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Client Services: Treasury Corporation
Loans
The Corporation lends funds to the Northern Territory Government, government business divisions, the government owned corporation, local authorities and other government organisations. Loans are issued in accordance with commercially based guidelines and practices.
All loans are approved by the Treasurer of the Northern Territory in accordance with section 13(2)(b) of the Northern Territory Treasury Corporation Act and section 31(1) of the Financial Management Act.
General Government Agencies
General government agencies are funded through the Central Holding Authority (CHA) via loans provided by the Corporation. The CHA is the "parent body" that represents the Territory Government's ownership interest in Government-controlled entities. The funds are used to finance general government activities and the Northern Territory's major infrastructure projects.
As at 30 June 2009, loans to the general government sector totalled approximately $1 582 million.
Government Business Divisions
Loans to government business divisions represent borrowings by Territory Government owned entities that operate on a commercial basis. The funds are used to finance capital and operating expenditure requirements.
As at 30 June 2009, loans to this sector totalled approximately $210 million.
Government Owned Corporations
Loans to government owned corporations (GOC) represent borrowings by Territory Government owned entities that operate on a commercial basis but whose operations are not guaranteed by the Crown and does not make the Territory liable for its debts, liabilities or obligations. The funds are used to finance capital and operating expenditure requirements.
The Power and Water Corporation is the only entity established as a GOC as at 30 June 2009.
As at 30 June 2009, loans to Power and Water Corporation totalled approximately $565 million.
Local Authorities
Loans to local authorities represent borrowings by town and community government councils situated throughout the Northern Territory. The funds are used to finance specific council infrastructure projects, working capital requirements or to purchase or replace existing plant and equipment.
Loans to local authorities are first assessed by the Department of Local Government, Housing and Sport and must carry the support and recommendation of the Minister for Local Government prior to being submitted for approval to the Treasurer of the Northern Territory.
As at 30 June 2009, loans to local authorities totalled approximately $0.467 million.
Other Government Organisations
Loans to other government organisations represent borrowings by non-financial public sector organisations with which the Northern Territory Government has an association.
As at 30 June 2009 there were no loans to other government organisations.
Central Holding Authority
The Central Holding Authority (CHA) is the "parent body" within the Northern Territory Treasury that represents the Government's interest in Government controlled entities.
The CHA records on behalf of the Territory Government:
- assets and liabilities controlled by the Government and managed by agencies on behalf of the Government;
- revenue collected by the CHA and regarded as Territory revenue. The main types being taxation, untied grants (GST revenue) and fines; and
- expenses where the main expense is the payment of appropriation to agencies. Other significant expenses are interest on Territory borrowings, interest on cash balances of government business divisions and the government owned corporation, and the centrally managed employee costs of superannuation and long service leave.
Investment Portfolio
The Northern Territory Government's investment portfolio is formed by pooling the surplus cash balances of the Government's bank accounts and investing in a variety of secure short, medium and long term debt securities issued in the Australian financial markets.
The broad objectives of the Corporation in managing the Northern Territory of Australia's investment portfolio are:
1. To ensure sufficient liquidity is maintained in the Government's cash balances to meet all financial obligations as they fall due; and
2. To obtain a return on the Government's cash balances in line with the benchmark while adhering to the investment guidelines approved by the Treasurer
The investment portfolio is composed of a range of secure investments of which a significant proportion are in short term instruments including 11am cash, bank accepted bills, promissory notes and negotiable certificates of deposit. A core amount of the investment portfolio is available for investment in longer term instruments such as floating rate notes and fixed interest securities.
As at 30 June 2009, the investment portfolio totalled approximately $621 million.
Medium Term Investment Fund (MTIF)
The Medium Term Investment Fund (MTIF) is a segregated pool of investments held with the Central Holding Authority (CHA) and commenced on 27 November 2007 with an initial investment of $50 million. The MTIF primarily represents surplus funds that have accumulated and not yet been expended by Territory Government agencies.
The fund is a tailored solution provided by MLC Investment Limited and has a relatively conservative investment style wih approximately 15% allocated to growth assets in order to achieve its stated objective of producing a superior return over the medium term of 2-3 years.
The Corporation is responsible for monitoring and reporting on the performance of the fund and managing the relationship with the investment manager.
The investment performance of the fund is benchmarked against the UBS Warburg Australian Bank Bill Index.
As at 30 June 2009, the market valuation of the MTIF totalled $50.7 million.
Conditions of Service Reserve (COSR)
The Conditions of Service Reserve (COSR) is a segregated pool of investments held within the Central Holding Authority (CHA).
The funds are held at the discretion of the Treasurer and are intended for purposes such as meeting the Northern Territory Government's unfunded superannuation liabilities. The funds are managed by three fund managers - AMP Capital Investors Limited, Colonial First State Investments Limited and MLC Implemented Consulting.
The Corporation is responsible for monitoring and reporting on the performance of the fund and managing the relationship with the fund managers.
The investment performance of the fund is benchmarked against performance results for the "growth" product category as published in the monthly InTech Investor Choice Performance Survey. This is consistent with the asset allocation mix applied to COSR.
As at 30 June 2009, the market valuations of the COSR fund totalled $345.2 million.