Finance and Administration

Asset sales function — continuation of resourcing

The Government will provide additional funding of $1.0 million in 2006-07 to continue the programme of asset sales activities.

Consistent with previous practice, core expenses for the asset sales function are determined on an annual basis in the budget process.

Commonwealth Grants Commission — implementation of quality assurance plan

The Government will provide funding of $5.1 million over four years to enable the Commonwealth Grants Commission to enhance its quality assurance processes, consistent with its 2010 Methodology Review Terms of Reference.

The funding is required for the implementation of a new quality assurance plan, training of staff and other implementation costs, external scrutiny and verification of data, research and calculations.

Future Fund — advisory unit

The Government will provide $2.8 million over four years to the Department of Finance and Administration for its ongoing portfolio advisory role in relation to the Future Fund.

Medibank Private — sale costs

The Government will provide $20.3 million in 2006-07 to the Department of Finance and Administration for the costs of selling Medibank Private Limited. This relates to the costs of external expert advisers including business, legal, process, communications and accounting advisers, internal staff, administrative and other overhead costs for the Department. The sale of Medibank Private Limited will allow the Government to remove its conflict of interest as both a regulator and owner, and to focus on its appropriate role as a health insurance industry regulator. The sale will also increase competition within the health insurance industry.

Further information can be found in the press release of 26 April 2006 issued by the Minister for Finance and Administration and the Minister for Health and Ageing.

Ministerial communications — network operations centre construction

The Government will provide $5.6 million over four years (including $2.7 million in capital funding) in order to construct a network operations centre for the Ministerial Wing Communications (MWC) unit. The MWC unit provides secure communication networks for Ministers and Government agencies.

The facilities are required to meet ‘continuity of government' requirements.

Snowy Hydro Limited — cost of sale and reduction of tax-equivalent payments to states

The Government will provide $13.7 million in 2006-07 to the Department of Finance and Administration to meet the external costs associated with the Australian Government's sale of its 13 per cent shareholding in Snowy Hydro Limited. In managing the sale, the Australian Government will work with the New South Wales and Victorian governments, which have also announced their decisions to sell their respective shareholdings in the company.

The Government will reduce resourcing for the Department of Industry, Tourism and Resources by $47.8 million per year over four years because it is no longer necessary to make tax-equivalent payments to New South Wales and Victoria. The Australian Government makes payments to the NSW and Victorian Governments equal to 87 per cent of the company tax paid by Snowy Hydro Limited. These payments were put in place to ensure that the States were not disadvantaged in relation to their holdings when the company was corporatised in 2002.

Further information can be found in the Minister for Finance and Administration's press release of 7 February 2006.

South Australian and Tasmanian former state rail employees superannuation —payment of liability

The Government has offered lump sum payments (totalling $521.1 million) to the South Australian and Tasmanian Governments in 2005-06 to extinguish the Australian Government liability in respect of superannuation entitlements of former state rail employees. This liability relates to the arrangements put in place when some South Australian and Tasmanian railway operations were transferred to the Australian Government.

The lump sum payments will extinguish the existing liability and therefore will not impact on the fiscal balance. Extinguishing this liability will result in an on-going reduction in the expenses associated with the liability.