State Finances 2016
NSW public sector financial reporting continues to improve, according to the Auditor-General, Margaret Crawford, in her Report to Parliament on NSW State Finances. For the fourth consecutive year, the Total State Sector Accounts received an unqualified audit opinion following more than a decade of qualifications.
The disciplines introduced by NSW Treasury four years ago, and subsequently implemented by agencies, have helped to reduce the number of misstatements and significant matters identified during the audits. At the same time, reporting timeframes have been brought forward. This enables more timely and effective decision making and financial management across the NSW public sector and has resulted in over 200 audit opinions being issued by 30 September 2016, compared to only 67 by the same time in 2011.
There is still room for improvement. In particular, some government agencies need to complete asset revaluations and associated quality reviews earlier.
The unfunded superannuation liability is at the same level it was at over ten years ago
The State’s unfunded superannuation liability, measured using AAS25 Financial Reporting by Superannuation Plans, increased $3.7 billion to $16.1 billion at 30 June 2016 from $12.4 billion at 30 June 2015.
This takes the unfunded liability to the same level it was at when the Fiscal Responsibility Act 2005 was introduced over ten years ago. The Act sets a target of eliminating the State's unfunded defined benefit liabilities by 2030.
The Budget result was a $4.7 billion surplus, $2.1 billion higher than the estimate
The State has recorded budget surpluses and exceeded the original budget forecast in nine of the last ten years. The 2015-16 surplus of $4.7 billion is the largest surplus since 1996. The largest previous surplus was $2.9 billion in 2014-15.
The 2015-16 result was higher than expected mainly because General Government Sector revenues exceeded budget by $2.2 billion. Revenue from stamp duties was $1.1 billion higher than expected while revenue from grants and subsidies was $322 million higher. At the same time General Government Sector costs only exceeded budget by $51 million. Growth in employee expenses has fallen from almost six per cent for the four years, 2007 to 2011, to three per cent for the four years, 2012 to 2016.
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