Overview
The directorate, through Economic and Financial Group, provides 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 include 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 participate 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 manages the implementation of the government's tax reform agenda and provides advice on competition matters.
In addition, the directorate manages 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 oversees 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 is responsible for policy and regulation of the ACT Compulsory Third Party (CTP) Insurance Scheme (see annexed Annual Report for the CTP Regulator) and for the development and implementation of the new Motor Accident Injuries (MAI) Scheme. The directorate administers 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).
The directorate also provides oversight of selected government business entities.
Highlights
In 2018-19 the directorate:
- prepared economic and revenue forecasts for the 2018-19 Budget Review and the 2019-20 Budget. In addition, the directorate continued to monitor the economy and provide the government with economic policy advice;
- produced population projections for the ACT out to 2058 showing changes in the ACT’s population disaggregated by age, sex and geographic location over this period;
- produced Tax Expenditure Statements for the 2016-17 and 2017-18 financial years, enabling the community to understand the scope and financial implications of various concessional tax treatments;
- facilitated the annual evaluation of the ACT’s credit rating;
- continued to implement the initiatives of Stage 2 of the government’s tax reform program to build a fairer and more sustainable ACT tax system;
- provided analysis and advice on revenue proposals to support the ACT budget;
- provided analysis and advice on economic aspects of projects and policy proposals including water, energy, climate change, housing and parking;
- undertook a review of the Lease Variation Charge, with the Government Response being announced as part of the 2019-20 Budget;
- supported the government in responding to Assembly Inquiries into the methodology for determining general rates and land tax for strata residences and commercial rates;
- successfully concluded the ACT’s participation in the National Partnership Agreement on Asset Recycling, which ended on 30 June 2019;
- supported the government’s participation in the Assembly Select Committee Inquiry on Fuel Pricing;
- managed the ACT’s participation in the COAG Standing Council on Federal Financial Relations, as well as associated forums including the Board of Treasurers, Heads of Treasuries, Deputy Heads of Treasuries, GST Advisory Sub-Committee, GST Policy and Administration Subgroup and the Heads of Treasuries’ National Partnership Network;
- managed the flow of Australian Government funding to the ACT, totalling $2.3 billion, or approximately 41% of ACT general government sector revenue, in 2018-19;
- coordinated the ACT’s participation in the Commonwealth Grants Commission’s 2019 Update of GST Revenue Sharing Relativities and 2020 Methodology Review of GST Revenue Sharing Relativities, facilitating an increase in the ACT’s share of GST funding in 2019-20;
- provided input and advice on the Productivity Commission’s Inquiry into Horizontal Fiscal Equalisation and the Commonwealth Government’s subsequent response and legislative changes to the distribution of the GST;
- continued to provide guidance on the financial reporting in the Territory by issuing Model Financial Statements updated to reflect the latest applicable accounting standards;
- assisted the government to successfully pass legislation in the Assembly to reform compulsory third-party insurance in the ACT, with a new motor accident injuries scheme to commence in February 2020;
- supported the functions of the CTP Regulator, including approving new premium filings for all insurers (see annexed 2018-19 CTP Regulator Annual Report);
- supported the functions of the Lifetime Care and Support Commissioner of the ACT (see annexed 2018-19 LTCS Commissioner Annual Report); and
- provided a range of advice on the governance and performance of Icon Water Limited and its investment in the ActewAGL Joint Venture energy business, the Suburban Land Agency and the City Renewal Authority.
The directorate met two and did not meet one of its 2018-19 accountability indicators against this output. The one accountability indicator not met was:
- Briefings on the ACT Economy – One less briefing than the target of 115 was provided, due to the amalgamation of ABS publications.
Future Direction
In 2019-20 the directorate will:
- monitor and advise on the state of the ACT economy;
- help deliver the 2019-20 Budget Review and 2020-21 Budget;
- undertake economic and revenue forecasting;
- progress the implementation and further development of tax reform initiatives, including supporting the government’s detailed analysis of Stage 2 of tax reform in preparation for its consideration of Stage 3 through the Tax Reform Advisory Group;
- implement the government’s policy on taxation;
- publish a Tax Expenditure Statement for the ACT for the 2018-19 financial year;
- prepare the government response to the final report of the Assembly Select Committee Inquiry on Fuel Pricing;
- implement Lease Variation Charge reforms agreed to by government and undertake consultation on some potential further reforms the government has announced it is considering;
- provide economic assessment and advice on a range of matters to be considered by the government;
- provide analysis and advice on economic aspects of projects and policy proposals including water, energy, climate change, housing and parking;
- manage the ACT’s participation in the deliberations of the COAG Standing Council on Federal Financial Relations and associated forums, including the Board of Treasurers, Heads of Treasuries, Deputy Heads of Treasuries, GST Advisory Sub-Committee, GST Policy and Administration Subgroup and the Heads of Treasuries’ National Partnership Network and the Heads of Treasuries Accounting and Reporting Advisory Committee;
- manage the flow of Commonwealth Government funding to the ACT, projected to equal
$2.4 billion, or approximately 43% of ACT general government sector revenue in 2019-20; - coordinate the ACT’s participation in the Commonwealth Grants Commission’s 2020 Methodology Review of GST Revenue Sharing Relativities, which is due to be reported to the Commonwealth Government in February 2020;
- continue implementation of the new MAI Scheme in the ACT that will commence 1 February 2020;
- complete development of a new information technology system for the Motor Accident Injuries Commission;
- continue to provide guidance to agencies on major new accounting standards effective from 1 July 2019; and
- maintain strategic oversight of selected government business entities including Icon Water, the Suburban Land Agency and the City Renewal Authority.
Further information can be obtained from
Stephen Miners
Deputy Under Treasurer
Economic, Budget and Industrial Relations
+61 2 207 5071
Stephen.Miners@act.gov.au
Sue Vroombout
Executive Group Manager
Economic and Financial Group
+61 2 6205 3216
Sue.Vroombout@act.gov.au