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Budget 2012-2013 Budget Paper No.3 The Budget



Budget 2012-2013 Budget Paper No.3 The Budget

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Tabled paper 1785


Tabled Papers for 11th Assembly 2008 - 2012; 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.




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69 Northern Territory Treasury Corporation Business Line 201112 Estimate 201213 Budget $000 $000 Income 233 250 261 232 Government Loans and Investments 233 250 261 232 Expenses 201 579 223 806 Government Loans and Investments 201 579 223 806 SURPLUS(+)/DEFICIT() BEFORE INCOME TAX 31 671 37 426 201213 Staffing: 8 Business Division Profile The Northern Territory Treasury Corporation is the central financing authority for the NorthernTerritory Government. The Corporation undertakes borrowing and investment activities on behalf of Government and provides costefficient loans to its public sector clients. Strategic Issues for 201213 Managing the Territory Governments investments efficiently. Securing costeffective refinancing of maturing debt and financing of additional borrowings. Continuous development of the Corporations business continuity planning and corporate governance framework. Budget Highlights for 201213 A borrowing program (including refinancing) of approximately $721million. Performance Interest rate fluctuations and investor demand for semigovernment securities are the two key variables that affect the Corporations financial performance. From 1July 2011 to April2012, the Reserve Bank of Australias official cash rate target has decreased by 0.50percent to 4.25percent, in line with weakening economic conditions in Europe and uncertainty about global economic growth. The Corporations cost of borrowing is expected to be 5.0percent for 201112, a significant improvement on its original budget forecast of 6.5percent. However, given the ongoing volatility in credit markets, funding conditions are expected to remain challenging throughout 201213. As a result, the Corporations cost of borrowings is estimated to increase to 6.0percent in 201213. The semigovernment bond sector has been well supported throughout 201112, however any deterioration in global credit markets will place further pressure on the Corporations borrowing margins. Relative to its peers, the Corporations borrowing program is small and is perceived to be less liquid by wholesale investors, and therefore pays a slightly higher yield. In 201011, this liquidity premium was approximately 0.22percent over comparable AAArated