❓ Mrs Roberts questions the validity of the reported operating surplus, suggesting it's primarily due to accounting changes rather than sound financial management. Mr Porter acknowledges the accounting changes' impact but highlights other contributing factors like increased royalty income.
AnsweredQoN 866Legislative Assembly
QuestionView source ↗
2011–12 QUARTERLY FINANCIAL RESULTS REPORT: SEPTEMBER 2011 — OPERATING SURPLUS
I refer to Treasury’s first quarter of financial year results released yesterday and the Treasurer’s accompanying press release. (1) Is it not true that the operating surplus of $325 million has little to do with good financial practices and nearly everything to do with bringing forward land tax assessments by a quarter? (2) Is it the case that $296 million of the surplus was just a once-off bonus because of the government’s accounting change that brought forward money that would have normally been received in the next quarter? Mr C.C. PORTER
I refer to Treasury’s first quarter of financial year results released yesterday and the Treasurer’s accompanying press release. (1) Is it not true that the operating surplus of $325 million has little to do with good financial practices and nearly everything to do with bringing forward land tax assessments by a quarter? (2) Is it the case that $296 million of the surplus was just a once-off bonus because of the government’s accounting change that brought forward money that would have normally been received in the next quarter? Mr C.C. PORTER
AnswerView source ↗
(1)–(2) I think the first thing to keep in mind is that the quarterly report just shows a snapshot in time. One thing we have stated publicly, which I said in my brief ministerial statement and which I said in front of the media, was that we should not place enormous reliance for positivity or negativity in terms of expectations about what will happen at the end of the year based on the quarterly results. In fact, I think I made the point to the media about that particularly being the case with the operating surplus. In yesterday’s BMS I noted many of the points that the member for Midland just raised; that is, although a $325 million operating surplus represents a much better situation in comparison with a snapshot of the quarter of the previous financial year, which showed a $47 million deficit, not too much reliance should be placed on that in terms of what we may end up with as a surplus in comparison with the predicted surplus at the end of the year. We have been very up-front with the fact that it is correct that some accounting changes sit inside that $325 million operating surplus — Mrs M.H. Roberts : They make up nearly all the money. Mr C.C. PORTER : Those changes take up a fair amount of it. One of those is accounting changes and the winding up of two boards that come and sit in as assets. However, the other thing to keep in mind, member, is that inside that $325 million snapshot of surplus for the first quarter is higher royalty income, which is up $266 million and reflects higher production volumes and higher prices for iron ore; some lower capital grants; and higher tax revenue in payroll tax. The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
(1) Is it not true that the operating surplus of $325 million has little to do with good financial practices and nearly everything to do with bringing forward land tax assessments by a quarter? (2) Is it the case that $296 million of the surplus was just a once-off bonus because of the government’s accounting change that brought forward money that would have normally been received in the next quarter? Mr C.C. PORTER replied: (1)–(2) I think the first thing to keep in mind is that the quarterly report just shows a snapshot in time. One thing we have stated publicly, which I said in my brief ministerial statement and which I said in front of the media, was that we should not place enormous reliance for positivity or negativity in terms of expectations about what will happen at the end of the year based on the quarterly results. In fact, I think I made the point to the media about that particularly being the case with the operating surplus. In yesterday’s BMS I noted many of the points that the member for Midland just raised; that is, although a $325 million operating surplus represents a much better situation in comparison with a snapshot of the quarter of the previous financial year, which showed a $47 million deficit, not too much reliance should be placed on that in terms of what we may end up with as a surplus in comparison with the predicted surplus at the end of the year. We have been very up-front with the fact that it is correct that some accounting changes sit inside that $325 million operating surplus — Mrs M.H. Roberts : They make up nearly all the money. Mr C.C. PORTER : Those changes take up a fair amount of it. One of those is accounting changes and the winding up of two boards that come and sit in as assets. However, the other thing to keep in mind, member, is that inside that $325 million snapshot of surplus for the first quarter is higher royalty income, which is up $266 million and reflects higher production volumes and higher prices for iron ore; some lower capital grants; and higher tax revenue in payroll tax. The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
(2) Is it the case that $296 million of the surplus was just a once-off bonus because of the government’s accounting change that brought forward money that would have normally been received in the next quarter? Mr C.C. PORTER replied: (1)–(2) I think the first thing to keep in mind is that the quarterly report just shows a snapshot in time. One thing we have stated publicly, which I said in my brief ministerial statement and which I said in front of the media, was that we should not place enormous reliance for positivity or negativity in terms of expectations about what will happen at the end of the year based on the quarterly results. In fact, I think I made the point to the media about that particularly being the case with the operating surplus. In yesterday’s BMS I noted many of the points that the member for Midland just raised; that is, although a $325 million operating surplus represents a much better situation in comparison with a snapshot of the quarter of the previous financial year, which showed a $47 million deficit, not too much reliance should be placed on that in terms of what we may end up with as a surplus in comparison with the predicted surplus at the end of the year. We have been very up-front with the fact that it is correct that some accounting changes sit inside that $325 million operating surplus — Mrs M.H. Roberts : They make up nearly all the money. Mr C.C. PORTER : Those changes take up a fair amount of it. One of those is accounting changes and the winding up of two boards that come and sit in as assets. However, the other thing to keep in mind, member, is that inside that $325 million snapshot of surplus for the first quarter is higher royalty income, which is up $266 million and reflects higher production volumes and higher prices for iron ore; some lower capital grants; and higher tax revenue in payroll tax. The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
Mr C.C. PORTER replied: (1)–(2) I think the first thing to keep in mind is that the quarterly report just shows a snapshot in time. One thing we have stated publicly, which I said in my brief ministerial statement and which I said in front of the media, was that we should not place enormous reliance for positivity or negativity in terms of expectations about what will happen at the end of the year based on the quarterly results. In fact, I think I made the point to the media about that particularly being the case with the operating surplus. In yesterday’s BMS I noted many of the points that the member for Midland just raised; that is, although a $325 million operating surplus represents a much better situation in comparison with a snapshot of the quarter of the previous financial year, which showed a $47 million deficit, not too much reliance should be placed on that in terms of what we may end up with as a surplus in comparison with the predicted surplus at the end of the year. We have been very up-front with the fact that it is correct that some accounting changes sit inside that $325 million operating surplus — Mrs M.H. Roberts : They make up nearly all the money. Mr C.C. PORTER : Those changes take up a fair amount of it. One of those is accounting changes and the winding up of two boards that come and sit in as assets. However, the other thing to keep in mind, member, is that inside that $325 million snapshot of surplus for the first quarter is higher royalty income, which is up $266 million and reflects higher production volumes and higher prices for iron ore; some lower capital grants; and higher tax revenue in payroll tax. The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
(1)–(2) I think the first thing to keep in mind is that the quarterly report just shows a snapshot in time. One thing we have stated publicly, which I said in my brief ministerial statement and which I said in front of the media, was that we should not place enormous reliance for positivity or negativity in terms of expectations about what will happen at the end of the year based on the quarterly results. In fact, I think I made the point to the media about that particularly being the case with the operating surplus. In yesterday’s BMS I noted many of the points that the member for Midland just raised; that is, although a $325 million operating surplus represents a much better situation in comparison with a snapshot of the quarter of the previous financial year, which showed a $47 million deficit, not too much reliance should be placed on that in terms of what we may end up with as a surplus in comparison with the predicted surplus at the end of the year. We have been very up-front with the fact that it is correct that some accounting changes sit inside that $325 million operating surplus — Mrs M.H. Roberts : They make up nearly all the money. Mr C.C. PORTER : Those changes take up a fair amount of it. One of those is accounting changes and the winding up of two boards that come and sit in as assets. However, the other thing to keep in mind, member, is that inside that $325 million snapshot of surplus for the first quarter is higher royalty income, which is up $266 million and reflects higher production volumes and higher prices for iron ore; some lower capital grants; and higher tax revenue in payroll tax. The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
Mrs M.H. Roberts : They make up nearly all the money. Mr C.C. PORTER : Those changes take up a fair amount of it. One of those is accounting changes and the winding up of two boards that come and sit in as assets. However, the other thing to keep in mind, member, is that inside that $325 million snapshot of surplus for the first quarter is higher royalty income, which is up $266 million and reflects higher production volumes and higher prices for iron ore; some lower capital grants; and higher tax revenue in payroll tax. The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
Mr C.C. PORTER : Those changes take up a fair amount of it. One of those is accounting changes and the winding up of two boards that come and sit in as assets. However, the other thing to keep in mind, member, is that inside that $325 million snapshot of surplus for the first quarter is higher royalty income, which is up $266 million and reflects higher production volumes and higher prices for iron ore; some lower capital grants; and higher tax revenue in payroll tax. The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
(1) Is it not true that the operating surplus of $325 million has little to do with good financial practices and nearly everything to do with bringing forward land tax assessments by a quarter? (2) Is it the case that $296 million of the surplus was just a once-off bonus because of the government’s accounting change that brought forward money that would have normally been received in the next quarter? Mr C.C. PORTER replied: (1)–(2) I think the first thing to keep in mind is that the quarterly report just shows a snapshot in time. One thing we have stated publicly, which I said in my brief ministerial statement and which I said in front of the media, was that we should not place enormous reliance for positivity or negativity in terms of expectations about what will happen at the end of the year based on the quarterly results. In fact, I think I made the point to the media about that particularly being the case with the operating surplus. In yesterday’s BMS I noted many of the points that the member for Midland just raised; that is, although a $325 million operating surplus represents a much better situation in comparison with a snapshot of the quarter of the previous financial year, which showed a $47 million deficit, not too much reliance should be placed on that in terms of what we may end up with as a surplus in comparison with the predicted surplus at the end of the year. We have been very up-front with the fact that it is correct that some accounting changes sit inside that $325 million operating surplus — Mrs M.H. Roberts : They make up nearly all the money. Mr C.C. PORTER : Those changes take up a fair amount of it. One of those is accounting changes and the winding up of two boards that come and sit in as assets. However, the other thing to keep in mind, member, is that inside that $325 million snapshot of surplus for the first quarter is higher royalty income, which is up $266 million and reflects higher production volumes and higher prices for iron ore; some lower capital grants; and higher tax revenue in payroll tax. The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
(2) Is it the case that $296 million of the surplus was just a once-off bonus because of the government’s accounting change that brought forward money that would have normally been received in the next quarter? Mr C.C. PORTER replied: (1)–(2) I think the first thing to keep in mind is that the quarterly report just shows a snapshot in time. One thing we have stated publicly, which I said in my brief ministerial statement and which I said in front of the media, was that we should not place enormous reliance for positivity or negativity in terms of expectations about what will happen at the end of the year based on the quarterly results. In fact, I think I made the point to the media about that particularly being the case with the operating surplus. In yesterday’s BMS I noted many of the points that the member for Midland just raised; that is, although a $325 million operating surplus represents a much better situation in comparison with a snapshot of the quarter of the previous financial year, which showed a $47 million deficit, not too much reliance should be placed on that in terms of what we may end up with as a surplus in comparison with the predicted surplus at the end of the year. We have been very up-front with the fact that it is correct that some accounting changes sit inside that $325 million operating surplus — Mrs M.H. Roberts : They make up nearly all the money. Mr C.C. PORTER : Those changes take up a fair amount of it. One of those is accounting changes and the winding up of two boards that come and sit in as assets. However, the other thing to keep in mind, member, is that inside that $325 million snapshot of surplus for the first quarter is higher royalty income, which is up $266 million and reflects higher production volumes and higher prices for iron ore; some lower capital grants; and higher tax revenue in payroll tax. The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
Mr C.C. PORTER replied: (1)–(2) I think the first thing to keep in mind is that the quarterly report just shows a snapshot in time. One thing we have stated publicly, which I said in my brief ministerial statement and which I said in front of the media, was that we should not place enormous reliance for positivity or negativity in terms of expectations about what will happen at the end of the year based on the quarterly results. In fact, I think I made the point to the media about that particularly being the case with the operating surplus. In yesterday’s BMS I noted many of the points that the member for Midland just raised; that is, although a $325 million operating surplus represents a much better situation in comparison with a snapshot of the quarter of the previous financial year, which showed a $47 million deficit, not too much reliance should be placed on that in terms of what we may end up with as a surplus in comparison with the predicted surplus at the end of the year. We have been very up-front with the fact that it is correct that some accounting changes sit inside that $325 million operating surplus — Mrs M.H. Roberts : They make up nearly all the money. Mr C.C. PORTER : Those changes take up a fair amount of it. One of those is accounting changes and the winding up of two boards that come and sit in as assets. However, the other thing to keep in mind, member, is that inside that $325 million snapshot of surplus for the first quarter is higher royalty income, which is up $266 million and reflects higher production volumes and higher prices for iron ore; some lower capital grants; and higher tax revenue in payroll tax. The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
(1)–(2) I think the first thing to keep in mind is that the quarterly report just shows a snapshot in time. One thing we have stated publicly, which I said in my brief ministerial statement and which I said in front of the media, was that we should not place enormous reliance for positivity or negativity in terms of expectations about what will happen at the end of the year based on the quarterly results. In fact, I think I made the point to the media about that particularly being the case with the operating surplus. In yesterday’s BMS I noted many of the points that the member for Midland just raised; that is, although a $325 million operating surplus represents a much better situation in comparison with a snapshot of the quarter of the previous financial year, which showed a $47 million deficit, not too much reliance should be placed on that in terms of what we may end up with as a surplus in comparison with the predicted surplus at the end of the year. We have been very up-front with the fact that it is correct that some accounting changes sit inside that $325 million operating surplus — Mrs M.H. Roberts : They make up nearly all the money. Mr C.C. PORTER : Those changes take up a fair amount of it. One of those is accounting changes and the winding up of two boards that come and sit in as assets. However, the other thing to keep in mind, member, is that inside that $325 million snapshot of surplus for the first quarter is higher royalty income, which is up $266 million and reflects higher production volumes and higher prices for iron ore; some lower capital grants; and higher tax revenue in payroll tax. The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
Mrs M.H. Roberts : They make up nearly all the money. Mr C.C. PORTER : Those changes take up a fair amount of it. One of those is accounting changes and the winding up of two boards that come and sit in as assets. However, the other thing to keep in mind, member, is that inside that $325 million snapshot of surplus for the first quarter is higher royalty income, which is up $266 million and reflects higher production volumes and higher prices for iron ore; some lower capital grants; and higher tax revenue in payroll tax. The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
Mr C.C. PORTER : Those changes take up a fair amount of it. One of those is accounting changes and the winding up of two boards that come and sit in as assets. However, the other thing to keep in mind, member, is that inside that $325 million snapshot of surplus for the first quarter is higher royalty income, which is up $266 million and reflects higher production volumes and higher prices for iron ore; some lower capital grants; and higher tax revenue in payroll tax. The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
The analysis that the member takes is simplistic, but we have never done anything but acknowledge that there are some large revenue increases, which are neither particularly good news nor particularly bad news. I think that yesterday the member for Midland told the media that debt has increased by $1.1 billion; is that right? Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
Mrs M.H. Roberts : That is not what I said, no. Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
Mr C.C. PORTER : I think the member may have been reading the wrong line; that is all.
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