Accounting Policies relating to Property, plant and equipment please refer to note 8.3. (a) Carrying amount

2020 2019 $’000 $’000

Land At independent valuation 30 June 2018 11 250 14 050 Total 11 250 14 050

Buildings At independent valuation 30 June 2018 24 950 47 650 Less: Accumulated depreciation (821) (765) Total 24 129 46 885

Leasehold improvements At cost 43 224 35 882 Less: Accumulated depreciation (8 057) (2 594) 35 167 33 288 Work in progress (at cost) … 7 000 Total 35 167 40 288 Total Land and Buildings 70 546 101 224

Plant, equipment and vehicles At cost 92 305 88 507 Less: Accumulated depreciation (24 880) (23 021) Total 67 425 65 486 Total Property, plant and equipment 137 971 166 710

Land and Buildings were independently valued by the Valuer-General on 30 June 2018. Land and Buildings were revalued either at market value using observable inputs in an active market or using a market- summated approach having regard to qualitative and quantitative market evidence.

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2020 Land Level 2 Buildings Level 2 Leasehold Plant, Total (vacant land in (general office improvements equipment & $’000 active markets) building) $’000 vehicles $’000 $’000 $’000

Carrying value at 1 July 14 050 46 885 40 288 65 486 166 710 Additions … … 342 28 733 29 075 Disposals (2 800) (21 659) … (11 257) (36 757) Assets held for sale … … … (572) (572) Depreciation and amortisation … (1 097) (5 463) (14 965) (20 484) Carrying value at 30 June 11 250 24 129 35 167 67 425 137 971

2019 Land Level 2 Buildings Level 2 Leasehold Plant, Total (vacant land in (general office improvements equipment & $’000 active markets) building) $’000 vehicles $’000 $’000 $’000

Carrying value at 1 July 10 850 30 050 35 299 59 768 135 967 Additions 3 200 17 600 583 35 403 56 786 Disposals … … … (13 701) (13 701) Assets held for sale … … … (791) (791) Depreciation and amortisation … (765) (2 594) (15 193) (18 552) Work in progress … … 7 000 … 7 000 Carrying value at 30 June 14 050 46 885 40 288 65 486 166 710

Department of Treasury and Finance Annual Report 2019–20 109 1 2 3 4 5 6

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15.23 Administered Right-of-use assets From 1 July 2019, AASB 16 requires the Department to recognise a right-of-use asset, where it has control of the underlying asset over the lease term. A right-of-use asset is measured at the present value of initial lease liability, adjusted by any lease payments made at or before the commencement date and lease incentives, any initial direct costs incurred, and estimated costs of dismantling and removing the asset or restoring the site. Right-of-use assets includes assets in respect of leases previously treated as operating leases under AASB 117, and therefore not recognised on the Statement of Financial Position. The Department has elected not to recognise right-of-use assets and lease liabilities arising from short-term leases and rental arrangements for which Finance-General has substantive substitution rights over the assets and leases for which the underlying asset is of low-value. Substantive substitution rights relate primarily to office accommodation. An asset is considered low-value when it is expected to cost less than $10 000. Right-of-use assets are depreciated over the shorter of the assets useful life and the term of the lease. Where the Department obtains ownership of the underlying leased asset or if the cost of the right-of-use asset reflects that the Department will exercise a purchase option, the Department depreciates the right-of-use asset overs its useful life.

Buildings $’000

Carrying value at 1 July 292 246 Additions 2 809 Disposals / derecognition … Depreciation and amortisation (31 687) Adjustment for change in discount rate 16 222 Carrying value at 30 June 279 591

15.24 Administered Infrastructure

(a) Carrying amount

2020 2019 $’000 $’000

At Cost: Optic Fibre Cable 30 473 30 473 Less: Provision for impairment (30 473) (30 473) … … At Cost - Project Unify 11 888 7 973 At Cost - Digital Transformation Priority Expenditure 9 859 6 880 Total 21 747 14 853

Total 21 747 14 853

During 2008-09, the Optic Fibre Cable was assessed as being impaired. The impairment arose as a result of the Strategic Partnership Agreement between Aurora Energy Pty Ltd (now TasNetworks Pty Ltd) and the Government where the Agreement provides TasNetworks with exclusive access to the cable for no return. The cable will therefore not provide future economic benefits to Finance General. This resulted in the recognition of an impairment loss for the full value of the asset. During 2019-20, there were no changes which would affect this assessment. Consequently, the Optic Fibre Cable remains fully impaired as at 30 June 2020.

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15.25 Administered Other assets For significant Accounting Policies relating to Other assets please refer to note 8.5.

2020 2019 $’000 $’000

Other current assets Prepayments 1 469 1 389 Total 1 469 1 389

Settled within 12 months 1 469 1 389 Total 1 469 1 389

15.26 Administered Payables For significant Accounting Policies relating to Payables please refer to note 9.1.

2020 2019 $’000 $’000

Accrued expenses 20 332 11 266 Total 20 332 11 266

Settled within 12 months 20 332 11 266 Total 20 332 11 266

Settlement is usually made within 14 days.

Department of Treasury and Finance Annual Report 2019–20 111 1 2 3 4 5 6

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15.27 Administered Lease liabilities For significant Accounting Policies relating to Lease liabilities please refer to note 9.2. The Department has entered into the following leasing arrangements:

Class of right-of-use asset Details of leasing arrangements

The Department is responsible for administering the Whole-of-Government Office Accommodation lease contracts. The Department’s exposure to future Land and Buildings cash outflows due to variable lease payments, lease extensions/termination options, residual value guarantees, restrictions or covenants imposed by leases, and sale and leaseback transactions is minimal.

2020 $’000

Current Lease liabilities 29 828 Non-current Lease liabilities 256 061 Total 285 889

The following amounts are recognised in the Schedule of Administered Income and Expenses:

2020 $’000

Interest on lease liabilities included in note 15.17 4 793 Net expenses from leasing activities 4 793

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15.28 Administered Interest bearing liabilities Bank loans and other loans are initially measured at fair value, net of transaction costs. Bank loans and other loans are subsequently measured at amortised cost using the effective interest rate method, with interest expense recognised on an effective yield basis. The effective interest rate method is a method of calculating the amortised cost of a financial liability and allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or where appropriate, a shorter period. Finance-General administers debt on behalf of the Government which takes the form of facilities taken out with the Tasmanian Public Finance Corporation. The Financial Agreement Debt, which related to the State’s outstanding housing related debt, was waived by the Australian Government during 2019-20. The debt holdings with TASCORP have been valued at historical capital value with no adjustment made to reflect changes in market interest rates. The borrowing portfolio consists of fixed rate borrowings. Interest expense is brought to account on an accrual basis. Historical capital value represents the present value of the cash flows associated with the service and eventual repayment of financial assets and liabilities, such present value being determined by discounting the cash flows at the rate implicit in the original contract or arrangement. The term historical capital value equates with present value. In the case of securities issued at a discount, historical capital value represents the proceeds of a loan transaction, or the cost of acquisition of a financial asset, plus the amortised discount. For securities issued at a premium, the amortised premium is subtracted from the original proceeds or cost to obtain the historical capital value. Discounts and premiums are amortised over the life of the related financial instrument on the basis of yield at purchase, with the amortisation being taken to the Schedule of Administered Income and Expenses as part of finance costs. Loans from TASCORP relate to Semi Annual bond loans, undertaken during 2019-20 to increase the Government’s cash holdings as a result of expected Public Account funding requirements (a) Carrying amount

2020 2019 $’000 $’000

Loans from the Tasmanian Public Finance Corporation 740 002 380 000 Australian Government Commonwealth-State Housing Agreement debt … 157 600 Total 740 002 537 600

15.29 Administered Superannuation

(i) Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as an expense when they fall due. (ii) Defined benefit plans A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. Key estimate and judgement Finance-General’s superannuation obligations, in respect of the contributory service of current and past government employees, are recognised at the latest actuarial assessment of the members’ entitlements, net of scheme assets. The valuation is determined by discounting to present value, the gross benefit payments at a current, market-determined, risk- adjusted discount rate appropriate to the respective plan. Actuarial gains or losses arising from the actuarial revaluation of superannuation liabilities are recognised in the Schedule of Administered Income and Expenses.

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(a) Type of plan Unfunded liabilities arise under the Public Sector Superannuation Reform Act 2016, the former Parliamentary Superannuation Act 1973, the former Parliamentary Retiring Benefits Act 1985 and the Judges’ Contributory Pensions Act 1968. All of these schemes are now closed to new membership. In November 2002, Parliament approved legislation that repealed the Parliamentary Superannuation Act 1973 and the Parliamentary Retiring Benefits Act 1985 with effect from 31 December 2002. The scheme details have been reproduced as regulations, namely the Public Sector Superannuation Reform Regulations 2017. The legislation transferred the Parliamentary Superannuation Fund and the Parliamentary Retiring Benefits Fund as sub-funds of the Retirement Benefits Fund. This decision, which followed a recommendation from the Parliamentary Superannuation and Retirement Benefits Trust to take such action, has not altered the benefits payable to Parliamentary Superannuation Fund or Parliamentary Retiring Benefits Fund members, but has provided administrative efficiencies and reduced costs. The Public Sector Superannuation Reform Act created the Superannuation Commission with effect from 1 April 2017 and transferred the trustee responsibility from the former Retirement Benefits Fund to the Commission, from that date. The functions and powers of the Commission are specified in the Public Sector Superannuation Reform Act and the Public Sector Superannuation Reform Regulations. The Superannuation Commission is supported by the Office of the Superannuation Commission, which is a branch of the Department of Treasury and Finance (Output 3.4). These schemes, which are now all closed to new entrants, provide superannuation arrangements for public sector employees generally, Members of Parliament, the judiciary and statutory legal officers. (i) Retirement Benefits Fund Scheme The RBF Scheme was established under the Retirement Benefits Act 1970, but was continued under the Retirement Benefits Act 1982, the Retirement Benefits Act 1993 and the Public Sector Superannuation Reform Act. Scheme details are contained in the Public Sector Superannuation Reform Regulations. The RBF contributory scheme is an unfunded defined benefit scheme. Members contribute between five per cent and 15 per cent of salary, and voluntary contributions may be made. This scheme was closed to new entrants from 15 May 1999, with new employees appointed on or after that date initially becoming members of the RBF non-contributory scheme. The RBF non-contributory scheme was an unfunded accumulation (or defined contribution) scheme for those employees not eligible to join the contributory scheme. The employer contributions in respect of non-contributory employees were at the rate required by the Australian Government’s Superannuation Guarantee (Administration) Act 1992. The scheme was closed on 25 April 2000, with the establishment of the fully funded Tasmanian Accumulation Scheme to replace it. Payments to the RBF to cover the employer liability component for pensioners and lump sum benefits with respect to retiring employees are met from the Public Account. In making an employer contribution to the Public Account, individual agencies discharge their superannuation liability, which is then met by the Crown. An independent actuarial assessment is undertaken into the RBF Scheme as at 30 June each financial year. In the valuation, the Actuary includes liabilities of Government Business Enterprises, State-owned Companies and other statutory authorities, as part of the overall RBF Scheme valuation. These liabilities are excluded from the administered liabilities of the Department, as these authorities carry their own provisions for superannuation and separately report liabilities in their financial statements. The net liability in respect of on Budget agencies as at 30 June each year is based on the latest available actuarial assessment, which was undertaken as at that date. The division between the current and non-current liability as at 30 June each year is based upon anticipated superannuation expenditure during the ensuing financial year. As a consequence of the Public Sector Superannuation Reform Act 1999, the RBF defined benefit scheme was closed to new entrants with effect from 15 May 1999. New public sector employees appointed after that date are now members of an alternative complying superannuation scheme of their choice. Thus, there are no liabilities pertaining to employees covered by these arrangements.

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(ii) Parliamentary Superannuation Fund The Parliamentary Superannuation Fund is a defined benefit pension scheme established under the provisions of the former Parliamentary Superannuation Act 1973, and continued under the Public Sector Superannuation Reform Regulations, and is the older of the two Parliamentary schemes in operation. The scheme was closed to new members in 1985, but was maintained for parliamentarians who, having been first elected before that date, were subsequently re-elected to Parliament after a period out of office. The 1999 reforms closed this scheme to parliamentarians re-elected as described above and therefore allows no parliamentarians to re-enter the scheme. The Parliamentary Superannuation Fund is fully in pension phase. An actuarial valuation of the scheme was undertaken as at 30 June 2020. (iii) Parliamentary Retiring Benefits Fund The Parliamentary Retiring Benefits Fund is a closed defined benefit lump sum scheme established under the provisions of the former Parliamentary Retiring Benefits Act 1985 and continued under the Public Sector Superannuation Reform Regulations 2017. The scheme covered those members of Parliament first elected after 12 November 1985 and before 1 July 1999. There are no members left in the Scheme at 30 June 2020, with the Scheme holding a residual balance. (iv) Judges’ Scheme Superannuation arrangements for judges are specified in theJudges’ Contributory Pensions Act 1968. The Judges’ Scheme is a defined benefit scheme that was closed to new entrants with effect from 1 July 1999. Prior to that date, the Solicitor General, the Director of Public Prosecutions and the Master of the Supreme Court were also members of this Scheme. Judges and statutory legal officers appointed after that date become members of Tasmanian Accumulation Scheme unless they elect to join a private complying superannuation scheme. The Judges’ Scheme is an unfunded scheme in respect of employer contributions, with all the benefits being met by the Government on an emerging cost basis. The Judges’ Scheme is fully in pension phase. (b) Superannuation liability

Retirement Benefits Fund Parliamentary Judges’ Total Liability Scheme Superannuation Contributory Schemes Pensions

2020 2019 2020 2019 2020 2019 2020 2019 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Present value of defined benefit 12 029 930 12 040 430 22 617 23 470 35 719 37 516 12 088 266 12 101 416 obligation Fair value of plan (1 817 604) (1 924 461) (5 047) (4 984) … … (1 822 651) (1 929 409) assets (Surplus)/deficit 10 212 325 10 115 969 17 570 18 522 35 719 37 516 10 265 615 10 172 007

Settled within 12 289 851 292 736 1 059 996 2 305 2 486 293 216 296 218 months Settled in more 9 922 474 9 823 233 16 511 17 526 33 414 35 030 9 972 399 9 875 789 than 12 months Total 10 212 325 10 115 969 17 570 18 522 35 719 37 516 10 265 615 10 172 007

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Retirement Benefits Fund Parliamentary Judges’ Total Liability Scheme Superannuation Contributory Schemes Pensions

2020 2019 2020 2019 2020 2019 2020 2019 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Balance at 1 July 12 040 430 10 085 127 23 470 23 504 37 516 35 916 12 101 416 10 144 547 Included in profit or loss Current service 156 185 122 893 … (8) … … 156 185 122 885 cost Interest cost 212 854 296 418 410 673 654 1 040 213 918 298 131 369 038 419 311 410 665 654 1 040 370 103 421 016 Included in other comprehensive income Actuarial loss

(gain) arising from: Demographic (7 500) … 44 … 80 … (7 376) … assumptions Financial (491) 1 913 603 (87) 2 873 643 3 865 65 1 920 341 assumptions Experience (10 723) 14 076 139 204 (873) (1 010) (11 457 ) (14 882) (18 715) 1 899 527 96 3 077 (149) 2 855 (18 768) 1 905 459 Other Contributions by 39 223 41 180 … … … … 39 223 41 180 plan participants Benefits paid (399 816) (404 472) (1 359) (3 776) (2 302) (2 295) (403 476) (410 543) Other (231) (242) … … … … (231) (242) (360 824) (363 534) (1 359) (3 776) (2 302) (2 295) (364 485) (369 605) Balance at 12 029 930 12 040 430 22 617 23 470 35 720 37 516 12 088 266 12 101 416 30 June

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(d) Reconciliation of movements in plan assets

Retirement Benefits Fund Parliamentary Judges’ Total Liability Scheme Superannuation Contributory Schemes Pensions

2020 2019 2020 2019 2020 2019 2020 2019 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Balance at 1 July 1 924 461 1 862 634 4 948 7 217 … … 1 929 409 1 869 851 Expected Return 33 878 54 646 85 195 … … 33 963 54 841 on Plan Assets Actuarial (loss)/ (64 861) 87 985 394 352 … … (64 467) 88 337 gain Employer 284 950 282 730 979 960 2 302 2 295 288 231 285 985 contributions Contributions by 39 223 41 180 … … … … 39 223 41 180 plan participants Benefits paid (399 816) (404 472) (1 359) (3 776) (2 302) (2 295) (403 476) (410 543) Other (231) (242) … … … … (231) (242) Balance at 1 817 604 1 924 461 5 047 4 948 … … 1 822 651 1 929 409 30 June

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(e) Plan assets at fair value

Retirement Benefits Level 1 (Quoted in Level 2 (Observable Level 3 Total Fund Scheme active market) inputs, not quoted) (Unobservable Fair value at 30 June inputs)

2020 2019 2020 2019 2020 2019 2020 2019 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Cash and cash … 28 867 … 55 809 … … … 84 676 equivalents Equity instruments … 621 600 661 608 88 526 … … 661 608 710 126 Debt instruments … … 458 036 … … … 458 036 … Derivatives … … 136 320 565 792 … … 136 320 565 792 Property/ 63 616 80 828 327 169 483 039 170 855 … 561 640 563 867 Infrastructure Balance at 30 June 63 616 731 295 1 583 133 1 193 166 170 855 … 1 817 604 1 924 461

Parliamentary Level 1 (Quoted in Level 2 (Observable Level 3 Total Superannuation active market) inputs, not quoted) (Unobservable Fair value at 30 June Schemes inputs)

2020 2019 2020 2019 2020 2019 2020 2019 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Cash and cash … 74 … 143 … … … 217 equivalents Equity instruments … 1 598 1 838 228 … … 1 838 1 826 Debt instruments … … 1 272 1 455 … … 1 272 1 455 Derivatives … … 379 … … … 379 … Property/ 176 208 909 1 242 475 … 1 560 1 450 Infrastructure Balance at 30 June 176 1 881 4 398 3 069 475 … 5 049 4 948

(f) Key actuarial assumptions

Retirement Benefits Parliamentary Judges’ Contributory Fund Scheme Superannuation Schemes Pensions

2020 2019 2020 2019 2020 2019 $’000 $’000 $’000 $’000 $’000 $’000

Discount rate 1.60 1.80 1.60 1.80 1.60 1.80 Expected rate of salary increases 3.00 3.00 … … … … Expected rate of pensions increases 2.25 2.50 2.25 2.50 3.00 3.00

(g) Weighted average durations

Retirement Benefits Parliamentary Judges’ Contributory Fund Scheme Superannuation Schemes Pensions 2020 2020 2020

Weighted average durations of the defined 15.2 10.4 9.3 benefit obligation (in years)

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(h) Sensitivity analysis

Base Case Scenario A Scenario B Scenario C Scenario D -0.5% pa +0.5% pa -0.5% pa inflation +0.5% pa inflation discount rate discount rate increase rate increase rate 2020 2020 2020 2020

Retirement Benefits Fund Scheme Discount rate (% pa) 1.60 1.10 2.10 1.60 1.60 Pension increase rate (% pa) 2.25 2.25 2.25 1.75 2.75 Defined benefit obligation 12 029 930 12 987 509 11 177 856 11 342 504 12 788 463 ($’000)

Parliamentary Superannuation Schemes Discount rate (% pa) 1.60 1.10 2.10 1.60 1.60 Pension increase rate (Parliamentary Superannuation 2.25 2.25 2.25 1.75 2.75 fund only) (% pa) Salary increase rate (Parliamentary Retiring Benefits … … … … … Fund only) (% pa) Defined benefit obligation 22 617 23 826 21 505 21 555 23 759 ($’000)

Judges Contributory Pensions Discount rate (% pa) 1.60 1.10 2.10 1.60 1.60 Pension increase rate (% pa) 3.00 3.00 3.00 2.50 3.50 Defined benefit obligation 35 720 37 412 34 145 34 235 37 298 ($’000)

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(i) Amounts recognised in Schedule of Administered Income and Expenses

2020 2019 $’000 $’000

Expenses Employer service cost 156 185 122 885 Interest cost 213 918 298 131 Expected return on plan assets (33 963) (54 841) Other 39 49 Total 336 179 366 224

Other comprehensive income Actuarial (gains)/losses 44 729 1 816 032 Total 380 908 2 182 256

(j) Funding arrangements Contributions to the Superannuation Commission in respect of defined benefit schemes are made on an emerging cost basis.

15.30 Administered Other liabilities For significant Accounting Policies relating to Other liabilities please refer to note 9.4.

2020 2019 $’000 $’000

Revenue received in advance Appropriation carried forward from current and previous years under … 8 675 section 8A(2) of the Public Account Act 1986 Other liabilities Deposits held on behalf of agencies 690 242 686 954 Accrued interest expense 1 438 142 Tasmanian Risk Management Fund outstanding claims liability 258 010 239 688 Other 3 270 2 077 Total 952 960 937 536

Settled within 12 months 747 354 742 993 Settled in more than 12 months 205 606 194 543 Total 952 960 937 536

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15.31 Tasmanian Risk Management Fund The Tasmanian Risk Management Fund is the Tasmanian Government’s self-insurance fund which was established on 1 January 1999 to provide a whole-of-government approach to funding and managing specific identifiable insurable liabilities of inner Budget agencies. The Department is responsible for the administration of the Fund and an inter-agency Steering Committee serves as a consultative forum through which agencies can provide input into the operations of the Fund and feedback to Treasury, the Fund Agent and the Actuary. (a) TRMF Concise Income Statement for the year ended 30 June 2020

2020 2019 $’000 $’000

Revenue and other income Agency contributions 77 936 67 559 Investment income 2 746 5 292 Total revenue and other income 80 682 72 851

Expenses from transactions Claim expenses 69 777 67 309 Other expenses 3 906 3 494 Total expenses 73 682 70 803

Net result 7 000 2 048

Other comprehensive income Net actuarial gain/(loss) of the Tasmanian Risk Management Fund (9 409) (911) Total other economic flows included in net result (9 409) (911) Net Result (2 409) 1 137

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(b) TRMF Concise Balance Sheet as at 30 June 2020

2020 2019 $’000 $’000

Assets Financial Assets Cash and cash equivalents 276 497 261 386 Receivables 2 375 1 147 Total assets 278 872 262 533

Liabilities Financial Liabilities Payables 1 536 1 067 Outstanding claims 258 010 239 688 Employee entitlements 85 118 Total liabilities 259 631 240 873

Net assets (liabilities) 19 241 21 660

Equity Accumulated funds 19 241 21 660 Total equity 19 241 21 660

2020 2019 $’000 $’000

Claims Liabilities Personal injury 122 879 112 839 Property 10 627 3 116 Motor vehicle 224 341 General liability 4 320 3 392 Medical liability 119 960 120 000 Total 258 010 239 688

Settled within 12 months 52 404 45 145 Settled in more than 12 months 205 606 194 543 Total 258 010 239 688

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(d) Timing of estimated claim expenditure Based on information provided by the Actuary, the Tasmanian Risk Management Fund has recognised a total provision of $258 million. For all insurance risks, the actual claim costs are uncertain. Even a modest deviation from the central estimate basis can have a material effect on the net outstanding liability. The timing of estimated expenditure is based on claims experience. The schedule below shows the average time to settle for each risk category:

Category Average Settlement

Workers compensation 2.6 years Personal accident cover <1 year Property risk <1 year Motor vehicle risk <1 year General liability >1 year Medical liability 6.0 years

(e) Reconciliation of movements in provision

2020 Workers’ Medical Other Total compensation liability liabilities $’000 $’000 $’000 $’000

Balance at 1 July 112 820 120 000 6 868 239 688 Claims paid (45 216) (7 122) (1 178) (53 516) Increase in provision 46 564 11 707 4 157 62 428 Actuarial losses/(gains) 8 667 (4 627) 5 369 9 409 Balance at 30 June 122 835 119 958 15 215 258 008

2019 Workers’ Medical Other Total compensation liability liabilities $’000 $’000 $’000 $’000

Balance at 1 July 99 854 116 000 11 129 226 983 Claims paid (43 008) (348) (7 786) (51 142) Increase in provision 46 079 11 958 4 899 62 936 Actuarial losses/(gains) 9 895 (7 610) (1 374) 911 Balance at 30 June 112 820 120 000 6 868 239 688

The provision for workers’ compensation does not reconcile with the personal injury liability, which also includes provision for personal accident and aero-medical retrieval activities. Workers’ compensation and medical claim liabilities are the only risk categories with discounting applied. As a consequence, the remaining risk categories are not shown in the reconciliation of movements in provisions.

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15.32 Schedule of Administered Commitments For significant Accounting policies relating to Commitments and contingencies please refer toNote 10.

2020 2019 $’000 $’000

By type Capital commitments Vehicles 5 758 10 830 Building works 253 2 704 Total capital commitments 6 011 13 534 Lease Commitments Operating leases … 314 642 Total lease commitments … 314 642

By maturity Capital commitments One year or less 6 011 13 534 Total capital commitments 6 011 13 534 Operating lease commitments One year or less … 16 459 From one to five years … 73 805 More than five years … 224 377 Total operating lease commitments … 314 641 Total 6 011 328 175

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15.33 Schedule of Administered Quantifiable contingencies

2020 2019 $’000 $’000

Quantifiable contingent liabilities Contingent Claims Appeals 674 83 Total Administered quantifiable contingent liabilities 674 83

The Appeals relate to tax assessments currently under appeal in the Supreme Court or Magistrates Court.

2020 2019 $’000 $’000

Quantifiable contingent assets GST Credits 18 879 20 892 Appeals 109 105 Total quantifiable contingent assets 18 988 20 997

Prior to the sale of TOTE Tasmania to Tattsbet Limited, TOTE Tasmania had accrued $41.7 million in GST credits for previously overpaid GST. The contingent asset represents the unutilised component of GST credits as at 30 June 2020. Under the sale agreement, Tatts Group Limited agreed to remit the value of those GST credits to the Government as and when they are utilised by Tatts Group Limited after completion of the sale.

15.34 Schedule of Administered Unquantifiable Contingencies Finance-General has an unquantifiable contingent liability related to the superannuation obligations of Government Business Enterprises and Statutory Authorities. Finance-General has an unquantifiable contingent liability related to the explicit support for the borrowings of Government businesses and other participating authorities provided to the Tasmanian Public Finance Corporation by the Treasurer on 15 June 2020. As at 30 June 2020, Finance-General had in place a number of indemnities under various sale agreements relating to the divestment of Government businesses. Treasury is of the opinion that these indemnities are unlikely to arise and the amounts are not quantifiable.

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15.35 Administered Reserves

2020 Financial Assets Land and Buildings Total $’000 $’000 $’000

Asset revaluation reserve Balance at beginning of financial year … 27 010 27 010 Transfer of reserve for disposed asset … (16 417) (16 417) Balance at end of financial year … 10 592 10 592

Other Reserves – Financial Asset Balance at beginning of financial year (350 365) … (350 365) Revaluation increments / (decrements) (499 990) … (499 990) Balance at end of financial year (850 355) … (850 355)

2019 Financial Assets Land and Buildings Total $’000 $’000 $’000

Asset revaluation reserve Balance at beginning of financial year … 27 010 27 010 Revaluation increments / (decrements) … … … Balance at end of financial year … 27 010 27 010

Other Reserves - Financial Asset Balance at beginning of financial year … … … Revaluation increments / (decrements) (350 365) … (350 365) Balance at end of financial year (350 365) … (350 365)

(a) Nature and purpose of reserves Asset revaluation reserve The Asset revaluation reserve is used to record increments and decrements on the revaluation of Non-financial assets. Financial asset reserves Financial asset reserves is used to record increments and decrements on the revaluation of the Government’s investment in Government Business Enterprises and State-owned Companies designated as fair value through other comprehensive income.

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15.36 Administered Cash and cash equivalents Administered Cash and cash equivalents includes the balance of the Specific Purpose Accounts held by the Department, and other cash held, which are administered or held in a trustee capacity or agency arrangement.

2020 2019 $’000 $’000

Westpac Banking Corporation 212 757 78 744 Tasmanian Public Finance Corporation Investments 999 782 1 182 264 Total cash and cash equivalents 1 212 540 1 261 008

The Tasmanian Public Finance Corporation Investments included the $380 million proceeds of an overnight end-of-year borrowing as at 30 June 2019. There was no overnight borrowing as at 30 June 2020. Accounts Administered by Finance-General

2020 2019 $’000 $’000

S118 TT-Line Vessel Replacement Fund 82 543 40 806 S513 Finance-General Financial Management Account 10 694 … T513 Finance-General Operating Account1 … 8 303 S722 Australian Government Funding Management Account 216 984 242 416 S775 Rosetta Landslip Account 530 541 T793 Agency Accommodation Charges Account1 … 378 S825 Payroll Provision Account 8 519 31 768 J839 State Debt Management Account2 (39 826) 20 733 S847 Tasmanian Risk Management Fund Account 276 497 261 377 S905 Government Car Fleet Account 6 322 8 532 S019 COVID-19 Funding Management Account 50 000 … Total cash and cash equivalents 612 263 614 855

Cash Held in a Trustee capacity or as part of an Agency Arrangement

2020 2019 $’000 $’000

T431 Assurance Fund - Lands Titles Act 1980 Account1 … 6 158 T702 Unclaimed Monies Account 48 472 43 102 T768 The Mount Lyell Closure Trust Fund Account1 … 1 265 Total cash and cash equivalents 48 472 50 524

1 Accounts transitioned as accounts within the Finance-General Financial Management Account from 1 July 2019 as part of the implementation of the Financial Management Act 2016. 2 The balance of the State Debt Management Account reflects the impact of the Public Account Outcome and Borrowings undertaken during the year. Approval for an overdraft has been provided under Section 14 of the Financial Management Act 2016.

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15.37 Reconciliation of net result to net cash from operating activities

2020 2019 $’000 $’000

Net result (504 060) (291 792) Depreciation and amortisation 53 212 18 551 (Gain) loss on non-financial assets (8 686) (2 879) Expected credit losses (485) 115 Decrease (increase) in Receivables (12 573) (12 622) Decrease (increase) in GST assets 2 161 (1 822) Decrease (increase) in Other Financial assets 140 717 147 744 Increase (decrease) in Payables 9 720 45 004 Increase (decrease) in Other liabilities 1 939 5 938 Non-cash movement in Superannuation 48 878 81 279 Net cash from (used by) operating activities (269 178) (10 484)

15.38 Reconciliation of Administered liabilities arising from financing activities Liabilities arising from financing activities are liabilities for which cash flows were, or future cash flows will be, classified in the Statement of Cash Flows as cash flows from financing activities.

2020 Borrowings Lease Liabilities $’000 $’000

Balance as at 1 July 2019 537 600 292 246 Acquisitions / New leases … 2 809 Foreign exchange rate movements … … Changes in fair value … 16 222 Other movements … (19 591) Interest on lease liabilities … 4 793 Transfers to / (from) other Government entity … … Changes from financing cash flows: Cash Received 582 402 … Cash Repayments (380 000) (10 591) Balance as at 30 June 2020 740 002 285 889

2019 Borrowings $’000

Balance as at 1 July 2018 425 515 Changes from financing cash flows: Cash Received 380 000 Cash Repayments (267 915) Balance as at 30 June 2019 537 600

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15.39 Administered Financial instruments

Financial Accounting and strategic policies (including Nature of underlying instrument (including significant terms Instrument recognition criteria, measurement basis and and conditions affecting the amount, timing and certainty of credit quality of instrument) cash flows)

Financial Asset Contractual Contractual receivables are recognised Credit terms are generally 30 days. receivables at the nominal amounts due, less any provision for bad and doubtful debts. Collectability of debts is reviewed on a monthly basis. Provisions are made when collection of the debt is judged to be less rather than more likely. Cash and cash Cash and cash equivalents are Cash means notes, coins and any deposits at call with a equivalents recognised at face value. bank or financial institution. It is a requirement for any changes in deposit strategy to be approved by the Treasurer. Currently only highly liquid, low risk cash based investment products, transacted with or via TASCORP, or at call cash held with Westpac, are approved. Other financial Other financial assets includes the Finance-General has beneficial ownership of the Fund’s assets TT-Line Vessel Replacement Fund. The assets, including exposure to all risks and rewards, which investment of the Fund is recognised as includes any applicable credit risk. This will be minimised a deposit with TASCORP. by detailed oversight by Treasury’s Financial Assets and Borrowings Management Committee.

The carrying amount of financial assets recorded in the Financial Statements, net of any allowances for losses, represents Finance-General’s maximum exposure to credit risk without taking into account of any collateral or other security.

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Expected credit loss analysis of receivables The simplified approach to measuring expected credit losses is applied, which uses a lifetime expected loss allowance for all trade receivables. The expected loss rates are based on historical observed loss rates adjusted for forward looking factors that will have an impact on the ability to settle the receivables. The loss allowance for trade debtors as at 30 June are as follows:

2020 Not past Past due Past due 31- Past due 61- Past due 91+ Total due 1-30 days 60 days 90 days days $’000 $’000 $’000 $’000 $’000 $’000

Expected credit loss rate (A) 1.01% 2.12% 0.00% 0.00% 24.09% 1.07% Total gross carrying amount (B) 94 674 225 … … 227 95 126 Expected credit loss (A x B) 956 5 … … 55 1 016

2019 Not past Past due Past due 31- Past due 61- Past due 91+ Total due 1-30 days 60 days 90 days days $’000 $’000 $’000 $’000 $’000 $’000

Expected credit loss rate (A) 1.39% 3.72% 21.43% 0.00% 51.09% 1.48% Total gross carrying amount (B) 100 495 672 28 … 137 101 332 Expected credit loss (A x B) 1 400 25 6 … 70 1 501

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(c) Liquidity risk Liquidity risk is the risk that Finance-General will not be able to meet its financial obligations as they fall due. The Department’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when they fall due.

Financial Liabilities Payables Payables, including goods received and services incurred but Settlement is usually made not yet invoiced, are recognised at amortised cost, which due within 14 days. to the short settlement period, equates to face value, when Finance-General becomes obliged to make future payments as a result of a purchase of assets or services Finance-General regularly reviews budgeted cash outflows to ensure that there is sufficient cash to meet all obligations. Interest bearing Bank loans and other loans are initially measured at fair value, Contractual payments made on liabilities net of transaction costs. Bank loans and other loans are a regular basis. subsequently measured at amortised cost using the effective interest rate method, with interest expense recognised on an effective yield basis. Finance-General regularly reviews its contractual outflows to ensure that there is sufficient cash available to meet contracted payments. Guarantees Financial guarantee contract liabilities are measured initially at Guarantees relate to financing fair value and subsequently at the higher of fair value or the obligations of government amount determined in accordance with AASB 137 Provisions, businesses and Statutory Contingent Liabilities and Contingent Assets. authorities. Lease contract A lease liability must be recognised for lease contracts or Lease contracts and contracts liabilities contracts that contain a lease where the term is more than 12 that contain a lease for Major months, unless it is of low value. Office Accommodation Finance-General recognises a liability for lease payments for Major Office Accommodation and an associated right-of-use asset that are initially recognised at cost then measured at present value as at the reporting date. Finance-General regularly reviews its lease invoicing arrangements with agencies to ensure that there is sufficient cash to meet specific lease payments. Customer Contract A liability is recognised where cash is received from Payments made under Liabilities customers under contracts with sufficiently specific contracts with sufficiently performance obligations where those obligations have not specific performance yet been delivered or achieved. Revenue is recognised upon obligations. achievement or progress over time towards delivery of contractual obligations has occurred Finance-General holds funds received from the Australian Government under National Partnership Agreements in a Specific Purpose Account within the Public Account. The account is monitored to ensure that sufficient cash is available to reimburse agencies for delivery against obligations under individual agreements.

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2020 1 year 2 years 3 years 4 years 5 years 5+ years Undiscounted Carrying $’000 $’000 $’000 $’000 $’000 $’000 Total Amount $’000 $’000

Financial liabilities Payables 20 332 … … … … … 20 332 20 332 Borrowings … 200 000 … 191 000 … 349 002 740 002 740 002 Lease Liability 29 828 28 374 23 470 20 943 20 677 162 597 285 889 285 889 Contract Liability 10 741 18 533 34 456 10 855 18 646 123 753 216 984 216 984 Total 60 901 24 907 57 926 222 798 39 323 635 352 1 263 207 1 263 207

2019 1 year 2 years 3 years 4 years 5 years 5+ years Undiscounted Carrying $’000 $’000 $’000 $’000 $’000 $’000 Total Amount $’000 $’000

Financial liabilities Payables 11 266 … … … … … 11 266 11 266 Borrowings 388 017 8 122 8 259 8 373 8 450 116 379 537 600 537 600 Total 399 283 8 122 8 259 8 373 8 450 116 379 548 866 548 866

(d) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The primary market risk, that the Department is exposed to, is interest rate risk. At the reporting date, the interest rate profile of the Department’s interest-bearing financial instruments was:

2020 2019 $’000 $’000

Fixed rate instruments Financial assets 3 290 161 360 Financial liabilities 740 002 157 600 Total (736 712) 3 760 Variable rate instruments Financial assets 1 295 083 1 301 814 Financial liabilities … 380 000 Total 1 295 083 921 814

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Sensitivity analysis of the Department’s exposure to possible changes in interest rate Changes in variable rates of 100 basis points at reporting date would have the following effect on the Department’s profit or loss and equity:

Profit or Loss Equity

100 basis 100 basis 100 basis 100 basis points points points points increase decrease increase decrease

30 June 2020 Financial assets 8 251 (8 251) … … Less: Financial liabilities … … … … Net sensitivity 8 251 (8 251) … …

30 June 2019 Financial assets 9 409 (9 409) … … Less: Financial liabilities 31 (31) … … Net sensitivity 9 378 (9 378) … …

This analysis assumes all other variables remain constant. The analysis was performed on the same basis for 2019.

15.40 Categories of Administered Financial assets and liabilities

2020 2019 $’000 $’000

Financial assets Financial assets at fair value through other comprehensive income – 4 843 899 5 243 987 Equity investments designated on initial recognition Amortised cost 108 292 220 452 Cash and deposits 1 212 540 1 261 008 Total 6 164 731 6 725 447

Financial Liabilities Financial liabilities measured at amortised cost 1 260 271 548 866 Total 1 260 271 548 866

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15.41 Net fair value of Administered Financial assets and liabilities

2020 Net fair value Net fair value Net fair value Net fair value Level 1 Level 2 Level 3 Total $’000 $’000 $’000 $’000

Financial assets Financial assets at fair value through other … 4 843 899 … 4 843 899 comprehensive income Total financial assets … 4 843 899 … 4 843 899

2019 Net fair value Net fair value Net fair value Net fair value Level 1 Level 2 Level 3 Total $’000 $’000 $’000 $’000

Financial assets Financial assets at fair value through other … 5 243 987 … 5 243 987 comprehensive income Total financial assets … 5 243 987 … 5 243 987 The recognised fair values of financial assets and financial liabilities are classified according to the fair value hierarchy that reflects the significance of the inputs used in making these measurements. The Department uses various methods in estimating the fair value of a financial instrument. The methods comprise: Level 1 the fair value is calculated using quoted prices in active markets; Level 2 the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and Level 3 the fair value is estimated using inputs for the asset or liability that are not based on observable market data.

NOTE 16: TRANSACTIONS AND BALANCES RELATING TO A TRUSTEE OR AGENCY ARRANGEMENT

16.1 Activities undertaken under a trustee or agency arrangement Transactions relating to activities undertaken by the Department in a trust or fiduciary (agency) capacity do not form part of the Department’s activities. Trustee and agency arrangements, and transactions/balances relating to those activities, are neither controlled nor administered. Fees, commissions earned and expenses incurred in the course of rendering services as a trustee or through an agency arrangement are recognised as controlled transactions.

Account / Activity Opening balance Net transactions Closing balance $’000 during 2019–20 $’000 $’000

Government Economic Regulator Account 661 (74) 587

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NOTE 17: EVENTS OCCURRING AFTER BALANCE DATE

In its July Economic and Fiscal Update, the Australian Government reduced its forecasts of GST receipts for 2019–20 and 2020–21 by $12.8 billion. The amount of GST overpaid to the State in 2019-20 is estimated at $191.9 million. The impact of the reduced GST receipts on Tasmania will be recognised in 2020–21. There have been no other events subsequent to balance date which would have a material effect on the Department’s Financial Statements as at 30 June 2020.

NOTE 18: OTHER SIGNIFICANT ACCOUNTING POLICIES AND JUDGEMENTS

18.1 Objectives and funding The Department’s objectives are to improve the well-being of Tasmanians by providing: – high quality advice and service delivery to the Premier/Treasurer, Minister for Finance and our other stakeholders, and – effective and efficient administration of our financial, property and regulatory responsibilities. The Department is structured to meet the following outcomes: – the Premier/Treasurer, Minister for Finance and other key clients receive efficient and effective financial and resource management services; – the Government receives sound and timely economic and fiscal policy advice; and – statutory bodies receive high quality regulatory and revenue management services. Departmental activities are classified as either controlled or administered. Controlled activities involve the use of assets, liabilities, revenues and expenses controlled or incurred by the Department in its own right. Administered activities involve the management or oversight by the Department, on behalf of the Government, of items controlled or incurred by the Government, as reported at note 2.4. The Department is a Tasmanian Government not-for-profit entity that is predominantly funded through Parliamentary appropriations, under two separate Divisions, Treasury and Finance and Finance-General. The activities of Treasury and Finance are controlled, while the activities of Finance-General are administered on behalf of the Government. The Department also provides services on a fee for service basis, as outlined in note 5.3. The Financial Statements encompass all funds through which the Department controls resources to carry out its functions, with the exception of the activities of the Office of the Tasmanian Economic Regulator. OTTER is required to prepare a separate financial report in accordance with theEconomic Regulator Act 2009, Water and Sewerage Industry Act 2008, Electricity Supply Industry Act 1995 and the Gas Act 2000.

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18.2 Basis of accounting The Financial Statements are a general purpose financial report and have been prepared in accordance with: – Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board; and – The Treasurer’s Instructions issued under the provisions of the Financial Management Act 2016. The Financial Statements were signed by the Accountable Authority on 5 October 2020. Compliance with the Australian Accounting Standards may not result in compliance with International Financial Reporting Standards, as the AAS include requirements and options available to not-for-profit organisations that are inconsistent with IFRS. The Department is considered to be not-for-profit and has adopted some accounting policies under the AAS that do not comply with IFRS. The Financial Statements have been prepared on an accrual basis and, except where stated, are in accordance with the historical cost convention. The accounting policies are generally consistent with the previous year except for those changes outlined in note 19.5. The Financial Statements have been prepared as a going concern. The continued existence of the Department in its present form, undertaking its current activities, is dependent on Government policy and on continuing appropriations by Parliament for the Department’s administration and activities. The Department has made no assumptions concerning the future that may cause a material adjustment to the carrying amounts of assets and liabilities within the next reporting period. COVID-19 is a disease caused by a new form of coronavirus which causes respiratory infections. COVID-19 was declared a worldwide pandemic by the World Health Organisation in March 2020. COVID-19 and the measures taken to slow the spread of the virus, have had a significant impact on global economies. The Department has considered the impact of COVID-19 in preparing the financial statements.

18.3 Reporting entity The Financial Statements include all the controlled activities of the Department. The Financial Statements consolidate material transactions and balances of the Department and entities included in its output groups. Material transactions and balances between the Department and such entities have been eliminated. The Department must provide a list of entities whose transactions and balances are included in its Consolidated Financial Statements in note 14.1.

18.4 Functional and presentation currency These Financial Statements are presented in Australian dollars, which is the Department’s functional currency.

18.5 Changes in accounting policies

(a) Impact of new and revised Accounting Standards In the current year, the Department has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to its operations and effective for the current annual reporting period. These include: – AASB 15 Revenue from Contracts with Customers – This Standard establishes principles that require an entity to apply to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. – AASB 15 supersedes AASB 111 Construction Contracts, AASB 118 Revenue and related Interpretations and it applies, with limited exceptions, to all revenue arising from contracts with customers. AASB 15 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

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The Standard requires the Department to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The Standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the Standard requires relevant disclosures. The Department has adopted AASB 15 retrospectively with the cumulative effect of applying the Standard recognised from 1 July 2019 by adopting the transitional practical expedient permitted by the Standard. The effect of adopting AASB 15 on the Schedule of Administered Income and Expenses is as follows:

2020 Notes With adoption of Adjustment Without adoption AASB 15 $’000 of AASB 15 $’000 $’000

Revenue Grants (a) 3 317 845 (25 433) 3 292 412 Net impact 3 317 845 (25 433) 3 292 412

The effect of adopting AASB 15 on the Schedule of Administered Assets and Liabilities is as follows:

2020 Notes With adoption of Adjustment Without adoption AASB 15 $’000 of AASB 15 $’000 $’000

Liabilities Contracted Liabilities (b) 242 416 (242 416) … Equity Accumulated funds (b) 242 416 (242 416) …

Explanation for AASB 15 adjustments: (a) The adjustment made to Grants revenue reflects the recognition of revenue in accordance with AASB 15 when performance obligations under National Partnership Agreements are met. The Department recognises revenue as agencies achieve performance obligations or over time as agencies make progress towards the delivery of outputs as required under specific NPAs. Agencies are reimbursed in arrears after costs have been incurred and obligations have been met or progressed. (b) The increase in the Contract liability as at 30 June 2020 represents the recognition of a revenue received in advance liability associated with funding received under National Partnership Agreements. The total Contract Liability reflects the balance in S722 Australian Government Funding Management Account as at 30 June 2020. – AASB 16 Leases –This Standard introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities. The standard results in most of the Department’s operating leases being brought onto the Statement of Financial Position and additional note disclosures. The calculation of the lease liability takes into account appropriate discount rates, assumptions about the lease term, and required lease payments. A corresponding right-of-use asset is recognised, which is amortised over the term of the lease. Operating lease costs are no longer shown. In the Statement of Comprehensive Income, impact of leases is through amortisation and interest charges. In the Statement of Cash Flows, lease payments is shown as cash flows from financing activities instead of operating activities. The Department has adopted AASB 16 retrospectively with the cumulative effect of applying the standard recognised from 1 July 2019 by adopting the transitional practical expedient permitted by the Standard. The Department elected to use the practical expedient to expense lease payments for lease contracts that, at their commencement date, have a lease term of 12 months or less and do not contain a purchase option (short-term leases), and lease contracts for which the underlying asset is valued at $10 000 or under when new (low value assets).

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In applying AASB 16 for the first time, the Department has used the following practical expedients permitted by the standard: – not reassess whether a contract is, or contains, a lease at 1 July 2019, for those contracts previously assessed under AASB 117 and Interpretation 4; – applying a single discount rate to a portfolio of leases with reasonably similar characteristics; – relying on its previous assessment on whether leases are onerous immediately before the date of initial application as an alternative to performing an impairment review; – not recognise a lease liability and right-of-use asset for short-term leases that end within 12 months of the date of initial application; – excluding the initial direct costs from the measurement of the right-of-use asset at the date of initial application; and – using hindsight in determining the lease term where the contract contained options to extend or terminate the lease. – The effect of adopting AASB 16 on the Schedule of Assets and Liabilities is as follows:

Note $’000

Administered Assets Right-of-use assets 15.23 292 246 Administered Liabilities Lease liabilities 15.38 292 246

The significant change in administered right-of-use assets and administered lease liabilities relate to the recognition of major office accommodation leases in Finance-General, in accordance with Treasurer’s Instruction C-2Contracts – Major Office Accommodation and Treasurer’s Instruction FC-19 Leases. Leases for major office accommodation were previously recognised as operating lease expenses and associated commitments, within the agency occupying the leased premises and having executed the lease on behalf of the Crown in Right of Tasmania. Treasurer’s Instructions C-2 and FC-19 require that lease contracts by the Crown in Right of Tasmania for premises that meet the criteria of major office accommodation are negotiated and executed by Treasury, and that Treasury will manage the occupancy of major office accommodation by assigning agencies to designated tenancies. Treasury hold the substantive substitution rights over these lease contracts and the leasing arrangements are executed through Finance-General.

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Reconciliation of administered operating lease commitments as at 30 June 2019 to administered lease liabilities on 1 July 2019:

$’000

Operating lease commitments as at 30 June 2019 (ex GST) 286 038 Weighted average incremental borrowing rate as at 1 July 2019 2.52% Reconciliation: Discounted operating lease commitments as at 1 July 2019 209 439 Add: Commitments relating to leases previously classified as finance leases (ex GST) … Lease payments relating to renewal periods not included in operating lease … commitments as at 30 June 2019 Less practical expedients: Commitments relating to short-term leases … Commitments relating to leases of low-value assets … Add / (less): Contracts re-assessed as lease contracts 82 807 Adjustments relating to changes in the index or rate affecting variable payments … Lease liabilities as at 1 July 2019 292 246

– AASB 1058 Income of Not-for-Profit Entities – This Standard establishes principles for Not-for-Profit entities that applies to transactions where the consideration to acquire an asset is significantly less than fair value, principally to enable a Not-for-Profit entity to further its objectives, and the receipt of volunteer services. The timing of income recognition under AASB 1058 depends on whether a transaction gives rise to a liability or other performance obligation, or a contribution by owners, related to an asset (such as cash or another asset) received. If the transaction is a transfer of a financial asset to enable the Department to acquire or construct a recognisable non-financial asset to be controlled by the Department (i.e. an in-substance acquisition of a non-financial asset), the Department recognises a liability for the excess of the fair value of the transfer over any related amounts recognised. The Department will recognise income as it satisfies its obligations under the transfer, similarly to income recognition in relation to performance obligations under AASB 15 as discussed above. Revenue recognition for the Department’s appropriations, taxes, royalties and most grants and contributions will not change under AASB 1058, as compared to AASB 1004. Revenue will continue to be recognised when the Department gains control of the asset (e.g. cash or receivable) in most instances. The Department does not currently receive volunteer services. The Department has adopted AASB 1058 retrospectively with the cumulative effect of applying the Standard recognised from 1 July 2019 by adopting the transitional practical expedient permitted by the Standard. The Department has also adopted the transitional practical expedient as permitted by the Standard, whereby existing assets acquired for consideration significantly less than fair value principally to enable the entity to further its objectives, remain recorded at cost and are not restated to their fair value. The financial impact of adopting this standard is minimal. (a) Impact of new and revised Accounting Standards yet to be applied The following applicable Standards have been issued by the AASB and are yet to be applied: – AASB 1059 Service Concession Arrangements: Grantors – The objective of this Standard is to prescribe the accounting for a service concession arrangement by a grantor that is a public sector entity. This Standard applies on or after 1 January 2020. The impact of this Standard is enhanced disclosure in relation to service concession arrangements for grantors that are public sector entities. The financial impact is expected to be minimal.

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18.6 Foreign currency Transactions denominated in a foreign currency are converted at the exchange rate at the date of the transaction. Foreign currency receivables and payables are translated at the exchange rates current as at balance date.

18.7 Comparative figures Comparative figures have been adjusted to reflect any changes in accounting policy or the adoption of new standards. Details of the impact of changes in accounting policy on comparative figures are at note 18.5.

18.8 Rounding All amounts in the Financial Statements have been rounded to the nearest thousand dollars, unless otherwise stated. As a consequence, rounded figures may not add to totals. Amounts less than $500 are rounded to zero and are indicated by the symbol “…”.

18.9 Departmental taxation The Department is exempt from all forms of taxation except Fringe Benefits Tax and Goods and Services Tax.

18.10 Goods and services tax Revenue, expenses and assets are recognised net of the amount of Goods and Services Tax, except where the GST incurred is not recoverable from the Australian Taxation Office. Receivables and payables are stated inclusive of GST. The net amount recoverable, or payable, to the Australian Taxation Office is recognised as an asset or liability within the Statement of Financial Position. In the Statement of Cash Flows, the GST component of cash flows arising from operating, investing or financing activities, which is recoverable from, or payable to, the Australian Taxation Office is, in accordance with the Australian Accounting Standards, classified as operating cash flows.

18.11 Budget Information Budget information refers to original estimates as disclosed in the 2019-20 Budget Papers and is not subject to audit. OTTER is included in the Department’s budget figures disclosed in the 2019-20 Budget Papers. However, OTTER has been excluded from budget information and actual figures in the 2019-20 Financial Statements. The entity is required to prepare separate financial reports in accordance with theEconomic Regulator Act 2009, Water and Sewerage Industry Act 2008, Electricity Supply Industry Act 1995 and the Gas Act 2000. A reconciliation to the 2019- 20 Budget Papers is included below.

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Reconciliation of 2019–20 Budget Papers to the Department’s Budget

Budget $’000 Comprehensive result (10) Adjustments for OTTER Plus impact of Revenue and other income from transactions Fees and fines (1 806) Other revenue (250) (2 056) Plus impact of Expenses from transactions Employee benefits 1 465 Supplies and consumables 349 Depreciation 10 Other expenses 259 2 083

Comprehensive result – Department only 17

Net assets/(liabilities) 9 333 Adjustments for OTTER Plus impact of Assets Cash and cash equivalents (572) Other financial assets (321) (893) Plus impact of Liabilities Employee Benefits 274 Payables 9 Other liabilities 453 736

Net assets/(liabilities) – Department only 9 176

Net increase/(decrease) in cash and cash equivalents held (296) Adjustments for OTTER Plus impact of Cash inflows Fees and fines (1 806) Other receipts (250) (2 056) Plus impact of Cash outflows Employee benefits 1 438 Supplies and consumables 349 Other payments 259 Net Borrowings 10 2 056

Net increase/(decrease) in cash and cash equivalents held – Department only (296)

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INDEPENDENT AUDITOR’S REPORT

Independent Auditor’s Report

To the Members of Parliament

Department of Treasury and Finance

Report on the Audit of the Financial Statements

Opinion

I have audited the financial statements of the Department of Treasury and Finance (the Department), which comprise the statement of financial position as at 30 June 2020 and statements of comprehensive income, changes in equity and cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting policies, other explanatory notes and the statement of certification by the Secretary of the Department.

In my opinion, the accompanying financial statements: (a) present fairly, in all material respects, the Department’s financial position as at 30 June 2020 and its financial performance and its cash flows for the year then ended (b) are in accordance with the Financial Management Act 2016 and Australian Accounting Standards.

Basis for Opinion

I conducted the audit in accordance with Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Department in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to my audit of the financial statements in Australia. I have also fulfilled my other ethical responsibilities in accordance with the Code.

The Audit Act 2008 further promotes the independence of the Auditor-General. The Auditor- General is the auditor of all Tasmanian public sector entities and can only be removed by Parliament. The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction by any person about the way in which audit powers are to be exercised. The Auditor- General has for the purposes of conducting an audit, access to all documents and property and can report to Parliament matters which in the Auditor-General’s opinion are significant.

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I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

My audit is not designed to provide assurance on the accuracy and appropriateness of the budget information in the Department’s financial statements.

Key Audit Matters

Key audit matters are those matters that, in my professional judgement, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters.

Why this matter is considered to be one of the Audit procedures to address the matter most significant matters in the audit included Defined Benefits Superannuation (Administered) Refer to note 15.29 The Department administers the Government’s • Obtaining the State Actuary’s valuation of defined benefit superannuation liability. As at the defined benefit liability and, with the 30 June 2020, the defined benefit assistance of an independent actuary: superannuation liability was $10.27bn. o assessing the appropriateness of the The underlying model used to value the liability methodology used is complex and involves a significant degree of assessing the reasonableness of judgement and estimation by management and o underlying assumptions and judgements the State Actuary in the selection of long-term used in estimating the liability, including assumptions. These include salary and pension comparison against accepted industry incremental rates, indexation rates for benchmarks compulsory preserved benefits, employer contribution rates, discount rates and other o confirming the accuracy of the amounts assumptions to which the valuation of the reported in the financial statements. liability is highly sensitive. • Evaluating the State Actuary’s responses to the findings from the report of the independent actuary. • Assessing the adequacy of relevant disclosures in the financial statements against the requirements of Australian Accounting Standards.

Australian Government Grants (Administered) and Contract Liabilities (Administered) Refer to notes 15.5 and 15.18 The Department administers Australian • Evaluating the basis for recognising Government Grants (Specific Purpose significant administered grant revenue Payments, National Partnership Payments and items under AASB 15 or AASB 1058. General Purpose Grants) and acts as an

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intermediary between the Australian • Testing on a sample basis, management’s : Government and other and State Departments. o identification and determination of Judgement is involved in determining whether performance obligations administered grant revenue is accounted for allocation of revenue to performance under AASB 15 Revenue from Contracts with o obligations Customers or AASB 1058 Income of Not-for- Profit Entities. For revenue recognised under o determination of when performance AASB 15, further judgement is required to: obligations have been met and the resultant calculation of revenue and • identify specific performance obligations contract liabilities. • allocate grant revenue to those • Assessing the adequacy of relevant performance obligations disclosures in the financial statements. • determine when the performance obligations have been satisfied. For administered grant revenue used to acquire or construct a non-financial asset, judgement is also exercised to determine when performance obligations are satisfied and revenue is recognised under AASB 1058.

Responsibilities of the Secretary for the Financial Statements

The Secretary is responsible for the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards, and the financial reporting requirements of Section 42 (1) of the Financial Management Act 2016. This responsibility includes such internal control as determined necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Secretary is responsible for assessing the Department’s ability to continue as a going concern unless the Department’s operations will cease as a result of an administrative restructure. The assessment must disclose, as applicable, matters related to going concern and the appropriateness of using the going concern basis of accounting.

Auditor’s Responsibilities for the Audit of the Financial Statements

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

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As part of an audit in accordance with the Australian Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Department’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Secretary. • Conclude on the appropriateness of the Secretary’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Department’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusion is based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Department to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

I communicate with the Secretary regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

From the matters communicated with the Secretary, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Rod Whitehead Auditor-General

Tasmanian Audit Office

8 October 2020 Hobart

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In 2019–20, we continued to meet Legislation Director of Public Prosecutions Act our compliance requirements. 1973 (in so far as it relates to the This section outlines our annual administered superannuation entitlements of the legislative reporting responsibilities. As at 30 June 2020, Treasury Director of Public Prosecutions) administered 66 pieces of primary Duties Act 2001 legislation, either whole or in part. Economic Regulator Act 2009 Appropriation Act (No. 1) 2019 Electricity Companies Act 1997 Appropriation Act (No. 2) 2019 Electricity Reform Act 2012 (administered for Minister for Appropriation (Supplementary Energy) Appropriation for 2019-20) Act 2020 Electricity Supply Industry Act 1995 Audit Act 2008 (Part 2 and Divisions 3, 4, 5, 6, 8A Business Undertakings Assistance Act and 10 of Part 3) 1984 Fee Units Act 1997 Charter of Budget Responsibility Act Financial Agreement Act 1994 2007 Financial Management Act 2016 Commonwealth and State Statistical Agreement Act 1924 Financial Sector Reform (Tasmania) Act 1999 Commonwealth Places (Mirror Taxes Administration) Act 1999 First Home Owner Grant Act 2000 Competition Policy Reform (Tasmania) Gaming Control Act 1993 Act 1996 Government Business Enterprises Consolidated Fund Appropriation Act (Sale) Act 2003 (No. 1) 2018 Government Business Enterprises Act Consolidated Fund Appropriation Act 1995 (No. 2) 2018 Government Procurement Review Consolidated Fund Appropriation (International Free Trade Agreements) (Supplementary Appropriation for Act 2019 2018-19) Act 2019 Governor of Tasmania Act 1982 Corporations (Tasmania) Act 1990 (in so far as it relates to the (in so far as it relates to the superannuation entitlements of the superannuation entitlements Governor) of transferred members of the Homebuilder Grants Act 2020 Australian Securities Commission) Homes (Sale of Mortgages) Act 1993 Decimal Currency Act 1965 Judges' Contributory Pensions Act 1968 Land Tax Act 2000

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Land Tax Rating Act 2000 Public Works Committee Act 1914 (in Legislation enacted so far as it relates to the conditions Liquefied Petroleum Gas (Subsidy) During 2019–20, ten pieces of precedent to commencing public Act 1980 legislation were prepared by works) Liquor Licensing Act 1990 Treasury and received Royal Assent. Public Works Construction Act 1880 Local Government (Rates and Charges Solicitor-General Act 1983 Supply Act (No. 1) 2020 Remissions) Act 1991 (in so far as it relates to the superannuation (Royal Assent on 6 April 2020) Mutual Recognition (Tasmania) entitlements of the Solicitor- This Act made provisions for the Act 1993 General) appropriation of $3.02 billion out of the Public Account to Nation Building and Jobs Plan State Grants Commission Act 1976 meet operating and capital Facilitation (Tasmania) Act 2009 Subordinate Legislation Act 1992 expenditure requirements of National Taxation Reform Government for the six months Supply Act (No. 1) 2020 (Commonwealth-State Relations) to 31 December 2020. Act 1999 Supply Act (No. 2) 2020 Supply Act (No. 2) 2020 New Tax System Price Exploitation Tamar Valley Power Station Act 2008 Code (Tasmania) Act 1999 (Royal Assent on 6 April 2020) Tasmanian Public Finance Corporation This Act made provisions for the Parliamentary Salaries, Act 1985 appropriation of $17.8 million out Superannuation and Allowances Act Taxation Administration Act 1997 of the Public Account to meet 2012 (in so far as it relates to the operating and capital expenditure superannuation entitlements of TOTE Tasmania (Sale) Act 2009 requirements of the Government in members of Parliament) Trans-Tasman Mutual Recognition respect of Parliament and Statutory Parliament Square Planning Permit Act (Tasmania) Act 2003 Offices for the six months to 2012 31 December 2020. (administered for Minister for TT-Line Gaming Act 1993 Planning) Appropriation (Supplementary Payroll Tax Act 2008 TT-Line Vessel Replacement Fund Act 2017 Appropriation for 2019-20) Payroll Tax Rebate (Apprentices, Treasury (Borrowing) Act 2016 Act 2020 Trainees and Youth Employees) (Royal Assent on 6 April 2020) Act 2017 Water and Sewerage Corporation Act This Act provided for a 2012 Public Sector Superannuation Reform supplementary appropriation out of Act 2016 Water and Sewerage Industry the Public Account, in accordance (Community Service Obligation) Act with the Financial Management 2009 Act 2016, for operating and capital expenditure requirements of Water and Sewerage Industry Act Government, which was not 2008 (Subdivision 3 of Division 1, included in the 2019-20 Budget. Division 5 of Part 4 and sections 88 a nd 111) Unclaimed Money Act 2015

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Gaming Control Amendment Public Sector Superannuation Taxation and Related Legislation (Wagering) Act 2019 Reform Amendment Act 2019 (Miscellaneous Amendments) (Royal Assent on 12 December 2019) (Royal Assent on 18 December Act 2020 This Act introduced a point of 2019 – yet to be proclaimed) (Royal Assent on 6 April 2020) consumption (POC) tax on This Act clarified roles and This Act amended the First Home wagering for all Australian betting responsibilities under the Heads of Owner Grant Act 2000 to extend operators offering services to Government Agreement in relation the $20 000 first home owner grant Tasmanians, gave effect to a to superannuation, provided that for a further two years to 30 June number of harm minimisation the accountable authority of the 2022; amended the Payroll Tax Act measures under the National Superannuation Commission will be 2008 to allow provision for the Consumer Protection Framework the Secretary of the Department Minister to make a Ministerial Order for Online Wagering in Australia, of Treasury and Finance for the to waive the payment of payroll tax and implemented miscellaneous purposes of the Audit Act 2008, under the Act for a specified period, wagering amendments to improve facilitated the closure of the and waive other administrative administrative efficiency and Tasmanian Government Insurance processes required under the Act national consistency. Office Reserve Account and for a period of one year after it provided for incorporation of the is declared that COVID-19 is no Government Procurement Tasmanian Ambulance Service longer a public health emergency, Review (International Free Superannuation Scheme Trust Deed and amended the Payroll Tax Rebate Trade Agreements) Act 2019 and the State Fire Commission (Apprentices, Trainees and Youth (Royal Assent on 2 October 2019) Superannuation Trust Deed in the Employees) Act 2017 to prescribe Public Sector Superannuation Reform that businesses that employ new This Act enables review by the Regulations 2017. youth employees between I April Tasmanian Supreme Court 2020 and 3I December 2020 will be of government procurement Public Works Committee eligible for a one year rebate of the complaints, consistent with the payroll tax paid on the wages and domestic review mechanism in the Amendment Act 2019 (Royal Assent on 12 December 2019) allows the Minister to amend the Comprehensive and Progressive length of the rebate and the eligible Agreement for Trans-Pacific This Act amended the Public Works Committee Act 1914 period by Ministerial Order, if the Partnership Agreement and the to lift the Minister considers it appropriate Singapore-Australia Free Trade threshold for public works referred in response to the impact of Agreement. to the Public Works Committee, COVID-19. from $5 million for public works to $8 million for building or construction works and $20 million for road or bridges works.

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Duties Amendment Act 2020 Appeal processes Similar provisions exist for recipients (Royal Assent on 30 March 2020) of grants under the First Home A number of avenues exist under Owner Grant Act 2000 This Act amended the Duties and claimants legislation for people to appeal Payroll Tax Rebate Act 2001 to provide clarity for under the decisions made by Treasury and its (Apprentices, Trainees and Youth provisions relating to the Foreign associated entities. Employees) Act 2017 Investor Duty Surcharge. . If the person is dissatisfied with the independent Under the Gaming Control Act internal review of a decision, the Homebuilder Grants Act 2020 1993, a person aggrieved of certain Tasmanian legal system provides decisions of the Tasmanian Liquor (Royal Assent on 6 July 2020 — Act the right of review/appeal to the and Gaming Commission may commenced 4 June 2020) Administrative Appeals Division of appeal to the Supreme Court of the Magistrates Court or by the This Act established the Tasmania. Where an exclusion from Supreme Court of Tasmania Australian Government’s $25 000 wagering has been applied, if the HomeBuilder Grant and the Commission amends the exclusion Under the State Service Act 2000, Tasmanian Government’s $20 000 order, the person who is subject to applicants to employment processes Tasmanian HomeBuilder Grant. the exclusion order or the person may seek a review to the Tasmanian who applied for it may apply to the Industrial Commission in relation to Administrative Appeals Division of a permanent recruitment process or the Magistrates Court under the an administrative action undertaken Magistrates Court (Administrative by Treasury. Appeals Division) Act 2001 for a Homebuilder Grants review of the decision. Under the Act 2020, a person may lodge an Under the Liquor Licensing Act objection against a decision of the 1990, a person may appeal to the Commissioner of State Revenue. Tasmanian Liquor and Gaming If the person is dissatisfied with Commission against a decision by the Commissioner’s review of the the Commissioner for Licensing. A decision in respect of the objection, decision by the Commission is final that person may apply to the and without appeal. Magistrates Court (Administrative Appeals Division) for a review of Under the Taxation Administration that decision. Act 1997, taxpayers may lodge an objection against a decision or assessment of the Commissioner of State Revenue.

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Participation in Internal grievance Speeches and industrial matters procedures presentations We take a consultative approach Our aim is to work with our people During the year, we delivered to change in Treasury and to resolve any employment matters seven key presentations at various provide a range of opportunities in a timely manner and at the local professional and community forums. for our people to contribute to level. We also have an internal – Tackling the exercise of the decision-making, new initiatives grievance resolution procedure, Commissioner’s Discretionary and workplace changes through which ensures that our employees Powers, 19th Annual States participation on various will be treated with care, respect Taxation Conference, Jonathon departmental committees and and that any grievances will be dealt Root, Commissioner of State forums. These include: with promptly and fairly. No formal Revenue, 24-26 July 2019, grievance complaints were received – Participation on the Executive Brisbane. this year. Committee as a six-month – Population projections, rotational member which Department of Communities, involves active input into policy Community Kirstan Long, Principal Policy development and governance awareness Analyst, Economic Policy, matters; 5 August 2019, Hobart. Our role and services are explained – Representative participation – Revenue Office Update, on our Work Health and on our websites, which include contact information for Treasury Australian Institute of Safety Committee which Conveyancers, Kyree Gaffney, involves consultation and active branches. To educate the public on our services and programs, our Team Leader, State Revenue consideration of relevant health Office, 31 August 2019, Hobart. and safety matters; State Revenue Office, Liquor and Gaming Branch and Office of – Population projections, – Participation in the Diversity the Superannuation Commission Economics Society of and Inclusion Reference Group regularly produce information Australia (Tasmanian Branch), provides staff an opportunity including newsletters, fact sheets, Kirstan Long, Principal Policy to contribute towards a more webinars, seminars and videos that Analyst, Economic Policy, diverse, inclusive and equitable are published on our websites. A list 17 September 2019, Hobart. workplace; and of Treasury’s websites appears at – Advancing Women’s Leadership – Participation in relation to the back of this Report. in Tasmania, Advancing Women’s specific change management Leadership in Tasmania summit, processes in order to Emsada Babic, Deputy Secretary, provide employees with the Corporate and Governance opportunity to influence Division, 21 October 2019, workplace initiatives or changes Hobart. that will affect them. – Welcome and Introduction, Australasian Liquor Licensing Authorities Forum (ALLAF), Jonathon Root, Commissioner for Licensing, 13-14 November 2019, Hobart.

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– The Superannuation – State Grants Commission – Response to CGC Staff Commission overview and 2019-20 Financial Assistance Discussion Paper: Significant information session, meeting of Grant Data Tables, changes since the Draft Report, the Tasmanian Association of September 2019 January 2020 State Superannuants, Adrian – Commission Decision CD20 01 – Discussion Paper DP20 01 - Christian, Director Office of the Socio Economic Factors in the Regional Responsibility Non Superannuation Commission, Base Grant Model - Proposal Resident Impacts - The Bigger 24 February 2020, Launceston. to replace the Unemployment Picture, January 2020 Cost Adjustor with a SEIFA – Revised Estimates Report Publications based Cost Adjustor, October 2019-20 (including December 2019 During 2019–20, we produced a Quarterly Report), February range of publications to develop – Tasmanian Government Fiscal 2020 community and stakeholder Sustainability Report 2019, – Economic Data Releases, awareness of Treasury’s role October 2019 multiple times a week up until and services. These publications – Treasurer’s Annual Financial March 2020 are available on our website Report 2018-19, October 2019 – Overall Government (www. treasury.tas.gov.au). – Department of Treasury and Procurement Statistics, August A list of publications is below: Finance Annual Report 2018-19, 2019, November 2019, February – Preliminary Outcomes Report October 2019 2020, April 2020 2018-19, August 2019 – Response to CGC Staff – Future Opportunities Schedule, – Guideline information to assist Discussion Paper 2019 01 July 2019, October 2019, January councils completing the State S: New Issues for the 2020 2020, April 2020 Grants Commission sections Review, November 2019 – Economic and Fiscal Update of the Consolidated Data – Technology Services Report, May 2020 (this report Collection (CDC) Return - Procurement Review Discussion included March Quarterly 2018-19 CDC, August 2019 Paper, November 2019 Report) – Tasmanian Government – Information Paper IP20 01 State submission to the CGC Draft Grants Commission Strategic Report on GST Revenue and Operational Planning Sharing Relativities (2020 Framework, December 2019 Methodology Review), September 2019 – September Quarterly Report 2019-20, December 2019 – State Grants Commission Annual Report 2018- – Office Accommodation Fitout 19, including 2019-20 Guideline, December 2019 Financial Assistance Grant – Tasmanian Risk Management Recommendations (Report Fund Annual Report 2018-19, #43), September 2019 December 2019

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Parliamentary Ethics and integrity Gifts, benefits and committee We are committed to upholding hospitality appearances our responsibilities under the Treasury maintains a register to Integrity Commission Act 2009, In 2019–20, our staff appeared record gifts received or given and we use various strategies by our staff consistent with the before seven parliamentary to help staff understand their committees. whole-of-government Gifts, responsibilities under the Act. Our Benefits and Hospitality Policy. – Legislative Council Sessional practices in relation to recruitment, Our 2019-20 register is available on Committee Government remuneration and entertainment our website (www.treasury.tas.gov. Administration ‘A’ – Inquiry expenditure align with the au/about-us/corporate-governance/ into Commonwealth Grants requirements of relevant legislation, routine-disclosure-of-information/ Commission Horizontal policies and guidelines. gifts-benefits-and-hospitality) and Fiscal Equalisation system, We have continued to evolve provides transparency on how we 12 August 2019. the Treasury Conflict of Interest manage the receipt and offer of – Select Committee on the Framework, by developing a staff gifts, benefits and/or hospitality. House of Assembly Restoration training package that sets out the Bill, 6 September 2019. process for clearly identifying and appropriately managing conflicts of – Parliamentary Standing interest. Committee of Public Accounts – Review of the Tasmanian Treasury’s Selection Report Government Fiscal Sustainability Template incorporates conflict of Report 2016, 30 October 2019. interest requirements to strengthen our management of these risks – Joint Standing Committee in the recruitment process and on Subordinate Legislation – align with whole of government Waiver of liquor and gaming requirements. fees, 28 April 2020. – Parliamentary Standing Committee of Public Accounts – Review of Economic and Fiscal Update Report – May 2020, 21 May 2020. – Joint Standing Committee on Subordinate Legislation – Land Tax bills under $150, 26 June 2020. – Parliamentary Standing Committee of Public Accounts – Inquiry into the Tasmanian Government’s response to the COVID-19 pandemic, 29 June 2020.

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Superannuation Flourishing Super Fund Pricing policy Gluskie Superannuation Fund contributions Hesta Super Fund We have limited activities for which the pricing of goods and services Hostplus Superannuation Fund SUPERANNUATION is required. In accordance with the CERTIFICATE ING Direct Living Super Government’s policy on fees and IOOF Employer Super I, Tony Ferrall, Secretary, Department charges, Treasury’s normal practice of Treasury and Finance, hereby Kandk Super Fund is to adopt a model based on certify that the Department of Local Government Super Scheme full-cost recovery. Treasury and Finance has met its Macquarie Super As at 30 June 2020, we levied fees obligations under the Australian Menzie Family Super Fund and charges in accordance with Government’s Superannuation MLC Super Fund the provisions of one Act and nine Guarantee (Administration) Act 1992 Regulations. in respect of those employees of MLC Wrap Super Gaming Control Act 1993 the Department who are members QSuper – of the following superannuation RBF Tasmania – Duties Regulations 2011 schemes to which the Department REST Superannuation – Economic Regulator Regulations contributes: Sunsuper Super 2010 AMP Flexible Super Directions Fund – Electricity Supply Industry AMP Flexible Lifetime Tasplan Super Regulations 2008 AMP Signature Super Telstra Super – Gaming Control Regulations 2014 AMP SuperLeader The Trustee for Hidding Superfund – Land Tax Regulations 2010 ANZ Smart Choice Super The Trustee for Marshwood Liquor Licensing (Fees) ANZ Super Advantage – Superannuation Regulations 2015 Asgard eWRAP Super The Trustee for Peter Bennett Super Public Sector Superannuation Asgard Infinity eWRAP Super – UniSuper Management Reform Regulations 2017 Australian Ethical Retail The Victorian Superannuation Fund Superannuation – Public Sector Superannuation Voyage Superannuation Master Trust Reform (Parliamentary Australian Super Superannuation) Regulations 2016 Bendigo and Adelaide Bank Staff Taxation Administration Big Black Dog Super Fund – Regulations 2010 Bresnehan Family Super BT Super for Life These fees and charges are subject to the Fee Units Act 1997 and were CARE Super revised and gazetted in accordance CBUS with the provisions of that legislation TONY FERRALL Colonial First State on 28 March 2019. Secretary Emergency Services Super 23 October 2020 Essential Super FirstChoice Personal Super First State Super

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Grant program Risk management Asset management reviews Our Audit and Risk Management We perform the function of building Treasury administers the First Committee, which has an equal owner for the Government-owned Home Owner Grant, a one-off representation of independent office accommodation portfolio payment to applicants who buy or members, has oversight of through the statutory maintenance build a newly constructed home. Treasury’s internal audit function and office works program. and risk management framework. The Government considered In 2019–20, $1.515 million was the future of the program and in Treasury worked with its expended under this program, March 2020 announced a two-year outsourced internal auditors, BDO and $271 208 of this expenditure extension of the grant at $20 000 Australia to complete the following was for maintenance required by until 30 June 2022. internal reviews in 2019-20: the Building Code of Australia and legislation, including the Work Health – Compliance with Treasurer’s and Safety Act 2012 and the Building Instructions. Act 2016. – Clientview Internal Control Review. Existing statutory maintenance contracts provide for routine and – Cash Receipting on the remedial maintenance and security Australian Government Funding of the Government office portfolio Management Account. managed by Treasury. The statutory – Liquor and Gaming Compliance maintenance and office works Framework. program also includes funding for consultancy investigations and – Implementation of the Financial Management Act 2016 landlord works for the buildings . within the Government office – Tasmanian Risk Management portfolio managed by Treasury. Fund - review of workers compensation excess. Under this program in 2019-20, we undertook air conditioning and – Office of the Superannuation fire door upgrades at the Franklin Commission - independent Square worksite, the balance of review of Anti-Money external painting at St John Street, Laundering and Counter Launceston and various repair Terrorism Financing (AML/CTF) works at Government House. program.

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Carbon emissions During 2019–20, our efforts Procurement focused on installing more energy and energy usage efficient heating, replacement of We undertake procurement We are committed to reducing our aging light fittings in our Franklin specific to our own needs, as well energy usage, and over the past Square worksite and the continued as being responsible for a number few years we have implemented recycling of paper, newspaper, of whole of government/common a number of initiatives to help cardboard, bottles, cans and plastic use contracts. All procurement is reduce emissions. During 2019-20, containers to reduce energy undertaken in accordance with the Treasury’s fuel usage has remained consumption and waste. mandatory requirements of the Treasurer’s Instructions. largely consistent with the previous Our energy usage from 2014-15 to year, due to stability in the size of 2019–20 is provided in the table the fleet. below. The increase in energy usage relates to the roll in of Kirksway Place electricity accounts to the Treasury portfolio with a 67 per cent increase in building area.

Energy usage by year:

2014–15 2015–16 2016–17 2017–18 2018–19 2019–20

Electricity (kWh) 940 390 857 968 801 249 855 561 887 015 1 149 827 Gas (MJ)1 … … … … 187 516 184 714 Petrol (kl) 27 18 21 18 24 24 Diesel (kl) 9 11 14 13 11 10 Total (kl) 36 29 35 31 35 34

1 Until the occupation of the Salamanca Building, Parliament Square, buildings managed by Treasury did not consume natural gas. The leased Salamanca Building, Parliament Square is heated using gas fired boilers and this is the consumption for that building.

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Support for A summary of the level of This summary does not include participation by local businesses procurement activity under TI PF-7 local business for contracts and procurement COVID-19 Emergency Procurement Measures We undertake procurement in processes (including direct , which is reported a manner that is consistent with selections) with a value of $50 000 separately in this report. the Government’s Buy Local or over (excluding GST) is set out in Policy, which provides Tasmanian the table below. businesses with opportunities to compete for business.

Level of participation of local businesses for contracts and procurement:

Treasury specific Whole of government Total Treasury specific and contracts common use contracts common use contracts

Total number of contracts awarded in 2019-20 9 131 221 Total number of contracts awarded to Tasmanian 6 121 181 businesses2 in 2019-20 Value of contracts3 awarded in 2019-20 $2 508 240 $15 226 0004 $17 734 2404 Value of contracts3 awarded to Tasmanian $893 120 $15 226 0004 $16 119 1204 businesses2 in 2019-20 Number of tenders called and/or quotation 8 3 11 processes run in 2019-205 Total number of bids and/or written quotations 24 26 50 received in 2019-205 Total number of bids and/or written quotations 18 20 38 received from Tasmanian businesses2 in 2019-205

1 Contracts awarded during the financial year include one common use contract panel arrangement - the Information and Communications Technology Hardware Contract - with multiple contracts awarded. Due to the nature of panel arrangements, the individual contract values for the suppliers awarded contracts cannot be determined. However, as the total estimated value of the procurement is $50 000 or more, the number of contracts awarded has been included in the ‘contracts awarded’ information for completeness. 2 A ‘Tasmanian business’ is a business operating in Tasmania that has a permanent office or presence in Tasmania and which employs Tasmanian workers. 3 The values in this table do not include the value of options to extend nor GST. 4 As individual contract sales under the Information and Communications Technology Hardware Contract are not guaranteed, individual contract values for the suppliers awarded contracts are not able to be determined. Therefore, zero values have been attributed to this contract. An estimate for this contract is set out in footnotes to the Contracts Awarded table below. 5 Includes selective tenders such as EOIs. Does not include direct selections pursuant to TI PP-2 or TI PF-2 nor contract extensions pursuant to TI PP-6 or TI PF-7.

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Contracts awarded The following table provides information on contracts that Treasury has awarded this year with a value of $50 000 or over (excluding GST):

Total value of contract Location of Period of Option to (excluding Name of contractor contractor Description of contract contract extend GST)1

Equipment Finance $276 000 Commonwealth Bank of Hobart, 25 Mar 2020 25 Mar 2023 Lease Facility Contract Australia Tasmania to 24 Mar 2023 to 24 Mar 2027 Option value: L300 $184 000

$450 000 Government Banking Services 1 Aug 2019 to 1 Aug 2024 to $14 500 000 – Commonwealth Bank of Australia – Hobart, Tasmania 31 Jul 2024 31 Jul 2029 – Westpac Banking Corporation – Hobart, Tasmania Option value: $14 950 000

Cambridge, Government House 6 Feb 2020 to Heritage Stone Pty Ltd na $117 320 Tasmania Stonework Restoration 30 Jun 2020

Information and Communication Technology Hardware Contract – Securatech – Ulverstone, Tasmania – OneTouch Technologies – Launceston, Tasmania – Interact IT Services – North Hobart, Tasmania – Innovative Network Solutions – Dynnyrne, Tasmania 10 Apr 2020 to na See note 2 – Jettech Networks – Midway Point, Tasmania 31 Dec 2021 – Eaglecrest Technologies – Hobart, Tasmania – Techquity Pty Ltd – North Hobart, Tasmania – ASI Solutions – Botany, New South Wales – BSH Electrical – Moonah, Tasmania – Officeworks Ltd – Bentleigh, Victoria3

20 Nov 2019 KF Tas (Property Hobart, Real Estate Agent one-off na $96 020 Services) Pty Ltd Tasmania Services purchase

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Total value of contract Location of Period of Option to (excluding Name of contractor contractor Description of contract contract extend GST)1

Masters Contracting Mornington, 20 Aug 2019 to Air Con Replacement na $78 062 Pty Ltd Tasmania 30 Sep 2019

Annual Printing of the 10 Mar 2020 Moonah, Mercury Walch Pty Ltd Budget Papers and one-off na $186 000 Tasmania Associated Documents purchase

Security and Front $82 107 Bellerive, 15 Jan 2020 to 15 Jan 2021 to MSS Security Pty Ltd Desk Reception Tasmania 15 Jan 2021 15 Jan 2023 Option value: Services $164 207

Taroona, Government House 25 Jul 2019 to Paradigm Construction na $333 611 Tasmania Structural Roof Repairs 30 Dec 2019

Supply and Integration Sydney, Performa Software of Enhancements for 13 May 2020 to New South na $350 000 Pty Ltd the Budget Information 31 Dec 2020 Wales Management System

1 The values in this table include the value, or estimated value, of any possible option to extend. 2 These contracts form part of the common use contract for Information & Communications Technology Hardware. During 2019-20, the final extension of the common use contract was exercised, for two years. A Request for Tender process for additional suppliers was undertaken alongside this extension, resulting in the awarding of 10 contracts. The estimated value of the panel contract is $2 000 000. As individual contract sales are not guaranteed under this panel arrangement, individual contract values are not shown. 3 While the head office/contract address of these businesses is in the location identified, these businesses meet the definition of a Tasmanian business being a business operating in Tasmania that has a permanent office or presence in Tasmania and which employs Tasmanian workers.

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Consultancies awarded The following table provides detailed information on consultancies that Treasury has awarded this year with a value of $50 000 or over (excluding GST):

Total value of consultancy Location of Description of Period of Option to (excluding Name of consultant consultant consultancy consultancy extend GST)1

Divestment Process for the Treasury Southbank, 8 Jul 2019 to Pricewaterhouse Coopers Building Complex: na $521 500 Victoria 1 Feb 2021 21 Murray Street, Hobart

Fifth Social and Adelaide, 16 Jun 2020 Economic Impact 1 Jan 2021 to The University of Adelaide South to 31 Dec $743 620 Study of Gambling in 30 Jun 2021 Australia 2020 Tasmania

1 The values in this table include the value, or estimated value, of any possible option to extend.

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In addition, Treasury awarded one year extensions to 22 whole-of-government common use contracts and consultancies under TI PF-7 COVID-19 Emergency Procurement Measures during 2019-20 and a contract for air conditioning works at 21 Murray Street. This information is summarised in the table below:

Whole of Total Treasury Treasury government specific and specific common use common use contracts contracts contracts

Total number of contracts awarded in 2019-20 under TI PF-7 COVID-19 1 221 231 Emergency Procurement Measures

Total number of contracts awarded to Tasmanian businesses2 in 2019-20 1 61 71 under TI PF-7

Value of contracts3 awarded in 2019-20 under TI PF-7 $229 916 $30 167 0004 $30 396 9164

Value of contracts3 awarded to Tasmanian businesses2 in 2019-20 under TI $229 916 $887 0004 $1 116 916 4 PF-7

Number of tenders called and/or quotation processes run in 2019-205 1 na na

Total number of bids and/or written quotations received in 2019-205 2 na na

Total number of bids and /or written quotations received from Tasmanian 2 na na businesses2 in 2019-205

1 Contracts awarded during the financial year include an extension to one common use contract panel arrangement the Vehicles (V672) panel. Due to the nature of panel arrangements, the individual contract values for the suppliers awarded contracts cannot be determined. However, as the total estimated value of the procurement is $50 000 or more, the number of contracts awarded has been included in the ‘contracts awarded’ information for completeness. 2 A ‘Tasmanian business’ is a business operating in Tasmania that has a permanent office or presence in Tasmania and which employs Tasmanian workers. 3 The values in this table do not include GST. 4 As individual contract sales under the Vehicles panel arrangement are not guaranteed, individual contract values for the suppliers awarded contracts are not able to be determined. Therefore, zero values have been attributed to this contract. An estimate for this contract is set out in footnotes to the Contracts Awarded table below. 5 Includes selective tenders such as EOIs. Does not include direct selections pursuant to TI PP-2 or TI PF-2 nor contract extensions pursuant to TI PP-6 or TI PF-7.

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The following table provides details of the individual contract extensions awarded under TI PF-7 COVID-19 Emergency Procurement Measures:

Option Total value Location of Period of to of contract Name of contractor contractor Description of contract contract extend (excluding GST)

21 Murray Street Stage Mornington, 16 Jun 2020 to Masters Contracting Pty Ltd 5A Air Conditioning na $229 916 Tasmania 11 Aug 2020 Upgrades – Building V Petroleum Products 1 Dec 2020 to $5 000 000 – BP Australia Pty Ltd – Melbourne, Victoria na 31 Nov 2021 $24 000 000 – Caltex Australia Petroleum Pty Ltd – Sydney, New South Wales Melbourne, Cartage and 1 Dec 2020 to StarTrack Express na $652 000 Victoria1 Interstate Freight 30 Nov 2021

Vehicles – Ford Motor Company – Campbellfield, Victoria – Tilford Pty Ltd T/A Honda Central – Hobart, Tasmania – Tilford Pty Ltd T/A Euro Central Skoda – Hobart, Tasmania – Volkswagen Group Australia – Chullora, New South Wales – Subaru (Australia) Pty Ltd – Baulkham Hills, New South Wales – Mitsubishi Motors – Mulgrave, Victoria – Isuzu Australia Pty Ltd (Isuzu Trucks) – Port Melbourne, Victoria 1 July 2020 to – Toyota Motor Corporation Australia Ltd – Port Melbourne, Victoria na See note 2 – Mercedes-Benz Australia Pacific Pty Ltd – Mulgrave, Victoria 30 Jun 2021 – Hyundai Fleet Advantage – Macquarie Park, New South Wales – Isuzu Ute Australia – Cannon Hill, Queensland – Nissan Motor Co. Australia Pty Ltd – Dandenong, Victoria – Fiat Chrysler Australia Pty Ltd – Port Melbourne, Victoria – Kia Motors Australia Pty Ltd – Homebush, New South Wales – Renault Australia, Mulgrave, Victoria – Hobart Mazda – Hobart, Tasmania – CJD Equipment – Launceston, Tasmania

1 While the head office/contract address of these businesses is in the location identified, these businesses meet the definition of a Tasmanian business being a business operating in Tasmania that has a permanent office or presence in Tasmania and which employs Tasmanian workers. 2 These contracts form part of the common use contract for Vehicles (V672). The estimated value of the panel contract is $29 000 000. As individual contract sales are not guaranteed under this panel arrangement, individual contract values are not shown.

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The following table provides details of the individual consultancy extensions awarded under TI PF-7 COVID-19 Emergency Procurement Measures:

Total value Location of Period of Option to of contract Name of consultant consultant Description of consultancy consultancy extend (excluding GST)

Tasmanian Risk Hobart, 1 Sep 2020 to GM Actuaries Pty Ltd Management na $235 000 Tasmania 31 Aug 2021 Fund – Actuary

Mercer (Australia) Consulting Melbourne, Public Sector 1 Sep 2020 to na $280 000 Pty Ltd Victoria Superannuation – Actuary 31 Aug 2021

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Common use Leasing Finance Facility Government Banking contracts (L300) Services (BK04) The Leasing Finance Facility contract The Government Banking Services Treasury administers a range of enables agencies to obtain operating contract provides agencies with common use contracts on behalf lease finance for the following efficient and effective banking of the Tasmanian Government. categories of equipment: services by ensuring that banking Common use contracts aggregate fees and charges are competitive – Personal Computers and other buying power to gain efficiencies and delivering a ‘best practice’ IT equipment; in the procurement process and banking environment appropriate achieve the best value for money. – Photocopiers and other for Government. A list of common use contracts electronic office equipment; and is located on Treasury’s purchasing – Other equipment (to be agreed This contract commenced on website by Treasury on a case by case 1 August 2019 and the initial (www.purchasing.tas.gov.au). basis). term expires on 31 July 2024. The contract provides for a three-year Selected common use contracts This contract commenced on may also be used by Government option to extend and a further 25 March 2020 and the initial term two-year option to extend. Business Enterprises, State-owned expires on 24 March 2023. The companies, statutory authorities, contract provides for two two-year During the year, extensions local government and other options to extend. were also issued to the following community based organisations whole-of-government common approved by Treasury. Information and use contracts: This year, Treasury tendered for, or Communications Technology established, the following common Hardware Contract (C150) Information and use contracts: Communications Technology The Information and Hardware Contract (C150) Communications Technology Hardware Contract is a common The second of two two-year use panel arrangement for the extension options for all contractors supply of specified computer under the C150 Contract hardware and related services to commenced on 1 January 2020. This government agencies. is the final extension option under the C150 Contract. A Request for Tender process was undertaken alongside the final extension option (see below) for the appointment of additional suppliers. At the conclusion of the tender process, 10 contracts were awarded during 2019-20 to successful suppliers.

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ICT Professional Services Cartage, Interstate Air Petroleum Products (P450) Panel Contract (ICT PS) Freight (C106) This contract provides for the The ICT Professional Services This contract provides provision of motor spirit and common-use panel arrangement is government users with freight automotive diesel either in bulk used to engage ICT professionals services throughout Australia. or via a fuel card/reseller network. to deliver Information and The contract commenced The contract commenced on Communications Technology on 1 December 2016 for an 1 November 2014 for an initial services. This panel currently has initial term of two years, term of three years, with a 61 suppliers and the first of two, with a two-year option to three-year option to extend and two-year extensions to these extend and was to expire on was to expire on 31 October contracts commenced on 1 July 2019. 30 November 2020. As the 2020. As the COVID-19 situation COVID-19 situation unfolded, unfolded, Treasury sought to Vehicles (V672) Treasury sought to extend extend the existing contract for a further 12 months, expiring on This contract provides for the the existing contract for a 31 October 2021. provision of a comprehensive further 12 months, expiring on range of new passenger and light 30 November 2021. commercial vehicles. The contract commenced on 1 July 2014 for an initial term of three years, with a three year option to extend and was to expire on 30 June 2020. As the COVID-19 situation unfolded, Treasury sought to extend the existing contract for a further 12 months, expiring on 30 June 2021.

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Direct/Limited procurement Treasurer’s Instruction PP-2 Market Approaches provides the Accountable Authority with the discretion, where specified circumstances exist, to approve a direct sourcing or limited submission sourcing approach. Treasury awarded two contracts as a result of a direct sourcing1,2:

Name of supplier Description of contract Reasons for approval Total value of contract

Direct sourcing was approved by the Head of Agency under the following grounds: – The services can be supplied only by a Direct sourcing particular supplier and no reasonable Performa arrangement with alternative or substitute goods or $350 000 Software Pty Ltd Performa Software for services exist; and the BIMS2 project. – additional deliveries of goods or services by the original supplier that were not included in the initial contract if a change of supplier cannot be made for technical reasons. Direct sourcing was approved by the Head Direct sourcing of Agency under the following grounds: arrangement to novate remainder – Exceptional circumstances exist that GM Actuaries of current contract justify the use of direct sourcing; and $186 256 Pty Ltd term from DeeDeeRa – the cost to the agency and to suppliers Actuaries to GM of seeking quotations or calling public Actuaries. tenders would outweigh the associated value for money benefits.

1 In accordance with the requirements of the Treasurer’s Instructions, the values in this table include the value, or estimated value, of any possible option to extend. 2 Approval to undertake direct sourcing for both of the above was granted under the now withdrawn Treasurer’s Instruction 1114 Direct/limited submission sourcing: goods and services during the 2018-19 financial year. However, the contracts were awarded in the 2019-20 financial year.

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Treasurer’s Instruction PF-7 Contracts exempt Contract extensions COVID-19 Emergency Procurement from disaggregation granted Measures provides for a Head requirement Treasurer’s Instructions PP-6 of Agency to extend existing Contract Extensions: Goods and contracts due to reasons of Under TI PF-2 Policies impacting Services provides for a Head of extreme urgency brought about in on procurement: all procurement, a connection with COVID-19. Head of Agency may approve an Agency to extend a contract exemption from the requirement outside the original term of the In addition to the five common-use to disaggregate contracts where contract, for a period of no longer contracts extended, detailed above, the benefits of aggregation clearly than one year, where specified an extension was also granted for outweigh any potential negative circumstances exist. the following contract: impact on local suppliers or the local economy. Tasmanian Risk Management Fund and Public Sector During 2019-20, one exemption to Superannuation – Actuary aggregate a contract was granted in Treasury under TI PF-21: This contract provides for the provision of actuarial services for the Tasmanian public sector superannuation arrangements, Description of Total value of contract Reason for approval contract the Tasmanian Risk Management Fund and other general advice. The contract commenced on Benefits of aggregation, including 1 September 2014 for an initial Social and efficiency, timeliness, independence, term of three years, with a three Economic Impact acceptance and utilisation in the $743 620 year option to extend and was Study of Gambling future, outweigh any potential to expire on 31 August 2020. in Tasmania negative impact on the local economy. As the COVID-19 situation unfolded, Treasury sought to extend the existing contract for 1 In accordance with the requirements of the Treasurer’s Instructions, the values in this table a further 12 months, expiring on include the value, or estimated value, of any possible option(s) to extend. 31 August 2021.

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Confidentiality Exemptions Right to information of government from Treasurer’s requests contracts Instructions We are committed to increasing Treasurer’s Instruction C-1 Government agencies must the Government’s accountability Disclosure and Confidentiality in undertake procurement activities to the public by giving people Government Contracting provides in accordance with the Treasurer’s access to information that we hold in accordance with the Right to for a Head of Agency to approve Instructions. The Secretary of Information Act 2009 the inclusion of a confidentiality Treasury can grant exemptions in (the RTI Act). provision in certain contracts. relation to certain requirements We understand that the information including: Two confidentiality provisions were held by Treasury belongs to the included in Treasury contracts – the requirement to use public and has been collected for awarded in 2019-20, as follows: prequalified contractors for them and on their behalf. building and construction/ Consistent with our aims of Name of Date of approval by roads and bridges works (see improving the sharing of information Parties Head of Agency Treasurer’s Instruction PF-4); or and increasing transparency, and in – the requirement to use accordance with section 53 of the RTI Act, we provide information DATA#3 16 December 2019 prequalified consultants for building and construction to the Department of Justice on our administration of the RTI Act. Standards projects (see Treasurer’s 29 May 2020 Instruction PF-4). This information is included in a Australia Right to Information Annual Report State Growth requested an that is tabled in Parliament by the exemption (under TI PF-4 4.12) on Minister for Justice. We also disclose 16 July 2019 from the requirement certain information on our website to use a prequalified contractor, in where it is considered to be in the order to engage International Fire broader public interest. and Electrical Pty Ltd to undertake works on the Tasman Bridge. This request was approved by the Secretary on 21 July 2019.

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Right to Information requests during 2019-20:

Right to Information requests

RTI requests to Treasury, the Treasurer and the Minister for Finance 24

Number of applications where no relevant information was held 3

Number of applications transferred to another Minister or Public Authority 2 under section 14 of the Act

Number of applications where information was exempt or partly exempt 12

Provisions of the RTI Act under which the information was exempt Sections 27, 30, 35, 36, 37, 39, 41

Number of applications refused 3

Provisions of the RTI Act under which application was refused Sections 17 and 19

Internal reviews sought on original decision 2

1) Original decision upheld in part. Results of these reviews 2) Internal review request refused under Section 19(1)(a)

Requests referred to Ombudsman for assessment 1

Not determined at time of Results of this referral publication

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Public interest We have a responsibility to afford No disclosures were received by natural justice to all parties involved Treasury during the reporting disclosures in the investigation of a disclosure. period. Pursuant with our reporting responsibilities under section 86 We are committed to the aims Our public interest disclosure of the Public Interest Disclosures and objectives of the Public Interest procedures are available on our Act, a nil return is provided in the Disclosures Act 2002, and value website (www.treasury.tas.gov.au/ prescribed table format. transparency and accountability in about-us/corporate-governance/ our administrative and management public-interest-disclosure). practices. Under the Act, we provide support to people who make disclosures that reveal corrupt conduct, conduct involving a substantial mismanagement of public resources, or conduct involving a substantial risk to public health and safety or the environment.

Public Interest Disclosures 2019-20 Number

The number and types of disclosures made to Treasury during the year and the number of disclosures 0 determined to be a public interest disclosure

The number of disclosures determined by Treasury to be public interest disclosures that it investigated during 0 the year

The number and types of disclosed matters referred to Treasury during the year by the Ombudsman 0

The number and types of disclosed matters referred during the year by Treasury to the Ombudsman to investigate 0

The number and types of investigations of disclosed matters taken over by the Ombudsman from Treasury 0 during the year

The number and types of disclosed matters that Treasury has declined to investigate during the year 0

The number and type of disclosed matters that were substantiated upon investigation and the action taken on 0 completion of the investigation

Any recommendations made by the Ombudsman that relate to Treasury 0

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COMPLIANCE INDEX

Topic Legislation Compliance requirement Page number

Description of Agency’s objectives and Corporate Planning/ State Service Regulations structures including its strategic plan, aims, 4, 17-23 Overview of Strategic Plan 2011 s.9(a)(i) functions and related programs. Major initiatives to give Details of the major initiatives undertaken State Service Regulations effect to Government by Agency to develop and give effect to 17-23 2011 s .9(a)(v) policy Government policy. A report on the performance of the functions Report by statutory office and the exercise of the powers of statutory holder except where State Service Act 2000 office holders and statutory authorities 3 required to report under s.36(1)(b) and (3) attached to that Agency except where any other act required under any other written law. Description of Agency's objectives and State Service Regulations structures including an organisation chart Organisational chart 5 2011 s.9(a)(ii) showing the administrative structure, regional offices and officers of the Agency. Details of the relationship between the State Service Regulations Organisational structure organisational structure and the program 5-16 2011 s.9(a)(iii) management structure of the Agency. Changes to organisational Details of any major changes to Agency State Service Regulations structure, functions and programs, aims, functions or structures and 5 2011 s .9(a)( i v) aims reasons for them. Statutory and non- State Service Regulations Description of other activities undertaken by 13-16 statutory bodies 2011 s.9(d) the Agency. A narrative summary of significant financial Treasurer's Instruction outcomes for Agency programs or activities Financial outcomes 31-145 FR-4 4.1.1 and any Ministerial directives in relation to financing or investment activities. State Service Act 2000 A report on the performance of the functions s.36(1)(a); Financial and the exercise of the powers of Head Performance report Management Act 17-23 of Agency in accordance with Treasurer's 2016 s.42; Treasurer's Instructions. Instruction FR-4 4.1.4

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Topic Legislation Compliance requirement Page number

Information on the performance of the Treasurer's Instruction Agency in its achievement of Agency Performance measures 21-23 FR-4 4.1.4 objectives and meeting of Agency responsibilities. Government requirement Carbon Emissions - climate - Climate Change Office, Information on Agency strategies for reducing change and environmental 155 Department of Premier emissions. impact initiatives and Cabinet State Service Regulations Details of legislation administered by the Legislation administered 146-147 2011 s .9(d ) Agency. Legislation enacted during State Service Regulations Details of significant changes to legislation 147-149 the year 2011 s .9(d ) administered by the Agency. Outline of means of public access to the State Service Regulations Agency including an outline of processes Appeals process 149 2011 s.9(c)(iii) available for appeals against decisions made by the Agency. A list of contact officers and public access State Service Regulations Contact details and officers points in relation to the services provided by 175-176 2011 s.9(c)(ii) the Agency. Details of activities undertaken to develop Community awareness State Service Regulations community awareness of the Agency and (speeches, presentations 150-152 2011 s.9(c)(i) the services it provides, including any Agency and publications) publications. Numbers of applications made to Agency/ Authority; refused and reasons for refusal; Right to information Right to Information Act applications with exempt information, internal 167-168 requests 2009 s.23 and 53 reviews and results of reviews; sections under which information was exempt; and applications for review to Ombudsman. Details on how to obtain Agency procedures, number and types of disclosures made Public Interest Disclosures Public interest disclosures to Agency and outcome of disclosures; 169 Act 2002 s.86 numbers of referrals to Ombudsman and recommendations of Ombudsman.

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Topic Legislation Compliance requirement Page number

State Service Diversity and Workplace diversity Inclusion Policy 2017 and Outcomes achieved under our Diversity and including equal employment State Service Diversity and 28 Inclusion Action Plan 2018-20. opportunities Inclusion Framework 2017 - 2020. Status of health and wellbeing program and summary of program highlights including Workplace health and Employment Direction numbers of program participants in whole 30 wellbeing No.23 5.2 of service programs and in Agency specific programs. Tasmania's Disability Progress against Accessible Island's key Disability Action Plan Framework for Action action areas for Premier's Disability Advisory 29 (DFA) 2018-2021 Council. Information on employee training and Integrity Commission Act education activities undertaken on ethical Ethical conduct of staff 152 2009 s.32 conduct and roles and responsibilities under Code of Conduct. Employment policies and practices of the Agency including details and statistics on Industrial democracy and State Service Regulations processes that ensure employee participation 150 employee participation 2011 s .9( b)( i v) in IR matters within the Agency and any disputes affecting the Agency. State Service Regulations Outline employment policies and practices of Occupational health and 2011 s.9(b)(vi); the Agency including details and statistics on 30 safety Employment Direction occupational health and safety. no.27 s.5.2 State Service Act 2000 Effectiveness of the development and Performance management s.36(ba); Employment implementation of performance management 30 Direction No.26 s.10 within the Agency. Certification that Agency has met its Public Sector obligations under Superannuation Guarantee Superannuation Superannuation Reform (Administration) Act 1992 in respect of any 153 contributions Act 2016 s.55 employee that is a member of a complying scheme.

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Topic Legislation Compliance requirement Page number

Information on pricing policies for goods and services provided by the Agency, including Treasurer's Instruction reference to any applicable Gazette or other Pricing policy 153 FR-4 4.1.2 public document which contains pricing or rating information and details of cost recovery policies and their application as appropriate. Treasurer's Instruction Information on infrastructure projects Infrastructure projects 154-158 FR-4 4.1.3 undertaken or being undertaken by the Agency. Statement of Agency's risk management Treasurer's Instruction Risk management policies and an outline of significant risk 154 FR-4 4.1.5 management activities or initiatives. Treasurer's Instruction Statement of asset management policies, Asset management 154 FR-4 4.1.6 strategies and initiatives. Treasurer's Instruction FR-4 4.1.7; Details of public property, revenue and debts Debts written off 31-145 Treasurer's Instruction due to the State. FC-14 Treasurer's Instruction FR-3; Amount of losses and damage to public Loss and damage 31-145 Treasurer's Instruction property and money. FC-4 Treasurer's Instruction Statement regarding the Agency's support for Support for local business FR-4 4.1.8.2; Treasurer's 156 Tasmanian businesses. Instruction FR-4 4.1.8.3 Procurement contracts awarded with a value Contracts with a value of Treasurer's Instruction of $50 000 or more, with consultancies 157-158 $50 000 or over FR-4 4.1.8.4 separately listed. Details of procurement contracts where a disaggregation exemption was applied, and Treasurer's Instruction Limited/direct procurement procurement contracts awarded as a result 165 FR-4 4.1.8.5 of limited tendering (excluding direct sourcing from other agencies). Details of contracts awarded as a result of a Treasurer's Instruction Contract extensions contract extension approved pursuant to the 166 FR-4 4.1.8.6 Treasurer's Instruction.

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Topic Legislation Compliance requirement Page number

Any exemptions granted to agencies from Exemptions from Treasurer's Instruction requirement to use a prequalified contractor 167 Treasurer’s Instructions FC-1 1.2 for works including building and construction. Details of any contracts entered into by Confidentiality of Treasurer's Instruction the Agency which contain confidentiality 167 Government Contracts FR-4 4.1.8.1 provisions. Contracts where a Treasurer's Instruction Details of procurement contracts where a disaggregation exemption 166 FR-4 4.1.8.5 disaggregation exemption was applied. applied Each grant program must be reviewed, at least Treasurer's Instruction Grant program reviews annually, to ensure that intended outcomes 154 FC-12 are being realised. Secretary certification that financial Financial Management Act Head of Agency statements of Agency and associated bodies 2016 s.42(2); Treasurer's 32 certification are accurate and comply with Treasurer's Instruction FR-3 3.1 Instructions and Act. Financial Management Act Financial Statements must be prepared in Financial statements 2016 s.42(2); Treasurer's 31-145 accordance with the Act. Instruction FR-3 Financial Management Act Auditor General’s report on Agency financial Audit opinion 142-145 2016 s.42 (4) statements. Significant financial Summary of significant financial outcomes performance directives Treasurer's Instruction for Agency programs or activities and which affected the 31-145 FR-4 4.1.1 Ministerial directives in relation to financing or achievement of operational investment activities. objectives

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Area Contact Details

21 Murray Street P: (03) 6166 4444 HOBART, TAS 7000 General enquiries E: [email protected] GPO Box 147 You can visit the Treasury website at HOBART, TAS 7001 www.treasury.tas.gov.au

Level 3 P: (03) 6166 4422 Office of the 21 Murray Street E: [email protected] Tasmanian Economic HOBART, TAS 7000 Regulator You can visit the Tasmanian Economic GPO Box 770 Regulator website at HOBART, TAS 7001 www.economicregulator.tas.gov.au

21 Murray Street P: (03) 6166 4274 State Grants HOBART, TAS 7000 F: (03) 6173 0219 Commission GPO Box 147 HOBART, TAS 7001 E: [email protected]

Ground floor, 21 Kirksway Place P: 1800 622 631 HOBART, TAS 7000 Postal address for member mail: Office of the GPO Box 147 HOBART 7001 Retirement Benefits Fund Superannuation Locked Bag 5052 Commission PARR AMATTA NSW 2124 Henty House You can visit the Superannuation Level 3, 1 Civic Square Commission website at: www.rbf.com.au LAUNCESTON, TAS 7250

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Area Contact Details

P: (03) 6166 4400 Ground Floor, Salamanca Building P: 1800 001 388 Parliament Square (Tas-based callers outside the 62 area) State Revenue Office HOBART, TAS 7000 For email contact, please refer to GPO Box 1374 “Contact Us” on the SRO website. HOBART, TAS 7001 You can visit the State Revenue Office website at www.sro.tas.gov.au

P: (03) 6166 4040 Ground Floor, Salamanca Building Parliament Square E: [email protected] HOBART, TAS 7000 E: [email protected] GPO Box 1374 You can visit the liquor and gaming website at Liquor and Gaming HOBART, TAS 7001 www.treasury.tas.gov.au/liquor-and-gaming Branch and Tasmanian Liquor and Gaming Commission Henty House Level 3, 1 Civic Square LAUNCESTON, TAS 7250 P: (03) 6777 2777 PO Box 972 LAUNCESTON, TAS 7250

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