Budget Paper No.2 Fiscal and Economic Outlook 2008-2009
Tabled paper 1293
Tabled papers for 10th Assembly 2005 - 2008; Tabled papers; ParliamentNT
Tabled By Delia Lawrie
Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.
15 revised sale of asset estimates across agencies with the remainder of receipts for Little Mindil now expected in 2008-09 and a change in accounting treatment for the recognition of land sales by the Land Development Corporation. The cash movement in 2007-08 incorporates $20 million that has been set aside for future infrastructure and superannuation requirements. Further information on the Territorys Infrastructure Program can be found in Budget Paper No. 4. Basis of Forward Estimates In accordance with the FITA, five years of estimates are maintained and used by Government, both as a planning and an operational tool. This provides the framework within which agencies plan and also provides the basis for the Governments fiscal strategy. Agency forward estimates vary in line with the application of parameters (inflators and deflators) to the budget year on a no policy change basis. New policy decisions and funding decisions linked to demand or cost growth also add to each agencys budget and forward estimates. The main parameters used to adjust estimates are: wages inflator; Consumer Price Index (CPI) inflator; and efficiency dividend deflator. Recently a number of new public sector wage agreements have been renegotiated. These agreements, including the general agreement, have resulted in a 4 per cent wage increase for 2008-09 and 3 per cent in 2009-10. Accordingly, the wage inflator applied is 4 per cent in 2008-09 with 3 per cent in all forward years for employee costs. For 2008-09, a CPI factor of 3.4 per cent is applied to operational costs, being CPI growth in calendar year 2007 compared with calendar year 2006. Although it is recognised that there will be timing differences between the CPI factor used for budget purposes and CPI in the budget year, the method adopted provides for reliability and predictability for agencies and produces more stable outcomes over time. An estimate of 2.5 per cent is used for CPI over the forward estimates period. An efficiency dividend is applied to operational and employee costs premised on agencies improving processes and delivering services more efficiently, as is the case with private sector enterprises. For key service delivery agencies with fixed staffing costs (police, health, education and correctional services), one-quarter of the dividend is applied. An efficiency dividend of 3 per cent has been applied in 2008-09, 2 per cent in 2009-10 and 1 per cent in 2010-11 and 2011-12. A composite factor based on 75 per cent of the wages factor and 25 per cent of the CPI-based operational factor is applied to grants. Efficiency dividends are not applied to grants. 2008-09 Budget and 2009-10 to 2011-12 Forward Estimates
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