2016-17

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NORTHERN TERRITORY GOVERNMENT

2016-17

TREASURER’S ANNUAL

FINANCIAL

REPORT

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Published by the Department of Treasury and Finance

Apart from any use permitted under the Copyright Act, no part of this document may be reproduced without prior written permission from the Northern Territory Government through the Department of Treasury and Finance.

ISSN 2201-2125 (print) ISSN 2201-2133 (online)

Department of Treasury and Finance

Charles Darwin Centre, 19 The Mall, Darwin NT 0800 GPO Box 1974, Darwin NT 0801

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2016-17 Treasurer’s Annual Financial Report

The financial statements and supplementary tables presented in the 2016-17 Treasurer’s Annual Financial Report (TAFR) have been prepared in accordance with Australian Accounting Standards.

Uniform Presentation Framework (UPF) financial statements (Comprehensive Operating Statement, Balance Sheet, Statement of Changes in Equity, and Cash Flow Statement) have been provided for each sector. These sectors are: general government; public non financial corporations; non financial public sector; public financial corporations; and total public sector. TAFR is presented in two

sections: one audited and the other unaudited. The overview presented in this report predominantly details variations in the non financial public sector since the 2016-17 Budget and presents the Government’s fiscal strategy outcomes.

Audited Section

TAFR complies with the Australian Accounting Standards, in particular AASB 1049 Whole of Government and General Government Sector Financial Reporting, and the UPF, and is consistent with the requirements of the Fiscal Integrity and Transparency Act and Financial Management Act.

The audited section of TAFR includes financial statements by sector with notes provided for the general government sector and the total public sector.

Comparative data is provided for 2015-16 in both the financial statements and notes to the financial statements. The 2015-16 comparatives have been restated, predominantly to reflect changes to asset and liability balances compared to those published in the 2015-16 TAFR. Further information on the restatements are provided later in this chapter and in Note 44 of the financial statements.

Unaudited Section

The unaudited section includes a summary table outlining appropriation changes through the year, by agency. Following this is an explanation of significant variations in appropriation for each agency.

The section also provides additional tables required by the UPF relating to: taxes; grant revenue;

grant expenses; dividend and income tax equivalents; purchases of non financial assets for the general government sector; and Loan Council Allocation for 2016-17 for the non financial public sector.

Explanations regarding significant variations between the original budget and actual results for both operating revenue and expenses are disclosed in agency financial statements in agency annual reports.

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Contents

Ministerial Portfolio Arrangements

This schedule of Ministerial Portfolio Arrangements details the ministerial responsibilities for individual areas of Government as at 30 June 2017 (drawn from the Administrative Arrangements Order of 12 September 2016).

Ministerial Portfolio Arrangements as at 30 June 2017

Minister Portfolio

The Hon. M. P. F. Gunner, MLA Chief Minister

Minister for Aboriginal Affairs Minister for Northern Australia

Minister for Police, Fire and Emergency Services Minister for Trade, Business and Innovation The Hon. N. S. Manison, MLA Minister for Children

Treasurer

Minister for Infrastructure, Planning and Logistics The Hon. N. K. Fyles, MLA Attorney-General and Minister for Justice

Minister for Health

The Hon. G. F. McCarthy, MLA Minister for Housing and Community Development Minister for Essential Services

Minister for Public Employment

The Hon. K. E. Vowles, MLA Minister for Primary Industry and Resources The Hon. L. J. Moss, MLA Minister for Environment and Natural Resources

Minister for Tourism and Culture

Minister for Corporate and Information Services The Hon. E. D. Lawler, MLA Minister for Education

The Hon. D. S. Wakefield, MLA Minister for Territory Families

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Overview 5

Overview

The Treasurer’s Annual Financial Report (TAFR) presents the Territory’s financial results for 2016-17 as required by the Fiscal Integrity and Transparency Act (FITA). The TAFR also satisfies reporting requirements as specified by accounting standards to include explanations of major variances between actual end of year amounts as presented in the financial statements and the corresponding original budget amounts. Accordingly, the analysis in this chapter predominantly provides an

assessment of the 2016-17 outcome compared to the Budget published in May 2016.

The final outcome for 2016-17 is a fiscal deficit of $548 million for the non financial public sector, which is an improvement of $245 million compared to the original Budget published in May 2016.

Although the fiscal outcome for the Territory improved during 2016-17, in absolute terms the outcome is characterised by constrained revenues and the Government’s commitment to increase infrastructure spending to support the economy.

The key factors contributing to the improved fiscal balance outcome since May 2016 are:

• lower than anticipated capital spending reflecting revised timing of the delivery of projects ($433 million), partially offset by

• lower GST revenue ($105 million)

• new funding decisions combined with additional demand for government services ($45 million).

The improved 2016-17 fiscal balance has had a flow-on effect to improvements in net debt and net debt to revenue ratios, since May 2016.

Table 1 sets out the key fiscal outcomes for the general government and non financial public sectors in 2016-17 compared to 2015-16, the original 2016-17 Budget (May 2016) and the 2016-17 Estimate (May 2017).

The key fiscal aggregates of the 2016-17 outcome are:

• a general government net operating deficit of $77 million

• a non financial public sector fiscal balance deficit of $548 million

• net debt for the non financial public sector of $2271 million with a ratio of net debt to revenue of 35 per cent.

Table 1: Key Fiscal Aggregates

2015-16

Outcome 2016-17

Budget 2016-17

Estimate 2016-17

Outcome Variation on Budget

$M $M $M $M $M

Net operating balance – GGS 286 70 - 50 - 77 - 147

Fiscal balance – NFPS - 114 - 794 - 552 - 548 245

Net debt – NFPS 1 825 2 707 2 358 2 271 - 437

Net debt to revenue – NFPS (%) 27 41 36 35 - 6

GGS: general government sector; NFPS: non financial public sector

In the 2016-17 Treasurer’s Annual Financial Statements (TAFS), the amounts presented for 2015-16 have been adjusted to reflect retrospective corrections and restatements to account balances in accordance with accounting standards, and therefore do not exactly match those presented in the 2015-16 TAFS.

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During 2016-17, a fixed asset rectification project was undertaken by Power and Water

Corporation (PWC) and its subsidiary Indigenous Essential Services Pty Ltd (IES), to resolve issues in its financial statements that led to the Auditor-General issuing a disclaimer of opinion in the 2014-15 TAFS and a qualified opinion in the 2015-16 TAFS, on the public financial corporation sector, non financial public sector and the total public sector statements. As a result, property, plant and equipment balances have been adjusted retrospectively as required by accounting standards, resulting in a change to the 2014-15 asset base, with the variances flowing through and requiring restatement of certain balances for 2015-16.

Other restatements affecting 2015-16 include the revised treatment of rent received in advance by the Top End Health Service and the uplift in fair value of the loan receivable in relation to the AustralAsia Railway.

Table 2 sets out the key fiscal aggregates for the original 2015-16 outcome and the restated 2015-16 outcome.

Table 2: Effect of 2015-16 Restatements on Key Fiscal Aggregates 2015-16

Original outcome 2015-16

Restated outcome Variation

$M $M $M

Net operating balance – GGS 293 286 - 7

Fiscal balance – NFPS - 78 - 114 - 36

Net debt – NFPS 1 850 1 825 - 25

Net debt to revenue – NFPS (%) 27 27

As shown in Table 2, the restated 2015-16 outcome represents modest change to the key fiscal aggregates as published in the 2015-16 TAFR. Further details on the effect of restatements are provided in Note 44 of the financial statements, with all tables in this chapter reflecting the restated balances for 2015-16.

Operating Statement Aggregates

Table 3: Operating Statement Aggregates

2015-16

Outcome 2016-17

Budget 2016-17

Estimate 2016-17

Outcome Variation on Budget

$M $M $M $M $M

Net operating balance – GGS 286 70 - 50 - 77 - 147

Fiscal balance – NFPS - 114 - 794 - 552 - 548 245

Net Operating Balance

As shown in Table 3, the 2016-17 general government sector net operating balance was a deficit of

$77 million, a $147 million deterioration from the estimate published in the May 2016 Budget. This is primarily due to:

• a reduction in GST revenue of $105 million as a result of lower national GST collections and a lower share of national population for the Territory

• $45 million in net new funding decisions combined with additional demand for government

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Overview 7

Fiscal Balance

The general government sector excludes public non financial corporations such as the PWC, Jacana Energy and Territory Generation. The fiscal balance measure is assessed at the non financial public sector level to ensure the financial performance of these entities are reflected in the

Government’s fiscal targets. The fiscal balance is a more complete measure of a jurisdiction’s financial performance as it takes into account net capital spending.

As shown in Table 3, the fiscal balance in 2016-17 is a deficit of $548 million, a $245 million improvement from the original 2016-17 Budget and a small improvement from the 2016-17 Estimate. Although the fiscal balance incorporates the flow-on effect of the worsened general government operating balance, this has been more than offset by lower levels of infrastructure spending than projected as a result of the revised timing of capital projects.

Policy and Non-Policy Changes since 2016-17 Budget

Table 4 summarises the effect of policy and non-policy changes on the non financial public sector‘s fiscal balance since the 2016-17 Budget. Policy variations are the result of government decisions to implement new or expanded agency programs, savings and efficiency measures. Non-policy variations are due to influences outside of the Government’s control, such as the timing of receipts from the Commonwealth, or changes in economic parameters.

Table 4: Non Financial Public Sector Fiscal Balance – Policy and Non-Policy Variations

Fiscal balance

$M

2016-17 Budget - 793.8

Policy changes - 0.2

Non-policy changes 245.6

2016-17 Outcome - 548.4

Table 4 demonstrates that non-policy variations are the main contributors to the improved fiscal balance outcome for 2016-17. Details of policy and non-policy variations are discussed in further detail below.

Policy Changes since 2016-17 Budget

Table 5 highlights the effect of policy changes on the non financial public sector fiscal balance since the original 2016-17 Budget.

Table 5: Policy Changes since the Original 2016-17 Budget

$M

Recurrent commitments - 73.6

Capital commitments 47.3

Savings and contingency measures 29.0

Revenue measures - 2.8

Total variations - 0.2

As demonstrated in Table 5, policy decisions, in total, have had minimal effect on the 2016-17 fiscal outcome since May 2016, with additional recurrent commitments and revenue measures predominantly offset by savings and efficiency measures and revised timing of capital commitments in 2016-17.

Recurrent commitments include decisions made by the former Government, combined with election commitments and additional policy decisions of the new Government. These are partially reduced

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by the revised timing of policy-related expenditure from 2016-17 to forward years, and budget improvement measures. Key commitments include:

• $30 million for Indigenous essential services

• $15.5 million for additional school resourcing

• $15 million to fund the rising cost of out of home care and support youth justice reforms

• $10 million for remote and urban public housing repairs and maintenance

• $3 million in immediate works grants.

The reduction in capital commitments of $47.3 million relate to the revised timing of expenditure on policy decisions, predominantly for the Health Core Clinical Systems Renewal program moving from 2016-17 to 2017-18 to align with contractual arrangements, and other minor timing changes.

As identified in the 2017-18 Budget, the revenue-related policy changes implemented since the 2016-17 Budget include:

• Government’s election commitment to introduce a first home buyer stamp duty discount resulting in stamp duty collections being $4.8 million lower in 2016-17

• ceasing the $10 000 one-off grant for conveyance stamp duty resulting in an additional $2 million in stamp duty collections in 2016-17.

Non-Policy Changes since 2016-17 Budget

Table 6 highlights the effect of non-policy changes to the non financial public sector fiscal balance since the original 2016-17 Budget.

Table 6: Non-Policy Changes since the Original 2016-17 Budget

$M

GST revenue - 105.5

Taxation and mining royalties 58.3

Other variations 13.9

Commonwealth and agency-related adjustments 278.9

Total variations 245.6

Non-policy variations since the 2016-17 Budget have resulted in a $245.6 million improvement to the 2016-17 fiscal balance. Key variations include:

• a reduction in GST revenue of $105.5 million as a result of lower national GST collections and the Territory having a lower share of national population

• increased taxation and mining royalties of $58.3 million, of which $27.3 million was attributable to increases in payroll tax as a result of employment and wages growth, and $33.7 million in additional mining royalties as a result of an improvement in market conditions, partially offset by lower taxes on gambling and motor vehicle registration fees

• Commonwealth and agency-related adjustments reflecting

−the revised timing of Territory and Commonwealth-funded capital projects including remote Indigenous housing and various roads programs, partially offset by

−additional demand pressures primarily related to heath, correctional services and community safety.

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Overview 9

Consolidated Changes since 2016-17 Budget

Table 7 sets out the consolidated changes in the fiscal balance for the non financial public sector since the original 2016-17 Budget.

Table 7: Policy and Non-Policy Changes to the Fiscal Balance since the Original 2016-17 Budget

$M

2016-17 Budget fiscal balance - 793.8

Effect of policy decisions

Revenues - 2.8

Expenses - 44.6

Capital 47.3

Total policy decisions - 0.2

Effect of non-policy decisions and other variations

Revenues - 105.3

Expenses - 34.4

Capital 385.3

Total non-policy decisions and other variations 245.6

Total variations 245.4

2016-17 fiscal balance outcome - 548.4

Balance Sheet Aggregates

Table 8 presents the key asset and liability aggregates for the non financial public sector for the 2015-16 outcome, the 2016-17 original Budget (May 2016), the 2016-17 Estimate (May 2017) and the 2016-17 Outcome.

Table 8: Non Financial Public Sector – Balance Sheet 2015-16

Outcome 2016-17

Budget 2016-17

Estimate 2016-17

Outcome Variation on outcome

$M $M $M $M $M

Total assets 20 685 21 083 20 733 21 426 741

Financial assets 3 538 2 755 2 927 3 002 - 536

Non financial assets 17 147 18 328 17 806 18 423 1 276

Total liabilities 11 012 10 227 10 705 10 361 - 651

Net worth 9 672 10 857 10 028 11 065 1 392

Net debt 1 825 2 707 2 358 2 271 446

Net debt to revenue (%) 27 41 36 35 8

Net worth in 2016-17 is $11 065 million, $1392 million higher than the 2015-16 outcome, driven by a $741 million increase in assets combined with a reduction in liabilities of $651 million.

The increase in total assets since 2015-16 is due to an increase in non financial assets of

$1276 million, partially offset by a decrease in financial assets of $536 million. The increase in non financial assets is predominantly due to a $525 million revaluation increment on remote dwellings, combined with an increase in the value of power and water utility assets in 2016-17. The 2016-17 fiscal balance deficit of $548 million is the primary contributor to the decrease in financial assets.

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Total liabilities in 2016-17 amounted to $10 361 million compared to liabilities of $11 012 million in 2015-16. The $651 million reduction in liabilities is largely due to a decrease in the superannuation liability of $588 million, net reduction in borrowings of $48 million, and other liabilities of

$66 million that includes the Motor Accidents Compensation Commission (MACC) outstanding claims liability. These decreases are partially offset by an increase in employee benefits and deposits held.

As discussed in previous reports, accounting standards require governments to value their superannuation liability using the Commonwealth’s 10-year bond rate at the time of reporting.

In June 2016 the bond rate was 2.0 per cent, but increased to 2.7 per cent at 30 June 2017, which mainly accounts for the decrease in the liability to $3676 million in 2016-17 compared to

$4264 million recorded in 2015-16.

Based on the most recent actuarial reviews, the Territory’s superannuation liabilities are forecast to peak in 2017 with superannuation payments forecast to peak around 2026.

The Territory is unable to influence the level of its future superannuation liabilities. The schemes to which the liabilities relate are closed and any variation to the liability is a result of factors outside the Territory’s control such as longevity of members or long-term bond rates, which affect the valuation.

The decrease in the MACC claims liability is as a result of changes in actuarial assumptions on the valuation of outstanding claims liabilities, including changes in interest rates and improvements in claims development and handling expenses, resulting in a reduction of $58.7 million to the liability from 2015-16.

Non financial public sector net debt comprises both the net debt of the general government and public non financial corporation sectors. Net debt for the non financial public sector is

$2271 million, $446 million more than the 2015-16 outcome, predominantly due to the 2016-17 fiscal deficit.

As a result of the above, when measured as a ratio to revenue, net debt is now 35 per cent in 2016-17, 8 percentage points more than the 27 per cent recorded in 2015-16, although an improvement of 6 percentage points since the 2016-17 original Budget.

Fiscal Strategy

The fiscal strategy is an essential element of budget planning and accountability and provides the basis against which policy decisions can be assessed. The Territory’s fiscal strategy was substantially revised in preparing the 2017-18 Budget to take into account subdued national and Territory economic conditions, falling GST revenue and the Government’s commitment to increase investment spending to support jobs and stimulate the Territory economy. The revised fiscal strategy was developed with both a short-term and medium-term focus.

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Overview 11 Analysis in previous sections of this report compares the 2016-17 outcome with the original Budget. However, as the original Budget was premised on the former government’s fiscal strategy, it is more appropriate to assess the 2016-17 outcome against the revised estimate published in the 2017-18 Budget that was developed based on the new Government’s strategy. Accordingly, the analysis in this section is an assessment of the 2016-17 outcome compared to the May 2017 estimate of the Government’s short-term fiscal objectives.

Sustainable Service Provision

Short-term target: Maintain an improving operating position over the budget cycle by ensuring growth in general government operating expenses is declining in real terms

The Government’s over-arching target of sustainable service provision is to achieve a general government sector net operating surplus. Given the Territory’s limited own-source revenue base and reliance on Commonwealth revenues, which represent around 70 per cent of total revenues, the Territory has limited ability to influence the level of revenue it is able to generate. However it can directly influence the level of expenditure.

In order to achieve this aim the 2017-18 Budget contains a number of savings and contingency measures totalling $789 million over the budget cycle to minimise growth in operating expenditure, including $29 million in 2016-17. As this element of the fiscal strategy relates to the performance of the operating position and expenditure growth over the budget cycle from 2017-18, a complete assessment of this measure cannot yet be determined.

For 2016-17, although the net operating balance outcome is a deficit of $77 million, Table 9 shows total operating expenses were largely in line with that projected in May 2017 when the new fiscal strategy was introduced.

Table 9: General Government Sector – Total Operating Expenses

2016-17

Estimate 2016-17

Outcome Variation

$M $M $M

Total operating expenses 5 961 5 971 10

Infrastructure for Economic and Community Development

Short-term target: Stimulate the economy by maintaining general government sector infrastructure spending to at least twice the level of depreciation on average over the immediate Budget cycle to 2020

The short-term fiscal strategy target of maintaining general government sector infrastructure spending to at least twice the level of depreciation was developed to counter the Territory’s subdued economic conditions by supporting economic activity.

This strategy was premised on the expectation that, when economic growth returns to long-term trends, the need for increased government investment in infrastructure would abate to make way for private sector investment. Accordingly, the medium-term strategy will be to maintain infrastructure spending at least equal to depreciation charges.

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As shown in Table 10, although the strategy takes effect from 2017-18, capital investment in 2016-17 exceeded the target at 2.7 times depreciation levels.

Table 10: General Government Sector – Capital Investment to Depreciation Ratio 2016-17

Estimate 2016-17

Outcome Variation

Total capital investment ($M) 1 013 899 - 114

Depreciation ($M) 337 335 - 2

Capital investment to depreciation ratio 3.0 2.7 - 0.3

The reduction of $114 million in capital investment compared to the May 2017 estimate reflects the revised timing of Territory and Commonwealth-funded capital works projects including remote Indigenous housing, various roads programs, and delivery of the Health Core Clinical Systems Renewal program.

Competitive Tax Environment

Target: Maintain a competitive tax environment that encourages investment, creates jobs and attracts business to the Territory, while raising sufficient revenue to contribute to funding government’s service delivery requirements

This element of the fiscal strategy aims to maintain taxation at levels that are competitive with other jurisdictions, encourage increased levels of business activity in the Territory while ensuring sufficient levels of own-source revenue to contribute to government service delivery.

The Commonwealth Grants Commission’s (CGC) analysis of tax effort assesses the extent to which a particular jurisdiction’s capacity to raise revenue is above or below the Australian average of 100 per cent. This measure is a lagging indicator as the CGC updates the information annually based on the actual outcome of the previous year. The Territory’s taxation effort has deteriorated from 103 per cent in 2014-15 to 85 per cent in 2015-16, the latest year assessed by the CGC.

This deterioration is reflective of large one-off stamp duty receipts in 2014-15. Given the Territory’s current economic conditions, it is expected that the Territory’s taxation effort will remain largely unchanged in the next CGC update.

Prudent Management of Debt and Liabilities

Short-term target: Achieve an improving fiscal balance at the non financial public sector over the budget cycle

The fiscal balance provides a more complete measure of the Territory’s overall financial position as it encompasses all the operating costs included in the operating balance but takes into account the change in net physical assets and the commercial activities of the government owned corporations.

A fiscal surplus indicates that a government has sufficient capacity to finance all its capital spending.

During the current subdued economic conditions, the short-term strategy is to achieve an improving fiscal balance over the budget cycle to minimise any further increase in net debt.

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Overview 13 As this element of the fiscal strategy is the performance of the fiscal balance over the budget cycle from 2017-18, a complete assessment of this measure cannot yet be determined. However, Table 11 shows the fiscal balance for 2016-17 is a deficit of $548 million, largely in line with that projected in May 2017.

Table 11: Non Financial Public Sector – Fiscal Balance

2016-17

Estimate 2016-17

Outcome Variation

$M $M $M

Fiscal balance - 552 - 548 4

The associated medium to long-term element of this strategy is for the Territory’s non financial public sector net debt, as a percentage of revenue, to return to the long-term average of

40 per cent. At 30 June 2017, the net debt to revenue ratio for the non financial public sector was 35 per cent, below the long-term average target. However, based on May 2017 forecasts net debt to revenue is set to rise to 87 per cent by 2020-21.

Conclusion

The 2016-17 fiscal outcome is largely in line with most recent projections contained in the

May 2017 Budget. However, the deficit outcome and continuing deficits projected over the budget cycle to 2020-21 present immediate challenges to the Government in achieving its fiscal objectives.

Despite a range of budget improvement measures introduced as part of the 2017-18 Budget, without a significant improvement in revenues, fiscal deficits and increasing debt appear

unavoidable in the short term. However, Government is committed to setting a path for the budget to return to a surplus by avoiding structural deficits through limiting expenditure growth.

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Treasurer’s Annual

Financial Statements

(Audited)

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Letter

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General Government Sector

Comprehensive Operating Statement

Notes 2016-17 2015-16 Restated

$000 $000

REVENUE FROM CONTINUING OPERATIONS

Taxation revenue 2 609 807 608 424

Current grants 3 4 195 824 4 351 430

Capital grants 4 301 303 331 203

Sales of goods and services 5 366 335 435 521

Interest income 97 154 101 785

Dividend and income tax equivalent income 6 76 458 97 324

Other revenue 7 247 571 275 418

TOTAL REVENUE FROM CONTINUING OPERATIONS 5 894 451 6 201 106

less EXPENSES FROM CONTINUING OPERATIONS

Employee benefits expense 2 267 162 2 153 697

Superannuation expenses

Superannuation interest cost 82 617 111 465

Other superannuation expenses 231 166 231 857

Depreciation and amortisation 335 476 322 587

Other operating expenses 8 1 416 655 1 440 410

Interest expenses 211 969 234 918

Other property expenses 2 077 2 002

Current grants 9 1 025 742 949 688

Capital grants 10 125 741 250 610

Subsidies and personal benefit payments 11 272 838 220 056

TOTAL EXPENSES FROM CONTINUING OPERATIONS 5 971 443 5 917 290

TRANSACTIONS FROM DISCONTINUING OPERATIONS 12 2 294

equals NET OPERATING BALANCE - 76 992 286 110

plus Other economic flows – included in operating result 13 65 808 - 144 509

plus Other economic flows – included in operating result – discontinued operations 13 100 221

equals OPERATING RESULT - 11 184 241 823

plus Other economic flows – other comprehensive income 13 1 403 457 - 415 864

plus Other economic flows – other comprehensive income – discontinued

operations 13 88 037

equals COMPREHENSIVE RESULT – total change in net worth before transactions

with owners in their capacity as owners 1 392 273 - 86 004

NET OPERATING BALANCE - 76 992 286 110

less Net acquisition of non financial assets

Purchases of non financial assets 773 652 741 740

Sales of non financial assets - 49 304 - 48 610

less Depreciation 23, 25, 27 335 476 322 587

plus Change in inventories 161 1 923

plus Other movements in non financial assets 343 - 56 026

equals Total net acquisition of non financial assets 389 375 316 441

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Financial Statements 21

General Government Sector

Balance Sheet

$000 $000

ASSETS Financial assets

Cash and deposits 16 283 962 623 654

Advances paid 18 171 358 177 967

Investments, loans and placements 19 2 074 854 2 206 762

Receivables 20 368 886 380 703

Equity

Investments in other public sector entities 2 236 380 2 027 718

Investments – other

Other financial assets 21 17 387 16 249

Total financial assets 5 152 827 5 433 053

Non financial assets

Inventories 22 13 631 13 470

Property, plant and equipment 23, 28 14 695 222 13 680 291

Investment property 24, 28 103 495 110 694

Intangible assets 25, 28 1 1

Assets held for sale 26, 28 16 832 26 141

Other non financial assets 27, 28 122 371 122 577

Total non financial assets 14 951 551 13 953 174

TOTAL ASSETS 20 104 378 19 386 227

LIABILITIES

Deposits held 29 416 857 361 349

Advances received 30 281 881 293 464

Borrowing 31 2 992 613 3 097 390

Superannuation 32 3 676 153 4 263 850

Other employee benefits 33 623 960 591 873

Payables 34 208 370 206 484

Other liabilities 35 839 925 899 470

TOTAL LIABILITIES 9 039 759 9 713 880

NET ASSETS 11 064 620 9 672 346

Contributed equity

Accumulated surplus 2 487 939 1 920 268

Reserves 37 8 576 681 7 752 078

NET WORTH 11 064 620 9 672 346

NET FINANCIAL WORTH¹ - 3 886 932 - 4 280 828

NET FINANCIAL LIABILITIES² 6 123 312 6 308 546

NET DEBT³ 1 161 177 743 821

1 Net financial worth equals total financial assets minus total liabilities.

2 Net financial liabilities equals the sum of total liabilities minus total financial assets excluding investments in other public sector entities.

3 Net debt equals the sum of deposits held, advances received and borrowing, minus the sum of cash and deposits, advances paid and investments, loans and placements.

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General Government Sector

Statement of Changes in Equity

Notes Equity at

1 July Comprehensive result

Transactions with owners in

their capacity

as owners Equity at 30 June

$000 $000 $000 $000

2016-17

Accumulated funds 1 920 268 - 11 184 1 909 084

Changes in accounting policy Correction of prior period errors

Transfers from reserves 18 331 18 331

Dividends paid/payable

Other movements directly to equity 560 523 560 523

Total accumulated funds 1 920 268 567 671 2 487 939

Reserves 37

Asset revaluation surplus 6 338 423 630 112 6 968 534

Asset realisation surplus Derivative revaluation surplus

Investments in public sector entities revaluation surplus 1 395 704 193 662 1 589 366

Other reserves 17 952 829 18 781

Total reserves 7 752 078 824 602 8 576 681

Capital – transactions with owners Equity injections

Capital appropriation Equity transfers in Other equity injections Specific purpose payments National partnership payments Commonwealth – capital Equity withdrawals

Capital withdrawals Equity transfers out

Total capital – transactions with owners

TOTAL EQUITY AT END OF FINANCIAL YEAR 9 672 346 1 392 273 11 064 620

2015-16 Restated

Accumulated funds 1 963 100 241 823 2 204 923

Dividends paid/payable

Other movements directly to equity - 397 982 - 397 982

Total accumulated funds 1 963 100 - 42 832 1 920 268

Reserves 37

Asset revaluation surplus 6 172 892 165 531 6 338 423

Investments in public sector entities revaluation surplus 1 621 728 - 226 024 1 395 704

Other reserves 631 17 321 17 952

Total reserves 7 795 250 - 43 172 7 752 078

Capital – transactions with owners Equity injections

Capital appropriation Equity transfers in Other equity injections Specific purpose payments National partnership payments Commonwealth – capital Equity withdrawals

Capital withdrawals

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General Government Sector

Cash Flow Statement

$000 $000

Cash receipts from operating activities

Taxes received 601 374 588 601

Receipts from sales of goods and services 378 924 453 702

Grants and subsidies received 4 497 127 4 683 836

Interest receipts 98 825 100 043

Dividends and income tax equivalents 86 106 100 194

Other receipts 496 194 492 586

Total operating receipts 6 158 549 6 418 963

Cash payments for operating activities

Payments for employees - 2 562 431 - 2 488 601

Payment for goods and services - 1 668 348 - 1 664 840

Grants and subsidies paid - 1 413 020 - 1 355 615

Interest paid - 211 979 - 234 986

Other payments - 9 357 - 26 321

Total operating payments - 5 865 135 - 5 770 363

NET CASH FLOWS FROM OPERATING ACTIVITIES 17 293 414 648 600

Cash flows from investments in non financial assets

Sales of non financial assets 49 304 48 610

Purchases of non financial assets - 774 627 - 744 604

Net cash flows from investments in non financial assets - 725 323 - 695 995

NET CASH FROM OPERATING ACTIVITIES AND INVESTMENTS IN NON FINANCIAL ASSETS - 431 908 - 47 395 Net cash flows from investments in financial assets for policy purposes¹ - 14 173 421 932 Net cash flows from investments in financial assets for liquidity purposes 168 917 176 303

NET CASH FLOWS FROM INVESTING ACTIVITIES - 570 579 - 97 759

Net cash flows from financing activities

Advances received (net) - 11 583 - 32 851

Borrowing (net) - 106 452 - 616 961

Deposits received (net) 55 508 112 251

Other financing (net)

NET CASH FLOWS FROM FINANCING ACTIVITIES - 62 527 - 537 561

NET INCREASE (+)/DECREASE (-) IN CASH HELD - 339 692 13 280

Net cash flows from operating activities 293 414 648 600

CASH SURPLUS (+)/DEFICIT (-) - 431 908 - 47 395

Future infrastructure and superannuation contributions/earnings² - 31 773 - 22 263

UNDERLYING SURPLUS (+)/DEFICIT (-) - 463 682 - 69 658

Additional information to the Cash Flow Statement

Acquisitions under finance leases and similar arrangements - 1 692 - 3 114

ABS GFS SURPLUS (+)/DEFICIT (-) including finance leases and similar arrangements - 433 601 - 50 509 1 Includes equity acquisitions, disposals and privatisations (net).

2 Contributions for future infrastructure and superannuation requirements.

(29)

Public Non Financial Corporation Sector

Comprehensive Operating Statement

2016-17 2015-16 Restated

$000 $000

Current grants 191 766 157 308

Capital grants 48 758 97 626

Sales of goods and services 635 129 648 787

Other revenue 35 719 54 890

TOTAL REVENUE FROM CONTINUING OPERATIONS 914 686 962 399

Employee benefits expense 115 644 111 690

Superannuation expenses 17 605 15 781

Other operating expenses 489 570 487 878

Current grants

Capital grants 2 487

Subsidies and personal benefit payments 1 210 1 578

TOTAL EXPENSES FROM CONTINUING OPERATIONS 925 746 954 531

TRANSACTIONS FROM DISCONTINUING OPERATIONS - 355

plus Other economic flows – included in operating result - 31 637 - 63 620

plus Other economic flows – included in operating result – discontinued operations - 31 906

equals OPERATING RESULT - 42 697 - 88 014

plus Other economic flows – other comprehensive income 249 926 - 150 938

plus Other economic flows – other comprehensive income – discontinued operations 31 906 equals COMPREHENSIVE RESULT – total change in net worth before transactions with owners

in their capacity as owners 207 229 - 207 046

Purchases of non financial assets 237 359 251 730

Sales of non financial assets - 707 - 318

less Depreciation 194 414 214 000

plus Change in inventories - 545 - 381

plus Other movements in non financial assets 15 672 35 024

equals FISCAL BALANCE - 68 425 - 64 543

(30)

Public Non Financial Corporation Sector

Balance Sheet

2016-17 2015-16 Restated

$000 $000

ASSETS Financial assets

Cash and deposits 268 728 240 290

Advances paid

Investments, loans and placements

Receivables 106 991 162 056

Equity 3 2

Other financial assets

Total financial assets 375 722 402 349

Non financial assets

Inventories 184 325 184 870

Property, plant and equipment 3 257 215 2 977 299

Investment property

Intangible assets 30 270 31 558

Assets held for sale

Other non financial assets 67 68

Total non financial assets 3 471 877 3 193 795

TOTAL ASSETS 3 847 599 3 596 144

LIABILITIES

Deposits held 1 700 1 329

Advances received

Borrowing 1 376 512 1 320 120

Superannuation

Other employee benefits 59 101 56 555

Payables 111 307 114 921

Other liabilities 84 229 97 130

TOTAL LIABILITIES 1 632 849 1 590 056

NET ASSETS 2 214 750 2 006 087

Contributed equity 628 300 613 300

Accumulated surplus 758 001 716 918

Reserves 828 449 675 869

TOTAL EQUITY 2 214 750 2 006 087

NET FINANCIAL WORTH¹ - 1 257 127 - 1 187 708

NET DEBT² 1 109 484 1 081 159

1 Net financial worth equals total financial assets minus total liabilities.

2 Net debt equals the sum of deposits held, advances received and borrowing, minus the sum of cash and deposits, advances paid and investments, loans and placements.

(31)

Public Non Financial Corporation Sector

Statement of Changes in Equity

Equity at

1 July Comprehensive result

Transactions with owners in

their capacity

as owners Equity at 30 June

$000 $000 $000 $000

2016-17

Accumulated funds 716 918 - 42 697 674 221

Dividends paid/payable - 13 567 - 13 567

Other movements directly to equity 1 508 1 508

Total accumulated funds 716 918 54 649 - 13 567 758 001

Reserves

Asset revaluation surplus 675 869 152 580 828 449

Investments in public sector entities revaluation surplus Other reserves

Total reserves 675 869 152 580 828 449

Capital – transactions with owners 613 300 613 300

Equity injections Capital appropriation

Equity transfers in

Other equity injections 15 000 15 000

Specific purpose payments National partnership payments Commonwealth – capital Equity withdrawals

Capital withdrawals Equity transfers out

Total capital – transactions with owners 613 300 15 000 628 300

TOTAL EQUITY AT END OF FINANCIAL YEAR 2 006 087 207 229 1 433 2 214 750 2015-16 Restated

Accumulated funds 812 738 - 88 014 724 724

Changes in accounting policy

Correction of prior period errors - 38 751 - 38 751

Dividends paid/payable - 18 978 - 18 978

Other movements directly to equity - 6 433 - 6 433

Total accumulated funds 812 738 - 76 842 - 18 978 716 918

Reserves

Asset revaluation surplus 806 074 - 130 205 675 869

Investments in public sector entities revaluation surplus Other reserves

Total reserves 806 074 - 130 205 675 869

Capital – transactions with owners 711 670 711 670

Equity injections Capital appropriation

Equity transfers in 93 542 93 542

Other equity injections 160 221 160 221

Specific purpose payments National partnership payments Commonwealth – capital Equity withdrawals

Capital withdrawals 94 853 94 853

(32)

Public Non Financial Corporation Sector

Cash Flow Statement

2016-17 2015-16 Restated

$000 $000

Cash receipts from operating activities

Receipts from sales of goods and services 686 951 634 394

Grants and subsidies received 239 157 253 489

Interest receipts 3 259 3 894

Other receipts 21 082 18 091

Total operating receipts 950 449 909 867

Cash payments for operating activities

Income tax equivalents paid - 50 177 - 42 421

Payments for employees - 142 923 - 130 409

Payment for goods and services - 453 547 - 352 893

Grants and subsidies paid - 1 210 - 1 578

Interest paid - 64 767 - 67 097

Other payments - 30 421 - 74 445

Total operating payments - 743 045 - 668 843

NET CASH FLOWS FROM OPERATING ACTIVITIES 207 404 241 024

Cash flows from investments in non financial assets

Sales of non financial assets 707 318

Purchases of non financial assets - 237 359 - 251 730

NET CASH FROM OPERATING ACTIVITIES AND INVESTMENTS IN NON FINANCIAL ASSETS - 29 247 - 10 388

Net cash flows from investments in financial assets for policy purposes¹ - 8 237

Net cash flows from investments in financial assets for liquidity purposes

NET CASH FLOWS FROM INVESTING ACTIVITIES - 236 651 - 259 649

Net cash flows from financing activities Advances received (net)

Borrowing (net) 54 166 61 486

Deposits received (net) 371 419

Dividends paid - 11 851 - 21 440

Other financing (net) 15 000 65 369

NET CASH FLOWS FROM FINANCING ACTIVITIES 57 685 105 835

NET INCREASE (+)/DECREASE (-) IN CASH HELD 28 439 87 209

Net cash flows from operating activities 207 404 241 024

Dividends paid - 11 851 - 21 440

Additional information to the Cash Flow Statement

Acquisitions under finance leases and similar arrangements - 2 226 - 1 159

ABS GFS SURPLUS (+)/DEFICIT (-) including finance leases and similar arrangements - 43 324 - 32 986 1 Includes equity acquisitions, disposals and privatisations (net).

(33)

Non Financial Public Sector

Comprehensive Operating Statement

2016-17 2015-16 Restated

$000 $000

Taxation revenue 598 802 598 147

Current grants 4 195 824 4 354 732

Sales of goods and services 928 937 1 007 363

Dividend and income tax equivalent income 21 366 24 132

Other revenue 279 072 301 320

TOTAL REVENUE FROM CONTINUING OPERATIONS 6 438 891 6 726 215

Employee benefits expense 2 382 806 2 265 387

Superannuation expenses

Superannuation interest cost 82 617 111 465

Other superannuation expenses 245 232 242 918

Other operating expenses 1 822 082 1 840 854

Current grants 963 845 892 350

Subsidies and personal benefit payments 144 179 124 965

TOTAL EXPENSES FROM CONTINUING OPERATIONS 6 540 510 6 453 560

TRANSACTIONS FROM DISCONTINUING OPERATIONS 1 990

plus Other economic flows – included in operating result 34 171 - 208 129

plus Other economic flows – included in operating result – discontinued operations 68 316

equals OPERATING RESULT - 67 448 134 831

plus Other economic flows – other comprehensive income 1 459 721 - 340 778

plus Other economic flows – other comprehensive income – discontinued operations 119 942 equals COMPREHENSIVE RESULT – total change in net worth before transactions with owners

in their capacity as owners 1 392 273 - 86 004

Purchases of non financial assets 1 011 010 993 470

Sales of non financial assets - 50 011 - 48 927

less Depreciation 529 890 536 587

plus Change in inventories - 384 1 542

plus Other movements in non financial assets 16 015 - 21 002