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Read an overview of the Treasury portfolio including details of key activities, expenses and staffing levels. The audit focus section outlines the influences on the ANAO’s allocation of financial audit resources and the selection of performance audit topics and other activities. Also included is a list of material and non-material entities within the portfolio with their corresponding risk profile and key risks. Any risks that are considered key audit matters (KAMs) by the ANAO are separately identified.
This audit would examine the effectiveness of the Australian Reinsurance Pool Corporation’s (ARPC’s) administration of the Terrorism Reinsurance Scheme, and value for money achieved in ARPC’s purchasing of retrocession reinsurance.
ARPC, which was established in response to the terrorist events of 11 September 2001 and subsequent global withdrawal of insurance, provides cover for eligible terrorism losses. Eligible losses can involve commercial property, associated business interruption losses and public liability. Through the Terrorism Reinsurance Scheme, insurance companies can reinsure the risk of terrorism losses by paying premiums to ARPC. Insurers are required to meet these claims in accordance with the terms and conditions of individual policies, with claims against the scheme met once an individual insurance company’s risk retention is exhausted.
ARPC’s pool of retained earnings is to be used to fund the payment of eligible claims until co-reinsurance thresholds are reached and accessed, after which claims will be met by Commonwealth guarantee.
The audit would assess the effectiveness of the Australian Border Force’s (ABF’s) processes for ensuring the accuracy of the Integrated Cargo System data supplied to the Australian Bureau of Statistics (ABS).
Australia’s international merchandise trade statistics are a key input into Australia’s balance of payments and national accounts. The source data is supplied each night to the ABS by the ABF, an operationally independent agency in the Home Affairs portfolio, from data input into the Integrated Cargo System by importers and exporters. Responsibility for monitoring and improving the accuracy of data input into the Integrated Cargo System rests with the customs compliance area of the ABF.
The audit would assess whether the Australian Government’s purchase of state government shares of Snowy Hydro Limited provided value for money with public resources.
In March 2018, the Australian Government announced that it would purchase New South Wales and Victoria’s combined shareholding of Snowy Hydro Limited (87 per cent). The purchase of Snowy Hydro Limited is a precursor to the planned implementation of Snowy Hydro 2.0, the expansion of the Snowy Mountains Scheme to facilitate pumped hydro for electricity generation.
The audit would include an assessment of the Department of Finance and the Treasury’s assurance on whether value for money was achieved in the purchase.
The audit would examine whether the Australian Taxation Office and the Department of Agriculture and Water Resources have effectively administered the Farm Management Deposits Scheme.
The Farm Management Deposits Scheme commenced in 1999. The Scheme provides an income tax concession to eligible primary producers to help them manage fluctuations in their income so that they can be more financially self-reliant. At 30 April 2018, a total of $5.17 billion was held by primary producers in Farm Management Deposits accounts. Treasury has estimated that the revenue forgone through the Scheme will increase from $245 million in 2016–17 to $560 million in 2017–18. In 2016, the Scheme was amended to double the amount that producers could deposit; re-establish early-access provisions; and remove the restriction on the use of deposits as loan offsets.
The audit could focus on the risk identification and compliance strategies and activities that support the integrity of the Scheme. It could also examine the: latest changes to the Scheme to determine whether they were established on a sound basis; the Department of the Treasury’s and the Australian Taxation Office‘s estimation of the potential tax revenue forgone through the Scheme; and the extent to which the objectives of the Scheme are being achieved.
The audit would examine the effectiveness of the Australian Energy Regulator’s (AER’s) compliance activities and enforcement of the national energy retail, electricity, and gas laws and rules.
The Australian Energy Regulator monitors and enforces the compliance of over 450 registered market participants that have an annual turnover of $9 billion. An audit would assess the extent to which the AER’s compliance and enforcement activities are graduated in proportion to compliance risk, and whether its responses to reported incidents of non-compliance and management of investigations are timely and effective.
An assurance review would examine whether the Department of Health has obtained assurance that the financial benefits from the Prostheses List reforms accruing to private health insurers have been passed on to consumers in the form of premium reductions.
The Prostheses List legislates the minimum benefits payable by private insurers (if insurance is held by the patient) for specific prostheses. As of 1 February 2018, the minimum benefit payable by private health insurers was reduced. In return for the reduction in payment obligations, private health insurers advised that every $200 million in prostheses benefits reductions will decrease private health insurance premiums by one per cent.
Private health insurers submit applications to the Minister for Health for premium increases at the same time each year. Each application is examined by the Department of Health and the Australian Prudential Regulation Authority. This process is known as the annual premium round. Premium changes take effect from 1 April each year.
This audit would examine the effectiveness of the Government’s policy framework for concessional loans. The audit would also consider the financial impact of concessional loans on the presentation of the federal budget, the accounting treatment of concessional loans for financial reporting purposes, and their impact on the consolidated financial statements balance sheet.
A concessional loan is a loan provided at more favorable terms than the borrower could obtain in the marketplace. The concession provided may be in the form of below-market interest rates, longer loan maturity, or grace periods before the payment of the principal or interest.
The objective of this audit is to assess whether the Royal Australian Mint’s (the Mint’s) strategies for addressing the impacts of declining demand for Australian circulating coins are appropriate and effective.