The Treasury's mission
The Treasury's mission is to improve the wellbeing of the Australian people by providing sound and timely advice to the Government, based on objective and thorough analysis of options, and by assisting Treasury ministers in the administration of their responsibilities and the implementation of government decisions.
Changes to outcome structure
From the 2009-10 Budget, the Treasury has reported on a program basis, moving from four outcomes with 12 outputs to a single outcome with 10 programs. In summary:
- all previous departmental outputs now come under Program 1.1;
- administered items previously in Outcome 1 are now included in Program 1.2;
- administered items previously in Outcome 2 are now included as part of Programs 1.4 and 1.10;
- administered items previously in Outcome 4 are now included in Program 1.3; and
- as a result of the new framework for federal financial relations, the Treasury has additional Programs 1.4 to 1.10.
The Treasury's new outcome and program structure is detailed in Figure 2.
Policy outcome
As a result of Operation Sunlight and the Outcomes Statement Review, the Treasury has moved from four outcomes to a single outcome.
In carrying out its mission, the Treasury has responsibility for the following outcome:
- 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 four policy groups that contribute to achieving this outcome:
- Macroeconomic Group;
- Fiscal Group;
- Revenue Group; and
- Markets Group.
Macroeconomic Group
Macroeconomic Group provides advice on a sound macroeconomic environment that is an essential foundation for strong, sustainable economic growth and the improved wellbeing of Australians.
Macroeconomic Group contributes to a sound macroeconomic environment by providing careful monitoring and analysis of economic conditions in Australia and overseas which forms the basis of macroeconomic policy advice to portfolio ministers.
Macroeconomic Group also provides advice to government on a range of international economic policy issues, including strengthening multilateral regimes underpinning open trade and capital flows, supporting developing countries' development aspirations and shaping the evolution of regional economic architecture.
Macroeconomic Group is also responsible for payments to international financial institutions as outlined in Program 1.2.
Fiscal Group
Fiscal Group provides advice on effective government spending arrangements that contribute to the overall fiscal outcome, influence strong sustainable economic growth and improve the wellbeing of Australians.
Effective spending measures should meet their stated objectives, minimise behavioural distortions and deliver significant economic and other benefits compared with costs.
Fiscal Group provides policy advice to portfolio ministers to promote government decisions that further these objectives.
Fiscal Group takes a whole-of-government and whole-of-economy perspective in developing its advice on the fiscal strategy and spending arrangements across and within portfolios.
Fiscal Group is also responsible for the efficient payment to and through the States and Territories of general revenue assistance, National Specific Purpose Payments and National Partnership payments as outlined in Programs 1.4 to 1.10.
Revenue Group
Revenue Group provides advice on effective taxation and retirement income arrangements that contribute to the overall fiscal outcome, influence strong sustainable economic growth and the improved wellbeing of Australians.
Tax measures should meet revenue or other public policy objectives and have regard to the principles of economic efficiency, horizontal and vertical equity, and transparency whilst minimising compliance and administrative costs. By meeting these objectives, tax measures contribute to wellbeing, either directly or by providing the revenue base to finance government services.
Revenue Group provides policy advice to government to promote government decisions that further these objectives.
Revenue Group takes a whole-of-government and whole-of-economy perspective in developing its taxation and retirement income policies.
Markets Group
Markets Group provides advice on well functioning markets that contribute to improving national productivity and promoting stronger economic growth, thereby enhancing the living standards of all Australians.
Well functioning markets enable the most efficient use of resources and maximise consumer confidence in markets, thereby enhancing community benefits from economic activity.
Markets Group provides advice on policies that promote competitive, efficient markets that work to enhance consumer wellbeing, a secure financial system and sound corporate practices, and foreign investment consistent with Australia's national interest.
Markets Group also maintains the operations of the Standard Business Reporting Management Group, Australian Government Actuary, Financial Reporting Panel and Takeovers Panel.
Markets Group is also responsible for payments in respect of support for markets and business as outlined in Program 1.3.
Treasury support services
To support the Treasury's policy outcomes, Corporate Services Group and the Policy Coordination and Governance Unit provide key services to assist with systems and facilities which provide essential support and organisational backup to the groups.
Corporate Services Group is responsible for providing corporate services, products and advice including accommodation and facilities management; administrative support management; communications advice and support; financial management; human resource management, training and development; information management and technology services; media management and monitoring; ministerial and parliamentary support; procurement; publishing; security and travel.
The Policy Coordination and Governance Unit functions include facilitation of whole-of-department policy discussions; support to the Executive Board and the Audit Committee; coordination of organisational strategy initiatives; departmental governance structures and systems; risk management, quality assurance and policy evaluation frameworks; implementation monitoring and tools; issues management and coordination of freedom of information requests.
Treasury people values
The Treasury's people values reflect its management approach, and these values are within the broader Australian Public Service framework.
The Treasury people management principles:
- stipulate open, two-way communication at all levels;
- clearly define accountabilities;
- use work performance as the basis for remuneration, which is determined by fair and transparent processes; and
- facilitate staff in achieving an appropriate work and private life balance.
Treasury people:
- strive for excellence;
- value teamwork, consultation and sharing of ideas;
- value diversity among its people;
- treat everyone with respect;
- exhibit honesty in all its dealings; and
- treat colleagues with fairness.
The Treasury‘s role and capabilities
The Treasury's mission statement reflects the breadth of its ministers' responsibilities and underscores the key importance for the Treasury of a strong relationship with its ministers, built on trust and effective advice. The Treasury plays a central policy agency role in developing and implementing public policy, and in assisting government in identifying national pol icy priorities.
In assessing public policy issues, the Treasury applies a broad wellbeing framework comprising five elements:
- the opportunity and freedom that allows individuals to lead lives of real value to them;
- the level of consumption possibilities available to the community over time. This includes both market and non-market goods and services, such as voluntary and community work, the quality of the physical environment, health and leisure;
- the distribution of these consumption possibilities, including among different groups within society, across geographical regions and across generations;
- the overall level and allocation of risk borne by individuals and, in aggregate, by the community; and
- the level of complexity confronting Australians in making decisions about their lives.
The application of the wellbeing framework, along with the scope of policy responsibilities held by Treasury ministers, means that the Treasury brings a whole-of-economy approach to its advice and analysis, taking account of a broad range of issues, such as freedom, opportunity and the natural environment.
To be an effective central policy agency across the full range of activities, the Treasury works to ensure that it:
- effectively focuses its efforts on issues that really matter, based on its understanding of government and its Ministers' interests;
- anticipates policy developments, both inside and outside the Treasury portfolio;
- brings a strong analytical approach to all issues by applying its understanding of economic principles and tools, the framework for understanding wellbeing, its knowledge of Australia and relevant international policy experience, and an understanding of relevant interests;
- provides highquality policy advice that is compatible with practical realities and ensures that government policy is implemented either by the Treasury or, where appropriate, by others;
- remains relevant over time through an inclusive and participatory involvement in policy processes, domestic and international engagement and continued sensitivity to the changes in community values and the policy environment; and
- consistently achieves results working with the government.
In broad terms, the capabilities the Treasury needs to fulfill its role and deliver programs include:
- a deep understanding of its mission, the economic and policy environment, and stakeholders' views;
- a collaborative approach with internal and external stakeholders to develop effective policy;
- proactivity and vision, anticipating policy, implementation and organisational issues;
- influence and reputation, building trust with the Government and other stakeholders, and influencing the policy agenda;
- improvement and adaptability, through being flexible, adaptable and innovative; and
- efficiency and productivity, through managing costs, allocating resources and enabling efficiencies.
Production and delivery of the Treasury's programs relies on:
- policy development, through identifying policy issues, shaping policy approaches, managing issues during a process of change and providing up-to-date information;
- quantitative analysis of the economy, of policy options and their impacts, and of government and departmental finances;
- policy implementation and development of legislation and related instruments;
- public consultation and information in developing policy and legislation, and managing issues;
- good working relationships within the Treasury portfolio and with external stakeholders;
- effective and collaborative international engagement; and
- administration of governance arrangements, legislation and programs.
These activities are supported by people, financial and facilities management systems, information and knowledge management systems, communications systems and strategic leadership at several levels in the organisation.
Financial performance
The Treasury received an unqualified audit report on the 2009-10 financial statements from the Australian National Audit Office. These statements can be found in Part 4.
Departmental
The Treasury ended 2009-10 with a surplus of $5.5 million, compared to a $3.9 million deficit in 2008-09. Employee expenses increased by $11 million from 2008-09 which was associated with a staffing increase of 71. This was due to additional funding provided in budget measures.
The Treasury's net asset position increased by $10 million in 2009-10. This is mainly due to an increase in intangible assets of $16 million, mainly due to the Standard Business Reporting asset which was completed late in 2009-10 and was available for use on 1 July 2010, offset by an increase of $6 million in liabilities mainly associated with creditors and employee provisions.
The Treasury has sufficient cash reserves to fund liabilities as and when they fall due.
Administered
The Treasury incurred $88 billion in administered expenses in 2009-10 compared to $54 billion in 2008-09. The $34 billion increase predominantly relates to additional payments to the States and Territories that the Treasury provides under the Intergovernmental Agreement on Federal Financial Relations which were implemented progressively from 1 January 2009.
The Treasury's administered net assets reduced by $10 billion in 2009-10. This is mainly due to a decrease in the value of financial asset investments and an increase in payables due to Australia's International Monetary Fund Special Drawing Rights allocation.