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Departmental Overview

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 wholeofgovernment and wholeofeconomy 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 wholeofgovernment and wholeofeconomy 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 wholeofdepartment 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, twoway 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 nonmarket 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 wholeofeconomy 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 uptodate 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.

Figure 1: Treasury senior management structure (as at 30 June 2010)
Secretary: Dr Ken Henry AC
Executive Director (Policy Coordination and Governance): Mr Richard Murray

Corporate Services Group
Group General Manager: Ms Deidre Gerathy

Financial and Facilities Management Division
General Manager: Mr Rob Donelly

Information Management and Technology Division
General Manager: Mr Tony Murray (A/g)

Human Resources Division
General Manager: Ms Pamela Henderson

Information Management and Technology Services Division
General Manager: Ms Alaine King

 
Macroeconomic Group: Executive Director (Domestic), Dr David Gruen

Macroeconomic Group: Executive Director (International/Special Envoy), Mr Mike Callaghan

Domestic Economy Division
General Manager: Dr Steve Morling

Macroeconomic Policy Division
General Manager: Mr Tony McDonald

Macroeconomic Modelling Division
General Manager: Mr Robert Ewing (A/g)

International and G20 Division
General Manager: Mr Bill Brummitt

International Finance and Development Division
General Manager: Mr Paul Flanagan

Overseas Posts

Washington
Mr David Pearl

Paris
Mr Matthew Flavel

London
Ms Kerstin Wijeyewardene

Tokyo
Mr Hector Thompson

Beijing
Ms Irene Sim

Jakarta
Mr Neil Richardson

 
Fiscal Group: Executive Director, Mr Nigel Ray

Budget Policy Division
General Manager: Ms Jan Harris

Commonwealth-State Relations
Division
General Manager: Ms Sue Vroombout

Industry, Environment and Defence Division
General Manager: Mr Steve French

Social Policy Division
General Manager: Ms Peta Furnell

 

 
Revenue Group: Executive Director, Mr David Parker

International Tax and Treaties Division
General Manager: Mr Mike Rawstron

Tax Analysis Division
General Manager: Ms Maryanne Mrakovcic

Business Tax Division
General Manager: Mr Paul McCullough

Tax System Division
General Manager: Ms Christine Barron

Personal and Retirement Income Division
General Manager: Mr Michael Willcock

Indirect, Philanthropy and Resource Tax Division
General Manager: Ms Brenda Berkeley

Board of Taxation Secretariat
Secretary: Ms Brenda Berkeley

 
Markets Group: Executive Director, Mr Jim Murphy

Foreign Investment and Trade Policy Division
General Manager: Ms Patrick Colmer

Financial System Division
General Manager: Mr John Lonsdale

Infrastructure,Competition and Consumer Policy Division
General Manager: Dr Steven Kennedy

Corporations and Financial Services Division
General Manager: Mr Geoff Miller

Australian Government Actuary
General Manager: Mr Peter Martin

Takeovers Panel
Director: Mr Allan Bulman

Standard Business Reporting Management Group
Program Director: Mr Paul Madden

 

Figure 2: Treasury outcome and program structure (as at 30 June 2010)

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

Domestic Economy Division
Macroeconomic Policy Division
Macroeconomic Modelling Division
International and G20 Division
International Finance and Development Division
Overseas Posts

   

Fiscal Group

Budget Policy Division
Commonwealth-State Relations Division
Industry, Environment and Defence Division
Social Policy Division

   

Revenue Group

Business Tax Division
Indirect Tax Division
International Tax and Treaties Division
Personal and Retirement Income Division
Tax Analysis Division
Tax System Division
Board of Taxation Secretariat

   

Markets Group

Foreign Investment and Trade Policy Division
Financial System Division
Infrastructure, Competition and Consumer Policy Division
Corporations and Financial Services Division
Australian Government Actuary
Takeovers Panel
Standard Business Reporting Management Group

Treasury support services

Corporate Services Group
Policy Coordination and Governance Unit

   
Program 1.2: Payments to International Financial Institutions

Macroeconomic Group: International Finance and Development Division 

Program 1.3: Support for Markets and Business

Markets Group: Financial System 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 Schools

Fiscal Group: Commonwealth-State Relations Division 

Program 1.7: Assistance to the States for Skills and Workforce Development

Fiscal Group: Commonwealth-State Relations Division 

Program 1.8: Assistance to the States for Disabilities Services

Fiscal Group: Commonwealth-State Relations Division 

Program 1.9: Assistance to the States for Affordable Housing

Fiscal Group: Commonwealth-State Relations Division 

Program 1.10: National Partnership Payments to the States

Fiscal Group: Commonwealth-State Relations Division 

 

Figure 3: Treasury portfolio outcome and program structure (as at 30 June 2010)

Portfolio Minister — Treasurer

The Hon Wayne Swan MP

Assistant Treasurer

Senator the Hon Nick Sherry

Minister for Financial Services, Superannuation and Corporate Law

The Hon Chris Bowen MP

Minister for Competition Policy and Consumer Affairs

The Hon Dr Craig Emerson MP

Minister for Sustainable Population

The Hon Tony Burke MP

 

Department of the Treasury

Secretary: Dr Ken Henry AC

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:

Program 1.2:

Program 1.3:

Program 1.4:

Program 1.5:

Program 1.6:

Program 1.7:

Program 1.8:

Program 1.9:

Program 1.10:

Department of the Treasury

Payments to International Financial Institutions

Support for Markets and Business

General Revenue Assistance

Assistance to the States for Healthcare Services

Assistance to the States for Government Schools

Assistance to the States for Skills and Workforce Development

Assistance to the States for Disabilities Services

Assistance to the States for Affordable Housing

National Partnership Payments to the States

 

Australian Bureau of Statistics

Statistician: Mr Brian Pink 

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 Graeme Samuel AC 

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
 

Australian Office of Financial Management

Chief Executive Officer: Mr Neil Hyden

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: Dr John Laker AO

Outcome 1: Enhanced public confidence in Australia’s financial institutions through a framework of prudential regulation which balances financial safety and efficiency, competition, contestability and competitive neutrality
Program 1.1: Australian Prudential Regulation Authority
 

Australian Securities and Investments Commission

Chairman: Mr Tony D’Aloisio

Outcome 1: Improved confidence in financial market integrity and protection of investors and consumers through research, policy, education, compliance and deterrence that mitigates emerging risks

Program 1.1:

Program 1.2:

Research, policy, compliance, education and information initiatives

Enforcement/deterrence

Outcome 2: Streamlined and cost-effective interaction and access to information for business and the public, through registry, licensing and business facilitation services

Program 2.1:

Program 2.2:

Legal infrastructure for companies and financial services providers

Banking Act and Life Insurance Act, unclaimed moneys and special accounts

 

Australian Taxation Office

Commissioner: Mr Michael D’Ascenzo 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:

Program 1.2:

Program 1.3:

Program 1.4:

Program 1.5:

Program 1.6:

Program 1.7:

Program 1.8:

Program 1.9:

Program 1.10:

Program 1.11:

Program 1.12:

Program 1.13:

Program 1.14:

Program 1.15:

Program 1.16:

Program 1.17:

Program 1.18:

Program 1.19:

Program 1.20:

Australian Taxation Office

Tax Practitioners Board

Australian Business Register

Australian Valuation Office

Product Stewardship for Oil

Cleaner Fuels Grant Scheme

Australian Screen Production Incentive

Research and Development Tax Offset

Private Health Insurance Rebate

Superannuation Co-contribution Scheme

Superannuation Guarantee Scheme

Fuel Tax Credits Scheme

Education Tax Refund

National Urban Water and Desalination Plan

National Rental Affordability Scheme

First Home Saver Accounts

Baby Bonus

Interest on Overpayment and Early Payments of Tax

Bad and Doubtful Debts and Remissions

Other Administered

 

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: Mr Kevin Stevenson 

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 Gary Banks AO 

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-like products
Program 1.1: Royal Australian Mint