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Part 1: Overview (continued)



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.

Policy 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, which is an essential foundation for strong, sustainable economic growth and the improved wellbeing of Australians.

Macroeconomic Group contributes to a sound macroeconomic environment by undertaking careful monitoring and analysis of economic conditions in Australia and overseas, which forms the basis of quality 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 on helping to shape the evolution of regional economic architecture.

Macroeconomic Group is also responsible for payments to international financial institutions as outlined in program 1.2 on pages 88-89.

Fiscal Group

Fiscal Group provides advice on effective government spending arrangements that contribute to the overall fiscal outcome, help deliver strong and 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 of general revenue assistance, National Specific Purpose Payments and National Partnership Payments to the States and Territories as outlined in programs 1.4 to 1.10 on pages 92-105.

Revenue Group

Revenue Group provides advice on effective tax and retirement income arrangements policy and on legislation to implement policy that contributes to the overall fiscal outcome and to strong, sustainable economic growth.

Revenue Group takes a whole-of-government and whole-of-economy perspective in developing its tax and retirement income advice.

Tax and retirement income policy affects the wellbeing of Australians through influencing individuals’ decisions on saving and investment and labour market participation and businesses’ decisions about whether, where and how much to invest.

Well-designed tax legislation contributes to the ability of taxpayers to understand and comply with their tax obligations.

Revenue Group provides advice on the fiscal and distributional impacts of changes to tax policy.

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 and wellbeing 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 Australian Government Actuary, the Financial Reporting Council and the Takeovers Panel, and provides business management for Standard Business Reporting.

Markets Group is also responsible for payments to support markets and business as outlined in program 1.3 on pages 90-91.

Corporate Strategy and Services Group

To support the Treasury’s policy outcomes, Corporate Strategy and Services Group provides key services, systems and facilities that provide essential organisational support to the groups.

Corporate Strategy and Services Group is responsible for providing corporate services, products and advice including accommodation and facilities management; communications advice and support; financial management; human resource management, training and development; information management and technology services; freedom of information management; media management and monitoring; ministerial and parliamentary support; procurement; publishing; security and travel.

Corporate Strategy and Services Group functions also include assisting development of whole-of-department corporate strategy; providing support to the Secretary, the Executive Board and the Audit Committee, including oversight of departmental structures and systems; designing and facilitating whole-of-department policy discussions; coordinating organisational strategy initiatives; overseeing the risk management framework; and undertaking and assisting with departmental reviews.

Treasury people values

Treasury people are skilled professionals, committed to providing quality advice, thinking analytically and strategically, and striving to achieve long-term benefits for all Australians. We uphold the important values and behaviours that shape the Treasury culture. These values influence all aspects of the way we work.

Treasury people:

  • strive for excellence;
  • value teamwork, consultation and sharing of ideas;
  • value diversity among our people;
  • treat everyone with respect;
  • exhibit honesty in all our dealings; and
  • treat colleagues with fairness.

Treasury people management principles are:

  • open, two-way communications at all levels;
  • to clearly define accountabilities;
  • work performance is the basis for remuneration, which is determined by fair and transparent processes; and
  • to facilitate an appropriate work and private life balance.

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. As a central policy agency, the Treasury is expected to anticipate and analyse policy issues from a whole-of-economy perspective, understand government and stakeholder circumstances, and respond rapidly to changing events and directions. As such,
the Treasury’s interests are broad and diverse.

The Treasury is engaged in a wide range of issues that affect the lives of Australians, from macroeconomic policy settings to microeconomic reform, social policy, tax policy and international agreements and forums. The Treasury has a program delivery role in supporting markets and business, and providing Commonwealth payments to the State and Territory governments.

In undertaking its mission, Treasury takes a broad view of wellbeing as primarily reflecting a person’s substantive freedom to lead a life they have reason to value.

This view encompasses more than is directly captured by commonly used measures of economic activity. It gives prominence to respecting the informed preferences of individuals, while allowing scope for broader social actions and choices. It is open to both subjective and objective notions of wellbeing, and to concerns for outcomes and consequences as well as for rights and liberties.

Treasury brings a whole-of-economy approach to providing advice to government based on an objective and thorough analysis of options. To facilitate that analysis, we have identified five dimensions that directly or indirectly have important implications for wellbeing and are particularly relevant to Treasury. These dimensions are:

  • The set of opportunities available to people. This includes not only the level of goods and services that can be consumed, but good health and environmental amenity, leisure and intangibles such as personal and social activities, community participation and political rights and freedoms.
  • The distribution of those opportunities across the Australian people. In particular, that all Australians have the opportunity to lead a fulfilling life and participate meaningfully in society.
  • The sustainability of those opportunities available over time. In particular, consideration of whether the productive base needed to generate opportunities (the total stock of capital, including human, physical, social and natural assets) is maintained or enhanced for current and future generations.
  • The overall level and allocation of risk borne by individuals and the community. This includes a concern for the ability, and inability, of individuals to manage the level and nature of the risks they face.
  • The complexity of the choices facing individuals and the community. Our concerns include the costs of dealing with unwanted complexity, the transparency of government and the ability of individuals and the community to make choices and trade-offs that better match their preferences.

These dimensions reinforce our conviction that trade-offs matter deeply, both between and within dimensions. The dimensions do not provide a simple checklist; rather their consideration provides the broad context for the use of the best available economic and other analytical frameworks, evidence and measures.

The Treasury applies and develops its technical expertise, knowledge base and support systems to deliver on the Government’s priorities. To maximise our potential, we nurture and strengthen our core organisational capabilities and consistently seek better ways to do business.

Our organisational capabilities are:

  • Deep understanding: understanding our mission, the economic and policy environment, and the views of our stakeholders.
  • Collaboration: collaborating 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: being flexible, adaptable and innovative.
  • Efficiency and productivity: managing costs, allocating resources and enabling efficiencies.

Financial performance

The Treasury received an unqualified audit report on the 2011-12 financial statements from the Australian National Audit Office. These statements can be found in Part 4 on pages 150-259.

Departmental

The Treasury ended 2011-12 with an attributable deficit of $11.6 million, compared to a $2.4 million surplus in 2010-11. Employee expenses increased by $15.8 million from 2010-11, which was associated with the cost of voluntary redundancies offered to staff in the first half of 2012, and the significant drop in the bond rate resulting in a large increase of long service leave expenses.

The Treasury’s net asset position decreased by $23.7 million in 2011-12, mainly due to the reduction of appropriation receivable used to pay for the voluntary redundancies and the increase in the long service leave provision as a result of the bond rate decrease.

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

Administered

The Treasury incurred $86.9 billion in administered expenses in 2011-12 compared to $86.9 billion in 2010-11. There was a small reduction in grant expenses to the States and Territories that the Treasury provides under the Intergovernmental Agreement on Federal Financial Relations.

The Treasury’s administered net assets increased by $3.3 billion in 2011-12. This is mainly due to an increase in the value of financial assets and a decrease in provisions and payables.

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

Figure 1: Treasury senior management structure (as at 30 June 2012)

Secretary: Dr Martin Parkinson PSM
Executive Director (Policy Coordination and Governance): Mr Barry Sterland

Corporate Strategy and Services Group
Group General Manager: Mr Steve French

Financial and Facilities Management Division
General Manager: Mr Matthew King

Information Management and Technology Division
General Manager: Mr Peter Alexander

Ministerial and Communications Division
General Manager: Ms Mary Balzary

People and Organisational Strategy Division
General Manager: Ms Marisa Purvis-Smith

Stakeholder Engagement
General Manager: Ms Jan Harris

 
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 James Kelly

Macroeconomic Modelling Division
General Manager: Mr Russ Campbell

International and G20 Division
General Manager: Mr Jason McDonald

International Finance and Development Division
General Manager: Ms Sue Vroombout

Overseas Operations

Papua New Guinea
Mr Colin Johnson

Solomon Islands
Mr Paul Flanagan

Indonesia
Mr Jason Allford

Overseas Posts

Washington DC
Ms Amanda Sayegh

OECD (Paris)
Mr Matthew Flavel

London
Ms Kerstin Wijeyewardene

Tokyo
Ms HK Holdaway

Beijing
Mr Adam McKissack

Jakarta
Mr Trevor Thomas

New Delhi
Mr Matt Crooke

 
Fiscal Group: Executive Director, Mr Nigel Ray

Budget Policy Division
General Manager: Mr John Lonsdale

Commonwealth-State Relations Division
General Manager: Mr Peter Robinson

Industry, Environment and Defence Division
General Manager: Ms Luise McCulloch

Social Policy Division
General Manager: Mr Chris Foster (A/g)

Review of GST Distribution Secretariat
General Manager: Mr Paul McCullough

 
Revenue Group: Executive Director, Mr Rob Heferen

International Tax and Treaties Division
General Manager: Mr Tony McDonald

Tax Analysis Division
General Manager: Mr Roger Brake

Business Tax Division
General Manager: Ms Christine Barron

Tax System Division
General Manager: Mr Gerry Antioch

Personal and Retirement Income Division
General Manager: Mr Nigel Murray (A/g)

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

Board of Taxation Secretariat
Secretary: Mr Roger Paul

 
Markets Group: Executive Director, Mr Jim Murphy

Foreign Investment and Trade Policy Division
General Manager: Ms Sam Reinhardt

Financial System Division
General Manager: Mr Ian Beckett (A/g)

Infrastructure Division
General Manager: Mr Brenton Thomas

Corporations and Capital Markets Division
General Manager: Mr David Woods

Competition and Consumer Policy Division
General Manager: Mr Geoff Francis

Retail Investor Division
General Manager: Ms Irene Sim

Australian Government Actuary
General Manager: Mr Peter Martin

Takeovers Panel
Director: Mr Allan Bulman

 

Figure 2: Treasury outcome and program structure (as at 30 June 2012)

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 Finance and Development Division
International and G20 Division
Overseas Operations
Overseas Posts

   

Fiscal Group

Budget Policy Division
Commonwealth-State Relations Division
Industry, Environment and Defence Division
Social Policy Division
Review of GST Distribution Secretariat

   

Revenue Group

Business Tax Division
Indirect, Philanthropy and Resource 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 Division
Competition and Consumer Policy Division
Corporations and Capital Markets Division
Retail Investor Division
Australian Government Actuary
Takeovers Panel

Corporate Strategy and Services Group

 
   
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 2012)

Portfolio Minister — Deputy Prime Minister and Treasurer

The Hon Wayne Swan MP

Assistant Treasurer

The Hon David Bradbury MP

Minister for Financial Services and Superannuation

The Hon Bill Shorten MP

Minister for Housing

The Hon Brendan O’Connor MP

Parliamentary Secretary to the Treasurer

The Hon Bernie Ripoll MP

 

Department of the Treasury

Secretary: Dr Martin Parkinson 

Outcome 1: Informed decisions on the development and implementation of policies to improve the well
being 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 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 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
 

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: 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 Greg Medcraft

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