Appendix F:
Performance and Reporting Under
Fiscal Responsibility Act
The Fiscal Responsibility Act 2012 (FRA) requires the Budget to include a report on performance
against the FRA’s object, targets and principles and an explanation of any departures with a plan
to restore compliance.
These tables report on the object, targets and principles of the FRA.
Object
Status
The object of the FRA is to
This object was met in 2013-14 with triple-A ratings obtained from the
maintain the State’s triple-A
two major international credit rating agencies.
credit rating.
Targets
Status
Hold expense growth below
Historical long-term average annual revenue growth was estimated at
long-run revenue growth
5.6 per cent in the 2011-12 Long Term Fiscal Pressures Report (refer to
page 4-9 in that report).
Over the four years of the 2014-15 Budget, expense growth is projected
to average 3.4 per cent per annum - 2.2 percentage points below target.
Eliminate the State’s
The triennial actuarial review of superannuation liabilities was completed
unfunded superannuation
in 2012. Based on the current Crown funding plan, the review concluded
liabilities by 2030
that liabilities were on track to be fully funded by 2030 in line with the
target. With the high rate of earnings achieved in 2012-13 and forecast
for 2013-14, the PTE sector as a whole is now fully funded, based on
AAS 25 measurements. Further discussion on unfunded superannuation
liabilities can be found in Chapter 8 Liability and Asset Management.
Principles
Status
Responsible and sustainable
The 2014-15 Budget to delivers historically low average expense growth
spending, taxation and
over the budget and forward estimates that is below long-run average
infrastructure investment
revenue growth. These outcomes will deliver significant budget surpluses
that can fund the Government’s large infrastructure spending program in
a sustainable way. Taxation policies remain stable and predictable.
Effective financial and asset
Since coming to office a key objective of the Government has been to
management
improve financial and asset management of the State. A significant
program of reform, initially informed by Commission of Audit reviews of
the State’s finances and public sector management, has seen the delivery
of:
 heightened accountability of Ministers and agency CEOs in
maintaining their expenses to budget
 expense growth brought under control
 private sector provision of public services and introduction of
contestability in the delivery of services
Budget Statement 2014-15
F-1
Principles
Status
Effective financial and asset
 infrastructure priorities being determined on the basis of the best
management (cont)
economic and social outcomes through Infrastructure NSW
 better use of existing infrastructure
 divestment of assets that are not core to the delivery of public
services and the sale of surplus property assets.
Achieving intergenerational
Keeping total state net debt low, as in this budget, ensures future
equity
generations bear less of the burden of today’s expenditure decisions.
The effect of Government policies on intergenerational equity is also
measured by the change in the long term fiscal gap from one budget to
the next.
Against all these measures, performance in 2013-14 and the strategy and measures in this budget
comply with the requirements of the FRA. There are no departures from the object, target and
principles in this budget.
F-2
Budget Statement 2014-15