Territory Stories

Budget 2011-12 Budget Paper No.3 The Budget



Budget 2011-12 Budget Paper No.3 The Budget

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Tabled paper 1279


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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71 Northern Territory Treasury Corporation Business Line 2010-11 Estimate 2011-12 Budget $000 $000 Income 197 978 223 195 Government Loans and Investments 197 978 223 195 Expenses 173 915 195 861 Government Loans and Investments 173 915 195 861 SURPLUS(+)/DEFICIT(-) BEFORE INCOME TAX 24 063 27 334 2011-12 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 cost-efficient loans to its public sector clients. Strategic Issues for 201112 Managing the Territory Governments investments efficiently. Securing cost-effective refinancing of maturing debt and financing of additional borrowings. Continuous development of the Corporations business continuity planning and corporate governance framework. Budget Highlights for 201112 A borrowing program (including refinancing) of approximately $728million. Performance Interest rate fluctuations and investor demand for semi-government securities are the two key variables that affect the Corporations financial performance. Since 1July 2010, the Reserve Bank of Australias official cash rate has risen by 0.25percent to 4.75 per cent, in line with the recovery in the domestic and global economy. The Corporations cost of borrowing is expected to be 6.0percent for 2010-11, a slight 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 2011-12. As a result, the Corporations cost of borrowings is expected to increase to 6.5 per cent. The semi-government bond sector has been well supported throughout 2010-11, however any deterioration in global credit markets will place 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 2009-10, this liquidity premium was approximately 0.24 per cent over comparable AAA-rated semi-government issuers. Market conditions have improved somewhat since then and the Corporation expects the 2010-11 borrowing margin to be approximately 0.21 per cent at year end.

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