2006-07 - Department of Treasury and Finance€¦ · The 2006-07 Report provides comparative...

Treasurer’s Annual Financial Report

2006-07

Northern Territory Treasury38 Cavenagh Street

GPO Box 1974, Darwin NT 0801

Telephone: (08) 8999 7406

Facsimile: (08) 8999 7150

Website: www.nt.gov.au/ntt

Treasurer’s Annual F

inancial Report 2006-07

TREASURER’S ANNUAL FINANCIAL REPORT

for the year ended 30 June 2007

The Treasurer’s Annual Financial Report for 2006-07 has been prepared to provide an informative,

comprehensive and clear report of the Northern Territory Government’s financial outcomes. It

includes the Treasurer’s Annual Financial Statement prepared in accordance with section 9 of the

Financial Management Act and section 16 of the Fiscal Integrity and Transparency Act, and also

includes unaudited information. In order to distinguish between the audited schedules and the

other material, all schedules have been marked accordingly.

SYD STIRLING

9 October 2007

PARLIAMENT HOUSE GPO BOX 3146 DARWIN NT 0800 DARWIN NT 0801TELEPHONE: (08) 8901 4052 FACSIMILE: (08) 8901 4060

[email protected]

DEPUTY CHIEF MINISTERTREASURER

�

�006-07 Treasurer’s Annual Financial Report

Purpose of the 2006‑07 Treasurer’s Annual Financial ReportThe 2006-07 Treasurer’s Annual Financial Report (the Report) is consistent with the requirements of the Fiscal Integrity and Transparency Act (FITA) and uses the Uniform Presentation Framework (UPF) as the external reporting standard.

The 2006-07 Report provides comparative financial information for the 2006-07 estimate and the 2005-06 outcome.

Structure of the 2006‑07 Treasurer’s Annual Financial ReportThe financial statements and supplementary tables presented in the 2006-07 Report have been prepared in accordance with UPF requirements and are consistent with the 2006-07 Budget.

A set of UPF financial statements (Operating Statement, Balance Sheet and Cash Flow Statement) has been provided for each sector. These sectors are: general government, public non financial corporation, non financial public sector, public financial corporations and total public sector. Information for the total public sector is not required under UPF, but is consistent with Australian Accounting Standards (AAS) requirements.

The Report is presented in two sections: one audited and the other unaudited.

The audited section includes a set of financial statements, by sector, with notes provided for the total public sector and, where appropriate, the general government or non financial public sectors.

Comparative data is provided for 2005-06 in both the financial statements and notes to the accounts. Comparative data is also provided in the financial statements for the estimated 2006-07 outcome, as published in the May 2007 Budget Papers.

The unaudited section includes a summary table outlining Appropriation changes through the year, by agency. Following this is an explanation of significant variations in Appropriation for each general government agency, as well as an explanation of significant variations between the latest estimate and actual result for both operating revenue and expenses. The latter is provided for both general government agencies and government business divisions.

Additional tables required by the UPF relating to general government operating expenses by function, general government purchase of non financial assets by function, general government sector taxes and Loan Council Allocation for 2006-07 are also provided in this section.

In addition, a reconciliation is provided between the net operating balance by sector, as reported in the audited section, with the net operating result that would have been reflected had the Report been prepared under Australian Accounting Standards.

Audited SectionAudited Section

Unaudited Section

Unaudited Section

�

ContentsMinisterial Portfolio Arrangements 5Overview 7

Treasurer’s Annual Financial Statement (Audited)

Auditor-General’s Report 23Reporting Framework 25Uniform Presentation Framework – Financial Statements

General Government Sector Operating Statement 27General Government Sector Balance Sheet 28General Government Sector Cash Flow Statement 29Public Non Financial Corporation Sector Operating Statement 30Public Non Financial Corporation Sector Balance Sheet 31Public Non Financial Corporation Sector Cash Flow Statement 32Non Financial Public Sector Operating Statement 33Non Financial Public Sector Balance Sheet 34Non Financial Public Sector Cash Flow Statement 35Public Financial Corporations Sector Operating Statement 36Public Financial Corporations Sector Balance Sheet 37Public Financial Corporations Sector Cash Flow Statement 38Total Public Sector Operating Statement 39Total Public Sector Balance Sheet 40Total Public Sector Cash Flow Statement 41

Notes to the Financial Statements Note 1: Statement of Significant Accounting Policies 45Note 2: Taxation Revenue 56Note 3: Current Grants and Subsidies 56Note 4: Capital Grants 56Note 5: Sales of Goods and Services 56Note 6: Other Revenue 57Note 7: Employee Expenses 57Note 8: Other Operating Expenses 57Note 9: Current Transfers 58Note 10: Capital Transfers 58Note 11: Cash and Deposits 58Note 12: Advances Paid 59Note 13: Investments, Loans and Placements 60Note 14: Other Non Equity Assets 61Note 15: Equity Investments 61Note 16: Land and Fixed Assets 62Note 17: Deposits Held 65Note 18: Advances Received 66Note 19: Borrowings 66Note 20: Superannuation Liabilities 67Note 21: Other Employee Entitlements and Provisions 69Note 22: Other Non Equity Liabilities 70Note 23: Commitments 71Note 24: Contingent Assets and Liabilities 73Note 25: Equity in Public Enterprises 78

Contents

�


Note 26: Cash Flow Reconciliation 79Note 27: Financial Instruments 81Note 28: Write Offs, Postponements, Waivers, 85

Ex Gratia Payments and Gifts

Additional Financial Information (Unaudited)

Variations to Allocations Authorised During the Year 91Summary Agency/Government Business Division Financial Information

Auditor-General’s Office 94Northern Territory Electoral Commission 95Ombudsman’s Office 96Department of the Chief Minister 97Department of the Legislative Assembly 98Northern Territory Treasury 99Central Holding Authority 100Northern Territory Treasury Corporation 101Department of Justice 102Department of Employment, Education and Training 103Tourism NT 104Territory Discoveries 105Office of the Commissioner for Public Employment 106Department of Health and Community Services 107Northern Territory Police, Fire and Emergency Services 108Department of Business, Economic and Regional Development 109Land Development Corporation 110Department of Planning and Infrastructure 111Darwin Bus Service 112Construction Division 113Darwin Port Corporation 114Department of Natural Resources, Environment and the Arts 115Territory Wildlife Parks 116Department of Local Government, Housing and Sport 117Territory Housing 118Department of Corporate and Information Services 119Data Centre Services 120Government Printing Office 121NT Fleet 122Aboriginal Areas Protection Authority 123Department of Primary Industry, Fisheries and Mines 124

Uniform Presentation Framework Supplementary Tables General Government Sector Expenses by Function 125General Government Sector Purchases of Non Financial 128 Assets by FunctionGeneral Government Sector Taxes 128Loan Council Allocation 129

Appendix A: Reconciliation of GFS Net Operating Balance 131 with GAAP Operating Result

Appendix B: Classification of Entities in the Northern 133 Territory Public Sector

Glossary 135

Contents

�Ministerial Portfolio Arrangements

Ministerial Portfolio ArrangementsThis schedule of Ministerial Portfolio Arrangements details the ministerial responsibilities for individual areas of Government at 30 June 2007 (drawn from the Administrative Arrangements Order at 30 June 2007).

Ministerial Portfolio Arrangements as at 30 June 2007Minister Agency or Government Business Division

The Hon C M Martin MLA Auditor-General’s Office

Northern Territory Electoral Commission

Ombudsman’s Office

Department of the Chief Minister

Department of the Legislative Assembly

The Hon S J Stirling MLA Northern Territory Treasury

Northern Territory Treasury Corporation

Department of Justice

The Hon P R Henderson MLA Department of Employment, Education and Training

Tourism NT

Territory Discoveries

Office of the Commissioner for Public Employment

Dr C B Burns MLA Department of Health and Community Services

Northern Territory Police, Fire and Emergency Services

The Hon K Vatskalis MLA Department of Business, Economic and Regional Development

Land Development Corporation

The Hon D P Lawrie MLA Department of Planning and Infrastructure

Darwin Bus Service

Construction Division

Darwin Port Corporation

Ms M R Scrymgour MLA Department of Natural Resources, Environment and the Arts

Territory Wildlife Parks

Mr E A McAdam MLA Department of Local Government, Housing and Sport

Territory Housing

Department of Corporate and Information Services

Data Centre Services

Government Printing Office

NT Fleet

Aboriginal Areas Protection Authority

Mr C W Natt MLA Department of Primary Industry, Fisheries and Mines

6


Since the reporting date, amendments to the Adminstrative Arrangements Order were made. This schedule of Ministerial Portfolio Arrangements details the ministerial responsibilities for individual areas of Government at 7 August 2007 (drawn from the Administrative Arrangements Order at 7 August 2007).

Ministerial Portfolio Arrangements as at 7 August 2007Minister Agency or Government Business Division

The Hon C M Martin MLA Auditor-General’s Office

Northern Territory Electoral Commission


Department of the Chief Minister

Department of the Legislative Assembly


The Hon S J Stirling MLA Northern Territory Treasury

Northern Territory Treasury Corporation


The Hon P R Henderson MLA Department of Employment, Education and Training

Tourism NT

Territory Discoveries

Office of the Commissioner for Public Employment

Dr C B Burns MLA Department of Health and Community Services

The Hon K Vatskalis MLA Department of Business, Economic and Regional Development


The Hon D P Lawrie MLA Department of Planning and Infrastructure

Darwin Bus Service

Construction Division


Department of Natural Resources, Environment and the Arts


Mr E A McAdam MLA Department of Local Government, Housing and Sport

Territory Housing

Department of Corporate and Information Services

Data Centre Services

Government Printing Office

NT Fleet

Aboriginal Areas Protection Authority

Mr C W Natt MLA Department of Primary Industry, Fisheries and Mines

Ms M R Scrymgour MLA Shared Agencies

Department of Health and Community Services (Family and Community Services)

Department of Natural Resources, Environment and the Arts (Arts and Museums)

Ministerial Portfolio Arrangements

7

OverviewThe Treasurer’s Annual Financial Report (the Report) presents the whole of government financial outcomes for 2006-07 as required under the Fiscal Integrity and Transparency Act (FITA) and includes performance against the Territory’s fiscal strategy:

• all key fiscal aggregates improved on those estimated;

• a general government cash surplus of $33 million, the fifth surplus since 2002-03;

• contribution of $150 million towards the Territory’s superannuation liabilities;

• a general government operating surplus of $143 million and a fiscal balance of $62 million, both significant improvements to the original Budget;

• an increase of 3906 in the Territory’s population to 210 674 following the updated 2006 Census estimates, with a resultant increase in the level of GST in 2006-07, that will flow through to future years;

• record capital expenditure of $463 million in the general government sector and $567 million in the non financial public sector;

• a reduction of $181 million in non financial public sector net debt to $1413 million, the lowest level of net debt since its high point in 2001-02;

• a net debt to revenue ratio for the non financial public sector of 39 per cent, down from 48 per cent in 2005-06; and

• a net debt plus employee liabilities to revenue ratio for the non financial public sector of 106 per cent, down from 112 per cent in 2005-06 and significantly lower than the 134 per cent recorded in 2001-02.

The Northern Territory’s key fiscal aggregates for 2006-07 are summarised in Table 1.

2005-06 Outcome1

2006-07 Budget

2006-07 Estimate

2006-07 Outcome

Variation on Budget

$M $M $M $M $M

GENERAL GOVERNMENT

Cash Surplus(+)/Deficit(-) 40 - 56 - 11 33 89

Net Operating Balance 22 17 31 143 126

Net Lending(+)/Borrowing(-) (Fiscal Balance)

- 50 - 105 - 71 62 167

2005-06 Outcome

2006-07 Budget

2006-07 Estimate

2006-07 Outcome

Variation on 2005-06

$M $M $M $M $M

NON FINANCIAL PUBLIC SECTOR

Net Worth 2 706 2 503 2 357 2 719 13

Net Debt 1 594 1 776 1 578 1 413 - 181

Net Debt to Revenue (%) 48 52 44 39 - 9

Net Debt plus Employee Liabilities

3 753 3 943 4 196 3 908 155

Net Debt plus Employee Liabilities to Revenue (%)

112 115 116 106 - 6

Source: Northern Territory Treasury.

1. Restated to reflect transfer of Territory Housing from the non financial public sector to the general government sector.

Table 1: Key Fiscal AggregatesTable 1: Key Fiscal Aggregates

Overview

�


Operating Results – General GovernmentTable 2 presents the key operating aggregates for 2006-07.

2005-06 Outcome1

2006-07 Budget

2006-07 Estimate

2006-07 Outcome

Variation on Budget

$M $M $M $M $M

CASH FLOW STATEMENT

Operating Receipts 3 023 3 019 3 207 3 286 267

Less: Operating Payments 2 736 2 806 2 895 2 855 49

Net Capital Spending 247 269 262 248 - 21

Superannuation Contributions

60 150 150

Cash Surplus(+)/Deficit(-) �0 - �6 - 11 �� 9

OPERATING STATEMENT

Revenue 3 037 3 030 3 198 3 289 259

Less: Expenses 3 015 3 013 3 168 3 146 132

Net Operating Balance �� 17 �1 1�� 1�6

Less: Net Capital Spending 73 122 102 81 - 41

Net Lending(+)/Borrowing(-) (Fiscal Balance)

- �0 - 10� - 71 6� 167



The general government cash surplus of $33 million represents a substantial improvement against the original Budget cash deficit of $56 million.

The improved cash position since the original Budget is largely the result of:

• higher receipts of $267 million, due to increased levels of economic activity affecting taxation and mining royalties ($60 million), together with increased GST receipts ($48 million), specific purpose payments (SPPs) and own-source revenue ($86 million) that are largely matched by expenditure commitments, the transfer of Territory Housing into general government ($41 million) and improved returns on Government’s investments and trading entities ($32 million);

• timing of net capital spending largely relating to the Darwin Waterfront Development ($26.3 million); offset by

• new and expanded initiatives, including Middle Years schooling, Jobs Plan and Road Safety ($40 million); and

• the contribution of $150 million towards the Territory’s superannuation liability.

In the May 2007 Budget, the Government announced that it would contribute additional amounts towards the Territory’s superannuation liabilities, to reduce the effect on future budgets. For 2006-07 the Government has been able to contribute an additional $150 million, a significant increase from the $60 million estimated in May 2007. Since 2002, levels of net debt have reduced, largely as a result of five successive cash surpluses. However, the Territory’s superannuation liability has steadily increased, following a series of actuarial reassessments, increasing the pressure on the Territory’s overall debt burden.

Outcome for 2006‑07

Outcome for 2006‑07

Table 2: Key Operating Aggregates – General

Government

Table 2: Key Operating Aggregates – General

Government

Overview

9

These contributions are invested in the Conditions of Service Reserve investment portfolio, which is included in the general government sector. However, as these funds are not available for current spending, the Territory has adopted an underlying cash measure from 2006-07 as its primary cash target. Accordingly, the additional $150 million contribution in 2006-07 results in an underlying cash surplus of $33 million. Decisions on future contributions will be made on a year by year basis.

The general government operating surplus of $143 million was $126 million higher than the original Budget operating surplus of $17 million and better than the final estimate operating surplus of $31 million, due largely to additional revenue outlined above, with only comparatively moderate increases in expenses. This outcome is consistent with the objective of all governments to achieve a significant positive operating result, as this provides the capacity for investment in capital infrastructure in the general government sector without the need for any additional borrowing.

The difference between the cash outcome of $33 million and the operating surplus of $143 million is largely due to the accounting treatment of the additional contribution towards the Territory’s long-term superannuation liabilities and employee entitlements, together with capital spending that only affects the cash outcome.

The fiscal balance represents a more complete picture of government spending as, similar to the cash outcome, it incorporates the effect of both capital and operational transactions.

For 2006-07, the fiscal balance for general government is a surplus of $62 million, an improvement on the original Budget deficit of $105 million. This $167 million improvement is due to the combination of a better than forecast operating surplus and the timing of capital spending.

Overview

10


Table 3 summarises the key movements in the cash flow and operating statements since the May 2006 Budget to the actual outcome.

2006-07

Accrual Cash

$M $M

�006-07 BUDGET 17.0 - �6.�

OPERATING REVENUE/RECEIPTS

Policy-related

Road safety initiatives 1.7 1.7

Increase in First Home Owner Concession - 0.6 - 0.6

Sub-total 1.1 1.1

Non policy-related

Taxation 42.4 43.6

GST revenue 47.6 47.6

Specific purpose payments 68.2 67.0

Own-source revenue 18.7 18.7

Interest 19.5 19.5

Mining royalties 16.6 16.6

Tax equivalents 12.0 12.0

Dividends - 16.8 - 0.3

Transfer of Territory Housing to general government 46.9 41.1

Other 2.3 0.2

Sub-total ��7.� �66.0

TOTAL OPERATING REVENUE/RECEIPTS ��.� �67.1

OPERATING EXPENSES/PAYMENTS

Policy-related

New and expanded initiatives 40.2 40.2

Sub-total �0.� �0.�

Non policy-related

Carry over into 2007-08 - 22.5 - 22.5

Employee liabilities 32.1 - 5.1

Specific purpose payments 42.1 35.6

Expenditure linked to own-source revenue 17.4 11.5

Depreciation and amortisation 8.3

Treasurer’s Advance - 30.0 - 30.0

Superannuation contribution 150.0

Transfer of Territory Housing to general government 42.2 22.9

Other 2.6 - 3.4

Sub-total 9�.� 1�9.0

TOTAL OPERATING EXPENSES/PAYMENTS 1��.� 199.�

NET CAPITAL

Carry over into 2007-08 - 2.9

Net capital spending 1.2

Specific purpose payments – capital 6.7

Revised Waterfront timing - 26.3

TOTAL NET CAPITAL - �1.�

TOTAL VARIATION 1�6.1 �9.�

�006-07 OUTCOME 1��.1 ��.�

Table 3: Variations to the Cash Flow and Operating

Statements since May 2006

Table 3: Variations to the Cash Flow and Operating

Statements since May 2006

Overview

11

Table 3 provides details of the movements in revenue and receipts and expenses and payments since May 2006. The significantly different cash and operating result is largely the result of the treatment of superannuation expenses/payments and capital projects.

A key component of the movement in the table relates to the reclassification of Territory Housing into the general government sector. Territory Housing, a government business division, has previously been included in the public non financial corporation sector because of the commercial focus adopted in the delivery of public housing services. In line with the treatment in the May 2007 Budget, Territory Housing has been included in the general government sector on the basis of its responsibilities for Indigenous housing policy and programs, along with the delivery and management of public housing to remote communities. Given this reclassification at the time of the 2007-08 Budget, the 2005-06 Outcome, as presented in the 2005-06 Treasurer’s Annual Financial Report and the 2006-07 final estimates, has been restated to enable reliable comparisons over this period.

General government operating revenue has increased from the 2006-07 Budget by $258.5 million and cash receipts have increased by $267.1 million. The difference between the cash and accrual movements is due largely to the timing of dividends received from government businesses.

The main policy variations in revenue/receipts include:

• an increase due to increased fine collections arising from the Road Safety initiative; and

• a small net reduction associated with the Government’s commitment to increase the first home owner stamp duty concession property value threshold from $225 000 to $350 000, with effect from 1 May 2007. The full year effect of this commitment is estimated to be $3.9 million.

The main non-policy variations to revenue since the May 2006 Budget include:

• increased economic activity resulting in higher Territory tax revenue of $42.4 million including payroll tax ($13.8 million) and stamp duty ($25.6 million), predominantly related to business conveyances;

• an increase in GST revenue of $47.6 million due largely to the increase in the Territory’s population estimate following the 2006 Census and slightly higher GST revenue available for distribution by the Australian Government;

• an increase in SPPs of $68.2 million, as new agreements were finalised or re-negotiated. These were mainly education, health, public safety and Indigenous housing grants;

• additional own-source revenue largely related to revenue generated from increased economic activity across the Territory that is largely matched by additional expenditure commitments;

• increased interest revenue of $19.5 million due to improved short-term investment holdings across government, mainly as a result of the improved cash position, interest rate rises and SPPs received in advance from the Australian Government;

Overview

1�


• increased mining royalty revenue of $16.6 million associated with increased mining production and rises in commodity prices; and

• changes in dividends to be paid and accrued from government trading entities, largely related to the Power and Water Corporation associated with the write down in value of $146 million in its water and sewerage assets.

General government accrual expenses have increased by $132.4 million above the 2006-07 Budget while there was an increase in operating cash payments of $49.2 million, excluding the $150 million additional superannuation contribution, compared to the Budget. The difference between operational expenses and payments is largely due to the respective treatment of the Territory’s superannuation liabilities between the Operating Statement and Cash Flow Statement, together with the accruing of other employee benefits and expenses in the Operating Statement.

The main policy variations which include funding to meet additional demand pressures and price growth, relate to funding for new and expanded initiatives, including Jobs Plan, Road Safety, Bringing Forward Discovery, Middle Years schooling and remote schools.

The key non-policy variations are:

• the carryover of expenses into 2007-08 of $22.5 million largely relating to the timing of Australian Government funding;

• increased superannuation expenses (accrual), including nominal interest charges due to updated actuarial reassessment during the year, largely relating to the Commonwealth Superannuation Scheme reported in the May 2007 Budget;

• expenses relating to SPPs from the Australian Government and other own-source revenue, however usual timing differences means that some expenses and payments will not occur until 2007-08;

• an increase in depreciation expenses in recognition of the completion of infrastructure assets; and

• the additional contribution towards the Territory’s superannuation liability of $150 million.

In addition to the above operating payment variations, there have been some changes to capital spending and receipts. These are reflected in the Cash Flow Statement, but not the Operating Statement. The key variation as reported in the May 2007 Budget was the revised timing of commitments for the Darwin Waterfront Development, in order to align the completion of the various elements of the development.

In addition to the above items, the transfer of Territory Housing into general government has affected various components of the financial statements. This has resulted in a minimal accrual effect, however, the timing of payments has resulted in an overall cash improvement for 2006-07, consistent with that reported in the May 2007 Budget.

Overview

1�

Balance Sheet – General Government and Non Financial Public SectorTable 4 presents the key asset and liability aggregates for 2006-07 for both the general government sector and the non financial public sector.

2005-06 Outcome1

2006-07 Budget

2006-07 Estimate

2006-07 Outcome


$M $M $M $M $M

GENERAL GOVERNMENT SECTOR

Total Assets 7 164 6 585 7 261 7 506 342

Less: Total Liabilities 4 458 4 082 4 904 4 787 329

Net Worth � 706 � �0� � ��7 � 719 1�

Net Debt 1 �96 1 ��1 1 �� 1 07� - ��1



3 431 3 397 3 820 3 547 116


113 112 119 108 - 5

2005-06 Outcome

2006-07 Budget

2006-07 Estimate

2006-07 Outcome


$M $M $M $M $M

NON FINANCIAL PUBLIC SECTOR

Total Assets 7 562 7 373 7 710 7 944 382

Less: Total Liabilities 4 856 4 871 5 352 5 225 369

Net Worth � 706 � �0� � ��7 � 719 1�

Net Debt 1 �9� 1 776 1 �7� 1 �1� - 1�1



3 753 3 943 4 196 3 908 155


112 115 116 106 - 6



Net worth for both sectors was $2719 million, a slight increase on the $2706 million recorded in 2005-06. Total assets have increased during 2006-07, largely due to the better than expected cash outcome and overall improvement in the valuation of assets.

This is largely offset by an increase in total liabilities, primarily a result of an increase in the Territory’s unfunded superannuation liabilities following actuarial review, as reported in the May 2007 Budget.

When considered over time, cash surpluses in the past five years and continued improvement in the value of the Territory’s assets have resulted in the Territory’s net worth rising from $1902 million in 2002-03 to $2719 million in 2006-07.

Table 4: Key Asset and Liability Aggregates

Table 4: Key Asset and Liability Aggregates

Overview

1�


The Territory is an emerging economy with significant infrastructure requirements, resulting in higher debt levels than the states. Despite this comparative disadvantage, net debt continues to fall over time, largely as a result of fiscal prudence and five successive cash surpluses.

Net debt for 2006-07 at the non financial public sector was $1413 million, an improvement of $181 million on the 2005-06 outcome, with a similar improvement for the general government sector. This improvement will flow through to the forward estimates, and be evident in the 2007-08 Mid-Year Report.

Net debt plus employee liabilities for the non financial public sector was $3908 million, an increase of $155 million on 2005-06, with a similar increase in the general government sector.

This increase predominantly relates to the upward revision to the Territory’s superannuation liability resulting from the triennial review of the Commonwealth Superannuation Scheme (CSS) as reported in the May 2007 Budget. This increase reflects improving mortality rates and the allocation by the CSS of responsibility for around 200 additional pensioners to the Territory.

Despite this increase in employee-related liabilities, the proportion of net debt and employee liabilities to total revenue for the non financial public sector in 2006-07 is 106 per cent, a significant improvement on the 112 per cent recorded for 2005-06, with a similar reduction for the general government sector.

Superannuation continues to be the largest of the Territory’s liabilities. The adoption of Australian equivalents to International Financial Reporting Standards it is likely to result in increased volatility in the value of unfunded superannuation liabilities as the discount rate to be applied to value superannuation liabilities is the 10-year bond rate as at 30 June of the reporting period and is therefore more sensitive to short-term fluctuations in market conditions.

This is highlighted by the reduction in superannuation liabilities of $138 million at 30 June 2007 compared to that projected in May 2007 that is predominantly attributable to a change in the discount rate that was applied at these two points in time. At 30 June 2007 the discount rate applied was 6.25 per cent, whereas that applied at May 2007 was 5.7 per cent, resulting in the lower liability at year end. Due to fluctuations in financial markets since 30 June 2007, it is expected that the discount rate used for the 2007-08 Mid-Year Report will be a lower rate, similar to the 5.7 per cent used in May 2007. Accordingly, it is likely to result in the liability in the forward estimates returning more in line with that estimated in May 2007.

The Territory’s fiscal strategy sets out the Government’s medium-term fiscal objectives and aims to promote a sound fiscal management framework to ensure sustainable service provision, continued investment in infrastructure, reducing debt levels and a competitive tax environment that supports economic growth. The 2006-07 outcome for each of the fiscal strategy targets is analysed below and, based on the 2006-07 outcomes, the Territory is on track to meet all targets. However, an assessment of achievement against the strategy and targets is best measured over time rather than for particular points in time.

Fiscal StrategyFiscal Strategy

Overview

1�

Government’s Fiscal Strategy Target Met

Sustainable Government Services

Target: General Government Net Operating Balance By 2012-13

Assessment: Net Operating Balance surplus of $143 million

Infrastructure for Economic and Community Development

Target: Maintain Infrastructure Investment at Appropriate Levels and Achieve Fiscal Balance by 2012-13

Assessment: Fiscal balance surplus of $62 million and record infrastructure spend of $567 million in the non financial public sector

Competitive Tax Environment

Target: Ensure Territory Taxes and Charges are Competitive with the Average of the States

Assessment: Tax revenue per capita second lowest in Australia

Prudent Management of Liabilities

Target: Net Debt and Employee Liabilities as a Proportion of Total Revenue to Fall

Assessment: Net debt and employee liabilities at 106 per cent, a reduction of 6 percentage points on the previous year

Target: General Government Net Operating Balance by 2012‑13Table 5 details the Territory’s net operating balance and cash outcome in 2005-06 and 2006-07. As a measure, the net operating balance determines whether the Government earns sufficient revenue to meet its operating activities. An operating surplus provides capacity to increase capital stock without increased borrowing requirements. The cash outcome determines whether total receipts in any given year are sufficient to fund the Government’s operating and capital payments.

2005-06 Outcome1

2006-07 Budget

2006-07 Estimate

2006-07 Outcome

Variation on Budget

Net Operating Balance ($M) 22 17 31 143 126

As a Proportion of Total Revenue (%)

0.7 0.6 1.0 4.4 4

Cash Outcome ($M) 40 - 56 - 11 33 89



In 2006-07, the net operating balance was a surplus of $143 million, $126 million higher than the Budget forecast and $121 million higher than the 2005-06 outcome. As a proportion of total revenue, the net operating balance has improved from 0.7 per cent in 2005-06 to 4.4 per cent in 2006-07, a 3.7 percentage point improvement.

Sustainable Government

Services

Sustainable Government

Services

Table 5: Net Operating Balance and Cash Outcome – General

Government

Table 5: Net Operating Balance and Cash Outcome – General

Government

Overview

16


The higher operating result was largely due to higher own-source revenue as a result of increased economic activity, predominantly related to mining royalties, stamp duty on business conveyancing and employment growth, together with higher GST revenue.

In 2006-07, the cash surplus was $33 million, $89 million higher than the Budget forecast. This improvement largely reflects the improved accrual result together with the revised timing of capital projects as highlighted in the May 2007 Budget and is after the $150 million additional contribution towards the Territory’s long-term superannuation liabilities. This surplus follows a cash surplus of $40 million recorded in 2005-06 and is the fifth year in succession a cash surplus has been recorded.

Target: Maintain Infrastructure Investment at Appropriate Levels and Achieve Fiscal Balance by 2012‑13Capital investment plays a central role in the Government’s budget strategy, as it is essential for the delivery of the Territory’s social and economic requirements. The provision of adequate levels of infrastructure remains an ongoing challenge for the Territory when its remoteness and stage of development compared to other states are considered.

The fiscal balance provides a measure of the Territory’s investment balance (that is, as a lender or a borrower) and includes the effect of both capital and operating transactions, after excluding the effect of depreciation.

2005-06 Outcome1

2006-07 Budget

2006-07 Estimate

2006-07 Outcome

Variation on Budget

Fiscal Balance ($M) - 50 - 105 - 71 62 167

As a Proportion of Total Revenue (%)

- 1.7 - 3.5 - 2.2 1.9 5.4



The fiscal balance was a surplus of $62 million, $167 million better than the May 2006 Budget forecast and $133 million better than the estimate in the May 2007 Budget. This is consistent with the improved operating balance together with the timing of capital spending. As a proportion of total revenue, the fiscal balance has improved from -2 per cent in 2005-06 to 2 per cent 2006-07.

When considering capital investment in the Territory, it is appropriate to consider the non financial public sector as this better reflects the complete picture of government spending on significant infrastructure projects, to include the Power and Water Corporation.

Infrastructure for Economic

and Community Development

Infrastructure for Economic

and Community Development

Table 6: Fiscal Balance – General Government

Table 6: Fiscal Balance – General Government

Overview

17

Table 7 represents the level of capital investment in both 2005-06 and 2006-07. The Government’s capital investment comprises construction projects and asset purchases (including the Darwin Waterfront Development), Power and Water Corporation utility assets and capital grants to non-government organisations.

2005-06 Outcome

2006-07 Budget

2006-07 Estimate

2006-07 Outcome

Variation on Budget

$M $M $M $M $M

Purchases of Non Financial Assets

395 382 419 410 28

Assets Acquired under Financial Lease

15 63 48 48 - 15

Capital Grants 82 74 83 109 35

Total �9� �1� ��9 �67 �9


Actual capital investment of $567 million has increased by $75 million since 2005-06 and represents a record level of infrastructure spending. The increased expenditure since 2005-06 predominantly relates to improved education and utility infrastructure together with the increased spending in relation to the Darwin Waterfront Development.

Target: Ensure Territory Taxes and Charges are Competitive with the Average of the StatesThe Government is committed to maintaining taxation at competitive levels to encourage increased levels of business activity in the Territory. Comparisons of relative tax competitiveness are complex due to inherent differences in respective economies and in taxation regimes.

In assessing the competitiveness of the Territory’s tax system, the following measures are utilised:

• taxation revenue per capita; and

• taxation effort as assessed by the Commonwealth Grants Commission (the Commission).

Taxation revenue per capita is a simple summary measure that affords comparability with other jurisdictions.

Table 8 shows that the Territory’s tax collections at $1721 per capita is below that of the average of the states at $2245 per capita. The 2006-07 tax collection per capita decreased compared to the 2005-06 figure, largely the result of a number of one-off stamp duty transactions in that year. Despite this reduction, the 2006-07 outcome continues to reflect increased economic activity affecting payroll tax and conveyancing stamp duty collections, albeit from a lower base. Overall, the Territory’s taxation revenue per capita of $1721 remains the second lowest nationally.

Table 7: Purchases of Non Financial Assets – Non Financial Public Sector

Table 7: Purchases of Non Financial Assets – Non Financial Public Sector



Overview

1�


2005-06 Outcome

2006-07 Budget

2006-07 Estimate

2006-07 Outcome1

Variation on Budget

$ $ $ $ $

New South Wales 2 335 2 479 2 442 2 432 - 47

Victoria 2 143 2 160 2 183 2 211 51

Queensland 1 833 1 862 2 028 2 012 150

Western Australia 2 543 2 254 2 671 2 684 430

South Australia 1 919 1 966 2 016 2 033 67

Tasmania 1 439 1 494 1 483 1 494

Australian Capital Territory 2 383 2 413 2 510 2 608 195

State Average 2 156 2 191 2 264 2 245 54

Northern Territory 1 ��6 1 60� 1 7�� 1 7�1 119

Source: State and territory outcome reports, state and territory budget papers, ABS Cat. No. 3101.0.

1. Based on Northern Territory’s 2006-07 outcome and 2006-07 estimate for all other jurisdictions.

Although taxation per capita is a useful comparative measure, it is limited in that it does not make any allowances for the differences in states’ capacities to raise revenue.

A more sophisticated measure of tax competitiveness is the Commission’s analysis of ‘tax effort’, which takes account of the extent to which a particular state’s capacity to raise revenue is above or below average. Table 9 details the Territory’s revenue raising capacity and effort expressed as a percentage of the Australian average in 2005-06, the latest year assessed by the Commission.

Capacity1 Effort2

% %

Total Taxation 82 111

Total Own-source Revenue 94 99

Total Taxation plus Royalties and Public Safety User Charges

92 101

Source: Commonwealth Grants Commission 2007.

1. Northern Territory’s capacity to raise revenue compared to the Australian average.

2. Northern Territory’s revenue effort compared with the Australian average, given the capacity available.

The Commission’s assessment shows that the Territory’s total tax effort (111 per cent) is above the Australian average, reflecting a large number of one-off stamp duty transactions. However, a better comparative measure, on a cross-jurisdictional basis, is taxation combined with mining royalties and public safety user charges. On this basis, the Territory’s tax effort (101 per cent) is only slightly above the Australian average and the third lowest of the states and territories.

This, combined with the per capital measure, demonstrates that the Territory continues to provide a competitive tax environment for all Territorians.

Target: Net Debt and Employee Liabilities as a Proportion of Total Revenue to FallThis element of the fiscal strategy aims to ensure that debt is prudently managed, taking into consideration service delivery needs and investment in infrastructure to promote sustainable social wellbeing and economic growth.

Table 8: Taxation Revenue Per Capita – General GovernmentTable 8: Taxation Revenue Per Capita – General Government

Table 9: Northern Territory Revenue‑Raising Capacity

and Effort 2005‑06 (Australian Average =

100 per cent)

Table 9: Northern Territory Revenue‑Raising Capacity

and Effort 2005‑06 (Australian Average =

100 per cent)

Prudent Management of

Liabilities

Prudent Management of

Liabilities

Overview

19

This is particularly important for the Territory due to its greater infrastructure requirements relative to other jurisdictions, resulting in the Territory having historically higher levels of debt than the states. This is highlighted in Figure 1, which compares the level of Territory debt with the average of the states for 2001-02 through to 2006-07. However, it shows the Territory continues to improve over time relative to the states.

Source: State and territory budget and outcome reports.

The Territory’s commitment to improvement of its fiscal performance over time has contributed to a continued reduction in 2006-07 for net debt of $181 million below that recorded in 2005-06 and $330 million below that recorded back in 2001-02. Over the same period, the ratio of net debt to revenue has reduced significantly, from 67 per cent in 2001-02 to 39 per cent in 2006-07.

This reduction reflects five successive cash surpluses and has been achieved despite record levels of investment in infrastructure across the Territory.

2005-06 Outcome

2006-07 Budget

2006-07 Estimate

2006-07 Outcome


Net Debt ($M) 1 594 1 776 1 578 1 413 - 181



Net debt plus employee liabilities is a broader measure than net debt in that it encompasses unfunded employee entitlements, consisting largely of unfunded superannuation, which is a major liability for the Territory and most states.

Since 2001-02, the level of net debt plus employee entitlements as a percentage of revenue has dropped from 134 per cent at 30 June 2002 to 106 per cent at 30 June 2007 as highlighted in Table 11. This is despite updated actuarial assessments and scheme revaluations over the past years that have resulted in increases in the Territory’s superannuation liabilities.

0

10

20

30

40

50

60

70

80

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

%

Northern Territory State Average (Actual) State Average (Budgeted)

0

10

20

30

40

50

60

70

80

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

%

Northern Territory State Average (Actual) State Average (Budgeted)

Figure 1: Historical State and Territory Net Debt to Revenue – Non Financial Public Sector

Figure 1: Historical State and Territory Net Debt to Revenue – Non Financial Public Sector

Table 10: Northern Territory Net Debt – Non Financial

Public Sector

Table 10: Northern Territory Net Debt – Non Financial

Public Sector

Overview

�0


Table 11 highlights, both for net debt and net debt and employee liabilities, the significant improving trend since 2001-02 through 2006-07.

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

Net Debt ($M) 1 743 1 723 1 638 1 656 1 594 1 413

Net Debt to Revenue (%)

67 64 57 54 48 39

Total Net Debt plus Employee Liabilities ($M)

3 453 3 508 3 435 3 777 3 753 3 908

Total as a Proportion of Revenue (%)

134 131 118 124 112 106


Overall, during 2006-07, the Territory has continued to maintain its trend towards the medium-term fiscal objectives and targets set out in the fiscal strategy.

The cash outcome of a $33 million surplus in 2006-07 is the fifth year in succession a surplus has been recorded, which accounts for the significant improvement in the level of net debt.

The improved net operating balance and fiscal balance outcomes also suggest that the targets of balance by 2012-13 remains achievable. This is despite record investments in the Territory’s infrastructure base.

Net worth continues to improve, reflecting the upward revision in the valuation of the Territory’s asset base and the improved outcomes. Although employee liabilities have increased by $335 million since 2005-06, largely a result of revision to the Territory’s unfunded superannuation liability, net debt plus employee liabilities as a proportion of revenue continues to fall, and at 106 per cent is significantly below the 134 per cent recorded in 2001-02.

The Territory Government is also continuing its commitment to maintain taxation at competitive levels to encourage increased levels of business activity.

Table 11: Net Debt plus Employee Liabilities as a

Proportion of Total Revenue – Non Financial Public Sector

Table 11: Net Debt plus Employee Liabilities as a

Proportion of Total Revenue – Non Financial Public Sector

ConclusionConclusion

Overview

Treasurer’s Annual Financial Statements

(Audited)

AUDITOR-GENERAL’S REPORT TO THE TREASURER

ON THE TREASURER’S ANNUAL FINANCIAL STATEMENT

YEAR ENDED 30 JUNE 2007Scope

I have audited the Treasurer’s Annual Financial Statement (“the Statement”) for the year ended 30 June 2007, set out on pages 25 to 85, as received by me in accordance with section 25 of the Audit Act. The Treasurer is responsible for preparing and presenting the Statement and the information it contains in accordance with the requirements of section 9 of the Financial Management Act. The Statement also satisfies the Treasurer’s reporting obligations as set out in the Fiscal Integrity and Transparency Act. The Fiscal Integrity and Transparency Act permits the Treasurer to base the Statement upon either the concepts and classifications set out in Government Finance Statistics, or upon Australian accounting standards. The Treasurer has elected to apply the concepts and classifications of Government Finance Statistics and these do not require the full application of Accounting Standards and other mandatory professional reporting requirements in Australia.

I have performed an independent audit of the Statement in order to express an opinion upon it to the Treasurer. My audit has been conducted in accordance with Australian Auditing and Assurance Standards, which include a requirement that I consider whether the Statement complies with Accounting Standards and other mandatory professional reporting requirements in Australia. My audit is also intended to provide reasonable assurance whether the Statement is free of material misstatement. My procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the Statement and the evaluation of significant accounting estimates. These procedures have been undertaken to form an opinion whether the Statement is prepared from proper accounts and records and whether, in all material respects, the Statement is presented fairly in accordance with Government Finance Statistics, as well as with Accounting Standards and other mandatory reporting requirements in Australia.

I qualified the financial statements prepared by the Power and Water Corporation for the year ended 30 June 2006 as a result of my inability to satisfy myself about the appropriateness of the carrying amounts of water system assets controlled by the Corporation. That qualification led, in turn, to the qualification of the Treasurer’s Annual Financial Statement for the year ended 30 June 2006 because of my inability to satisfy myself about the appropriateness of the carrying amounts of utility assets recognised in the Statement. That qualification continues to affect the carrying amount of utility assets as at 30 June 2006 inasmuch as they are included as part of the comparative information presented in the Statement for the year ended 30 June 2007.

My audit opinions have been formed on the above basis.

Audit Opinion on prescribed reporting format

In my opinion, after taking into account the matters referred to in the preceding paragraphs, the Treasurer’s Annual Financial Statement for the year ended 30 June 2007 has been prepared from proper accounts and records and is presented fairly in accordance with the requirements of the Financial Management Act and the Fiscal Integrity and Transparency Act, and the information presented in the Statement complies with the requirements of Government Finance Statistics, Australia – Concepts, Sources and Methods.

AUDITOR-GENERAL

��Auditor-General’s Report

Level 12 Northern Territory House 22 Mitchell Street Darwin 0800 Tel: 08 8999 7155 Fax: 08 8999 7144

Qualified Audit Opinion – variance from the requirements of Australian Accounting Standards

The Treasurer’s Annual Financial Statement has been prepared to present the information required by section 9 of the Financial Management Act and section 16 of the Fiscal Integrity and Transparency Act, and is based upon the Government Finance Statistics, Australia – Concepts, Sources and Methods. The Statement does not, therefore, comply fully with Accounting Standards and other mandatory professional reporting requirements in Australia.

In my opinion, the Treasurer’s Annual Financial Statement for the year ended 30 June 2007 does not present fairly, in accordance with applicable Accounting Standards and other mandatory professional reporting requirements in Australia, the financial position of the Northern Territory Government as at 30 June 2007, its financial performance, changes in equity and its cash flows for the year then ended.

Frank McGuinessAuditor-General for the Northern Territory Darwin11 October 2007 Northern Territory

Level 12 Northern Territory House 22 Mitchell Street Darwin 0800 Tel: 08 8999 7155 Fax: 08 8999 7144

AUDITOR-GENERAL

�� Auditor-General’s Report


��

Reporting FrameworkThe 2006-07 Treasurer’s Annual Financial Statement has been prepared using the Uniform Presentation Framework (UPF) as the external reporting standard.

There are two principal Acts that combine to form the basis for this year’s Treasurer’s Annual Financial Statement: the Financial Management Act (FMA) and the Fiscal Integrity and Transparency Act (FITA).

Financial Management ActSection 9 of the FMA requires the preparation of a Treasurer’s Annual Financial Statement (TAFS) in a form the Treasurer considers appropriate. This must be done within the period of three months immediately following the end of each financial year, and may include the Final Fiscal Results Report required by the FITA.

The FMA requires all write-offs, waivers, postponements and gifts that the Treasurer has approved under section 35, and ex gratia payments that the Treasurer directs under section 37, to be reported. These reports are in respect of only those entities that are subject to the FMA.

Fiscal Integrity and Transparency ActThe Fiscal Integrity and Transparency Act requires that the Treasurer must publicly release and table a Final Fiscal Results Report no later than four months after the end of the financial year, and that this report may be incorporated in the Treasurer’s Annual Financial Statement. The report is to be based on external reporting standards, at least in the level of detail required by the UPF.

The Final Fiscal Results Report is to include the financial results for the general government sector and the non financial public sector for the financial year, an explanation of any material differences between the financial result and the equivalent projections published for that year, and an explanation of any material differences between the financial result and the expected outcomes for the key fiscal indicators for that year as specified in the Government’s Fiscal Strategy.

These explanations are outlined in the Overview, which should be read in conjunction with this financial statement. Further details on an agency basis are provided in supporting schedules in the unaudited section of the Treasurer’s Annual Financial Report.

The UPF forms the basis for the Final Fiscal Results Report included in the TAFS and as such is also the basis for the audited TAFS.

Reporting on a UPF basis was agreed by all Australian governments at the May 1991 Premiers’ Conference, with the primary objective being that Australian, state and territory governments provide a uniform set of financial data that would facilitate more meaningful comparisons between governments. The UPF is based on the reporting standards of the Australian Bureau of Statistics (ABS) Government Finance Statistics (GFS).

Legislative BasisLegislative Basis

The Uniform Presentation

Framework (UPF)

The Uniform Presentation

Framework (UPF)

Reporting Framework

�6


A major revision was made to the UPF in 2000 after the ABS adopted an accrual framework for its GFS. The UPF now requires that all governments report on an accrual basis.

The GFS scope includes all entities controlled by government, otherwise known as the total public sector. The UPF requires that GFS-based reports be produced for the general government sector, the public non financial corporations sector and the public financial corporations sector. It also requires reports on the non financial public sector, which is the sector formed through a consolidation of the general government and public non financial corporations sub-sectors. For the composition of the various sectors, see Appendix B ‘Classification of Entities in the Northern Territory Public Sector’.

In late 2002, the Financial Reporting Council (FRC) issued a directive to have an Australian Accounting Standard for a single set of harmonised Government reports which were auditable and comparable between jurisdictions. In early 2007, the Australian Accounting Standards Board released Exposure Draft (ED) 155 Financial Reporting by Whole of Government in response to the FRC directive. This proposed standard assists in harmonising the Generally Accepted Accounting Principles (GAAP) with the Government Finance Statistics concepts. It is anticipated that the finalised standard will be released in late October 2007 and will be applied to financial reporting periods beginning 1 July 2008. Accordingly, it is likely that the UPF will be amended to incorporate the new harmonised standard and the reporting format of future TAFS will also be revised to accord with the new standard.

Notes to the financial statements are provided for the total public sector and for the general government and non financial public sectors where appropriate. Although the UPF does not require notes, they are in line with the Government’s commitment to enhance transparency and accountability and are generally consistent with note disclosures required by Australian Accounting Standards.

GAAP/GFS Harmonisation

GAAP/GFS Harmonisation

Notes to the Financial Statements


Reporting Framework

�7Uniform Presentation Framework – Financial Statements

General Government Sector

Operating Statement

Notes

2006-07

Actual

(Audited)

2006-07

Final Estimate

(Unaudited)

2005-06

Actual

(Audited)

$000 $000 $000

REVENUE

Taxation revenue 2 368 035 358 155 375 996

Current grants and subsidies 3 2 450 470 2 400 032 2 248 729

Capital grants 4 106 335 101 784 87 194

Sales of goods and services 5 148 177 135 886 135 366

Interest income 48 226 46 489 33 899

Other 6 167 683 156 106 155 747

TOTAL REVENUE � �� 9�7 � 19� �� 0�6 9�0

EXPENSES

Gross operating expenses 2 206 608 2 227 502 2 080 248

Depreciation 170 876 169 340 163 071

Employee expenses 7 1 299 578 1 292 919 1 215 643

Other operating expenses 8 736 155 765 243 701 534

Nominal superannuation interest expense 7 104 800 122 220 96 103

Other interest expenses 139 259 138 377 142 277

Other property expenses 746 269

Current transfers 9 564 509 571 556 583 764

Capital transfers 10 129 855 107 955 112 036

TOTAL EXPENSES � 1�� 77� � 167 610 � 01� 696

NET OPERATING BALANCE 1�� 1�9 �0 ��

less

Net acquisition of non financial assets

Purchases of non financial assets 284 925 288 939 294 041

Sales of non financial assets - 85 117 - 74 442 - 62 876

less Depreciation 170 876 169 340 163 071

plus Change in inventories 701 771

plus Other movements in non financial assets 51 629 56 418 3 855

Total net acquisition of non financial assets �1 �6� 101 �7� 7� 719

equals

NET LENDING/BORROWING (Fiscal balance) 61 ��6 - 70 7�� - �0 ��6

The Operating Statement is to be read in conjunction with the notes to the financial statements.

�� Uniform Presentation Framework – Financial Statements



Balance Sheet 2006-07

Actual (Audited)

2006-07 Final Estimate (Unaudited)

2005-06 Actual

(Audited)

$000 $000 $000

ASSETS

Financial assets

Cash and deposits 73 548 47 129 55 849

Advances paid 185 153 196 644 220 144

Investments, loans and placements 868 936 736 655 642 931

Other non equity assets 116 486 107 179 134 063

Equity 1 069 948 1 057 713 1 098 676

Total financial assets � �1� 071 � 1�� 0 � 1�1 66�

Non financial assets

Land and fixed assets 5 191 986 5 115 568 5 012 213

Other non financial assets

Total non financial assets � 191 9�6 � 11� �6� � 01� �1�

TOTAL ASSETS 7 �06 0�6 7 �60 �� 7 16� �76

LIABILITIES

Deposits held 161 457 163 884 195 782

Advances received 295 327 323 582 323 912

Borrowing 1 745 716 1 717 614 1 695 326

Superannuation liability 2 087 387 2 225 280 1 773 196

Other employee entitlements and provisions 399 488 382 213 378 551

Other non equity liabilities 97 615 91 163 91 521

TOTAL LIABILITIES � 7�6 990 � 90� 7�6 � ��

NET WORTH � 719 066 � ��7 1�� 70� ��

NET FINANCIAL WORTH (a) - 2 472 919 - 2 758 416 - 2 306 625

NET DEBT (b) 1 07� �6� 1 �� 6�� 1 �96 096

(a) Net financial worth equals total financial assets minus total liabilities.

(b) Net debt equals the sum of deposits held, advances received and borrowing, minus the sum of cash and deposits, advances paid and investments, loans and placements.



Cash Flow Statement

Notes

2006-07 Actual

(Audited)


2005-06 Actual

(Audited)

$000 $000 $000

Cash receipts from operating activities

Taxes received 368 711 357 655 374 364

Receipts from sales of goods and services 146 119 136 487 119 854

Grants and subsidies received 2 555 604 2 501 707 2 334 619

Other receipts 215 490 210 781 194 095

Total operating receipts � �� 9�� 06 6�0 � 0�� 9��

Cash payments for operating activities

Payment for goods and services - 2 030 380 - 2 079 621 - 1 904 055

Grants and subsidies paid - 685 351 - 677 439 - 689 881

Interest paid - 139 730 - 138 387 - 142 152

Other payments

Total operating payments - � �� 6� - � �9� ��7 - � 7�6 0��

NET CASH FLOWS FROM OPERATING ACTIVITIES 26 ��0 �6� �11 1�� 6 ��

Net cash flows from investments in non financial assets

Sales of non financial assets 85 117 74 442 62 876

Purchases of non financial assets - 284 925 - 288 939 - 294 041

Net cash flows from investments in non financial assets - 199 �0� - �1� �97 - ��1 16�

NET CASH FROM OPERATING ACTIVITIES AND INVESTMENTS IN NON FINANCIAL ASSETS

��0 6�� 96 6�6 �� 6�1

Net cash flows from investments in financial assets for policy purposes (a)

35 781 24 863 - 7 281

Net cash flows from investments in financial assets for liquidity purposes

- 188 385 - 72 642 - 151 307

NET CASH FLOWS FROM INVESTING ACTIVITIES - 352 412 - 262 276 - 389 752

Net cash flows from financing activities

Advances received (net) - 28 585 - 329 14 327

Borrowing (net) 2 559 - 25 554 - 1 160

Deposits received (net) - 34 325 - 31 897 120 056

Distributions paid

Other financing (net) 120

NET CASH FLOWS FROM FINANCING ACTIVITIES - 60 351 - 57 780 133 343

NET INCREASE/DECREASE IN CASH HELD 17 699 - 8 873 30 436


��0 6�� 96 6�6 �� 6�1

Finance leases and similar arrangements - 47 869 - 47 841 - 15 456

GFS SURPLUS (+)/DEFICIT (-) 182 785 48 845 40 225

less Superannuation contributions (b) - 150 000 - 60 000

UNDERLYING SURPLUS (+)/DEFICIT (-) �� 7�� - 11 1�� 0 ��

(a) Includes equity acquisitions, disposals and privatisations (net).

(b) Contributions to meet future defined benefit superannuation liabilities.

The Cash Flow Statement is to be read in conjunction with the notes to the financial statements.

�0 Uniform Presentation Framework – Financial Statements


Public Non Financial Corporation Sector

Operating Statement 2006-07

Actual

(Audited)

2006-07

Final Estimate

(Unaudited)

2005-06

Actual

(Audited)

$000 $000 $000

REVENUE

Current grants and subsidies 99 398 102 771 110 589

Capital grants 19 870 26 516 32 969

Sales of goods and services 435 847 420 100 352 389

Interest income 3 239 2 484 1 617

Other 23 110 37 931 22 273

TOTAL REVENUE ��1 �6� ��9 �0� �19 ��7

EXPENSES

Gross operating expenses 502 371 499 974 463 746

Depreciation 67 234 70 494 66 679

Employee expenses 57 092 50 687 49 842

Other operating expenses 378 044 378 793 347 224


Other property expenses 8 031 10 478 19 834

Current transfers 3 397 3 580

Capital transfers 1 132 122

TOTAL EXPENSES ��1 �� 7 0�� 1� �0�

NET OPERATING BALANCE �9 616 �� 760 6 ��

less



Sales of non financial assets - 1 032 - 118 - 517


plus Change in inventories 386 - 1 037 1 532


Total net acquisition of non financial assets 70 �99 7� 7�� 6 0�7

equals

NET LENDING/BORROWING (Fiscal balance) - �0 �� - 19 96� - �9 7��



Balance Sheet2006-07

Actual

(Audited)

2006-07

Final Estimate

(Unaudited)

2005-06

Actual

(Audited)

$000 $000 $000

ASSETS

Financial assets


Investments, loans and placements


Equity

Total financial assets 11� 71� 1�� 1�� 9��




Total non financial assets 1 ��6 1�0 1 �6� 777 1 �0� �16

TOTAL ASSETS 1 ��0 �� 1 �90 06� 1 �� 17�

LIABILITIES

Deposits held

Advances received 32 872

Borrowing 388 487 396 991 327 296

Superannuation liability



TOTAL LIABILITIES �00 16� �00 �9� �79 �0�

Shares and other contributed capital 850 668 889 764 948 669

NET FINANCIAL WORTH (a) - 385 451 - 376 013 - 356 548

NET DEBT (b) �� 9 �9� �00






Cash Flow Statement

Notes

2006-07 Actual

(Audited)


2005-06 Actual

(Audited)

$000 $000 $000



Grants and subsidies received 121 033 129 178 143 716

Other receipts 6 033 17 401 16 505

Total operating receipts �67 �� 9 ��


Payment for goods and services - 437 226 - 425 350 - 384 431

Grants and subsidies paid - 3 658 - 3 641

Interest paid - 26 998 - 26 617 - 26 470

Other payments

Total operating payments - �67 �� - ��1 967 - �1� ��

NET CASH FLOWS FROM OPERATING ACTIVITIES 26 99 70� 97 �16 1�� 001


Sales of non financial assets 1 032 118 517


Net cash flows from investments in non financial assets - 1�� 1 - 1�9 91� - 100 ��


-�� 6�� - �� 60� �� 7�





Advances received (net)

Borrowing (net) 28 989 36 823 34 581

Deposits received (net) - 249

Distributions paid - 16 308 - 28 583 - 36 837

Other financing (net) 233 6 126 11 803

NET CASH FLOWS FROM FINANCING ACTIVITIES 12 914 14 366 9 297

NET INCREASE/DECREASE IN CASH HELD - 11 714 - 18 236 42 875


- �� 6�� - �� 60� �� 7�


Finance leases and similar arrangements

GFS SURPLUS (+)/DEFICIT (-) - 40 936 - 61 185 - 3 260

less Superannuation contributions (b)

UNDERLYING SURPLUS (+)/DEFICIT (-) - �0 9�6 - 61 1�� - � �60(a) Includes equity acquisitions, disposals and privatisations (net).


The Cash Flow statement is to be read in conjunction with the notes to the financial statements.

��Uniform Presentation Framework – Financial Statements

Non Financial Public Sector


Actual

(Audited)

2006-07

Final Estimate

(Unaudited)

2005-06

Actual

(Audited)

$000 $000 $000

REVENUE

Taxation revenue 363 610 353 537 371 672

Current grants and subsidies 2 450 427 2 403 939 2 248 940

Capital grants 106 335 105 803 89 707


Interest income 48 308 46 522 33 942

Other 164 658 162 275 152 168

TOTAL REVENUE � 66� 79� � 606 6�� 6�

EXPENSES


Depreciation 238 110 239 834 229 750

Employee expenses 1 351 353 1 337 519 1 259 938

Other operating expenses 1 047 165 1 104 511 1 002 348

Nominal superannuation interest expense 104 800 122 220 96 103


Other property expenses 727 264

Current transfers 468 466 473 798 476 966

Capital transfers 109 389 82 628 81 702

TOTAL EXPENSES � �� 0�� 0�6 � �1� 996

NET OPERATING BALANCE 1�� 76� �� 60� �� 66

less





plus Change in inventories 1 088 - 1 037 2 303


Total net acquisition of non financial assets 1�1 761 17� �9� 11� 776

equals

NET LENDING/BORROWING (Fiscal balance) �1 00� - 90 696 - 90 �10




Balance Sheet

Notes

2006-07 Actual

(Audited)


2005-06 Actual

(Audited)

$000 $000 $000

ASSETS

Financial assets

Cash and deposits 11 75 698 48 466 57 281

Advances paid 12 185 153 196 644 220 144

Investments, loans and placements 13 868 936 736 655 642 931


Equity 219 279 167 949 150 007

Total financial assets 1 �1� 9�� 1 �� 1 �� 11�




Total non financial assets 6 �� 10� 6 ��1 �� 6 �17 ��9

TOTAL ASSETS 7 9�� 0�0 7 709 6�7 7 �61 ��

LIABILITIES

Deposits held 17 113 553 121 689 135 445

Advances received 18 295 327 323 582 356 784

Borrowing 19 2 134 203 2 114 605 2 022 622

Superannuation liability 20 2 087 387 2 225 280 1 773 196

Other employee entitlements and provisions 21 421 639 420 324 400 904


TOTAL LIABILITIES � �� 97� � �� 7� � �� 9�7

NET WORTH � 719 066 � ��7 1�� 70� ��


NET DEBT (b) 1 �1� �96 1 �7� 111 1 �9� �96



The Balance Sheet is to be read in conjunction with the notes to the financial statements.

��Uniform Presentation Framework – Financial Statements


Cash Flow Statement

Notes

2006-07 Actual

(Audited)


2005-06 Actual

(Audited)

$000 $000 $000


Taxes received 364 164 353 037 370 159



Other receipts 191 044 189 604 171 694

Total operating receipts � 6�� 9�0 � �70 0�1 � �� 6




Interest paid - 163 660 - 162 557 - 167 132

Other payments

Total operating payments - � 1�� 0�� - � 190 11� - � 960 ��

NET CASH FLOWS FROM OPERATING ACTIVITIES 26 �1� �� 79 916 �� 009




Net cash flows from investments in non financial assets - �� 1�9 - �� 1� - ��1 ��7


1�9 719 �� 01 ��


36 617 25 700 3 919


- 188 385 - 72 642 - 151 307



Advances received (net) - 28 585 - 329 14 327

Borrowing (net) 31 547 11 269 33 421

Deposits received (net) - 21 893 - 8 466 74 537

Distributions paid

Other financing (net) -604 723

NET CASH FLOWS FROM FINANCING ACTIVITIES - 19 535 2 474 123 008



1�9 719 �� 01 ��

Distributions paid


GFS SURPLUS (+)/DEFICIT (-) 141 850 - 12 340 36 966


UNDERLYING SURPLUS (+)/DEFICIT (-) - � 1�0 - 7� ��0 �6 966(a) Includes equity acquisitions, disposals and privatisations (net).


The Cash Flow Statement is to be read in conjunction with the notes to the financial statements.



Public Financial Corporations Sector


Actual

(Audited)

2006-07

Final Estimate

(Unaudited)

2005-06

Actual

(Audited)

$000 $000 $000

REVENUE

Current grants and subsidies

Capital grants


Interest income 245 874 218 236 228 804

Other 6 462 14 635 7 988

TOTAL REVENUE �9� 7�� 61 �0� �� 16

EXPENSES

Gross operating expenses 135 732 159 987 145 125

Depreciation 2 108 1 256 1 648

Employee expenses 18 214 17 451 16 759

Other operating expenses 115 410 141 280 126 718



Current transfers 3 261 1 286 2 374

Capital transfers

TOTAL EXPENSES �� 09� ��1 60� �� 6��

NET OPERATING BALANCE �1 6�� 10 �01 �� 7�1

less



Sales of non financial assets - 3 423


plus Change in inventories

plus Other movements in non financial assets

Total net acquisition of non financial assets - � �� 70 � ��7

equals

NET LENDING/BORROWING (Fiscal balance) �� 9 7 9�1 ��



Balance Sheet 2006-07

Actual

(Audited)

2006-07

Final Estimate

(Unaudited)

2005-06

Actual

(Audited)

$000 $000 $000

ASSETS

Financial assets


Investments, loans and placements 3 224 979 3 243 340 3 103 574


Equity

Total financial assets � �� 1 �� 9� �1�


Land and fixed assets 79 471 76 070 73 800


Total non financial assets 79 �71 76 070 7� �00

TOTAL ASSETS � 6�1 70� � ��7 �1� � �66 �1�

LIABILITIES

Deposits held 379 275 580 698 505 817

Advances received 298 013 296 546 301 068

Borrowing 2 217 075 2 014 878 1 997 879

Superannuation liability



TOTAL LIABILITIES � �0� �� 9 ��9 � �16 �70

Shares and other contributed capital 219 276 167 886 149 945

NET FINANCIAL WORTH (a) 139 805 91 816 76 145

NET DEBT (b) - �� 0�� - �79 00� - �77 ��1






Cash Flow Statement

Notes

2006-07

Actual

(Audited)

2006-07

Final Estimate

(Unaudited)

2005-06

Actual

(Audited)

$000 $000 $000



Grants and subsidies received

Other receipts 254 176 196 667 229 941

Total operating receipts �0� 07� �67 77� �79 �9�


Payment for goods and services - 139 010 - 169 805 - 131 760

Interest paid - 174 197 - 165 794 - 166 368

Other payments - 4 445 - 3 643 - 4 386

Total operating payments - �17 6�� - ��9 �� - �0� �1�

NET CASH FLOWS FROM OPERATING ACTIVITIES 26 �� 1 �� 6 76 ��1


Sales of non financial assets 3 423


Net cash flows from investments in non financial assets � 116 - � ��6 - � 1��


�6 ��7 �� 010 71 696



- 117 062 - 131 863 - 110 931



Advances received (net) 1 269 - 4 522 - 4 672

Borrowing (net) 215 817 16 000 45 247

Deposits received (net) - 126 542 74 881 47 235


Other financing (net) 1 007

NET CASH FLOWS FROM FINANCING ACTIVITIES 59 223 55 895 63 368

NET INCREASE/DECREASE IN CASH HELD 28 698 -50 958 24 133


�6 ��7 �� 010 71 696


Finance leases and similar arrangements


less Superannuation contributions (b)

UNDERLYING SURPLUS (+)/DEFICIT (-) �� 16 - � �� 6 ��7(a) Includes equity acquisitions, disposals and privatisations (net).




Total Public Sector

Operating Statement

Notes

2006-07

Actual

(Audited)

2006-07

Final Estimate

(Unaudited)

2005-06

Actual

(Audited)

$000 $000 $000

REVENUE

Taxation revenue 2 362 486 352 482 370 603

Current grants and subsidies 3 2 450 427 2 403 939 2 248 940

Capital grants 4 106 335 105 803 89 707

Sales of goods and services 5 663 276 658 683 578 588

Interest income 130 999 101 753 96 059

Other 6 137 382 149 350 128 649

TOTAL REVENUE � ��0 906 � 77� 010 � �1� ��

EXPENSES


Depreciation 16 240 219 241 090 231 398

Employee expenses 7 1 368 449 1 354 936 1 275 406

Other operating expenses 8 1 149 610 1 238 612 1 114 026

Nominal superannuation interest expense 7 104 800 122 220 96 103



Current transfers 9 471 727 475 084 479 340

Capital transfers 10 109 389 82 628 81 702

TOTAL EXPENSES � 616 �07 � 67� �07 � �� 19�

NET OPERATING BALANCE �� 99 9� �0� 67 ��7

less




less Depreciation 16 240 219 241 090 231 398

plus Change in inventories 1 088 - 1 037 2 303


Total net acquisition of non financial assets 1�7 ��7 176 �6� 1�� 1�

equals

NET LENDING/BORROWING (Fiscal balance) �6 �6� - �� 76� - �� 96�

The Operating Statement is to be read in conjunction with the notes to the financial statements.



Total Public Sector

Balance Sheet

Notes

2006-07

Actual

(Audited)

2006-07

Final Estimate

(Unaudited)

2005-06

Actual

(Audited)

$000 $000 $000

ASSETS

Financial assets

Cash and deposits 11 253 762 145 519 196 854

Advances paid 12 167 045 178 611 202 111

Investments, loans and placements 13 1 751 397 1 633 482 1 415 269

Other non equity assets 14 233 303 219 503 240 368

Equity 15 3 63 63

Total financial assets � �0� �10 � 177 17� � 0�� 66�


Land and fixed assets 16 6 507 576 6 457 415 6 391 229


Total non financial assets 6 �07 �76 6 ��7 �1� 6 �91 ��9

TOTAL ASSETS � 91� 0�6 � 6�� 9� � �� 9�

LIABILITIES

Deposits held 17 441 609 657 343 589 035

Advances received 18 285 800 285 270 290 123

Borrowing 19 2 320 036 2 114 108 2 052 021

Superannuation liability 20 2 087 387 2 225 280 1 773 196

Other employee entitlements and provisions 21 764 900 780 090 749 181

Other non equity liabilities 22 294 288 215 350 286 750

TOTAL LIABILITIES 6 19� 019 6 �77 ��1 � 7�0 �06

NET WORTH � 719 066 � ��7 1�� 70� ��


NET DEBT (b) �7� ��1 1 099 109 1 116 9��



The Balance Sheet is to be read in conjunction with the notes to the financial statements.


Total Public Sector

Cash Flow Statement

Notes

2006-07

Actual

(Audited)

2006-07

Final Estimate

(Unaudited)

2005-06

Actual

(Audited)

$000 $000 $000


Taxes received 363 040 351 982 369 090



Other receipts 250 781 191 441 207 753

Total operating receipts � �� 61 � 7�7 1�� 17 909




Interest paid - 173 957 - 165 309 - 166 605

Other payments - 1 370 - 2 357 - 4 036

Total operating payments - � �76 �0� - � ��9 1�� - � 0�� 0�9

NET CASH FLOWS FROM OPERATING ACTIVITIES 26 �66 9�� 77 9�� 70




Net cash flows from investments in non financial assets - �� 0�� - ��7 9�1 - ��6 77�


�� 9�� 0 0�7 99 09�


36 670 25 700 - 7 742


- 294 164 - 189 228 - 205 219



Advances received (net) 23 - 4 851 8 288

Borrowing (net) 217 475 13 246 42 957

Deposits received (net) - 147 426 73 598 113 200

Distributions paid

Other financing (net) - 604 1 300

NET CASH FLOW FROM FINANCING ACTIVITIES 69 467 81 993 165 745



�� 9�� 0 0�7 99 09�

Distributions paid




UNDERLYING SURPLUS (+)/DEFICIT (-) �7 06� - 77 79� �� 6��(a) Includes equity acquisitions, disposals and privatisations (net).



��Notes to the Financial Statements

Notes to the Financial StatementsFor the year ended 30 June 2007

Note 1: Statement of Significant Accounting PoliciesThese policies have been applied in the context of the legal and regulatory framework outlined in the section ‘Reporting Framework’. These notes should be read in conjunction with that section and the financial statements.

(a) The Government Reporting Entity

This financial report covers the total public sector and comprises the general government, public non financial corporation, non financial public and public financial corporations sectors.

Financial information, in the form of an operating statement, balance sheet and cash flow statement, has been presented for each of these reporting sectors. Consistent with 2005-06, notes to the financial statements are presented for the total public sector. In addition, notes have also been provided for the general government and non financial public sector where appropriate.

Appendix B, ‘Classification of Entities in the Northern Territory Public Sector’, contains a full list of entities forming each of the sectors listed below, which are in accordance with the principles used in the Government Finance Statistics (GFS) conventions of the Australian Bureau of Statistics (ABS).

General Government

Entities which are mainly engaged in the production of goods or services outside the normal market mechanism. Goods and services are generally provided free of charge or at nominal charges well below costs of production. Also includes certain activities, government business divisions (GBD) and government-controlled enterprises that operate in a cost-recovery environment observing competitive neutrality principles, but that are closely aligned to the operations of general government.

Public Non Financial Corporation (PNFC)

A public enterprise primarily engaged in the production of goods or services of a non financial nature, for sale in the market place, at prices which aim to recover most of the costs involved.

Non Financial Public Sector (NFPS)

This sector is formed through a consolidation of the general government and public non financial corporation sub-sectors. This process eliminates transactions between the two sectors.

Public Financial Corporations (PFCs)

Government-controlled entities which perform central bank functions, and/or have the authority to incur liabilities and acquire financial assets in the market on their own account.

Total Public Sector

The total public sector is formed through a consolidation of all sectors of government. This process eliminates transactions and balances between sectors.

�6 Notes to the Financial Statements


(b) Basis of Consolidation

The report has been consolidated in accordance with principles used in the GFS conventions of the ABS, but where practical, Australian Accounting Standards have been used to measure material assets and liabilities. The report includes material revenues, expenses, assets, liabilities and equity of the Government, including entities controlled by the Government. All entities controlled by the Government are included in a specific reporting sector and the total public sector.

The consolidation of the financial statements for the total public sector is consistent with accounting standards, with the exception of the AustralAsia Railway Corporation (AARC).

The AARC is a statutory corporation of the Northern Territory established under the AustralAsia Railway Corporation Act. As a controlled entity under the Uniform Presentation Framework (UPF) the full net assets of $416 million ($419 million: 30 June 2006) of the AARC is consolidated under the general government sector. By contrast, under accounting standards only the Territory’s 57 per cent interest ($237 million), based on the proportion of contributions made, would have been recognised.

Under the UPF, the Territory Insurance Office (TIO) is a controlled entity and is consolidated under the public financial corporations sector. Included in the TIO’s financial statement are the assets, liabilities, equity, revenue and expenses of the Motor Accidents Compensation Fund (MAC) which is administered by the TIO. The MAC Fund may only be applied to meet the obligations of the TIO in respect of the MAC Fund, or for meeting the reasonable costs of operating the scheme or participating in the promotion of road safety.

(c) Basis of Accounting

The form of the Treasurer’s Annual Financial Statements (TAFS) is consistent with the accrual budget format and has been prepared using the accrual basis of accounting, which recognises the effect of financial transactions and events when they occur, rather than when cash is paid out or received.

(d) Comparatives

Where necessary, comparative information for the 2005-06 financial year has been reclassified to provide consistency with current year disclosures.

Territory Housing, a GBD, has historically been included in the public non financial corporation sector due to its breadth of functions including the provision of public housing, government employee housing and shared equity loans. However, Territory Housing now has prime responsibility for Indigenous housing policy and programs, along with the delivery and management of public housing to remote communities. Given this shift in focus, Territory Housing was transferred as at 1 July 2006, into the general government sector, and is reflected in this sector for the 2006-07 financial information. The 2005-06 comparatives have also been restated for consistency with the current year.

Indigenous Essential Services, a consolidated entity within the public non financial corporation sector, has recognised a prior period error of $21.7 million for construction works in progress. The 2005-06 comparatives have been restated to reflect this reduction in net worth.

�7Notes to the Financial Statements

Territory Insurance Office, a consolidated entity within the public financial corporation sector, has disclosed in its financial statements that it has repositioned and reclassified its investments and has restated the 2005-06 comparatives of its financial statements to reflect this. The 2005-06 comparatives of this report have also been restated to reflect this reclassification.

(e) Presentation and Rounding of Amounts

Amounts in the financial statements and notes to the financial statements are presented in Australian dollars and have been rounded to the nearest thousand dollars, with amounts of $500 or less being rounded down to zero. Totals may not add due to rounding.

(f) Changes in Accounting Policies

There have been no changes to accounting policies adopted in 2006-07 as a result of management decisions.

(g) Basis of Measurement

The Treasurer’s Annual Financial Statement has been prepared in accordance with the historical cost convention and, except where stated, does not take into account changing money values.

(h) Revenue Recognition

Revenue is recognised at the fair value of the consideration received, exclusive of the amount of goods and services tax (GST). Exchanges of goods or services of the same nature and value without any cash consideration being exchanged are not recognised as revenue.

Taxation

Territory taxation is recognised when the underlying transaction or event which gives rise to the right to collect revenue occurs and can be measured reliably. Government-assessed revenues are recognised at the time the assessments are issued. Taxpayer-assessed revenues, including payroll tax and stamp duty, are recognised when a taxpayer’s self assessment is received. Additional revenues are recognised for assessments subsequently issued following review of returns lodged by taxpayers.

In accordance with GFS conventions, PNFC and PFC entity deferred tax assets and deferred tax liabilities are not recognised. Rather, tax payments in relation to these entities are recognised when payable.

Fees and Fines

Revenue from regulatory fees and fines is recognised at the time the fine or regulatory fee is issued.

Grants and Other Contributions

Grants, subsidies, donations, gifts and other non-reciprocal contributions are recognised as revenue when the Government obtains control over the assets comprising the contributions. Under the UPF, control is generally only established when all contractual conditions are met. In practice, this means that amounts, predominantly related to capital projects, are initially recorded as a liability and revenue is only recognised to the extent that contractual obligations are subsequently met.

�� Notes to the Financial Statements


Contributions are recognised at their fair value. Contributions of services are only recognised when a fair value can be reliably determined and the services would be purchased if not donated.

Sale of Goods

Revenue from the sale of goods is recognised (net of returns, discounts and allowances) when control of the goods passes to the customer and specified conditions associated with the sale have been satisfied.

Rendering of Services

Revenue from rendering services is recognised on a stage of completion basis of the contract.

Interest Income

Interest and other investment income is recognised as it accrues, taking into account the effective yield on the financial asset.

Disposal of Assets

Under the UPF, these transactions are treated as a revaluation adjustment and are therefore not recognised as revenue.

Contributions of Assets

Contributions of assets and contributions to assist in the acquisition of assets, being non-reciprocal transfers, are recognised, unless otherwise determined by Government, as revenue when the agency obtains control of the asset or contribution. Contributions are recognised at the fair value received or receivable.

(i) Interest Expenses

Interest expenses include interest and finance lease charges. Interest expenses are expensed in the period in which they are incurred.

(j) Cash and Deposits

For the purposes of the Balance Sheet and the Cash Flow Statement, cash includes cash on hand, cash at bank and cash equivalents. Cash equivalents are highly liquid short-term investments that are readily convertible to cash. Cash at bank includes monies held in an Accountable Officers’ Trust Account (AOTA) that are ultimately payable to the beneficial owner (refer also to Note 17).

(k) Inventories

Under the UPF, inventories are recorded under ‘land and fixed assets’. Inventories are valued at the lower of cost and net realisable value, except for those held for distribution, which are carried at the lower of cost and current replacement cost.

(l) Receivables

Under the UPF, accounts receivable are recorded under ‘other non equity assets’.

Receivables include accounts receivable and other receivables and are recognised at fair value less any allowance for uncollectable amounts. The collectability of receivables is reviewed regularly, and part of this process is to assess, at reporting date, whether an allowance for doubtful debts is required.


(m) Advances Paid

Advances paid includes investments in financial assets for policy purposes. Advances paid are recorded at cost.

(n) Investments, Loans and Placements

Investments, loans and placements include investments in financial assets for liquidity management purposes. Securities and investments are recorded at net market value, after deducting estimated costs of realisation at reporting date. Loans are carried at amortised cost, using the effective interest rate method less impairment.

(o) Land and Fixed Assets

Acquisitions

‘Land and fixed assets’ includes property, buildings, infrastructure and plant and equipment assets, hereafter referred to as ‘property, plant and equipment’. All items of property, plant and equipment with a cost, or other value, equal to or greater than $5000, are recognised in the year of acquisition and depreciated as outlined below. Items of property, plant and equipment below the $5000 threshold are expensed in the year of acquisition.

Complex Assets

Major items of plant and equipment comprising a number of components that have different useful lives, are accounted for as separate assets. The components may be replaced during the useful life of the complex asset.

Subsequent Additional Costs

Costs incurred on property, plant and equipment subsequent to initial acquisition are capitalised when it is probable that future economic benefits in excess of the originally assessed performance of the asset will flow to the Government in future years. Where these costs represent separate components of a complex asset, they are accounted for as separate assets and are separately depreciated over their expected useful lives.

Revaluations

Subsequent to initial recognition, assets belonging to the following classes of non current assets are revalued with sufficient regularity to ensure that the carrying amount of these assets does not differ materially from their fair value at reporting date:

• land;

• buildings;

• infrastructure assets;

• heritage and cultural assets;

• investment properties;

• biological assets; and

• intangibles.

The above classes of non current assets include certain new assets that are initially recognised at cost. Such new assets will continue to be measured at cost, which is deemed to equate to fair value, until the next revaluation for that asset class occurs.

Plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.



Power and Water utility assets, consisting of electricity, water and sewerage systems, are measured at deemed cost less accumulated depreciation and any impairment at each reporting date.

The Australian Valuation Office (AVO) has provided independent valuations since the adoption of accrual accounting for key general government land, building and infrastructure assets. Valuations are in accordance with the fair value basis, with most general government building and infrastructure assets being valued at depreciated replacement cost. Parcels of land are valued based on existing land use.

Depreciation and Amortisation

Items of property, plant and equipment, including buildings but excluding land and non current assets held for sale, have limited useful lives and are depreciated or amortised using the straight-line method over their estimated useful lives. Investment properties are not subject to depreciation.

Amortisation applies in relation to intangible non current assets with limited useful lives and is calculated and accounted for in a similar manner to depreciation.

The estimated useful lives for each class of asset are summarised below for agencies and other consolidated entities and are consistent with previous years:

Entities subject to

FMA1 (years)

Other Consolidated

Entities (years)

Buildings 20-100 10-50

Infrastructure assets 8-50 3-99

Plant and equipment 1-15 3-99

Plant and equipment under finance lease 3-5 n/a

Cultural assets 100 n/a

Utility assets n/a 3-99

Biological assets 100 n/a

Intangibles 3-6 41. FMA means Financial Management Act.

Assets are depreciated or amortised from the date of acquisition or from the time an asset is completed and held ready for use.

Impairment of Assets

An asset is said to be impaired when its carrying amount exceeds its recoverable amount.

Non current physical and intangible assets are assessed for indicators of impairment on an annual basis.

If an indicator of impairment exists, Government determines the asset’s recoverable amount. The asset’s recoverable amount is determined as the higher of the asset’s depreciated replacement cost and fair value, less costs to sell. Any amount by which the asset’s carrying amount exceeds the recoverable amount is recorded as an impairment loss.

Under the UPF, impairment losses are treated as a revaluation adjustment and are therefore not recognised in the Operating Statement.


In certain situations, an impairment loss may subsequently be reversed. Where an impairment loss is subsequently reversed, the carrying amount of the asset is increased to the revised estimate of its recoverable amount. Under the UPF, a reversal of an impairment loss is also treated as a revaluation adjustment and is therefore not recognised in the Operating Statement as revenue.

Assets Not Recognised

Financial information in relation to significant school items such as land and buildings and government grants made to schools has been included in the financial statements. However, certain Northern Territory Government school assets have not been included in the financial statements due to the reliability of the information.

In addition, financial information in relation to all works of art and museum collections has not been included in the financial statements. The unique nature of many of these assets makes the determination of reliable financial information difficult, particularly in relation to meaningful valuations. A valuation of art and museum collections will be undertaken in 2007-08 and a working group has been established to determine the scope and methodology to be applied by the AVO. It is anticipated that the material valuations, where reliable, will be incorporated into the 2007-08 Financial Statements.

(p) Intangibles

Under the UPF, intangibles are recorded under ‘land and fixed assets’. Total public sector intangibles consist largely of deferred development costs associated with a Gas Purchase Agreement to which a government controlled entity is a party. Under this agreement, certain gas field development costs are reimbursed to the gas field developers.

The costs associated with field development are capitalised and amortised over the remaining periods of the Gas Purchase Agreement. Deferred development costs are reviewed at reporting date and, where such costs are no longer considered recoverable, they are written off.

Other intangible assets consist of purchased software and in-house installation thereof. Intangible assets are originally stated at cost less accumulated amortisation and any accumulated impairment losses.

These intangible assets have limited useful lives and are amortised using the straight-line method over their estimated useful lives. Assets are amortised from the date of acquisition or from the time the asset is held ready for use. Amortisation rates and methods are reviewed annually for appropriateness. When adjustments are made, they are reflected prospectively in current and future periods only.

(q) Leased Assets

Leases under which the agency assumes substantially all the risks and rewards of ownership of an asset are classified as finance leases. Other leases are classified as operating leases.

Finance Leases

Under the UPF, finance leases are capitalised and recorded under ‘land and fixed assets’. A lease asset and a lease liability equal to the present value of the minimum lease payments are recorded at the inception of the lease.

Repayments of principal reduce lease liabilities. The interest components of the lease payments are expensed.



Operating Leases

Operating lease payments made at regular intervals throughout the term are expensed when the payments are due, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased property. Lease incentives under an operating lease of a building or office space are recognised as an integral part of the consideration for the use of the leased asset.

(r) Payables

Under the UPF, amounts payable are recorded under ‘other non equity liabilities’. Liabilities for accounts payable and other amounts payable are carried at cost, which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the agency.

(s) Interest-bearing Liabilities

Interest-bearing liabilities are recorded at amortised cost, using the effective interest rate method, with the associated interest expense recognised in the reporting period in which it is payable.

(t) Advances Received

Advances received reflect loans received for policy purposes. These are primarily the original Australian Government loans issued at Self Government.

(u) Borrowings

Borrowings represent funds raised for liquidity management purposes from the following sources: loans raised by the Australian Government on behalf of the Territory, domestic and overseas borrowings via the Northern Territory Treasury Corporation, and overdraft facilities obtained from the commercial banking sector by public non financial corporations and public financial corporations.

(v) Employee Entitlements and Provisions

Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include wages and salaries, recreation leave and long service leave. Liabilities arising in respect of wages and salaries, recreation leave and other employee benefit liabilities that fall due within 12 months of the reporting date are classified as current liabilities and are measured at amounts expected to be paid. Non current employee benefit liabilities that fall due after 12 months of the reporting date are measured at present value, calculated using the Government long term bond rate and taking into consideration expected future salary and wage levels, experience of employee departures and periods of service.

No provision is made for sick leave, which is non vesting, as the anticipated pattern of future sick leave to be taken is less than the entitlement accruing in each reporting period.


Employee benefit expenses are recognised on a net basis, against the GFS net operating balance, in respect of the following categories:

• wages and salaries, non-monetary benefits, recreation leave, sick leave and other leave entitlements; and

• other types of employee benefits.

Workers compensation liabilities comprise those under the Work Health Act and COMCARE liabilities under Australian legislation. The change in liability for the year ended 30 June 2007 is based on an actuarial assessment of the value of outstanding claims at the end of the period and takes into account revisions to earlier years’ estimates of the value of outstanding claims.

Outstanding claims liabilities associated with the Territory Insurance Office and the Nominal Insurer are based on claims reported but not yet paid, claims incurred but not reported and the expected costs associated with settlement of those claims, all of which are reported at net present value (refer Note 21).

(w) Superannuation

Employees’ superannuation entitlements are provided through the:

• Northern Territory Government and Public Authorities’ Superannuation Scheme (NTGPASS);

• Commonwealth Superannuation Scheme (CSS);

• Northern Territory Supplementary Superannuation Scheme (NTSSS);

• Northern Territory Police Supplementary Benefit Scheme (NTPSBS);

• Legislative Assembly Members (LAMS) and other statutory schemes; or

• employee nominated non-government schemes for those employees commencing on or after 10 August 1999.

The amount of the unfunded liability has been determined by actuarial reviews conducted at three yearly intervals (refer Note 20 for further details).

Since 10 August 1999, employees have had the option to nominate non-government schemes for their superannuation. There is no liability for these amounts as they are funded on an ongoing basis.

The UPF operating statement only recognises superannuation expenses relating to liabilities incurred in the current period. Revisions to superannuation liabilities due to actuarial reassessment are treated as a revaluation and are therefore not recognised in the operating statement.



(x) Equity

The value of all holdings in entities external to a sector that are controlled by that sector are included in equity. Under the UPF, the general government sector is considered to control all other government entities. The movement in the net worth of sub-sectors (that is, the PNFC and PFCs) is included in the value of equity for the general government sector. Similarly, the non financial public sector includes the movement in the net worth of the public financial corporations sector.

(y) Foreign Currency

Foreign currency transactions are initially translated into Australian currency at the date of the transaction. Amounts payable and receivable in foreign currencies at balance date are translated to Australian currency rates of exchange at 30 June 2007.

The Government may undertake hedging to avoid or minimise adverse financial effects of movements in exchange rates.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is deferred in equity. The gain or loss relating to the ineffective portion, and any gain or loss on a derivative hedging foreign currency risk of a recognised monetary asset or liability, are treated as revaluation adjustments under the UPF and are therefore not recognised in the Operating Statement.

Note 27 provides additional information on foreign exchange risk.

(z) Taxation

The Government is exempt from Australian Government taxation with the exception of fringe benefits tax and goods and services tax.

Pursuant to National Competition Policy, the Government has implemented a tax equivalents regime that levies the equivalent of specified taxes and local government rates on certain public sector entities. Tax equivalent transactions and balances other than taxation amounts actually payable, which are eliminated on consolidation, are excluded from these statements.

Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred on a purchase of goods and services is not recoverable from the Australian Taxation Office (ATO). In these circumstances, GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables in the Balance Sheet.

Cash flows are included in the Cash Flow Statement on a gross basis. The GST components of cash flows arising from investing and financial activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the ATO.


(aa) Commitments

Disclosures in relation to capital and other commitments, including lease commitments, are shown at Note 23.

Commitments are those contracted as at 30 June where the amount of the future commitment can be reliably measured.

(ab) Reporting Period

The reporting period for consolidated entities is the year ended 30 June 2007, with the exception of the Batchelor Institute of Indigenous Tertiary Education, which operates on a calendar year reporting period. Management information, which is considered reliable, was used in respect of the Institute.



Note 2: Taxation Revenue General Government Total Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

Taxes on employers’ payroll and labour force taxes 127 993 123 940 122 444 118 552

Stamp duties on financial and capital transactions 112 175 136 744 112 175 136 744

Financial institutions transaction taxes 788 788

Taxes on gambling 64 528 56 987 64 528 56 987

Taxes on insurance 23 100 21 223 23 100 21 223

Motor vehicle registration fees 40 239 36 313 40 239 36 308

�6� 0�� 7� 996 �6� ��6 �70 60�

Note 3: Current Grants and SubsidiesGeneral Government Total Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

GST revenue 2 015 336 1 850 175 2 015 336 1 850 175

General purpose grants 41 093 57 636 41 093 57 934

Specific purpose grants 358 455 316 088 358 412 316 002

Other grants and non capital contributions 35 586 24 830 35 586 24 830

� ��0 �70 � �� 7�9 � ��0 ��7 � �� 9�0

Note 4: Capital GrantsGeneral Government Total Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

General purpose capital grants 22 804 3 545 22 804 3 545

Specific purpose capital grants 68 256 56 448 68 256 58 962

Other Australian Government capital contributions 15 276 27 200 15 276 27 200

106 �� 7 19� 106 �� 9 707

Note 5: Sales of Goods and ServicesGeneral Government Total Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

Fees from regulatory services 13 246 11 124 10 891 10 273

Other goods and services revenue 134 931 124 242 652 385 568 315

1�� 177 1�� 66 66� �76 �7� ��


Note 6: Other RevenueGeneral Government Total Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

Dividend income 16 682 28 402

Tax Equivalents Regime 24 050 22 142

Land rent income 4 289 4 253 10 957 12 931

Royalty income 77 373 52 502 77 373 52 502

Fines revenue 6 472 6 448 6 472 6 401

Miscellaneous revenue 38 456 41 556 30 934 45 590

Donated assets 360 443 11 646 11 224

167 6�� 1�� 7�7 1�7 �� 1�� 6�9

Note 7: Employee ExpensesGeneral Government Total Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

Wages and salaries 1 162 793 1 096 994 1 226 906 1 152 454

Unfunded superannuation expense 83 250 70 993 83 250 70 993

Funded superannuation expense 53 535 47 656 58 293 51 959

1 �99 �7� 1 �1� 6�� 1 �6� ��9 1 �7� �06

Nominal interest on unfunded superannuation (a) 104 800 96 103 104 800 96 103

Total employee expenses (a) 1 404 378 1 311 746 1 473 249 1 371 509

Total superannuation expense (b) 241 585 214 752 246 343 219 055

(a) Nominal interest on unfunded superannuation refers to the imputed interest accrued during the period on unfunded superannuation liabilities. The Uniform Presentation Framework requires this line item to be separately disclosed on the face of the financial statements. This amount has been added to other employee expenses to arrive at ‘Total employee expenses’ which represents the total expense incurred for the period relating to compensation of employees.

(b) Total superannuation expense has been calculated as the sum of unfunded superannuation expense, funded superannuation expense and nominal interest on unfunded superannuation.

Note 8: Other Operating ExpensesGeneral Government Total Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

Repairs and maintenance 125 983 112 372 176 806 165 206

Property management 102 918 99 676 80 629 75 943

Purchases of goods and services 500 522 481 546 885 840 864 588

Other operating expenses 6 731 7 940 6 336 8 289

7�6 1�� 701 �� 1 1�9 610 1 11� 0�6



Note 9: Current TransfersGeneral Government Total Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

Monetary transfers to households 21 688 20 429 21 688 20 429

Community service obligations and other subsidies 71 409 70 529 14 465 17 690

General current grants 225 186 257 489 189 348 205 904

Current grants to race clubs 6 599 6 433 6 599 6 433

Recurrent grants to schools 143 560 139 014 143 560 139 014

Current grants to charities and not for profit associations

93 981 87 779 93 981 87 779

Current grants to regional tourism associations 2 085 2 091 2 085 2 091

�6� �09 �� 76� �71 7�7 �79 ��0

Note 10: Capital TransfersGeneral Government Total Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

General capital grants 106 778 90 353 87 169 59 959

Capital grants to schools 14 460 18 219 14 460 18 219

Capital grants to charities and not for profit associations

1 465 1 692 1 465 1 692

Bad debts written off 58 223 930 284

Assets transferred 7 095 1 549 5 366 1 549

1�9 �� 11� 0�6 109 ��9 �1 70�

Note 11: Cash and Deposits Non Financial Public Sector Total Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

Cash at bank 13 865 19 195 42 221 41 387

Cash on hand 954 1 235 2 792 2 433

Cash on call or short-term deposit 60 879 36 850 208 749 153 034

7� 69� �7 ��1 �� 76� 196 ��


Note 12: Advances Paid (a)Non Financial

Public Sector

Total

Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

Current

Department of Business, Economic and Regional Development (b)

654 991 654 991

Department of Health and Community Services (c) 800 800

Department of Local Government, Housing and Sport 24 723 24 723

NT Legal Aid Commission 13 13

Territory Housing (d) 1 961 2 443 1 961 2 443

Less: provision for doubtful advances - 20 - 20

� 6�� 9�7 � 6�� 9�7

Non current

Department of Planning and Infrastructure (e) 3 395 3 342 22

Department of the Chief Minister (f) 42 817 42 817 42 817 42 817

Northern Territory Treasury (g) 23 805 23 805 9 092 9 092

Territory Housing (d) 154 226 186 967 154 226 186 967

Less: provision for doubtful advances - 41 723 - 41 745 - 41 723 - 41 745

1�� 0 �1� 1�7 16� �1� 197 1��

Total advances paid 1�� 1�� 0 1�� 167 0�� 0� 111

(a) Advances Paid refers to loans motivated by policy considerations rather than for liquidity management purposes.

(b) Natural Disaster Relief and Recovery Arrangements advances.

(c) Advances reclassified as grants.

(d) These balances comprise the HomeStart program, which provides advances to individuals to purchase homes from the private markets, and the HomeShare program, which provides advances to individuals to purchase Territory Housing properties.

(e) Advances made to the Territory Insurance Office which are eliminated on consolidation at the Total Public Sector.

(f) Represents advances to the railway consortium. A $33 million provision for doubtful advances has been provided in relation to these amounts.

(g) Total Public Sector represents an amount advanced to Jabiru Town Development Authority. A provision for doubtful advances has been provided for in relation to this amount. At the non financial public sector this also includes advances to the Territory Insurance Office of $15 million, that are eliminated on consolidation at the total public sector.

60 Notes to the Financial Statements


Note 13: Investments, Loans and PlacementsNon Financial

Public Sector

Total

Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

Current

Securities (a) 381 605 293 589 740 833 585 300

Conditions of Service Reserve investments (b) 421 908 233 919 421 908 233 919

Loans (c) 20 811 19 458

�0� �1� ��7 �0� 1 1�� 677

Non current

Securities (a) 40 000 90 000 41 986 92 101

Loans (c) 25 423 25 423 525 859 484 491

6� �� 11� �� 67 �� 76 �9�

Total investments, loans and placements �6� 9�6 6�� 9�1 1 7�1 �97 1 �1� �69

(a) Current securities are predominantly cash invested by the Northern Territory Treasury Corporation on behalf of the Territory Government. These investments include short-term securities, fixed interest securities, asset swaps and fixed rate notes. Non current securities represent investments by the Territory Insurance Office.

(b) The Conditions of Service Reserve (COSR) investments relate to funds that have been put aside to fund the Territory Government’s employee related liabilities including salaries, leave entitlements, redundancy, superannuation payments and to meet similar payments. These funds are managed by three different external fund managers on behalf of the Territory Government. The value of the COSR at 31 August 2007 was estimated at $422 million.

(c) Current and non current loans are mainly those provided by the Territory Insurance Office as part of its normal operations. Small loans are also provided by the Northern Territory Treasury Corporation to Charles Darwin University, schools and local government councils and communities.

61Notes to the Financial Statements

Note 14: Other Non Equity Assets Total Public Sector

2006-07 2005-06

$000 $000

Current

Receivables (a) 126 303 130 560

Accrued revenue 41 242 49 260

Prepaid expenses (b) 31 938 29 014

199 �� 0� ��

Non current

Receivables (a) 33 820 31 534

�� 0 �1 ��

Total other non equity assets �� 0� ��0 �6�

(a) Receivables comprise:

Current

Accounts receivable 98 398 85 059

Less: provision for doubtful debts - 9 907 - 7 943

Interest receivable 2 208 2 271

GST receivable 18 422 24 176

Other receivables 17 183 26 997

1�6 �0� 1�0 �60

Non current

Accounts receivable 570

Other 33 250 31 534

�� 0 �1 ��

Total receivables 160 1�� 16� 09�

(b) Prepaid expenses comprise:

Current

Prepaid salaries 412 520

Other prepayments 31 526 28 494

�1 9�� 9 01�

Note 15: Equity Investments Total Public Sector

2006-07 2005-06

$000 $000

Current

Non current (a) 3 63

� 6�

(a) The balance at 30 June 2007 represents holdings by Darnor Pty Limited in the Amadeus Gas Trust.

6� Notes to the Financial Statements


Note 16: Land and Fixed Assets

At Valuation (a)

Accumulated

Depreciation Written Down Value

Total Public Sector 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000 $000 $000

Current

Non current assets held for resale

Inventories 10 888 10 614 10 888 10 614

Inventory held for distribution 14 830 14 017 14 830 14 017

Non current

Land 500 320 497 341 500 320 497 341

Buildings 3 891 695 3 729 727 991 597 933 806 2 900 097 2 795 921

Infrastructure assets (b) 3 080 042 3 008 538 1 498 573 1 528 431 1 581 470 1 480 107

Power and Water utility assets 1 791 246 1 855 343 1 081 374 909 521 709 872 945 821

Construction works in progress 399 689 315 293 399 689 315 293

Construction (work in progress) under finance lease

72 634 24 765 72 634 24 765

Plant and equipment 341 639 308 848 133 850 125 947 207 788 182 900

Property, plant and equipment under finance lease

7 339 141 418 7 098 136 716 241 4 702

Cultural assets 3 017 2 854 305 301 2 712 2 553

Self generating and regenerating assets 22 22 22 22

Investment properties 91 551 93 108 91 551 93 108

Intangibles (c) 83 189 77 018 67 728 52 952 15 461 24 066

Total land and fixed assets 10 �� 101 10 07� 90� � 7�0 �� 6�7 67� 6 �07 �76 6 �91 ��9

(a) For further information on valuation methods, refer Note 1 Statement of Significant Accounting Policies.

(b) The full value of AustralAsia Railway Corporation (AARC) is consolidated under the general government sector. As at 30 June 2007, the financial statements of AARC showed net assets of $416 million ($419 million as at 30 June 2006). As at 30 June 2007, the Territory has a 57 per cent interest ($241 million) in AARC, based on the proportion of contributions made. Following completion of the railway, the Government works totalling $427.5 million are classified as infrastructure assets. During the 50-year concession period the rights and obligations for the new rail corridor continue to rest with AARC as it has freehold title over large portions of the rail corridor and hold long-term head leases over the remaining portions tracking through Aboriginal land. Hence, ultimate control over the corridor rests with AARC including the rail assets contained within. As such, no provision for the resulting diminution in the value of the Territory’s assessment in AARC has been made in these financial statements.

At the expiration of the 50-year concession period, the complete railway infrastructure (including the Government works) will be transferred back to AARC. However, due to the subjectivity involved with any measurement of the future value of the asset after the expiry of the concession period, it is not considered practical at this point to recognise any further assets in the accounts of AARC or in these financial statements.

(c) The intangibles balance consists largely of deferred development expenditure incurred by Gasgo Pty Ltd, a subsidiary of Power and Water Corporation.

6�Notes to the Financial Statements

ReconciliationsReconciliations of the carrying amount for each class of land and fixed assets are set out below.

Total Public Sector 2006-07

Balance at 30 June

2006Additions

(a)Disposals

(b)

Depreciation and

Impairment

Revaluation Adjustments

(c)

Balance at 30 June

2007

$000 $000 $000 $000 $000 $000

Current

Inventories 10 614 637 364 10 888


Non current

Land (d) 497 341 5 938 7 695 4 735 500 320

Buildings (e) (f) 2 795 921 98 331 23 563 74 750 104 158 2 900 097

Infrastructure assets (g) 1 480 107 80 925 17 470 73 981 111 890 1 581 470

Power and Water utility assets (h) 945 821 195 556 136 399 295 105 709 872

Construction works in progress (i) 315 293 409 068 324 674 399 689

Construction (work in progress) under finance lease (j)

24 765 47 869 72 634

Plant and equipment (k) 182 900 111 321 50 165 36 128 - 141 207 788


4 702 3 754 707 241

Cultural assets 2 553 27 49 15 196 2 712

Self generating and regenerating assets 22 22

Investment properties (l) 93 108 7 277 18 610 110 9 887 91 551

Intangibles 24 066 1 253 824 8 695 - 340 15 461

Total land and fixed assets 6 �91 ��9 99� 90� 6�� 9 �90 ��0 ��6 6 �07 �76

(a) Additions include the gross value of transfers in, including the transfer of construction works in progress recognised upon completion.

(b) Disposals include the gross value of transfers out and the written down value of sales.

(c) Revaluation adjustments include adjustments to accumulated depreciation on revaluation and accumulated depreciation associated with transfers.

(d) The movement in land additions predominantly relates to land acquisitions in the Department of Planning and Infrastructure of $2.1 million. Land disposals include $5.2 million in sales by the Land Development Corporation.

(e) Building additions include $20.1 million building assets in Territory Housing, $32.7 million of building assets in the Department of Employment, Education and Training, $9.9 million building assets in the Department of Health and Community Services, additional building assets in the Department of Local Government, Housing and Sport of $8.8 million, and $7.5 million of additional building assets reported by the Power and Water Corporation. Building disposals include the sale of $22.2 million in Territory Housing assets.

(f) The movement in building revaluation adjustments predominantly relates to an upward revaluation of Territory Housing assets by $69 million.

(g) Infrastructure asset additions include $59.9 million in the Department of Planning and Infrastructure.

(h) The movement in Power and Water utility assets includes an impairment of water and sewerage assets of $146.4 million.

(i) Construction works in progress includes the capitalisation of costs associated with:

– Darwin Port Corporation – East Arm Wharf ($8.5 million);– Power and Water Corporation electricity, water and sewerage assets ($35.9 million);– Territory Housing – houses under construction ($24.2 million); and– over $184 million of works associated with the construction of various assets managed by the Department of

Planning and Infrastructure.(j) The additions in construction works in progress under finance leases comprises entirely of the Darwin

Convention Centre.



(k) The increase in plant and equipment included $10.8 million in additions by the Department of Health and Community Services, additional acquisitions by NT Fleet totalling $28 million, a further $4.2 million in the Department of Employment, Education and Training, additional Power and Water Corporation assets of $13.3 million and an increase in assets for the Indigenous Essential Services of $10 million. Disposals predominantly include sales of vehicles by NT Fleet with a carrying amount of $20.4 million.

(l) The movement predominantly relates to the addition and disposal of investment property holdings under the HomeNorth HomeStart scheme in Territory Housing. This category also includes owner occupied buildings in the Territory Insurance Office, classified as ‘investment properties’.

Reconciliations

Reconciliations of the carrying amount for each class of land and fixed assets for the comparative year are set out below.

Total Public Sector2005-06

Balance at 30 June

2005 Additions Disposals

Depreciation and

ImpairmentRevaluation Adjustments

Balance at 30 June

2006

$000 $000 $000 $000 $000 $000

Current

Non current assets held for resale 10 495 10 495

Inventories 13 406 98 714 99 275 2 232 10 614


Non current

Land 425 646 5 303 9 000 75 392 497 341

Buildings 2 763 001 98 156 25 003 71 091 30 857 2 795 921

Infrastructure assets 1 471 017 95 066 13 669 72 142 - 165 1 480 107

Power and Water utility assets 927 334 61 311 42 824 945 821

Construction works in progress 253 755 373 114 311 576 315 293

Construction (work in progress) under finance lease

9 390 15 479 104 24 765

Plant and equipment 172 352 66 590 22 514 32 702 - 825 182 900


8 583 111 30 3 962 4 702

Cultural assets 2 696 4 22 16 - 109 2 553

Self generating and regenerating assets 22 22

Investment properties 84 259 18 619 13 749 3 978 93 108

Intangibles 25 091 7 229 114 8 139 24 066

Total land and fixed assets 6 16� �7� �7� �� 719 �� 107 109 1�9 6 �91 ��9


Note 17: Deposits HeldNon Financial

Public Sector

Total

Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

Accountable Officers’ Trust Accounts (a) 18 844 15 995 18 844 15 995

Clearing money 2 663 2 316 6 373 3 924

Interest bearing deposits 88 827 115 374 413 174 565 801

Other 3 218 1 761 3 218 3 316

11� �� 1�� 1 609 ��9 0��

(a) Accountable Officers’ Trust Accounts comprises:

Northern Territory Electoral Commission 6 5 6 5

Department of the Chief Minister 3 3 3 3

Department of the Legislative Assembly 1 1

Northern Territory Treasury 151 151

Department of Justice 673 744 673 744

Territory Discoveries 6 942 5 180 6 942 5 180

Department of Health and Community Services 283 255 283 255


453 375 453 375

Land Development Corporation 358 9 358 9

Department of Planning and Infrastructure 386 439 386 439

Department of Natural Resources, Environment and the Arts

169 171 169 171

Department of Local Government, Housing and Sport 3 422 3 559 3 422 3 559

Territory Housing 1 737 1 676 1 737 1 676

Department of Corporate and Information Services 3 30 3 30

Department of Primary Industry, Fisheries and Mines 4 403 3 387 4 403 3 387

NT Legal Aid Commission 5 10 5 10

1� �� 1� 99� 1� �� 1� 99�



Note 18: Advances Received (a)Non Financial

Public Sector

Total

Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

Current

Batchelor Institute of Indigenous Tertiary Education 762 816 762 816

Department of Business, Economic and Regional Development

49 49

Northern Territory Treasury 83 411 83 411

Territory Housing 7 093 7 366

Northern Territory Treasury Corporation 4 730 4 522

7 9�� 6�1 � �7� � 79�

Non current

AustralAsia Railway Corporation 5 050 5 050 5 050 5 050

Batchelor Institute of Indigenous Tertiary Education 762 762

Central Holding Authority 1 109 1 109

Power and Water Corporation 32 872

Territory Housing 281 230 308 350

Northern Territory Treasury Corporation 270 071 274 603

Territory Insurance Office 5 104 3 910

��7 ��9 �� 1�� 0 ��

Total advances received �9� ��7 ��6 7�� 00 �90 1��

(a) Advances received refers to loans motivated by policy considerations rather than for liquidity management

purposes.

Note 19: Borrowings (a)Non Financial

Public Sector

Total

Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

Current

Finance leases (b) 19 560 564 19 560 564

Loans 33 538 24 061 424 502 343 073

�� 099 �� 6�� 06� �� 6�7

Non current

Finance leases (b) 53 324 25 016 53 324 25 016

Loans 2 027 781 1 972 982 1 822 650 1 683 368

� 0�1 10� 1 997 99� 1 �7� 97� 1 70� ��

Total borrowings � 1�� 0� � 0�� 6�� 0 0�6 � 0�� 0�1

(a) Refer also Note 27: Financial Instruments – Total Public Sector.

(b) Refer also Note 23: Commitments – Total Public Sector.


Note 20: Superannuation LiabilitiesNon Financial

Public Sector

Total

Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

Current 126 614 108 899 126 614 108 899

Non current 1 960 773 1 664 297 1 960 773 1 664 297

Total superannuation liabilities (a) � 0�7 ��7 1 77� 196 � 0�7 ��7 1 77� 196

(a) The Northern Territory public sector superannuation schemes comprise:

CSS 1 208 500 960 200 1 208 500 960 200

NTGPASS 593 400 585 600 593 400 585 600

NTSSS 167 200 162 200 167 200 162 200

NTPSBS 30 818 29 400 30 818 29 400

LAMS 6 971 6 971

Northern Territory Death and Invalidity Scheme 37 400 37 400

Statutory schemes* 43 098 35 796 43 098 35 796

� 0�7 ��7 1 77� 196 � 0�7 ��7 1 77� 196

* The statutory schemes comprise the superannuation liability for the Administrator and judges.

The values reported above are based on estimates of the size and timing of future benefit payments obtained through actuarial reviews conducted at three yearly intervals. The NTGPASS, the NTSSS, the Supreme Court (Judges’ Pension) Scheme, the NTDIS, the Administrators Pension Scheme and LAMS are based on reviews carried out at 30 June 2007. The NTPSBS and the CSS are based on reviews carried out at 30 June 2006.

The increase in the CSS predominantly relates to:

• improved mortality rates ($95 million);

• updated member account balances for active and deferred members, including increased investment returns of 16.7 per cent compared to assumed long-term rates of 6 per cent per annum together with the allocation by the CSS of responsibility for additional pensioners to the Territory ($172 million); offset by

• the increase in the discount rate from 5.9 per cent at 30 June 2006 to 6.25 per cent at 30 June 2007 ($52 million), being the respective 10 year bond rates used to discount the liability as required by Australian Accounting Standards.

These valuation base changes and experiences resulted from updated information that came to light during 2006-07 and were incorporated as part of the actuarial reassessment at 30 June 2007. These updated assumptions were reported in the May 2007 Budget and have the net effect of increasing the liability by $215 million at 30 June 2007.



2007 2006

% %

Key assumptions as at balance date and for following year expense

Discount rate (gross of tax) 6.25 5.90

Salary rate 4.50 3.50

Expected return on plan assets 6.00 6.00

Inflation (pensions) 2.50 2.50

Imputed cost of interest 5.90 5.20

2007 2006

Balance sheet amounts $000 $000

The amounts recognised in the balance sheet are determined as follows:

Total defined benefit obligations 2 144 450 1 821 792

Scheme assets - 57 063 - 48 596

Deficit(+)/Surplus(-) � 0�7 ��7 1 77� 196

Current net liability 126 614 108 899

Non current net liability 1 960 773 1 664 297

Net liability � 0�7 ��7 1 77� 196

Movement in net liability

Net liability in balance sheet at end of prior year 1 773 196 1 761 509

Expense recognised in operating statement 188 050 167 096

Revaluation adjustments 236 920 - 55 600

Benefits paid - 110 779 - 99 400

Other - 409

Net liability in balance sheet at end of year � 0�7 ��7 1 77� 196

Plan assets

The major categories of plan assets are as follows:

Investment trust 56 880 47 705

Other 183 891

�7 06� �� 96

Funded status

Defined benefit obligations:

Funded 57 063 48 596

Unfunded 2 087 387 1 773 196

Total � 1�� 0 1 ��1 79�

Operating statement

The amounts recognised in the operating statement are as follows (refer Note 7):

Interest cost 104 800 96 103

Past service cost 83 250 70 993

Total included in superannuation expense 1�� 0�0 167 096


Note 21: Other Employee Entitlements and ProvisionsNon Financial

Public Sector

Total

Public Sector

2006-07 2005-06 2006-07 2005-06

$000 $000 $000 $000

Current

Employee entitlements

Accrued salaries 16 178 10 874 16 183 10 878

Recreation leave 120 089 113 686 121 772 115 945

Long service leave 135 304 125 260 137 528 127 734

Provision for workers compensation premiums 90 73 92 75

Workers compensation liability (a) 14 593 14 036 14 593 14 036

Other provisions

Provision for current taxes 2 332 3 169 2 332 3 169

Provision for employer superannuation contributions 669 497 669 497

Provision for outstanding claims 2 656 3 182 61 912 61 665

�91 911 �70 776 �� 0�0 �� 99�

Non current

Employee entitlements

Recreation leave 40 234 38 931 40 234 38 931

Long service leave 39 136 37 347 39 821 37 347

Workers compensation liability (a) 41 157 44 664 41 157 44 664

Other provisions

Provision for outstanding claims 9 201 9 186 288 607 294 241

1�9 7�9 1�0 1�� 09 ��0 �1� 1��

Total other employee entitlements and provisions ��1 6�9 �00 90� 76� 900 7�9 1�1

(a) Workers compensation liability comprises:

Work Health Act 47 300 49 900 47 300 49 900

COMCARE (Australian legislation) 8 450 8 800 8 450 8 800

�� 7�0 �� 700 �� 7�0 �� 700



Note 22: Other Non Equity Liabilities Total

Public Sector

2006-07 2005-06

$000 $000

Current

Accounts payable 105 313 115 386

Accrued expenses 80 214 74 142

Unearned revenue 107 257 95 909

�9� 7�� 6

Non current

Accounts payable 1 504 1 312

Unearned revenue 1

1 �0� 1 �1�

Total other non equity liabilities �9� �� 6 7�0


Note 23: Commitments – Total Public Sector

(a) Capital Expenditure CommitmentsCapital expenditure commitments represent contracted capital expenditure with non public sector entities additional to the amounts reported in the financial statements. These contracts are expected to require payment as follows:

2006-07 2005-06

$000 $000

Not later than one year 185 623 135 225

Later than one year and not later than five years 8 045 25 625

Later than five years

Total capital expenditure commitments 19� 66� 160 ��0

A significant portion of the capital commitments relate to the community infrastructure as part of the Darwin Waterfront Development. Other commitments relate to the Government’s contracted commitments for capital works and Power and Water Corporation’s capital investment program.

(b) Operating Lease CommitmentsFuture non-cancellable operating lease commitments are payable as follows: 2006-07 2005-06

$000 $000



Later than five years 62 673 59 670

Total operating lease commitments �17 ��0 1�6 �6�

(c) Finance Lease CommitmentsFuture finance lease commitments are payable as follows: 2006-07 2005-06

$000 $000

Not later than one year 19 595 591


Later than five years 48 470 4 569

Less future lease finance charge - 35 - 34

Total finance lease commitments 7� �� 0

Represented by:

Current 19 560 564

Non-current 53 324 25 016

7� �� 0

The finance lease commitments relate to the recognition of a liability matching the certified completed works to date on the Darwin Convention Centre (DCC), which will be repaid over 25 years following practical completion in mid 2008.

The net present value of the total minimum lease payments, including all finance charges, following completion of the DCC is estimated to total $66 million.



(d) Other non cancellable contract commitmentsOther future commitments not provided for in the financial statements primarily represent non cancellable purchase, lease and hire and, expenditure contracts expiring from 1 to 13 years. Other contracted commitments relate to grants and subsidies payable to health and education service providers and are payable as follows:

2006-07 2005-06

$000 $000



Later than five years 4 747 582 4 313 909

Total other non cancellable contract commitments � 769 1�6 � 19� �19

The most significant portion relates to gas purchase commitments including take-or-pay obligations under a 25-year gas sale agreement, the first supply of which will commence on 1 January 2009.


Note 24: Contingent Assets and Liabilities – Total Public Sector

Contingent Assets

A contingent asset is a possible asset that arises from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or an asset that is not recognised because it is not probable that the future economic benefits embodied will eventuate, or the asset does not possess a cost or other value that can be measured reliably.

Under the Crimes (Victims Assistance) Act, the Territory is entitled to recover monies from an offender equal to the amount of assistance, costs and disbursements paid to victims under the Act. However, due to circumstances of offenders including some being imprisoned for lengthy terms, declared bankrupt or unable to be located, it is probable that a significant proportion of the amounts owed are uncollectable. Therefore any contingent asset cannot be reliably quantified.

Contingent Liabilities

A contingent liability is a potential financial obligation arising out of a condition, situation, guarantee or indemnity, the ultimate effect of which will be confirmed only on the occurrence or non-occurrence of one or more uncertain future events.

The Treasurer’s Directions (Part 1 Section 2) state that:

• a guarantee is an undertaking to answer for the debt or obligations of another person or entity; and

• an indemnity is a written undertaking to compensate, protect or insure another person or entity against future financial loss, damage or liability.

In relation to the reporting of contingent liabilities, the Treasurer has determined a materiality threshold of $5 million.

Records of agency contingent liabilities have been supplied by all Accountable Officers in accordance with Treasurer’s Direction 2.3.6.

This note has two purposes. First, an explanation is provided in italics for each of the categories of contingent liabilities arising from guarantees and indemnities under the Financial Management Act. Second, normal text is used to distinguish those indemnities which are being reported.

Net present value amounts referred to in this Schedule are calculated based on a discount factor of 7.5 per cent per annum. The discount rate has been approved by the Treasurer and is based on the published 10-year bond rate plus a margin to reflect the Territory’s cost of funds and the uncertainties associated with contingent liabilities. The rate is considered a sustainable average rate that can be used for the longer term unless there is a significant change in market conditions.

As at the date of the report, no transaction or event of a material nature has occurred that would crystallise the contingent liabilities reported in this note.



Contingent Liabilities Arising from Guarantees and Indemnities Provided Under the Financial Management Act

Electricity, Gas and Water Supply

The Power and Water Corporation has been a government owned corporation (GOC) since 1 July 2002. Under the Government Owned Corporations Act, a GOC is not within the shield of the Crown and the obligations of a GOC are not guaranteed by the Territory except where the Treasurer specifically agrees to this. The following Territory commitments were given prior to the Power and Water Corporation becoming a GOC and will remain in place until the relevant contractual arrangements cease.

Amadeus Basin to Darwin Gas Pipeline

The Territory has indemnified the financiers of the Amadeus Basin to Darwin Gas Pipeline Lease in relation to its residual value on expiry or termination. The residual value to be paid to the financier after the end of the contract term, in June 2011, was $43 million in net present value terms at 30 June 2007.

Electricity and Gas Supply to Pine Creek and McArthur River

The Power and Water Corporation has entered into agreements for the provision of gas and wholesale supply of electricity for the supply of power to the Pine Creek region and McArthur River Mine.

The agreement for the supply of gas contains three indemnities relating to the Power and Water Corporation supplying nonconforming gas.

The contingent liability is unquantifiable. However, a major portion of the value of the contingent liability is the cost of overhauling turbine machinery owned by the electricity producers, where damage has been caused by the provision of nonconforming gas. In the case of one such power station at Cosmo Howley in the Pine Creek region, this is estimated at approximately $6 million.

Under the Power and Water Corporation’s current operating practices, the contingent events relating to each of the above indemnities are within the Power and Water Corporation’s control and are expected to be easily avoidable.

In relation to the electricity purchase agreements, the Territory has provided an indemnity against possible actions of the Territory in relation to the structure or operations of the Power and Water Corporation. The Territory’s maximum exposure is equivalent to the net present value of lease and operating charges under the purchase agreements, which amount to $80 million.

The contingent events relating to the indemnities in the electricity purchase agreements are within the Territory’s control and are expected to be easily avoidable. The Cosmo Howley power station is no longer operational, and is currently being decommissioned and the generators removed. Accordingly, the prospect of these undertakings being called upon is considered to be negligible.

Transport and Storage

Contingent liabilities under the Transport and Storage category relate to indemnities and guarantees which have been provided in support of the Adelaide to Darwin Railway Project and the relocation of fuel terminals from Darwin to East Arm.


The AustralAsia Railway Corporation (AARC) and the Northern Territory and South Australian governments entered into a concession arrangement for the design, construction, operation and maintenance of the Adelaide to Darwin Railway on a build, own, operate and transfer-back basis.

Unquantifiable contingent liabilities of the Territory in relation to the Adelaide to Darwin Railway Project relate to the following:

• joint guarantee of the obligations of the AARC;

• indemnities granted in relation to title over the railway corridor (title is secure but the indemnity continues);

• agreement to compensate in the case of early termination of the project (where a termination event is caused by the Territory); and

• indemnities in favour of the Australian Government for the Australian Government’s financial contribution.

The Northern Territory Government holds investments in the AustralAsia Railway project. The Australian Government has contributed 50 per cent of the funding for these investments and is entitled to a 50 per cent return on any investments recovered by the Northern Territory Government. As a result of actions by other investors a decision was taken to create a provision in the event that investments in the project cannot be recovered. This provision has also been applied to the liability to repay the Australian Government contributions to the project. These actions have resulted in a reduction in net worth of the Territory’s investment in the railway of $16.35 million (refer Note 12).

Although the majority of contingent liabilities arising from the above guarantees and indemnities are unquantifiable, AARC and the governments have comprehensive risk management procedures in place for all events that would give rise to liabilities.

The Darwin Port Corporation has leased facilities at the East Arm port to Asia Pacific Transport Pty Ltd, interfacing the port and the railway. There are contingent liabilities which arise out of the performance of the facilities.

The Northern Territory Government has entered into agreements for the relocation of fuel terminals from Darwin city. The agreements provide for certain unquantifiable contingent liabilities to be provided to the developer of the new fuel terminal and an oil company. Government has put in place comprehensive risk management processes to address potential exposure.

Health and Community Services

The Territory has granted a series of health-related indemnities for various purposes including indemnities to specialist medical practitioners employed or undertaking work in public hospitals, indemnities provided to medical professionals requested to give expert advice on inquiries before the Medical Board and indemnities to midwives.

Although the risks associated with health indemnities are potentially high, the beneficiaries of the indemnities are highly trained and qualified professionals. The indemnities generally cannot be called upon where there is wilful or gross misconduct on the part of the beneficiary.

There are no reportable contingent liabilities in this category.



Government Administration

Where the Territory has invited the participation of private sector persons and Government officers on boards of Government owned or funded companies, the Territory may grant indemnities to the board members to cover them for any losses which may result from good faith actions.

These indemnities are generally consistent with cover available through Directors and Officers Insurance and the policy of issuing an indemnity rather than purchasing commercial insurance is in line with the Government’s self insurance arrangements.

In relation to corporations established in accordance with the Government Owned Corporations Act (GOC Act) an indemnity given by the Territory to board members is limited to actions arising from compliance with a direction issued by the shareholding minister or the portfolio minister pursuant to the GOC Act.

The resulting contingent liabilities are considered low risk as board members are professionals selected based on their expertise and knowledge. Further the indemnities are restricted to good faith actions only. These contingent liabilities are unquantifiable.

Indemnities are also granted to the Australian Government and other entities involved in funding or sponsoring activities and programs initiated or undertaken by the Territory. Under the indemnities, the Territory generally accepts liability for damage or losses occurring as a result of the activities or programs and acknowledges that, while the Australian Government or another party has contributed financially or provided in-kind support, the Territory is ultimately liable for the consequences of the activity or program.

Although the resulting contingent liability may, depending on the activity undertaken, not always be low risk, the Territory’s financial exposure is no greater than would have been the case without funding or sponsorship assistance. These contingent liabilities are unquantifiable.

The Territory was engaged in a number of legal proceedings and disputes at 30 June 2007. Due to the wide variety and nature of these cases and the uncertainty of any potential liability, no value can be attributed to these cases. To attempt to attribute a value to these cases also has the potential to prejudice the outcome of the proceedings and disputes.

The Government has indemnified private sector insurers who provide workers compensation insurance in the Territory. The indemnity covers insurers for losses which arise as a result of acts of terrorism.

Except for the terrorism indemnity, which is unquantifiable, there are no reportable contingent liabilities in this category.

Finance

The Territory’s financial management framework is underpinned by centralised banking arrangements. The sole provider of banking-related services has been granted indemnities under the whole of government banking contract. The contingent liability resulting from the indemnities is unquantifiable.

There are no reportable contingent liabilities in this category.


Property and Business Services

Agreements for leases or licences of property, plant or equipment generally contain standard indemnity provisions, similar to those commonly found in commercial leases generally, covering the lessor or licensor for any losses suffered as a result of the lease or licence arrangement. The contingent liabilities resulting from the indemnities are unquantifiable.

There are risks in relation to the Darwin Waterfront Development project that may result in payments being made by the Territory. These risks relate to discriminatory changes in law, native title and environmental clean-up costs. The amount of these risks is unable to be estimated accurately but provision has been made in the forward estimates for environmental clean-up costs and it is within the Territory’s discretion whether to make a discriminatory change in law.

There are no other reportable contingent liabilities in this category.

Contingent Liabilities Arising Out of Other Legislation

Public Trustee Act

Under section 97(4) of the Public Trustee Act, any liability incurred by the Public Trustee or Investment Board may be enforced against the Territory, in which case, the liability is to be met by the Treasurer.

This contingent liability is unquantifiable and the prospect of the contingent liability being called upon is considered to be low.

Under section 97(7) of the Act, regulations may provide for guarantee of the capital in a specified common fund or guarantee a prescribed rate of return for money held as cash in a specified common fund. As at 30 June 2007, the common funds held deposits of $35 million. Common Fund No. 1 was specified in the regulations and held deposits of $19 million as at 30 June 2007.

This contingent liability is unquantifiable but cannot exceed the amount of investments in the common funds ($35 million 2007; $33 million 2006) plus any outstanding interest on the investments. The prospect of the contingent liability being called upon is considered to be low.



Note 25: Equity in Public EnterprisesGovernment equity in public financial and non financial corporations is not shown in the UPF reports as it consists entirely of internal transactions which are eliminated upon consolidation.

The movements in government equity in both these sectors are shown below for information purposes. Total closing equity represents government claims on the residual value of public enterprises after the claims of all creditors have been extinguished. Dividends and other income arising from such claims are not predetermined or fixed.

2006-07 2005-06

Public Financial Corporations $000 $000

Opening capital 35 206 35 206

Equity injections

Equity withdrawals

Closing capital �� 06 �� 06

Asset revaluation reserve 10 061 4 871

Hedging reserve - 1 435

Other reserves 121 539 78 189

Total reserves 1�1 600 �1 6��

Opening accumulated funds 33 114 18 258

Current year surplus 78 457 65 277

Dividends paid/payable - 16 554 - 18 278

Transfers to reserve - 42 547 - 32 143

Closing accumulated funds �� 71 �� 11�

Total closing equity �19 �76 1�9 9��

Public Non Financial Corporations

Opening capital 355 178 343 842

Equity injections 837 11 200

Equity withdrawals

Equity transfers in 506 136

Closing capital ��6 ��1 �� 17�

Asset revaluation reserve 20 136 10 133

Asset realisation reserve

Other reserves - 2 804

Total reserves 17 �� 10 1��

Opening accumulated funds 583 358 576 801

Current year surplus(+)/deficit(-) - 106 414 16 681

Dividends paid/payable - 128 - 10 124

Closing accumulated funds �76 �1� ��

Total closing equity ��0 66� 9�� 66�


Note 26: Cash Flow Reconciliation

2006-07

Total

Public Sector

General

Government

Public Non

Financial

Corporation

Non

Financial

Public

Sector

Public

Financial

Corporations

$000 $000 $000 $000 $000

GFS Net Operating Balance �� 99 1�� 1�9 �9 616 1�� 76� �1 6��

Non cash movements

Increase in provisions for depreciation 240 219 170 876 67 234 238 110 2 108

Increase in employee related provisions 101 394 106 431 342 101 570 - 140

Increase in other provisions 8 031 32 354

Assets acquired below fair value - 11 646 - 360 - 13 015 - 11 646

Assets donated 5 366 7 095 5 366

Write offs and losses 651 59 592 651

Change in assets and liabilities

Change in inventories 1 407 1 021 386 1 407

Increase in payables and borrowings - 168 020 - 148 523 - 8 224 - 158 119 - 9 102

Increase in receivables and investments 163 188 150 714 4 741 153 755 7 567

Cash flows from operating activities �66 9�� 0 �6� 99 70� �1� �� 1

For the purposes of the Cash Flow Statement, cash includes cash at bank, cash on hand, and cash on call or short term deposit. A reconciliation of closing cash balances to the Cash Flow Statement for the Total Public Sector is as below:

Cash at beginning of year 196 854

Net increase in cash held as per Cash Flow Statement

56 907

Cash at end of year �� 76�

This cash flow reconciliation is based on reports prepared according to the Uniform Presentation Framework (UPF). Therefore some reconciling items are different to those which would appear in an Australian Accounting Standard AAS31 cash reconciliation note.

A cash flow reconciliation note reconciles the Operating Statement to the total of the operating cash flows in the Cash Flow Statement. To arrive at the operating cash flows, the Operating Statement must be adjusted not only for any non cash entries but also for any non operating cash flows. Certain items which are normally reconciling items (due to their non cash or non operating nature) are not reconciling items under UPF because they are not included in the UPF Operating Statement. These items are profit on sale of non financial assets, profit on sale of financial assets, provisions for bad and doubtful debts, and asset revaluations.



2005-06

Total

Public Sector

General

Government

Public Non

Financial

Corporation

Non

Financial

Public

Sector

Public

Financial

Corporations

$000 $000 $000 $000 $000

GFS Net Operating Balance 67 ��7 �� 6 �� 66 �� 7�1

Non cash movements

Increase in provisions for depreciation 231 398 163 071 66 679 229 750 1 648

Increase in employee related provisions 93 705 97 884 1 408 93 808 - 66

Increase in other provisions 9 19 834 9 30 416

Assets acquired below fair value - 11 224 - 443 - 10 781 - 11 224

Assets donated 1 549 1 549 1 549

Write offs and losses 290 229 61 290

Change in assets and liabilities

Change in inventories 3 500 1 024 2 476 3 500

Increase in payables and borrowings - 134 841 - 149 140 5 195 - 142 639 9 876

Increase in receivables and investments 184 137 150 439 42 795 180 399 - 3 774

Cash flows from operating activities �� 70 ��6 �� 1�� 001 �� 009 76 ��1

For the purposes of the Cash Flow Statement, cash includes cash at bank, cash on hand, and cash on call or short term deposit. A reconciliation of closing cash balances to the statement of cash flows for the Total Public Sector is as below:

Cash at beginning of year 144 972

Net increase in cash held as per Cash Flow Statement

51 882

Cash at end of year 196 ��


Note 27: Financial Instruments – Total Public SectorObjectives of derivative financial instrumentsThe Northern Territory Government’s two public financial corporations (namely the Northern Territory Treasury Corporation and the Territory Insurance Office) enter into derivative financial instruments in the normal course of business in order to manage exposure to interest rate and foreign exchange rate risk including:

• interest rate swaps to mitigate the risk of rising interest rates;

• forward start interest rate swap contracts to manage interest rate risk; and

• cross currency swaps to manage the foreign currency risk associated with foreign currency denominated borrowings.

The Northern Territory Government does not enter into or trade in derivative financial instruments for revenue speculative purposes.

(a) Interest Rate RiskInterest rate risk exposures

The Government’s exposure to interest rate risk, repricing maturities and the effective interest rates on financial instruments at balance date are shown below.

Interest rate swaps

The Government uses interest rate swaps and forward start interest rate swaps to manage interest rate risk. The interest rate swap agreements are used to convert the variable interest rate of some short and long term borrowings into fixed interest rates. For the Territory Insurance Office, swap agreements are used to convert fixed rate loans assets into variable rates.

(b) Foreign exchange risk Foreign exchange risk is the risk of financial loss due to adverse movements in foreign exchange rates. The Government’s exposure to foreign exchange risk arises when certain borrowings are denominated in foreign currencies. However, the Government does not accept any foreign currency exposure and, as such, currency hedging is a part of the management of these activities.

In order to remove the currency exposure, all foreign currency borrowings are fully hedged by way of cross currency interest rate swaps at the initiation of the borrowing transaction. Cross currency interest rate swaps allow the Government to raise long-term borrowings in foreign currencies and effectively swap them into Australian dollar fixed interest rates.

By using cross currency interest rate swap contracts, the Government agrees to exchange specified principal and interest foreign currency amounts at an agreed future date at a specified exchange rate, thereby enabling the Government to mitigate the risk of adverse movements in foreign exchange rates.

The Government does not lend funds in currencies other than the Australian dollar.



(c) Credit RiskCredit risk is the risk of financial loss and/or increased costs due to the failure of a counterparty to meet its financial obligations.

Credit risk on financial assets which have been recognised on the balance sheet is their carrying amount, net of any provision for doubtful debts. Credit risk on interest rate swap contracts is limited to the net fair value of the contract, if a positive amount.

Government entities aim to ensure that their exposures to individual and group counterparties are within acceptable levels; and to minimise the likelihood that a counterparty will fail to execute their financial obligations. Risk is minimised by the fact that the Government and its entities undertake transactions with a large number of diverse counterparties within the Northern Territory.

Only two Government entities deal in derivative financial instruments. The Northern Territory Treasury Corporation’s dealings in physical securities and/or derivative financial instruments are transacted only with counterparties possessing strong or extremely strong credit rating criteria as determined by Standard and Poor’s Rating Group. In addition, derivative financial instruments are only transacted with counterparties that have signed an International Swaps and Derivatives Association (ISDA) Master Agreement with the Corporation. The Territory Insurance Office deals only with counterparties which are reputable financial intermediaries with acceptable credit ratings determined by a recognised rating agency.


2006-07

Weighted Average Interest

Rate Variable Interest

1 year or less

1 to 5 years

More than 5 years

Non-interest Bearing Total

% $000 $000 $000 $000 $000 $000FINANCIAL ASSETSCash 6.25 253 762 253 762Receivables and accrued revenue 201 366 201 366AdvancesVariable interest advances 7.58 156 257 579 156 836Non interest bearing advances 10 209 10 209Total advances 1�6 ��7 �79 10 �09 167 0��Securities Discount securities 6.39 324 099 324 099Unit trust investments 706 468 706 468Floating rate notes 6.63 9 801 16 925 26 726Fixed interest securities 5.24 61 284 43 866 35 006 140 156Corporate bondsOther 6.25 7 277 7 277Total securities �9� 1�� 60 791 �� 006 71� 7�� 1 �0� 7�7Loans paid Fixed rate loans 7.22 105 636 155 492 3 276 264 404Floating rate loans 8.20 254 413 254 413Credit foncier loans 8.28 630 243 588 1 461No interest risk* 26 393 26 393Total loans �60 679 1�� 7�� 6� �6 �9� ��6 670TOTAL FINANCIAL ASSETS �10 01� 7�� 6� �17 10� �� 70 9�1 71� � �7� �69Prepayments 31 938 31 938Equity investments 3 3TOTAL FINANCIAL ASSETS PER UPF BALANCE SHEET 9�� 6�� 0� �10FINANCIAL LIABILITIESAccounts payable 106 817 106 817Deposits held 441 609 441 609Finance lease liabilities 6.69 36 369 9 085 2 449 24 982 72 884AdvancesVariable interest 4.70 83 4 730 26 303 248 872 762 280 750No interest risk* 5 050 5 050Total advances �� 7�0 �6 �0� �� 7� � �1� �� 00Borrowings

DomesticFixed interest securities 6.18 426 548 1 082 312 447 546 1 956 406Floating rate notes 6.55 262 661 262 661No interest risk* 28 084 28 084Australian Government credit

foncier loans

International**Euro Medium Term Notes

US dollar fixedUS dollar floating

Total borrowings 6�9 �09 1 0�� 1� ��7 ��6 �� 0�� 7 1��TOTAL FINANCIAL LIABILITIES �6 �� 70� 0�� 1 111 06� 7�1 �00 �� 1�� 6�Net financial assets(+)/liabilities(-) 373 567 52 839 - 893 959 - 682 530 401 330 - 748 752less non financial liabilities 3 039 757plus non financial assets 6 507 576NET WORTH AS PER UPF BALANCE SHEET � 719 066


2005-06

Weighted Average Interest

Rate Variable Interest

1 year or less

1 to 5 years

More than 5 years

Non-interest Bearing Total

% $000 $000 $000 $000 $000 $000FINANCIAL ASSETSCash 5.75 196 854 196 854Receivables and accrued revenue 211 353 211 353AdvancesVariable interest advances 6.83 198 503 909 199 411Non interest bearing advances 2 700 2 700Total advances 19� �0� 909 � 700 �0� 111Securities Discount securities 5.92 280 500 280 500Unit trust investments 496 536 496 536Floating rate notes 6.45 24 058 26 365 1 017 51 440Fixed interest securities 5.8 467 80 000 80 467Corporate bondsOther 2 377 2 377Total securities �0� 0�� 106 �6� 1 017 �9� 91� 911 ��0Loans paidFixed rate loans 6.97 112 360 137 755 11 034 261 150Floating rate loans 6.35 216 595 73 216 668Credit foncier loans 8.38 132 119 458 709No interest risk* 25 423 25 423Total loans ��9 0�7 1�7 9�� 11 �9� �� 0� 9�9TOTAL FINANCIAL ASSETS �9� ��7 6�� 111 �� 1 1� �09 7�� 9 � 0�� 7Prepayments 29 015 29 015Equity investments 63 63TOTAL FINANCIAL ASSETS PER UPF BALANCE SHEET 767 �66 � 0�� 66�FINANCIAL LIABILITIESAccounts payable 116 698 116 698Deposits held 589 035 589 035Finance lease liabilities 6.69 564 17 797 7 219 25 580AdvancesVariable interest 4.68 411 3 910 279 125 1 627 285 073No interest risk* 5 050 5 050Total advances �11 � 910 �79 1�� 6 677 �90 1��Borrowings

DomesticFixed interest securities 6.09 135 060 1 051 501 446 928 1 633 489Floating rate notes 5.56 284 939 3 562 288 501No interest risk* 25 000 25 000Australian Government credit

foncier loansInternational**Euro Medium Term Notes

US dollar fixed 7.25 40 398 40 398US dollar floating 5.35 39 053 39 053

Total borrowings �99 ��0 1 0�� 06� ��6 9�� 000 � 0�6 ��1TOTAL FINANCIAL LIABILITIES �11 �00 01� 1 076 770 7�� 7� 7�7 �10 � 0�7 �77Net financial assets(+)/liabilities(-) 394 946 134 097 - 831 549 - 720 763 30 056 - 993 212less non financial liabilities 2 692 429plus non financial assets 6 391 229NET WORTH AS PER UPF BALANCE SHEET � 70� ��* The AustralAsia Railway Corporation and the Department of the Chief Minister have liabilities relating to the construction of the Adelaide

to Darwin rail link. These loans do attract interest, however, no interest is payable until an equivalent amount of interest is received from the Asia Pacific Transport Consortium. As such, the Government is not exposed to interest rate risk in relation to these loans.

** Shown as translated carrying value in Australian dollars at balance date.



Note 28: Write-Offs, Postponements, Waivers, Ex Gratia Payments and Gifts – Total Public Sector

2006-07 No. 2005-06 No.

$000 $000

1. WRITE-OFFS, POSTPONEMENTS AND WAIVERS UNDER THE FINANCIAL MANAGEMENT ACT

� 9�9 � �76

Amounts Written Off, Postponed, Waived By Treasurer � �7� �� 610 ��

Irrecoverable money written off 486 16 1 042 25

Crimes compensation debts 83 9

Taxation debts 213 10 152 9

Employee debts 32 4

Government services debts 72 5 5 1

Other 201 1 770 2

Losses or deficiencies of money written off

Waiver of right to receive or recover money 2 886 8 1 569 7

Crimes compensation debts 16 1

Taxation debts 2 816 6 1 538 4

Government services debts 70 2 14 2

Amounts Written Off, Postponed, Waived by Delegates �77 1 �� 666 1 ��0

Irrecoverable money written off 363 867 394 1 487

Losses or deficiencies of money written off 1 2 8 11

Value of public property written off 208 611 83 79

Waiver of right to receive or recover money 5 8 181 3

�. GIFTS (a) 190 1� 1� 1�

Office furniture 1 5 2 11

Computer and other electronic equipment 2 5

Vehicles 178 6 8 1

Other 10 3 1 1

�. EX GRATIA PAYMENTS 6�9 7 ��

�. WRITE-OFFS, POSTPONEMENTS AND WAIVERS AUTHORISED UNDER OTHER LEGISLATION

� � 9� 6

Details of write-offs, postponements and waivers approved under the Financial Management Act are reported by agencies in their financial statements.

(a) Agency valuations at time of gifting. Where one recipient has received more than one gift covering various categories, the gift has been counted in the category which has the highest value item.

Additional Financial Information (Unaudited)

�9Additional Financial Information

Additional Financial InformationThis section of the report provides financial information for agencies and government business divisions (GBDs) to supplement the whole of government and sectoral tables presented in the audited section. This information is not required under the Uniform Presentation Framework (UPF) or the Fiscal Integrity and Transparency Act (FITA) and accordingly is not audited. The summary agency financial information and explanations ensure that the report is a comprehensive financial report and evidence of further enhancements to, and improvements in, transparency and accountability in the Territory’s financial reporting framework. The intent of this section is to highlight changes in appropriation (the direct funding to agencies approved by Parliament in the Appropriation Act and subsequent adjustments approved in accordance with the Financial Management Act (FMA)) to agencies and to provide a summary of the key financial performance for both agencies and GBDs, with significant movements during 2006-07 explained.

This section also includes supplementary tables that are required under UPF, but not required to be audited.

Allocation is the term used in the FMA to describe appropriation provided for operational and capital expenditure purposes to general agencies. Appropriation is described as either Output Appropriation or Capital Appropriation. Allocation to agencies for the 2006-07 financial year is specified in the 2006-07 Appropriation Act, passed by the Territory Parliament. During the course of any financial year, situations can change which necessitate variations to allocation.

Section 18 of the FMA provides that the Treasurer can approve additional allocation through the use of Treasurer’s Advance.

Section 19 of the FMA provides that the Administrator can approve, within specified parameters, an increase in Treasurer’s Advance.

Section 20 of the FMA provides that the Treasurer can approve allocation transfers within a financial year, as follows:

• Section 20 (1) – allows the transfer of allocation from one agency to another agency; and

• Section 20 (1A) – allows the transfer of allocation between appropriation purposes within an agency (for example a transfer from Output Appropriation to Capital Appropriation or vice versa).

Section 21 – allows the transfer of allocation between agencies following redistribution of government business (public sector restructure).

Allocation transfers can also affect the Treasurer’s Advance, which provides a pool of funds specifically set aside in each Budget to meet operational contingencies that arise during the year.

Allocation transfers change the distribution of appropriation across agencies and the Treasurer’s Advance but do not change the total Budget funding approved by Parliament.

Variations to Allocations Authorised

During the Year

Variations to Allocations Authorised

During the Year

90 Additional Financial Information


Variations to allocation recorded in the table reflect the net effect on allocation arising from Government decisions taken during 2006-07.

In addition to appropriation, agencies also receive agency revenue that comprises funding from external bodies (usually the Australian Government in the form of specific purpose payments) and own-source revenue in the form of fees and charges.

General agency information is presented in two parts – an Appropriation summary and an Operating Statement summary which includes expense and revenue variations. GBD information is presented as an Operating Statement summary. As commercially focused entities, GBDs do not usually receive appropriation and only one summary is necessary. All schedules include explanations of variations over 1 per cent or $50 000.

For the Appropriation summary, the original 2006-07 Budget is compared to the final approved budget with significant variations reflecting approved Government decisions as they pertain to resources provided to general agencies. The appropriation changes in this summary align with the Variations to Allocations table.

The Operating Statement summary contains a high level comparison of financial performance for each agency and GBD. Comparison is made between the final approved budget and the actual result for 2006-07 highlighting significant variations between revenue and expenses. For GBDs, the original May 2006 Budget is also provided. Explanations have been provided for material movements between the final estimate and the actual result. The actual results and the overall effect of movements explained in these summaries are reflected in the whole of government financial statements.

These tables are required by the UPF framework and provide detailed information on taxes, expenses, purchases of non financial assets and Loan Council Allocations. The first three are based on the general government sector only, with the latter based on the non financial public sector.

Where necessary, comparative information for the 2005-06 financial year has been reclassified to provide consistency with current year disclosures.

Summary Agency/GBD Financial

Information

Summary Agency/GBD Financial

Information

UPF Supplementary Tables

UPF Supplementary Tables

91Additional Financial Information

Variations to Allocations Authorised During the Year

Appropriation Act

Variations actioned under the

Financial Management Act Final AllocationAGENCY/Activity 2006-07 s18 s19 s20 s21

$000 $000 $000 $000 $000 $000

AUDITOR-GENERAL’S OFFICE � 6�1 �01 � 9��

Output Appropriation 2 621 301 2 922

Capital Appropriation

NORTHERN TERRITORY ELECTORAL COMMISSION

1 �77 110 1 ��7



OMBUDSMAN’S OFFICE 1 7�6 6� 1 ��



DEPARTMENT OF THE CHIEF MINISTER �� 9�9 � 100 �90 � ��0 �9 169

Output Appropriation 43 564 2 100 590 2 520 48 774

Capital Appropriation 395 395

DEPARTMENT OF THE LEGISLATIVE ASSEMBLY

16 7�9 �� 17 �6�



NORTHERN TERRITORY TREASURY 11� 0�� - 1� �6� 97 607

Output Appropriation 111 756 384 - 14 862 97 278


DEPARTMENT OF JUSTICE 11� �67 ��7 1 �� 16 767 1�� 7��

Output Appropriation 114 021 1 432 16 767 132 220

Capital Appropriation 246 287 533

DEPARTMENT OF EMPLOYMENT, EDUCATION AND TRAINING

�7� ��7 11 �00 1� 91� 1 0�� 0� 7�0

Output Appropriation 478 347 11 400 12 915 1 058 503 720


TOURISM NT �� 9�� - ��0 - 1 �90 �� 71�

Output Appropriation 35 855 - 830 - 1 390 33 635


OFFICE OF THE COMMISSIONER FOR PUBLIC EMPLOYMENT

6 1�0 77 6 197



(continued)

9� Additional Financial Information


Variations to Allocations Authorised During the Year (continued)Appropriation

Act



$000 $000 $000 $000 $000 $000

DEPARTMENT OF HEALTH AND COMMUNITY SERVICES

�� 9�� 0 - ��0 ��6 07�

Output Appropriation 542 343 430 - 3 055 539 718

Capital Appropriation 3 645 2 715 6 360

NORTHERN TERRITORY POLICE, FIRE AND EMERGENCY SERVICES

197 6�9 9�7 9�� 199 ��9

Output Appropriation 192 199 947 1 246 194 392

Capital Appropriation 5 460 - 293 5 167

DEPARTMENT OF BUSINESS, ECONOMIC AND REGIONAL DEVELOPMENT

�0 �1� ��0 1 �90 ��

Output Appropriation 20 515 320 1 390 22 225


LAND DEVELOPMENT CORPORATION 1 �� 1 ��

Output Appropriation 1 458 1 458


DEPARTMENT OF PLANNING AND INFRASTRUCTURE

�� 0 � �00 �� - 1 0�� 6� 6�7

Output Appropriation 174 392 8 300 21 465 - 1 058 203 099

Capital Appropriation 161 148 1 390 162 538

DEPARTMENT OF NATURAL RESOURCES, ENVIRONMENT AND THE ARTS

96 701 1 1�9 97 ��0

Output Appropriation 96 181 1 139 97 320


DEPARTMENT OF LOCAL GOVERNMENT, HOUSING AND SPORT

79 �1� � 7�� 11� - � �� 0 7�6

Output Appropriation 79 270 2 752 3 114 - 4 425 80 711


DEPARTMENT OF CORPORATE AND INFORMATION SERVICES

�9 766 ��0 �� 90 7��



ABORIGINAL AREAS PROTECTION AUTHORITY

� �77 � �77

Output Appropriation 2 339 2 339


DEPARTMENT OF PRIMARY INDUSTRY, FISHERIES AND MINES

�0 �67 10 �0 �77

Output Appropriation 50 216 - 221 49 995


(continued)

9�Additional Financial Information

Variations to Allocations Authorised During the Year (continued)Appropriation

Act



$000 $000 $000 $000 $000 $000

CENTRAL HOLDING AUTHORITY �90 0�9 - �6 91� �0 000 - �� 0� �� 9�0

Treasurer’s Advance 30 000 - 26 914 40 000 - 37 959 5 127

Interest, taxes and administration 131 482 - 10 428 121 054

Employee entitlements 128 577 4 182 132 759

TOTAL APPROPRIATION � �� 06� �0 000 � �6� 06�

Output Appropriation 2 060 814 26 627 40 162 2 127 603

Capital Appropriation 172 195 287 4 043 176 525

Treasurer’s Advance 30 000 - 26 914 40 000 - 37 959 5 127

Interest, taxes and administration 131 482 - 10 428 121 054

Employee entitlements 128 577 4 182 132 759

Total � �� 06� �0 000 � �6� 06�



Auditor‑General’s OfficeAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000

Output Appropriation 2 621 2 922 2 922 301 (1)


TOTAL APPROPRIATION � 6�1 � 9�� 9�� 01

Significant Variances

(1) Additional funding to increase audit capacity 200

Recovery of additional audit costs 101

Operating Statement Final

Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 3 388 3 369 - 19

Expenses 3 388 3 397 9

Net Surplus(+)/Deficit(-) - �7 - �7


Income and expense variations less than 1%


Northern Territory Electoral CommissionAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000



TOTAL APPROPRIATION 1 �77 1 ��7 1 ��7 110


(1) Additional funding provided for by-elections and other local government elections 110


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 1 705 1 771 66 (2)

Expenses 1 687 1 782 95 (3)

Net Surplus(+)/Deficit(-) 1� - 11 - �9


(2) Department of Corporate and Information Services notional charges higher than estimated

64

(3) Increase in employee expenses due to conduct of elections across the region and expenditure on electoral equipment

108




Appropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000



TOTAL APPROPRIATION 1 7�6 1 7�6 1 �� 6�


(1) Additional funding for the upgrade of records management system 68


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 2 206 2 202 - 4

Expenses 2 207 2 098 - 109 (2)

Net Surplus(+)/Deficit(-) - 1 10� 10�


(2) Timing delays for delivery of programs - 64


Department of the Chief MinisterAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000

Output Appropriation 43 564 46 674 48 774 5 210 (1)


TOTAL APPROPRIATION �� 9�9 �7 069 �9 169 � �10


(1) Safer roads campaign 583

Transfer of major sporting events 3 148

Board of Inquiry into the Protection of Aboriginal Children from Sexual Abuse 1 222

Donation to Cyclone Larry recovery fund 250


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 55 484 54 797 - 687 (2)

Expenses 56 045 56 181 136

Net Surplus(+)/Deficit(-) - �61 - 1 �� - ��


(2) Agency revenue lower than estimated due to timing of sporting events transfers - 400

Department of Corporate and Information Services notional charges less than expected - 200



Department of the Legislative AssemblyAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000



TOTAL APPROPRIATION 16 7�9 17 �6� 17 �6� ��


(1) Statehood Steering Committee 250

Remuneration Tribunal Determinations 305

Electorate Officers’ salary reclassification 230


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 19 362 19 512 150

Expenses 21 200 21 318 118

Net Surplus(+)/Deficit(-) - 1 �� - 1 �06 ��




Northern Territory TreasuryAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000

Output Appropriation 111 756 97 278 97 278 - 14 478 (1)


TOTAL APPROPRIATION 11� 0�� 97 607 97 607 - 1� �7�


(1) Transfer of Racing, Gaming and Licensing to the Department of Justice - 14 862

Uniform tariff community service obligation 1 249

Lower take up in first home owner grants and petroleum subsidies - 867


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 101 541 101 278 - 263

Expenses 100 434 97 880 - 2 554 (2)

Net Surplus(+)/Deficit(-) 1 107 � �9� � �91


(2) Lower than anticipated employee expenses due to higher number of vacancies - 1 115

Lower than anticipated legal and consultants expenses, and information technology charges

- 292

Lower take up in first home owner grants and petroleum subsidies - 867



Central Holding AuthorityOperating Statement Final

Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 2 649 773 2 725 503 75 730 (1)

Expenses 2 860 909 2 696 579 - 164 330 (2)

Net Surplus(+)/Deficit(-) - �11 1�6 �� 9�� 0 060


(1) Increase in GST revenue received from Australian Government 39 436

Increase in stamp duty due to higher than anticipated activity in business conveyancing

9 268

Increase in dividends from public trading entities 2 391

Increased unrealised gain on Conditions of Service Reserve 16 908

(2) Decrease predominantly relates to actuarial reviews of superannuation and other employee-related benefits

- 164 330


Northern Territory Treasury CorporationOperating Statement May 2006

Published

Budget

May 2007

Final

Estimates

Actual

Result

Total

Variance

$000 $000 $000 $000

Operating Statement

Goods and services revenue 348 415 415

Community service obligations

Other revenue 164 571 162 060 161 881 - 179

Operating expenses (after income tax) 148 264 147 180 145 742 - 1 438 (1)

Net Surplus(+)/Deficit(-) 16 6�� 1� �9� 16 �� 1 ��9


(1) Interest expense lower than estimated due to refinancing maturing debt at lower rates - 1 684





Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000


Capital Appropriation 246 246 533 287 (2)

TOTAL APPROPRIATION 11� �67 1�� 66 1�� 7�� 1� ��6


(1) Transfer of Racing, Gaming and Licensing from Northern Territory Treasury 14 862

Transfer of Community Harmony from the Department of Local Government, Housing and Sport

1 905

Additional funding for primary health care services in Northern Territory correctional facilities 800

Remuneration Tribunal determination for judges and magistrates 498

Additional funding for Community Visitor program 50

(2) Capital item funding for video conferencing in courts and accommodation at Darwin Correctional Centre

287


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 154 987 155 640 653

Expenses 160 429 160 397 - 32

Net Surplus(+)/Deficit(-) - � �� - � 7�7 6��


Income and expense variations are less than 1%


Department of Employment, Education and TrainingAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000



TOTAL APPROPRIATION �7� ��7 ��9 0�0 �0� 7�0 �� 7�


(1) Upgrade school administrative and principal positions 1 686

Transfer of Electrical Safety Unit from the Department of Planning and Infrastructure 1 058

Fit out and establishment costs for middle schools 1 159

Increase per capita rates for non government schools 442

Natural disaster related costs 378

Reclassification of Australian Government capital grants 3 512

Funding for government employee housing 2 000

Transfer of five mission schools to the Catholic Education Office 11 200

Capital interest subsidy for non government schools 3 280


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 641 356 642 958 1 602

Expenses 663 383 665 971 2 588

Net Surplus(+)/Deficit(-) - �� 0�7 - �� 01� - 9�6





Tourism NTAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000



TOTAL APPROPRIATION �� 9�� 71� �� 71� - � ��0


(1) Transfer of Corporate Services Group to the Department of Business, Economic and Regional Development

- 1390

Transfer of funding for the Larapinta Trail to the Department of Planning and Infrastructure

- 380


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 37 887 38 327 440

Expenses 38 503 38 578 75

Net Surplus(+)/Deficit(-) - 616 - ��1 �6�




Territory DiscoveriesOperating Statement May 2006

Published

Budget

May 2007

Final

Estimates

Actual

Result

Total

Variance

$000 $000 $000 $000

Operating Statement

Goods and services revenue 4 894 4 894 5 184 290 (1)

Community service obligations 448 448 448

Other revenue 2 650 2 284 2 521 237 (2)

Operating expenses (after income tax) 7 657 7 657 7 786 129 (3)

Net Surplus(+)/Deficit(-) �� - �1 �67 �9�


(1,3) Higher than anticipated sale of goods and services and corresponding expenditure in relation to the sale of holidays

290

(2) Higher than anticipated interest revenue 246



Office of the Commissioner for Public EmploymentAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000



TOTAL APPROPRIATION 6 1�0 6 197 6 197 77


(1) Additional funding for the Employee Assistance Scheme 77


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 8 352 8 240 - 112 (2)

Expenses 8 409 7 965 - 444 (3)

Net Surplus(+)/Deficit(-) - �7 �7� ��


(2) Department of Corporate and Information Services charges lower than estimated

- 115

(3) Fewer training programs delivered than anticipated - 429


Department of Health and Community ServicesAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000


Capital Appropriation 3 645 6 360 6 360 2 715 (2)

TOTAL APPROPRIATION �� 9�� 7 097 ��6 07� 90


(1) Transfer of Appropriation to the Department of Planning and Infrastructure for capital works in relation to Rapid Assessment Planning Unit and other capital projects

- 5 705

Transfer of Appropriation for infrastructure to the Department of Planning and Infrastructure

- 1 449

Capital grant for upgrade works at Banyan House 4 000

Transfer of output to Capital Appropriation for clinical equipment

- 2 380

Nurses Enterprise Bargaining Agreement 1 990

St John Ambulance 554


(2) Additional clinical equipment 2 380


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 783 059 784 672 1 613

Expenses 798 593 797 329 - 1 264

Net Surplus(+)/Deficit(-) - 1� �� - 1� 6�7 � �77


Income and expense variations are less than 1%



Northern Territory Police, Fire and Emergency ServicesAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000

Output Appropriation 192 199 192 928 194 392 2 193 (1,2)

Capital Appropriation 5 460 5 684 5 167 - 293 (2)

TOTAL APPROPRIATION 197 6�9 19� 61� 199 ��9 1 900


(1) Australian Pacific Economic Cooperation security 420

Renner Springs cyanide spill clean up 412

Establishment and operational funding for the Mutitjulu Police Post 177


Road Safety Program 400

(2) Road Safety Program 336

Transfer of Appropriation for information technology and operational expenses - 629


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 212 119 211 919 - 200

Expenses 221 243 217 724 - 3 519 (3)

Net Surplus(+)/Deficit(-) - 9 1�� - � �0� � �19


(3) Revised commencement date of airport policing initiative and timing delays in delivering other Australian Government funded initiatives

- 3 633


Department of Business, Economic and Regional DevelopmentAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000



TOTAL APPROPRIATION �0 �1� �� 1 710


(1) Transfer of funding for Aboriginal Resource and Development Services from Department of Local Government, Housing and Sport

228

Transfer of Corporate Services Group from Tourism NT 1 390

Trade Support Scheme incentives 125


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 24 910 24 977 67

Expenses 25 511 23 873 - 1 638 (2)

Net Surplus(+)/Deficit(-) - 601 1 10� 1 70�


(2) Timing delays for delivery of programs - 1 619





Published

Budget

May 2007 Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000



TOTAL APPROPRIATION 1 �� 1 �� 1 ��


No variations to Appropriation


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 1 836 2 449 613 (1)

Expenses 2 527 2 188 - 339 (2)

Net Surplus(+)/Deficit(-) - 691 �61 9��


(1) Additional revenue from land sales 613

(2) Expenses lower than estimated largely due to delays in consultancies and maintenance work

- 339


Department of Planning and InfrastructureAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000


Capital Appropriation 161 148 165 589 162 538 1 390 (2)

TOTAL APPROPRIATION �� 0 ��6 1�� 6� 6�7 �0 097


(1) Transfer of Electrical Safety Unit to the Department of Employment, Education and Training

- 1 058

Funding for repairing roads following natural disasters 8 000

Transfer of Appropriation for road maintenance following natural disasters 4 500

Grants to Power and Water Corporation for undergrounding power project 6 000

Grants to Power and Water Corporation for Borroloola sewerage upgrade 5 000

Road safety initiatives 2 075

Reclassification of recoverable works from related revenue 1 520

School buses for middle years 1 145

Grant to Darwin Port Corporation for dredging at Fort Hill Wharf 1 000

(2) Increased infrastructure spending 10 970

Lower Waterfront redevelopment expenditure due to timing - 11 503

Transfer from Department of Health and Community Services for the Rapid Admission and Planning Unit and the Flynn Drive Community Health Care Centre

5 849

Road Safety initiatives 450

Transfer of Appropriation for road maintenance following natural disasters - 4 500


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 270 056 270 838 782

Expenses 309 897 312 659 2 762 (3)

Net Surplus(+)/Deficit(-) - �9 ��1 - �1 ��0 - 1 979


(3) Timing delays associated with arrangement for the transfer of fuel terminal tanks

- 1 850

Gifted assets to non government organisations 3 285

Additional repairs and maintenance expenses 1 152



Darwin Bus ServiceOperating Statement May 2006

Published

Budget

May 2007

Final

Estimates

Actual

Result

Total

Variance

$000 $000 $000 $000

Operating Statement



Other revenue 357 559 580 21


Net Surplus(+)/Deficit(-) 79 �6� ��7 - 11


(1) Additional bus services 102

(2) Purchase of new ticketing devices, increased repairs and maintenance and fuel costs

134


Construction DivisionOperating Statement May 2006

Published

Budget

May 2007

Final

Estimates

Actual

Result

Total

Variance

$000 $000 $000 $000

Operating Statement

Goods and services revenue 39 307 39 307 42 685 3 378 (1)


Other revenue 120 120 541 421 (2)

Operating expenses (after income tax) 37 871 37 871 40 870 2 999 (1)

Net Surplus(+)/Deficit(-) 1 ��6 1 ��6 � ��6 �00


(1) Higher activity associated with an increase in capital projects managed 3 378

(2) Higher interest revenue on cash balances 274




Operating Statement May 2006

Published

Budget

May 2007

Final

Estimates

Actual

Result

Total

Variance

$000 $000 $000 $000

Operating Statement

Goods and services revenue 13 544 12 224 10 404 - 1 820 (1)

Community service obligations 3 981 4 981 4 981

Other revenue 1 450 1 630 2 018 388 (2)

Operating expenses (after income tax) 23 211 23 102 22 830 - 272 (3)

Net Surplus(+)/Deficit(-) - � ��6 - � �67 - � �� - 1 161


(1) Reduction in wharfage and shipping charges due to lower than anticipated cargo tonnage and trade

- 2 158

(2) Other revenue for rentals was estimated under goods and services revenue 368

(3) Lower than estimated depreciation expense - 569

Additional operational expenses - 423


Department of Natural Resources, Environment and the ArtsAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000



TOTAL APPROPRIATION 96 701 97 ��0 97 ��0 1 1�9


(1) Support for the television production ‘Double Trouble’ and the film production ‘Australia’

443

Transfer of the Olive Pink Botanic Garden from the Department of Local Government, Housing and Sport

126

Cane toad management by Frogwatch 150

Support for the public art precinct at Darwin International Airport 105

Indigenous Ranger Program and assistance to Dhimurru 225


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 123 346 121 738 - 1 608 (2)

Expenses 131 228 125 681 - 5 547 (3)

Net Surplus(+)/Deficit(-) - 7 �� - � 9�� 9��


(2) Timing delays in receipt of external grant funding - 2 369

Higher than anticipated revenue from park fees, admissions at Araluen Art Precinct and funding from the Natural Resource Management Board

686

(3) Timing delays for delivery of externally funded programs - 5 391





Published

Budget

May 2007

Final

Estimates

Actual

Result

Total

Variance

$000 $000 $000 $000

Operating Statement



Other revenue 18 46 140 94 (2)


Net Surplus(+)/Deficit(-) - 1 ��7 - 1 ��7 - 1 700 - 17�


(1) Management of Territory Wildlife Park café 163

(2) Increased interest revenue 55


Department of Local Government, Housing and SportAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000



TOTAL APPROPRIATION 79 �1� 7� ��6 �0 7�6 1 ��1


(1) Transfer of responsibility and funding for the Olive Pink Botanic Garden to the Department of Natural Resources, Environment and the Arts

- 126

Revised Service Level Agreement arrangements with Territory Housing 1 500

Darwin Bus services for Arafura Games 135

Australian Football League home and away matches 420

Transfer of funding for Aboriginal Resource and Development Services to the Department of Business, Economic and Regional Development

- 228

Transfer of Community Harmony to the Department of Justice - 1 905

Capital grants to various local government bodies 237

Local government reform 215

Grant for Central Australian drag racing strip 250

Transfer to the Department of the Chief Minister for major sporting events - 2 520

Additional funding for roads and community sporting infrastructure 1 100

Safe Pool Grant scheme 1 700

Barunga basketball court repairs 200



Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 207 656 209 904 2 248 (2)

Expenses 207 811 215 005 7 194 (3)

Net Surplus(+)/Deficit(-) - 1�� - � 101 - � 9�6


(2) Australian Government funding for recruitment of 12 development coordinators 700

Revaluation of Hidden Valley motor sports land and building assets transferred from the Territory Motor Sports Board

1 000

(3) Grants for Indigenous Housing 6 100

Transfer of completed works for Palmerston Recreation Centre and Alice Springs Shooting Complex

1 960

Timing delays in delivery of various programs - 718



Territory Housing


Published

Budget

May 2007

Final

Estimates

Actual

Result

Total

Variance

$000 $000 $000 $000

Operating Statement



Other revenue 30 412 36 227 45 123 8 896 (2)


Net Surplus(+)/Deficit(-) - 1� ��6 - � �� 1 ��6 6 96�


(1) Increased rent received from additional dwellings head-leased in urban areas 1 343

(2) Profit on sale of houses and revaluation of shared equity investments 4 800

Australian Government grants for housing in remote areas 3 600

Higher than anticipated cash balances, due to higher loan discharges, resulting in additional interest received

400

(3) Additional staffing costs associated with expanding activities 1 165

Increased property management costs in urban areas 1 700


Department of Corporate and Information ServicesAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000



TOTAL APPROPRIATION �9 766 90 7�� 90 7�� 97�


(1) Additional 60 Northern Territory Public Sector trainees 162

Lease costs for early delivery of Chinatown 300

Additional workers compensation payouts and other payments 520


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 102 365 102 502 137

Expenses 104 302 104 631 329

Net Surplus(+)/Deficit(-) - 1 9�7 - � 1�9 - 19�



1�0 Additional Financial Information


Data Centre ServicesOperating Statement May 2006

Published

Budget

May 2007

Final

Estimates

Actual

Result

Total

Variance

$000 $000 $000 $000

Operating Statement



Other revenue 112 163 186 23


Net Surplus(+)/Deficit(-) 6�1 1 06� 1 �� 77


(1) Higher revenue due to increased usage 1 469

(2) Increased expenditure due to the implementation of EPASS 2 985

1�1Additional Financial Information

Government Printing OfficeOperating Statement May 2006

Published

Budget

May 2007

Final

Estimates

Actual

Result

Total

Variance

$000 $000 $000 $000

Operating Statement

Goods and services revenue 6 185 6 185 6 053 - 132 (1)


Other revenue 100 171 151 - 20

Operating expenses (after income tax) 6 156 6 108 6 099 - 9

Net Surplus(+)/Deficit(-) 1�9 �� 10� - 1��


(1) Lower than anticipated usage - 132

1�� Additional Financial Information


NT FleetOperating Statement May 2006

Published

Budget

May 2007

Final

Estimates

Actual

Result

Total

Variance

$000 $000 $000 $000

Operating Statement

Goods and services revenue 30 602 33 400 33 625 225


Other revenue 1 083 1 095 1 716 621 (1)

Operating expenses (after income tax) 26 640 28 889 29 155 266

Net Surplus(+)/Deficit(-) � 0�� 606 6 1�� 79


(1) Higher than anticipated profits on disposal of vehicles 618

1��Additional Financial Information

Aboriginal Areas Protection AuthorityAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000



TOTAL APPROPRIATION � �77 � �77 � �77


No variations to Appropriation


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 3 060 3 241 181 (1)

Expenses 3 102 3 226 124

Net Surplus(+)/Deficit(-) - �� 1� �7


(1) Increased demand for authority certificates 136

1�� Additional Financial Information


Department of Primary Industry, Fisheries and MinesAppropriation May 2006

Published

Budget

May 2007

Final

Estimate

Final

Approved

Budget

Total

Variance

$000 $000 $000 $000

Output Appropriation 50 216 50 176 49 995 - 221

Capital Appropriation 251 301 482 231

TOTAL APPROPRIATION �0 �67 �0 �77 �0 �77 10


Output and capital variations are less than 1%


Approved

Budget

Actual

Result

Total

Variance

$000 $000 $000

Operating Statement

Income 67 321 68 676 1 355 (1)

Expenses 72 782 72 071 - 711 (2)

Net Surplus(+)/Deficit(-) - � �61 - � �9� � 066


(1) Increased revenue for Renewable Remote Power Generation 916

Assets recorded in relation to Mount Todd Mine Site and Katherine Research Station

240

(2) Timing delays for delivery of externally funded programs - 1 215

National Livestock Identification Scheme, drought assistance and contribution to the 2006-07 Alice Springs Solar City project

599

1��Uniform Presentation Framework Supplementary Tables

Uniform Presentation Framework

Supplementary TablesGeneral Government Sector Expenses by Function

2006-07 Actual

2005-06 Actual

$000 $000

General public services

Government superannuation benefits 2 435 3 052

General public services n.e.c. 114 307 114 504

Total general public services 116 7�� 117 ��6

Public order and safety

Police services 155 391 143 850

Fire protection services 30 358 28 118

Law courts and legal services 98 602 86 618

Juvenile corrective services 8 653 7 644

Prisons and other corrective services 66 681 56 922

Other public order and safety 2 409 2 229

Total public order and safety �6� 09� �� 0

Education

Primary education 332 255 314 216

Secondary education 186 096 175 996

Technical and further education 87 184 82 713

Tertiary education n.e.c. 30 681 29 251

Pre-school education 22 328 21 111

Special education 2 232 2 242

Transportation of non-urban school students 3 131 3 124

Transportation of other students 5 686 5 592

Total education 669 �9� 6�� 6

Health

Other admitted patients 353 110 325 325

Non-admitted patient services in acute care institutions 57 835 53 283

Mental health institutions 8 864 8 165

Community health services (excluding community mental health) 122 691 113 024

Community mental health 19 585 18 042

Patient transport 18 805 17 291

Public health services 36 693 33 807

Pharmaceuticals, medical aids and appliances 20 354 18 722

Other health research 4 763 4 380

Total health 6�� 699 �9� 0�9

Social security and welfare

Family and child welfare services 52 697 48 553

Welfare services for the aged 17 276 15 921

Welfare services for people with a disability 50 811 46 815

Welfare services n.e.c. 54 547 50 415

Total social security and welfare 17� �� 161 70�

(continued)

1�6 Uniform Presentation Framework Supplementary Tables


General Government Sector Expenses by Function (continued) 2006-07

Actual 2005-06

Actual

$000 $000

Housing and community amenities

Housing 151 629 156 847

Aboriginal community development 50 152 50 614

Other community development 33 684 34 377

Aboriginal community water supply 11 114 11 186

Other water supply 532 520

Aboriginal community sanitation services 6 054 6 100

Other sanitation and protection of the environment n.e.c. 43 495 42 069

Total housing and community amenities �96 660 �01 71�

Recreation and culture

National parks and wildlife 29 859 31 102

Recreation facilities and services n.e.c. 20 750 17 857

Cultural facilities and services 85 195 87 702

Broadcasting and film production 410 439

Recreation and culture n.e.c. 1 840 2 097

Total recreation and culture 1�� 0�� 1�9 19�

Fuel and energy

Petroleum 8 229 9 070

Aboriginal community electricity services 53 602 53 938

Other electricity 63 379 76 962

Other energy 152 152

Total ruel and energy 1�� 61 1�0 1��

Agriculture, forestry and fishing

Agricultural land management 1 744 1 779

Agricultural support schemes 430 381

Agricultural research and extension services 31 591 31 378

Forestry 287 287

Fishing 7 968 7 936

Total agriculture, forestry and fishing �� 0�1 �1 761

Mining, manufacturing and construction

Mining and mineral resources other than fuels 17 925 17 791

Manufacturing 1 671 1 655

Construction 4 614 3 225

Total mining, manufacturing and construction �� 10 �� 671

(continued)

1�7Uniform Presentation Framework Supplementary Tables

General Government Sector Expenses by Function (continued) 2006-07

Actual 2005-06

Actual

$000 $000

Transport and other communications

Aboriginal community road transport services 1 475 1 470

Road maintenance 142 116 142 182

Road transport n.e.c. 13 296 13 263

Aboriginal community water transport services 1 515 1 526

Urban water transport services 2 109 2 075

Non-urban rail transport freight services 4 054 4 014

Aboriginal community air transport services 4 600 4 616

Multi-mode urban transport 17 396 17 490

Other transport n.e.c. 3 809 3 771

Total transport and other communications 190 �70 190 �07

Other economic affairs

Tourism and area promotion 54 482 47 689

Other labour and employment affairs 35 210 28 039

Other economic affairs n.e.c. 22 163 21 282

Total other economic affairs 111 �� 97 011

Other purpose

Public debt transactions 237 653 236 011

General purpose inter-government transactions 9 201 11 564

Other natural disaster relief 3 142 3 108

Other purposes n.e.c. 791 203

Total other purpose ��0 7�7 ��0 ��6

Total Operating Expenses � 1�� 77� � 01� 696

1�� Uniform Presentation Framework Supplementary Tables


General Government Sector Purchases of Non Financial Assets by Function

2006-07

Actual

2005-06

Actual

$000 $000

General public services 12 068 5 148

Public order and safety 14 729 25 897

Education 63 629 55 296

Health 35 927 36 501

Social security and welfare 1 624 1 430

Housing and community amenities 40 120 51 095

Recreation and culture 44 135 31 472

Fuel and energy 2 165 1 907

Agriculture, forestry, fishing and hunting 3 545 3 009

Mining, manufacturing and construction 6 966 11 135

Transport and communications 55 107 69 599

Other economic affairs 4 911 1 553

Total Purchases of Non Financial Assets �� 9�� 9� 0�1

General Government Sector Taxes2006-07 Actual

2005-06 Actual

$000 $000

Taxes on employers’ payroll and labour force taxes (a) 127 993 123 940

Taxes on property

Stamp duties on financial and capital transactions 112 175 136 744

Financial institutions transaction taxes 788

Taxes on the provision of goods and services

Taxes on gambling 64 528 56 987

Taxes on insurance 23 100 21 223

Taxes on the use of goods and performance of activities

Motor vehicle registration fees 40 239 36 313

�6� 0�� 7� 996

(a) Includes payroll tax of $5.5 million ($5.4 million 2006) paid by Public Non Financial Corporation and Public Financial Corporations to General Government. This eliminates on consolidation and therefore explains the difference between the Total Public Sector taxes.

1�9Uniform Presentation Framework Supplementary Tables

Loan Council Allocation 2006-07

Original

Budget

2006-07

Actual

(Audited)

$M $M

General government sector cash deficit (+)/surplus (-) 56 - 183

Public non financial corporation sector cash deficit (+)/surplus (-) 26 41

Non financial public sector cash deficit (+)/surplus (-) 82 - 142

minus

Net cash flows from investments in financial assets for policy purposes - 10 37

plus

Memorandum items

�006-07 Loan Council Allocation (a) 9� - 179

(a) The actual result for 2006-07 is a surplus of $179 million, an improvement of $271 million from the 2006-07 Budget-time estimate of a $92 million deficit. This is outside the revised tolerance limit of $69 million, albeit in a positive direction, which is calculated based on the 2006-07 Budget-time estimate.

1�1Appendices

Appendix A: Reconciliation of GFS Net Operating Balance with GAAP Operating Result

Total Public

Sector

General

Government

Public

Non Financial

Corporation

Non

Financial

Public

Sector

Public

Financial

Corporations

$000 $000 $000 $000 $000

GFS Net Operating Balance �� 99 1�� 1�9 �9 616 1�� 76� �1 6��

less Increase(-)/decrease(+) in doubtful debts expense (a)

- 2 227 - 2 249 22 - 2 227

add Gains(+)/losses(-) on financial assets (derivatives)

280 280 280

add Gains(+)/losses(-) on financial assets (securities marked to market) (b)

43 220 38 134 38 134 5 086

add Gains(+)/losses(-) on non financial assets (c)

- 130 730 10 278 - 146 349 - 136 071 5 341

add Dividends paid/payable 128 16 554

add Increase(+)/decrease(-) in superannuation revaluation (d)

- 236 920 - 236 920 - 236 920

Net Operating Result as per generally accepted accounting principles (GAAP)

- 91 97� - �7 60� - 106 �0� - 1�� 0�9 7� 61�

(a) Includes a $1 million allowance for doubtful debts expense in relation to taxes receivable.

(b) Includes $38 million increment in the value of investments held in the Conditions of Service Reserve and $5 million increment in investments held by TIO.

(c) Includes:

– profit on sale of assets $9 million;

– impairment of Power and Water Corporation’s water and sewerage assets $146 million; and

– increase in fair value of investment properties held by TIO of $5 million.

(d) Represents revaluation increase following actuarial reviews of superannuation funds conducted during the year.

1��Appendices

Appendix B: Classification of Entities in the Northern Territory Public Sector at Reporting DateTotal Public Sector

Non Financial Public SectorGeneral Government

Aboriginal Areas Protection AuthorityAuditor-General’s OfficeAustralAsia Railway Corporation3

Batchelor Institute of Indigenous Tertiary Education3

Central Holding AuthorityConstruction Division1

Darwin Waterfront Corporation3

Data Centre Services1

Department of Business, Economic and Regional DevelopmentDepartment of the Chief MinisterDepartment of Corporate and Information ServicesDepartment of Employment, Education and TrainingDepartment of Health and Community ServicesDepartment of JusticeDepartment of the Legislative AssemblyDepartment of Local Government, Housing and SportDepartment of Natural Resources, Environment and the ArtsDepartment of Planning and Infrastructure Department of Primary Industry, Fisheries and MinesDesert Knowledge Australia3

Government Printing Office1

Land Development CorporationNominal Insurer’s Fund3

Northern Territory Electoral CommissionNorthern Territory Legal Aid Commission3

Northern Territory Major Events Company Pty Ltd3

Northern Territory Police, Fire and Emergency ServicesNorthern Territory TreasuryNT Build3

NT Fleet1

Office of the Commissioner for Public EmploymentOmbudsman’s OfficeTerritory Discoveries1

Territory Housing1

Territory Motor Sports Board Pty Ltd3

Territory Wildlife Parks1

Tourism NTPublic Non Financial Corporations

Darnor Pty Ltd3

Darwin Bus Service1

Darwin Port Corporation1

Gasgo Pty Ltd3

Indigenous Essential Services Pty Ltd3

Power and Water Corporation2,3

Public Financial CorporationsNorthern Territory Treasury Corporation1

Territory Insurance Office3

1. Government business divisions.2. Government owned corporation.3. Non budget sector entity.

1��Glossary

GlossaryAccountable Officer’s

Trust AccountEstablished under section 7(1) of the Financial Management Act to enable agencies to hold money in trust for another person or entity. Transactions in these accounts are excluded from the Public Account.

Accounts Payable Refers to the value of trade debt and accounts payable, interest payable, and prepayments received.

Accounts Receivable Refers to the value of trade credit and accounts receivable, interest receivable, and prepayments made.

Accrual Accounting A recording method in which revenues, expenses, lending and borrowing are recognised as they are earned or incurred regardless of when a cash payment is made or received.

Administrative Arrangements Order

A list of Ministers of the Territory, agencies, Acts and principal areas of government for which they are responsible.

Advances Amounts paid or received for policy purposes rather than for liquidity management purposes.

Agency A unit of government administration, or office or statutory corporation, nominated in an Administrative Arrangements Order for the purposes of the Financial Management Act and includes, where the case requires, a part or division (by whatever name called) of an agency.

Allocation An amount authorised to be paid from the Central Holding Authority pursuant to an Appropriation Act or an amount required by any other Act to be provided from the public monies of the Territory, and includes any variation in that amount authorised in accordance with the Financial Management Act or any other Act.

Appropriation An authority given by the Legislative Assembly to make payments, now or at some future time, for the purposes stated, up to the limit of the amount in the particular Act.

Appropriation Act Includes a Supply Act and an annual Appropriation Act or an additional Appropriation Act which authorises an Allocation to a Purpose.

Australian Accounting Standards

Statements of accounting standards which can be applied in the preparation and presentation of financial statements.

Cash Accounting A recording method in which transactions are recognised when cash payments are made or received.

Cash Surplus/Deficit The Government Finance Statistics cash surplus or deficit is reported in the cash flow statement and measures the net impact of cash flows during the period.

Central Holding Authority Created by section 5 of the Financial Management Act, the Central Holding Authority is a representation of the revenue, expenses, assets and liabilities of the Territory. Credited to this account is all money received by or on behalf of the Territory or an agency, except that required or permitted by or under the Financial Management Act or any other Act to be credited to an Operating Account or to an Accountable Officer’s Trust Account.

Contingent Liability A potential financial obligation arising out of a condition, situation, guarantee or indemnity, the ultimate effect of which will be confirmed only on the occurrence or non occurrence of one or more uncertain future events.

1�6 Glossary


Doubtful Debt A debt which is treated as a possible future loss and for which a provision has been made.

Finance Lease Lease agreements that transfer substantially all the risks and benefits relating to ownership of an asset from the lessor (legal owner) to the lessee (party using the asset).

Generally Accepted Accounting Principles

(GAAP)

Term used to describe broadly the body of principles that governs the accounting for financial transactions underlying the preparation of a set of financial statements.

General Government Defined in Government Finance Statistics as an entity or group of entities which are mainly engaged in the production of goods and/or services outside the normal market mechanism. Goods and services are provided free of charge or at nominal charges well below costs of production.

Goods and Services Tax (GST) Revenue

On 1 July 2000, the Australian Government introduced the goods and services tax (GST). Payments from the Australian Government return the GST revenue to the states and territories, replacing the previous general purpose grants.

Government Business Divisions

Government business divisions (GBDs) are Territory-controlled trading entities that follow commercial practices and are required to comply with competitive neutrality principles.

Government Finance Statistics

Refers to statistics that measure the financial transactions of governments and reflect the impact of those transactions on other sectors of the economy. Government Finance Statistics in Australia are developed by the Australian Bureau of Statistics in conjunction with all governments and are mainly based on international statistical standards developed, in consultation with member countries, by the International Monetary Fund.

Government Owned Corporation

A government owned corporation is an entity whose objectives are to operate at least as efficiently as any corporate business and maximise the sustainable return to government. The Government Owned Corporations Act adopts the shareholder model of corporate governance and the Power and Water Corporation became the Territory’s first GOC on 1 July 2002.

Government Purpose Classification

Classifies outlays or expenditure transactions by the purpose served (for example, health, education).

Guarantee An undertaking to answer for the debt or obligations of another person or entity.

Indemnity A written undertaking to compensate, protect or insure another person or entity against future financial loss, damage or liability.

International Financial Reporting Standards

The term used to describe the move to standardise existing global international accounting standards. Australian equivalents to these new standards have been adopted for reporting periods on or after 1 January 2005.

Inventories Includes goods or other property used in the production of goods or services, or held for sale, but does not include livestock and other regenerative natural resources.

Loan Council The Australian Loan Council coordinates borrowing by Australian and state governments. Current arrangements seek to emphasise transparency of public sector finances, through financial market scrutiny of proposed borrowing to restrict borrowing to prudent levels.

Loan Council Allocation The nomination to the Loan Council of the level of financing required.

1�7Glossary

Net Debt Net debt measures a government’s net stock of selected gross financial liabilities less financial assets. It is calculated from the Uniform Presentation Framework (UPF) balance sheet as the sum of cash and deposits, advances paid and investments, loans and placements, minus the sum of deposits held, advances received and borrowings.

Net Financial Worth Net financial worth measures a government’s net holdings of financial assets. It is calculated from the UPF balance sheet as financial assets minus liabilities. Net financial worth is a broader measure than net debt, in that it incorporates provisions (such as superannuation, but excludes depreciation and doubtful debts) as well as holdings of equity. Net financial worth includes all classes of financial assets and liabilities.

Net Lending/Borrowing Net lending/borrowing, also referred to as the fiscal balance, is an operating statement measure that differs from the net operating balance in that it includes spending on capital items but excludes depreciation. The net lending/borrowing measure more accurately reflects the cash requirements of a government in any given year. A net lending (or fiscal surplus) balance indicates that a government is saving more than enough to finance all its investment spending. A net borrowing (or fiscal deficit) position indicates that a government’s level of investment is greater than its level of savings.

Net Operating Balance The net operating balance is calculated from the UPF operating statement as the excess of revenue over expenditure. This measure, which excludes capital expenditure, provides a good measure of a government’s position over time and an indication of the sustainability of the existing level of government service provision.

Net Worth The UPF net worth provides a relatively comprehensive picture of a government’s overall financial position. It is calculated as total assets less total liabilities less shares and other contributed capital. It includes a government’s non financial assets such as land, other fixed assets etc., which may be sold and used to repay debt, as well as its financial assets and liabilities including debtors, creditors and superannuation liabilities. Net worth also shows asset acquisitions over time, giving an indication of the extent to which borrowings are used to finance asset purchases, rather than only current expenditure.


Defined in Government Finance Statistics as the sector formed through a consolidation of the general government and public non financial corporation sectors.

Operating Account A government business division Operating Account or an agency Operating Account established under section 6(1) of the Financial Management Act.

Provisions Amounts set aside by entities from current revenue or income for future payments.

Public Account Comprises agencies subject to the Financial Management Act (FMA), where the financial transactions of the Northern Territory Government are recorded. As defined in section 4(2) of the FMA, it comprises the Central Holding Authority and Operating Accounts.

Public Financial Corporation

Defined in Government Finance Statistics as government controlled entities which perform central bank functions, and/or have the authority to incur liabilities and acquire financial assets in the market on their own account.

1�� Glossary


Public Non Financial Corporation

Defined in Government Finance Statistics as a public enterprise primarily engaged in the production of goods or services of a non financial nature, for sale in the market place, at prices which aim to recover most of the costs involved.

Specific Purpose Payments

Specific purpose payments (SPPs) are tied grants received from the Australian Government which are earmarked for a specific purpose.

Tax Equivalents Regime The mechanism to ensure that GBDs and GOCs incur similar tax liabilities to privately owned organisations. Thus, greater parity exists between the cost structures of government controlled trading entities and the private sector, aiding in the achievement of competitive neutrality.

Treasurer’s Advance An Allocation of that name as specified in an Appropriation Act, which provides a pool of funds specifically set aside in each Budget to meet operational contingencies that arise during the year.

Uniform Presentation Framework

A uniform reporting framework agreed by the Australian Loan Council in 2000, which is a revision of the agreement reached at the 1991 Premiers’ Conference. It specifies that the Australian, state and territory governments will present a minimum set of budget and financial outcome information on the Government Finance Statistics basis according to an agreed format and specified Loan Council reporting arrangements.

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