Territory Stories

Annual Report 2012/2013 Department of Housing



Annual Report 2012/2013 Department of Housing

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Tabled paper 575


Tabled papers for 12th Assembly 2012 - 2016; Tabled papers; ParliamentNT






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FINANCIAL STATEMENT OVERVIEW For the year ended 30 June 2013 NT Home Ownership has been determined by the Treasurer to be a Government Business Division (GBD) in accordance with the provisions of the Financial Management Act. Pursuant to the Financial Management Act, a GBD is a separate reporting entity and as such is required to prepare annual financial statements in accordance with the format as determined by the Treasurer and in compliance with Australian Accounting Standards. Consistent with general commercial principles, GBDs are also required to pay tax and dividends on any profit made during the year. NT Home Ownerships core business is to oversee the Northern Territory Governments home loan assistance products that provide affordable loans to low and middle- income earners and to assist other eligble Territorians into home ownership. NT Home Ownership returned a positive outcome in its financial performance, posting a comprehensive result of a net surplus in operating activities after income tax of $0.59 million in 2013. The positive result for 2013 has been achieved following a gain of $2.8 million on the revaluation of shared equity investments. The comprehensive result was down from the previous years net surplus of $1.3 million. No income tax or dividends are payable in respect of the 2013 financial result. The financial results for the year reflect an increase in loans provided following a change to loan levels and equity share arrangements per short period through the (now ceased) Homestart Extra loan period. This resulted in more loans being approved and, consequently,an increase of $110 million in borrowings from NT Treasury Corporation to fund an increased portfolio of loans to Territorians of $61.7 million. The impact of increased borrowing and lending has also flowed through to the Comprehensive Operating Statement; interest revenue increased by $1.9 million year on year,and interest expenses increased by $3.7 million. Interest expenses are higher than interest revenue due to the timing differences involved in ensuring that funds are available for lending in advance of loan funds being made available to home buyers. The increased lending also flows through to operating expenses, with an increase in purchases of goods and services of $0.8 million. This increase is largely attributable to increased loan administration fees of $0.7 million. The entitys largest source of income is interest revenue from loans, which this year comprises 75 per cent of total income of $16.5 million.Total expenses of $15.9 million include $12.2 million in interest payable on borrowings from NT Treasury Corporation. At 30 June, NT Home Ownerships loan portfolio comprised 2135 (2012; 1776) loans issued to Territorians totalling $225 million. It held an interest in 963 (2012: 772) shared equity investment properties to the value of $92.9 million; up from $55.6 million in 2012.The home loan portfolio increased by $61.7 million during the year as a result of the value of new loans provided exceeding the value of loans discharged. Borrowings and advances are the major component of liabilities in the Balance Sheet and total $297 million.This increased due to additional funding requirements to finance new home loan applications and shared equity interests in properties. The cash balance at year end was $19.9 million with a minor increase in total equity to $38.6 million compared to $38 million in 2011-12, 86 DEPARTMENT OF HOUSING ANNUA! REPORT ?0I2-I3

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