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Commonwealth of Australia - The Treasury

Annual Report 2014/15

Departmental overview

Purpose

The Treasury serves the Australian people by assisting the Australian Government’s Treasury Ministers to carry out their responsibilities. The Treasury provides advice to its ministers, as well as to others in government proactively and responsively. The Treasury administers a number of government programs and performs a range of administrative and support tasks to assist our ministers in carrying out their responsibilities.

The specific matters that the Treasury works on are ever-changing. They are informed by the current operating environment and by having an eye to the future. We must and will pay close attention to developments in the Australian and international economies. As a high-level guide, the Treasury’s three priorities are:

  1. Promoting fiscal sustainability
  2. Increasing productivity and workforce participation
  3. Securing the benefits of global economic integration

Delivering on these priorities requires a high-performing and flexible organisation.

The Treasury seeks to perform its tasks to the best of its institutional ability, within the resources it has available. We do this by directly employing, or having timely access to, the best possible people. We equip our people and collect and maintain critically-important and timely information, including through engagement with private sector, non-government organisations, academia and other policy-focused institutions. We engage people with specialist skills and continually deploy our resources to the Treasury’s highest priority tasks at any point in time.

Under the Portfolio Budget Statements 2014-15, the Treasury outcome is: Informed decisions on the development and implementation of policies to improve the wellbeing of the Australian people, including by achieving strong, sustainable economic growth, through the provision of advice to government and the efficient administration of federal financial relations. The Treasury has five groups which contribute to achieving its outcome:

  • Macroeconomic Group
  • Markets Group
  • Fiscal Group
  • Revenue Group
  • Chief Operating Officer Group*

* The Chief Operating Officer Group was established in 2015 and comprises Corporate Strategy and Services and Foreign Investment and Trade Policy Division. For this report, the activities for the Chief Operating Officer Group are reported under Corporate Strategy and Services and under Markets Group for Foreign Investment and Trade Policy Division.

Financial performance

The Treasury received an unqualified audit report on the 2014-15 financial statements from the Australian National Audit Office. These statements can be found in Part 4 on pages 95-196.

Departmental

The Treasury ended 2014-15 with an attributable surplus of $4.6 million, compared to a surplus of $0.3 million in 2013-14. Employee expenses were $10.2 million lower compared to 2013-14, primarily reflecting lower staffing levels. Supplier expenses increased by $12.1 million, mainly as a result of an increase in the number of secondees from a range of government agencies ($2.0 million of which was received free of charge) and an increase in contractors for various information communication technology projects. The Treasury’s net asset position increased by $1.3 million in 2014-15, partially as a result of the reduction in payables.

The Treasury has sufficient cash reserves to fund its debts as and when they fall due.

Administered

The Treasury incurred $83.8 billion in administered expenses in 2014-15 compared to $93.8 billion in 2013-14. The difference reflects the one-off grant of $8.8 billion in 2013-14
to the Reserve Bank of Australia (RBA) to strengthen its financial position to the level considered appropriate by the RBA board.

The Treasury’s administered net assets increased by $7.6 billion in 2014-15, driven by an increase in the value of the Treasury’s investments in Australian Government Entities.

Figure 1: Treasury senior management structure (as at 30 June 2015)

SECRETARY: JOHN FRASER

Chief Operating Officer Group
Chief Operating Officer: John Lonsdale

Business Services Division – Chief Information Officer: Peter Alexander

Financial and Parliamentary Division – Chief Finance Officer: Matthew King

Organisational Strategy — People and Communications Division – Division Head: Emma Greenwood

Foreign Investment and Trade Policy Division* – Division Head: Rob Donelly

*The Foreign Investment and Trade Policy Division’s deliverables are reported within Markets Group consistent with the Portfolio Budget Statements.

Markets Group
Deputy Secretary: Michael Willcock a/g

Australian Government Actuary – Manager: Peter Martin

Deregulation Division – Division Head: Paul McCullough

Financial System and Services Division – Division Head: Meghan Quinn

Small Business, Competition and Consumer Division – Division Head: Patrick Boneham a/g

Takeovers Panel – Director: Allan Bulman

Revenue Group
Deputy Secretary: Rob Heferen

Board of Taxation Secretariat – Secretary: Matthew Brine

Corporate and International Tax Division – Division Head: Luise McCulloch

Law Design Practice – Division Head: Tom Reid

Personal and Retirement Income Division – Division Head: Paul Tilley

Small Business Tax Division – Division Head: Russell Campbell

Tax Analysis Division – Division Head: Steve French

Tax White Paper Task Force – Division Head: Roger Brake

Fiscal Group
Deputy Secretary: Nigel Ray

Budget Policy Division – Division Head: Matthew Flavel

Commonwealth-State Relations – Division Head: Sam Reinhardt

Industries and Infrastructure Division – Division Head: Damien White

Social Policy Division – Division Head: Leesa Croke

Macroeconomic Group
Deputy Secretary (Domestic): Jenny Wilkinson a/g
Deputy Secretary (International): HK Yu a/g

International Policy and Engagement Division – Division Head: Kerstin Wijeyewardene

Macroeconomic Conditions Division – Division Head: Christine Barron

Macroeconomic Modelling and Policy Division – Division Head: Simon Duggan

Overseas Operations  

Washington: Hector Thompson

Beijing: David Woods

Jakarta: Shaun Anthony & Natalie Horvat

Honiara: Colin Johnson

Port Moresby: Bruce Reid

OECD (Paris): Sue Vroombout

London: James Kelly

Tokyo: Kate Phipps

New Delhi: Hamish McDonald

Figure 2: Treasury outcome and program structure (as at 30 June 2015)
Outcome 1: Informed decisions on the development and implementation of policies to improve the wellbeing of the Australian people, including by achieving strong, sustainable economic growth, through the provision of advice to government and the efficient administration of federal financial relations.

Program 1.1: Department of the Treasury

Macroeconomic Group

Macroeconomic Conditions Division

Macroeconomic Modelling and Policy Division

International Policy and Engagement Division

G20 Policy Division

G20 Operations and Logistics Division

Overseas Deployments

Overseas Posts

Fiscal Group

Budget Policy Division

Commonwealth-State Relations Division

Industries and Infrastructure Division

Social Policy Division

Revenue Group

Board of Taxation Secretariat

Tax Analysis Division

Small Business Tax Division

Corporate and International Tax Division

Law Design Practice

Personal and Retirement Income Division

Tax White Paper Task Force

Markets Group

Australian Government Actuary

Deregulation Division

Small Business, Competition and Consumer Policy Division

Financial System and Services Division

Takeovers Panel

Competition Policy Review Secretariat

Financial System Inquiry

Chief Operating Officer Group

Financial and Parliamentary Division

Business Services Division

Organisational Strategy – People and Communications Division

Foreign Investment and Trade Policy Division*

*The Foreign Investment and Trade Policy Division’s deliverables
are reported within Markets Group consistent with the Portfolio
Budget Statements.

Program 1.2: Payments to International Financial Institutions

Macroeconomic Group: International Policy and Engagement Division

Program 1.3: Support for markets and business

Markets Group: Financial System and Services Division

Program 1.4: General revenue assistance

Fiscal Group: Commonwealth-State Relations Division

Program 1.5: Assistance to the states for healthcare services

Fiscal Group: Commonwealth-State Relations Division

Program 1.6: Assistance to the states for skills and workforce development

Fiscal Group: Commonwealth-State Relations Division

Program 1.7: Assistance to the states for disability services

Fiscal Group: Commonwealth-State Relations Division

Program 1.8: Assistance to the states for affordable housing

Fiscal Group: Commonwealth-State Relations Division

Program 1.9: National partnership payments to the states

Fiscal Group: Commonwealth-State Relations Division

The Treasury’s program structure differs from the PBS 2014-15 because from January 2014 the National Schools Specific Purpose Payment was replaced by Students First funding which is provided for under the Australia Education Act 2013 and reported in the Education portfolio.

Figure 3: Treasury portfolio outcome and program structure (as at 30 June 2015)

Portfolio Minister — Treasurer

The Hon Joe Hockey MP

Minister for Small Business

The Hon Bruce Billson MP

Assistant Treasurer

The Hon Josh Frydenberg MP

Parliamentary Secretary to the Treasurer

The Hon Kelly O’Dwyer MP

Department of the Treasury

Secretary: Mr John Fraser

Outcome 1: Informed decisions on the development and implementation of policies to improve the wellbeing of the Australian people, including by achieving strong, sustainable economic growth, through the provision of advice to government and the efficient administration of federal financial relations

Program 1.1: Department of the Treasury

Program 1.2: Payments to International Financial Institutions

Program 1.3: Support for markets and business

Program 1.4: General revenue assistance

Program 1.5: Assistance to the states for healthcare services

Program 1.6: Assistance to the states for skills and workforce development

Program 1.7: Assistance to the states for disability services

Program 1.8: Assistance to the states for affordable housing

Program 1.9: National partnership payments to the states

Australian Bureau of Statistics

Statistician: Mr David W. Kalisch

Outcome 1: Informed decisions, research and discussion within governments and the community by leading the collection, analysis and provision of high-quality, objective and relevant statistical information

Program 1.1: Australian Bureau of Statistics

Australian Competition and Consumer Commission

Chairman: Mr Rod Sims

Outcome 1: Lawful competition, consumer protection, and regulated national infrastructure markets and services through regulation, including enforcement, education, price monitoring and determining the terms of access to infrastructure services

Program 1.1: Australian Competition and Consumer Commission

Program 1.2: Australian Energy Regulator

Australian Office of Financial Management

Chief Executive Officer: Mr Robert Nicholl

Outcome 1: The advancement of macroeconomic growth and stability, and the effective operation of financial markets, through issuing debt, investing in financial assets and managing debt, investments and cash for the Australian Government

Program 1.1: Australian Office of Financial Management

Australian Prudential Regulation Authority

Chairman: Mr Wayne Byres

Outcome 1: Enhanced public confidence in Australia’s financial institutions through a framework of prudential regulation that balances financial safety and efficiency, competition, contestability and competitive neutrality

Program 1.1: Australian Prudential Regulation Authority

Australian Securities and Investments Commission

Chairman: Mr Greg Medcraft

Outcome 1: Improved confidence in Australia’s financial markets through promoting informed investors and financial consumers, facilitating fair and efficient markets and delivering efficient registry systems

Program 1.1: Australian Securities and Investments Commission

Program 1.2: Banking Act 1959, Life Insurance Act 1995, unclaimed monies and special accounts

Australian Taxation Office

Commissioner: Mr Chris Jordan AO

Outcome 1: Confidence in the administration of aspects of Australia’s taxation and superannuation systems through helping people understand their rights and obligations, improving ease of compliance and access to benefits, and managing non-compliance with the law

Program 1.1: Australian Taxation Office

Program 1.2: Tax Practitioners Board

Program 1.3: Australian Business Register

Program 1.4: Australian Valuation Office

Program 1.5: Australian Charities and Not-for-profit Commission

Program 1.6: Australian Screen Production Incentive

Program 1.7: Cleaner Fuels Grant Scheme

Program 1.8: Conservation Tillage Refundable Tax Offset

Program 1.9: Exploration Development Incentive

Program 1.10: Fuel Tax Credits Scheme

Program 1.11: National Rental Affordability Scheme

Program 1.12: Product Stewardship for Oil Program

Program 1.13: Research and Development Tax Incentive

Program 1.14: Seafarer Tax Offset

Program 1.15: Baby Bonus

Program 1.16: Education Tax Refund

Program 1.17: First Home Saver Accounts

Program 1.18: Low Income Superannuation Contribution

Program 1.19: Private Health Insurance Rebate

Program 1.20: Superannuation Co-contribution Scheme

Program 1.21: Superannuation Guarantee Scheme

Program 1.22: Targeted assistance through the taxation system

Program 1.23: Interest on Overpayments and Early Payments of Tax

Program 1.24: Bad and Doubtful Debts and Remissions

Clean Energy Finance Corporation

Chair: Ms Jillian Broadbent AO

Outcome 1: Facilitate increased flows of finance into Australia’s clean energy sector applying commercial rigour to investing in renewable energy, low-emissions and energy efficiency technologies, building industry capacity, and disseminating information to industry stakeholders

Program 1.1: Clean Energy Finance Corporation

Commonwealth Grants Commission

Secretary: Mr John Spasojevic

Outcome 1: Informed government decisions on fiscal equalisation between the states and territories through advice and recommendations on the distribution of GST revenue and health care grants

Program 1.1: Commonwealth Grants Commission

Corporations and Markets Advisory Committee

Convenor: Ms Joanne Rees

Outcome 1: Informed decisions by Government on issues relating to corporations regulation and financial products, services and markets through independent and expert advice

Program 1.1: Corporations and Markets Advisory Committee

Inspector-General of Taxation

Inspector-General: Mr Ali Noroozi

Outcome 1: Improved tax administration through community consultation, review and independent advice to government

Program 1.1: Inspector-General of Taxation

National Competition Council

President: Mr David Crawford

Outcome 1: Competition in markets that are dependent on access to nationally significant monopoly infrastructure, through recommendations and decisions promoting the efficient operation of, use of and investment in infrastructure

Program 1.1: National Competition Council

Office of the Auditing and Assurance Standards Board

Chairman: Ms Merran Kelsall

Outcome 1: The formulation and making of auditing and assurance standards that are used by auditors of Australian entity financial reports or for other auditing and assurance engagements

Program 1.1: Auditing and Assurance Standards Board

Office of the Australian Accounting Standards Board

Chairman: Kris Peach

Outcome 1: The formulation and making of accounting standards that are used by Australian entities to prepare financial reports and enable users of these reports to make informed decisions

Program 1.1: Australian Accounting Standards Board

Productivity Commission

Chairman: Mr Peter Harris

Outcome 1: Well-informed policy decision-making and public understanding on matters relating to Australia’s productivity and living standards, based on independent and transparent analysis from a community-wide perspective

Program 1.1: Productivity Commission

Royal Australian Mint

Chief Executive Officer: Mr Ross MacDiarmid

Outcome 1: The coinage needs of the Australian economy, collectors and foreign countries are met through the manufacture and sale of circulating coins, collector coins and other minted products

Program 1.1: Royal Australian Mint