Part 4: Financial statements (continued)

Note 3: Operating Expenses

	2010 $'000	2009 $'000
Note 3A: Employee Benefits
Wages and salaries	87,672	79,743
Superannuation:
Defined contribution plans	12,065	12,905
Defined benefit plans	3,604	2,643
Leave and other entitlements	12,381	9,540
Other	2,891	2,744
Total employee benefits	118,613	107,575
Note 3B: Suppliers
Goods and services
Communications	1,536	1,453
Computers	3,055	2,443
Conferences and training	2,675	3,378
Consultants and contractors	11,779	10,987
Fees - Audit, Accounting, Bank and Other	987	1,193
Insurance	1,086	698
Legal	4,310	631
Property operating expenses	11,316	11,162
Publications and Subscriptions	1,325	1,193
Travel	5,576	6,083
Other	4,470	4,762
Total goods and services	48,315	47,046
Goods and services are made up of:
Provision of goods from:
related entities	103	83
external entities	3,199	1,798
Rendering of services from:
related entities	11,091	7,013
external entities	24,883	29,285
Operating lease rentals:1	8,145	8,403
Workers compensation premiums	894	464
Total supplier expenses	48,315	47,146
Note 3C: Grants
Grants paid
Public sector:
Australian Government entities	475	18
Private sector:
Non-profit organisations	2,509	3,230
For-profit organisations	2	-
Total grants	2,986	3,248

1. Operating lease rentals comprise minimum lease payments only.

Note 3: Operating Expenses (continued)

	2010 $'000	2009 $'000
Note 3D: Depreciation and amortisation
Depreciation
Other plant and equipment	1,656	1,472
Buildings – leasehold improvements	1,751	1,460
Total depreciation	3,407	2,932
Amortisation
Intangibles – computer software	840	551
Total amortisation	961	1,259
Total depreciation and amortisation	4,368	4,191
Note 3E: Finance costs
Leases	35	94
Total finance costs	35	94
Note 3F: Write-down and impairment of assets
Non-financial assets
Plant and equipment	28	7
Intangibles	-	26
Total write-down and impairment of assets	28	33
Note 3G: Losses from asset sales
Property, plant and equipment
Proceeds from sale	(9)	(12)
Carrying value of asset sold	46	21
Total losses from asset sales	37	9

Note 4: Income

	2010 $'000	2009 $'000
Note 4A: Sale of goods and rendering of services
Provision of goods to:
external entities	1	-
Rendering of services to:
related entities	11,611	7,853
external entities	907	878
Operating lease rental	88	92
Total sale of goods and rendering of services	12,607	8,823
Note 4B: Other revenue
Other	742	290
Total other revenues	742	290
Note 4C: Other gains
Resources received free of charge	546	534
Total other revenue	546	534
Note 4D: Revenue from Government
Appropriations
Departmental outputs	162,941	145,931
Other	2,998	2,749
Total revenue from Government	165,939	148,680

Note 5: Other Comprehensive Income

	2010 $'000	2009 $'000
Changes in asset revaluation reserves	-	(30)
Total	-	(30)

Note 6: Financial Assets

	2010 $'000	2009 $'000
Note 6A: Cash and cash equivalents
Cash
Special Accounts	264	586
Departmental (other than special accounts)	932	781
Total cash	1,2196	1,367
Note 6B: Trade and other receivables
Goods and Services:
related entities	1,467	2,475
external parties	1,134	539
Total goods and services	2,601	3,014
Net GST receivable from the ATO	416	732
Appropriations Receivable:
for existing outputs	74,237	73,047
Total trade and other receivables (net)	77,254	76,793
All receivables are current assets
Receivables (gross) are aged as follows:
Not overdue	76,470	76,275
Overdue by:
0 to 30 days	688	398
31 to 60 days	87	69
61 to 90 days	-	34
More than 90 days	9	17
Total receivables (gross)	77,254	76,793

Note 7: Non-financial assets

Note 7: Non-Financial Assets

	2010  $'000	2009  $'000
Note 7A: Land and buildings
Leasehold improvements - fair value
Under construction	206	137
At fair value	18,394	18,312
Accumulated depreciation	(9,886)	(8,135)
Total leasehold improvements - fair value	8,714	10,314
Total land and buildings	8,714	10,314

No indicators of impairment were found for land and buildings. No land and buildings are expected to be sold or disposed of within the next 12 months. All revaluations are independent and are conducted in accordance with the revaluation policy stated at Note 1.17.

Note 7: Non-Financial Assets (continued)

	2010  $'000	2009  $'000
Note 7B: Plant and equipment
Plant and equipment - fair value
Under construction	-	169
At fair value	11,212	9,791
Accumulated depreciation	(3,626)	(2,131)
Total plant and equipment - fair value	7,586	7,829
Plant and equipment under finance lease
Under finance lease	260	2,347
Accumulated amortisation	(226)	(2,191)
Total plant and equipment under finance lease	34	156
Total plant and equipment	7,620	7,985

No indicators of impairment were found for plant and equipment. Other than those items in held for sale for 2009, no other plant and equipment is expected to be sold or disposed of within the next 12 months. There are a number of finance leases due to expire within the next 12 months. The assets associated with these leases will be returned. All revaluations are independent and are conducted in accordance with the revaluation policy stated at Note 1.17.

Note 7: Non-Financial Assets (continued)

	2010  $'000	2009  $'000
Note 7C: Intangibles
Computer software - at cost
Under construction	32,716	17,970
At cost	7,197	4,429
Accumulated amortisation	(3,202)	(2,749)
Total computer software - at cost	36,711	19,650
Total intangibles	36,711	19,650

No indicators of impairment were found for Intangibles. The development of software for the SBR project is the majority of asset under construction. The SBR software is expected to be finalised and available for use on 1 July 2010.

Note 7: Non-Financial Assets (continued)

	2010  $'000	2009  $'000
Assets held for sale - fair value
At fair value	-	39
Accumulated amortisation	-	(15)
Total assets held for sale - fair value	-	24
Total assets held for sale	-	24

Note 7: Non-financial assets (continued)
Table A: Reconciliation of the opening and closing balances of property, plant and
equipment (2009-10)

	Buildings - leasehold  improvements   $'000	Other  plant and  equipment   $'000	Computer  software   $'000	Assets held  for sale   $'000	Total   $'000
As at 1 July 2009:
Gross book value	18,449	12,292	22,399	39	53,179
Accumulated depreciation amortisation	(8,135)	(4,307)	(2,749)	(15)	(15,206)
Net book value 1 July 2009	10,314	7,985	19,650	24	37,973
Additions
By purchase	2,306	226	17,336	-	19,868
By finance lease	-	-	-	-	-
Net revaluation increment/(decrement)	-	-	-	-	-
Depreciation/amortisation expense	(1,751)	(1,777)	(840)	-	(4,368)
Recoverable amount write-downs	-	-	-	-	-
Disposals
Other disposals	-	(28)	-	(16)	(44)
Transfers	(2,155)	1,214	565	(8)	(384)
As at 30 June 2010:
Gross book value	18,600	11,473	39,913	-	69,986
Accumulated depreciation/amortisation	(9,886)	(3,853)	(3,202)	-	(16,941)
Net book value 30 June 2010	8,714	7,620	36,711	-	53,045

Note 7: Non-financial assets (continued)
Table A: Reconciliation of the opening and closing balances of property, plant and equipment (2008-09)

	Buildings -  leasehold  improvements   $'000	Other  plant and  equipment   $'000	Computer  software   $'000	Assets held  for sale   $'000	Total   $'000
As at 1 July 2008:
Gross book value	17,117	9,274	2,997	12	29,400
Accumulated depreciation/amortisation	(6,675)	(2,210)	(2,209)	(9)	(11,103)
Opening net book value	10,442	7,064	788	3	18,297
Additions
By purchase	2,910	1,941	19,060	-	23,911
By finance lease	-	53	-	-	53
Net revaluation increment/(decrement)	-	(30)	-	-	(30)
Depreciation/amortisation expense	(1,460)	(2,180)	(551)	-	(4,191)
Recoverable amount write-downs	-	(7)	(26)	-	(33)
Disposals
Other disposals	-	(6)	-	(2)	(8)
Transfers	(1,578)	1,150	379	23	(26)
As at 30 June 2009:
Gross book value	18,449	12,292	22,399	39	53,179
Accumulated depreciation/amortisation	(8,135)	(4,307)	(2,749)	(15)	(15,206)
Closing net book value	10,314	7,985	19,650	24	37,973

Note 7: Non-Financial Assets (continued)
Table B: Property, plant and equipment and intangibles held under finance lease (2009-10)

	Buildings -  leasehold  improvements   $'000	Other  plant and  equipment   $'000	Computer  software   $'000	Total   $'000
As at 30 June 2010:
Gross book value	-	260	-	260
Accumulated depreciation/amortisation	-	(226)	-	(226)
Closing net book value	-	34	-	34
As at 30 June 2009:
Gross book value	-	2,347	-	2,347
Accumulated depreciation/amortisation	-	(2,191)	-	(2,191)
Closing net book value	-	156	-	156

Note 7: Non-Financial Assets (continued)
Table C: Property, plant and equipment and intangibles under construction (2009-10)

	Buildings -  leasehold  improvements   $'000	Other  plant and  equipment   $'000	Computer  software   $'000	Total   $'000
As at 30 June 2010:
Gross book value	206	-	32,716	32,922
As at 30 June 2009:
Gross book value	137	169	17,970	18,276

	2010  $'000	2009  $'000
Note 7E: Other non-financial assets
Prepayments	1,799	1,042
Other non-financial assets are represented by:
No more than 12 months	1,670	955
More than 12 months	129	87
Total other non-financial assets	1,799	1,042

Note 8: Payables

	2010  $'000	2009  $'000
Note 8A: Suppliers
Trade creditors
- related entities	408	1,316
- external entities	1,254	2,537
Total trade creditors	1,662	3,853
Total supplier payables	1,662	3,853
All supplier payables are expected to be settled within 12 months
Note 8B: Other payables
Salaries and wages	1,773	1,374
Superannuation	311	256
Other creditors	7,602	3,753
Prepayments received/unearned revenue	2,412	1,238
Total other payables	12,098	6,621
Other payables are represented by:
No more than 12 months	12,091	6,609
More than 12 months	7	12
Total other payables	12,098	6,621

Note: Settlement is usually made net 30 days.

Note 9: Interest bearing liabilities

	2010   $'000	2009  $'000
Note 9: Leases
Finance leases:	40	233
Payable:
Within one year
Minimum lease payments	41	201
Deduct: future finance charges	(1)	(8)
Total leases payable within one year	40	193
In one to five years
Minimum lease payments	-	41
Deduct: future finance charges	-	(1)
Total leases payable within one year to five years	-	40
Finance leases recognised on the balance sheet	40	233

Note: Finance leases exist in relation to certain major office equipment assets. The leases are noncancellable and for fixed terms averaging 2.75 years, with a maximum of 3.25 years.
The interest rate implicit in the leases averaged 5.92 per cent (2009: 6.24 per cent).
The lease assets secure the lease liabilities. The Treasury guarantees the residual values of all assets leased. There are no contingent rentals.

Note 10: Provisions

	2010   $'000	2009   $'000
Note 10: Employee provisions
Leave	38,920	35,976
Aggregate employee benefit liability	38,920	35,976
Other employee entitlements	190	81
Total employee provisions	39,110	36,057
Employee provisions are expected to be settled in
No more than 12 months	10,937	9,955
More than 12 months	28,173	26,102
Total employee provisions	39,110	36,057

Note 11: Cash flow reconciliation

	2010  $'000	2009  $'000
Reconciliation of cash and cash equivalents as per balance sheet to cash flow statement
Cash and cash equivalents as per
Cash flow statement	1,196	1,367
Balance sheet	1,196	1,367
Reconciliation of net cost of services to net cash from operating activities
Net cost of services	5,452	(3,869)
Adjustments for non-cash items
Depreciation/amortisation	4,368	4,191
Loss on disposal of non-current assets	37	9
Net write down of non-financial assets	28	33
Changes in assets/liabilities
(Increase)/decrease in net receivables	(461)	(3,323)
(Increase)/decrease in other non financial assets	(757)	401
Increase/(decrease) in provisions	3,053	2,424
Increase/(decrease) in other payables	5,477	1,461
Increase/(decrease) in supplier payables	(2,191)	1,064
Net cash from/(used by) operating activities	15,006	2,391

Note: Figures for the comparative year differ from what was published in the 2008-09 annual report due to reclassification of certain employee entitlements from provisions to payables.

Note 12: Contingent liabilities and assets

Note 12: Contingent Assets and Liabilities

	Other		Total
	2010  $'000	2009  $'000		2010  $'000	2009  $'000
Contingent liabilities
Balance from previous period	248	255		248	255
New	255	224		255	224
Obligations expired/crystallised	(231)	(231)		(231)	(231)
Total contingent liabilities	272	248		272	248
NET CONTINGENT LIABILITIES	272	248		272	248

Quantifiable contingencies

The schedule of contingencies reports ‘other’ liabilities of $271,856 (2009: $248,224). This amount represents an estimate of the Treasury’s liability in respect of studies assistance.

Unquantifiable contingencies

As at 30 June 2010, the Treasury had a number of legal claims against it. The Treasury has denied liability and is defending the claims. It is not possible to estimate the amounts of any eventual payments that may be required in relation to these claims.

The courts may award legal costs against the Treasury in the event it is unsuccessful in an action before the courts. As there is uncertainty over the outcome of outstanding and pending court cases, duration of court cases and the legal costs of the opposing party, these costs cannot be reliably measured.

Remote contingencies

The Treasury’s lease on its current premises contains a make good clause which has been estimated by an independent valuer at $2.7 million. The Treasury has assessed the likelihood of the make good provision being required and has deemed it as remote.

As at 30 June 2010, the Treasury has a number of contracts which may give rise to contingent liabilities based on certain events occurring. The Treasury has assessed the likelihood of such events occurring as being remote and unquantifiable.

Note 13: Executive Remuneration
Note 13A: Actual remuneration paid to senior executives

	2010	2009
The number of executives who received or were due:
less than $145,000*	2	3
$145,000 to $159,999	4	2
$160,000 to $174,999	1	2
$175,000 to $189,999	2	2
$190,000 to $204,999	5	11
$205,000 to $219,999	20	13
$220,000 to $234,999	16	18
$235,000 to $249,999	12	6
$250,000 to $264,999	5	8
$265,000 to $279,999	4	3
$295,000 to $309,999	1	1
$310,000 to $324,999	1	3
$325,000 to $339,999	1	1
$340,000 to $354,999	2	-
$355,000 to $369,999	1	-
$370,000 to $384,999	1	2
$385,000 to $399,999	1	-
$430,000 to $444,999	1	1
$535,000 to $549,999	1	-
$625,000 to $639,999	-	1
Total	81	77
* Excluding acting arrangements and part-year service.
Total expense recognised in relation to Senior Executive employment
Short-term employee benefits:
Salary (including annual leave taken)	$15,851,649	$14,215,420
Changes in annual leave provisions	$158,435	$194,648
Performance bonus	$0	$57,525
Other1	$248,640	$261,749
Total Short-term employee benefits	$16,258,724	$14,729,342
Superannuation (post-employment benefits)	$2,482,755	$2,745,183
Other long-term benefits	$478,804	$669,255
Total	$19,220,283	$18,143,780

The comparative aggregate total amount has been revised and does not match what was published in the 2008-09 annual report due to new disclosure requirements.

1 ‘Other’ includes motor vehicle allowances and other allowances

Note 13B: Salary packages for senior executives as at 30 June

		As at 30 June 2010				As at 30 June 2009
		No. SES	Base salary  (including  annual leave)	Total  remuneration package		No. SES	Base salary  (including  annual leave)	Total  remuneration package
Total remuneration*:
$160,000 to $174,999		-	-	-		2	163,698	171,374
$175,000 to $189,999		3	173,064	185,563		5	166,293	181,564
$190,000 to $204,999		8	169,758	196,704		19	174,451	200,217
$205,000 to $219,999		30	181,170	209,929		22	178,775	215,944
$220,000 to $234,999		16	194,877	225,967		8	189,811	227,632
$235,000 to $249,999		4	206,652	226,076		7	205,408	246,155
$250,000 to $264,999		6	218,147	242,382		2	220,672	255,338
$265,000 to $279,999		2	225,990	275,665		4	214,407	271,327
$280,000 to $294,999		2	241,878	284,014		3	251,616	287,683
$310,000 to $324,999		2	273,160	319,164		4	268,043	317,567
$325,000 to $339,999		3	290,208	336,666		1	281,755	325,149
$340,000 to $354,999		-	-	-		2	281,755	346,064
$355,000 to $369,999		1	313,645	368,253		-	-	-
$370,000 to $384,999		1	327,184	383,371		1	304,510	375,589
$385,000 to $399,999		-	-	-		1	317,654	393,021
$445,000 to $459,999		1	402,670	452,407		-	-	-
$505,000 to $519,999		-	-	-		1	390,940	505,175
$520,000 to $534,999		1	402,670	521,148		-	-	-
	Total	80				82
*Excludes executive level staff acting in senior executive positions.

Note: Nonsalary elements available to Senior Executives include:
a) Agreed base salary (including annual leave).
b) Motor vehicle allowance.
c) Superannuation.
Total number of SES shown in the above table is as at 30 June of the respective year and does not match the total represented in Table 13A which reflects SES numbers over the year as opposed to as at 30 June. Long service leave values have been excluded in the table above. No performance bonuses were paid by the Treasury in 2009-10. Performance bonuses paid in 2008-09 have been excluded.

Note 14: Remuneration of Auditors

	2010   $'000	2009  $'000
Financial statement audit services are provided free of
charge to the Treasury
The fair value of the services provided was:
The Treasury	436	395
Total	436	395

Note: The above amounts are exclusive of GST. No other services were provided by the AuditorGeneral.

Note 15: Average staffing levels

	2010	2009
The Treasury	1,007	936
Total	1,007	936