Output 4.1 Economic Management

Output 4.1 Economic Management

Overview

The directorate is responsible for providing analysis and advice to the ACT Government and agencies on a range of activities encompassing: economic and financial analysis; financial framework management and asset management; and financial assets and liabilities (including borrowings, superannuation and insurance).

The directorate's responsibilities included preparing economic and revenue forecasts, monitoring and reporting on the state of the ACT economy, modelling the ACT economy and providing advice to the Chief Minister, Treasurer and other areas of government on economic and fiscal matters relating to the Territory. Officials participated in a range of inter-directorate working groups and processes to assess economic impacts of policy proposals and other initiatives being considered by government. The directorate also managed the implementation of the government's tax reform agenda and provided advice on competition matters.

The directorate managed the borrowings and investments of the Territory Banking Account  (see Output EBT 1 Territory Banking Account), and the government's unfunded employer superannuation liabilities and the investment assets of the Superannuation Provision Account (SPA), (see Output EBT 1 Superannuation Provision Account).

The directorate also oversaw the ACT's financial relations with the Australian Government, states and the Northern Territory within a framework encompassing the operations of the Intergovernmental Agreement (IGA) on Federal Financial Relations.

The directorate was responsible for policy and regulation of the ACT Compulsory Third Party (CTP) Insurance Scheme (see annexed Annual Report for the CTP Regulator).

The directorate was also responsible for the administration of the Lifetime Care and Support (LTCS) Scheme for persons catastrophically injured in motor vehicle accidents in the ACT on or after
1 July 2014 and ACT private sector workers catastrophically injured on or after 1 July 2016  (see annexed Annual Report for the Lifetime Care and Support Fund). It is also responsible for the ACT’s input to the continuing National Injury Insurance Scheme (NIIS) reform agenda.

Highlights

Against this output in 2017-18 the directorate:

• prepared economic and revenue forecasts for the 2017-18 Budget Review and the 2018-19 ACT Budget;
• produced and published the ACT’s first Tax Expenditure Statement for the 2015-16 financial year;
• provided advice and analysis on the 2016 Population Census;
• implemented the initiatives of stage 2 of the government’s tax reform program, commencing 2017-18, building a fairer and more sustainable ACT tax system;
• provided analysis and advice on revenue proposals to support the ACT budget;
• monitored, reported and advised on movements to key economic indicators;
• led a cross-directorate working group to develop regulatory reforms to support a competitive procurement for management of ACT streetlight assets;
• provided analysis and advice on economic aspects of projects and policy proposals including water, energy, climate change, housing and parking;
• monitored and reported on the ACT's participation in the Asset Recycling Initiative;
• negotiated funding for regulatory reform under the Small Business Regulation Reform Bilateral Agreement with the Commonwealth;
• participated in the development of the National Housing and Homelessness Agreement, which secured funding for housing services;
• facilitated the annual evaluation of the ACT's credit rating;
• managed within the IGA framework, the Government's participation in the 2017-18 deliberations of the Standing Council on Federal Financial Relations and supported Heads of Treasuries Secretaries, and associated forums including Board of Treasurers, Deputy Heads of Treasuries, GST Advisory Sub Committee, GST Policy & Administration Sub Group and the Heads of Treasuries National Partnership Network;
• managed within the IGA framework, the flow of federal funding to the ACT totalling $2.3 billion (approximately 41% of ACT general government sector revenue in 2017-18);
• directed the ACT's participation in the Commonwealth Grants Commission processes, including the Report on GST Revenue Sharing Relativities - 2018 Update and the Commonwealth Grants Commission 2020 Methodology Review due to report to the Commonwealth and the States and Territories by 28 February 2020;
• directed the ACT’s participation in the Australian Productivity Commission inquiry into Australia’s system of horizontal fiscal equalisation which reported to the Commonwealth Government on 15 May 2018;
• supported the Under Treasurer in his role as Chair of Heads of Treasuries Accounting and Reporting Advisory Committee, including providing the secretariat function for the Committee;
• continued to improve the financial reporting in the Territory by issuing Model Financial Statements focused on improved readability of material information;
• successfully delivered the ACT Government’s pilot deliberative democracy process; a citizens’ jury on the Compulsory Third Party Insurance Scheme. The jury process commenced in September 2017 and concluded in March 2018, when the citizens’ jury chose a CTP model they believe best meets the needs of all road users in the ACT;
• supported the functions of the CTP Regulator, including approving new premium filings for all insurers (see annexed Annual Report of the CTP Regulator); and
• supported the functions of the Lifetime Care and Support Commissioner of the ACT (see annexed Annual Report for the LTCS Commissioner).

The directorate met all three accountability indicators against this output.

Future Direction

In 2018-19 the directorate will provide economic analysis and advice to the Government and agencies; manage federal financial relations; and provide accounting, financial framework, and insurance policy advice. The directorate will:

• monitor and advise on the state of the ACT economy;
• help deliver the 2018-19 Budget Review and the 2019-20 Budget;
• undertake economic and fiscal modelling as well as economic and revenue forecasting;
• publish a Tax Expenditure Statement for the ACT for the 2016-17 financial year;
• undertake analysis of the housing outlook;
• undertake a review of the Lease Variation Charge;
• prepare the government’s response to the Assembly Inquiry into the methodology for determining general rates and land tax for strata residences;
• establish a cross Directorate Population Advisory Group;
• publish Population Projections for the ACT based on the 2016 Census;
• progress the implementation and further development of tax reform initiatives;
• implement the government’s policy on taxation;
• provide advice on government’s further participation in the next stages of the IGA on Competition and Productivity Enhancing Reform;
• provide economic assessment and advice on a range of matters to be considered by the government;
• manage the ACT Government's participation in the 2018-19 deliberations of the Standing Council on Federal Financial Relations and supporting fora;
• manage the flow of federal funding to the ACT estimated at $2.3 billion;
• direct the ACT's participation in the Commonwealth Grants Commission Report on GST Revenue Sharing Relativities - 2019 Update;
• direct the ACT’s participation in the Commonwealth Grants Commission 2020 Methodology Review due to report to the Australian Government and the States and Territories by  28 February 2020;
• advise on the Australian Productivity Commission inquiry into Australia’s system of horizontal fiscal equalisation, report findings and the Australian Government’s response;
• continue implementation of a new compulsory third party insurance scheme in the ACT;
• develop a new information technology system for the compulsory third party insurance scheme;
• contribute to the Heads of Treasuries Accounting and Reporting Advisory Committee; and
• provide guidance to agencies on major new accounting standards effective from 1 July 2019.

Further information can be obtained from

Stephen Miners
Deputy Under Treasurer
Economic, Budget and Industrial Relations
+61 2 6207 5071
Stephen.Miners@act.gov.au

Sue Vroombout
A/g Executive Director
Economic and Financial
+61 2 6205 3216
Sue.Vroombout@act.gov.au