Client services

Loans to the Territory Government

NTTC lends funds to the Territory Government, government business divisions, government owned corporations, 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 1994 and section 31(1) of the Financial Management Act 1995.

At 30 June 2023, NTTC had a total outstanding loan portfolio of $9.4 billion, about $273.4 million lower than the balance reported at 30 June 2022. The figure below shows the breakdown of the total outstanding loans provided by NTTC at 30 June 2023. A full listing of NTTC’s loans is provided in the table below.

General government agencies

General government agencies are funded through Central Holding Authority (CHA) appropriations, some of which are funded by loans provided by NTTC. 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 Territory's major infrastructure projects.

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.

Government owned corporations

Loans to government owned corporations represent borrowings by Territory Government-owned entities that operate on a commercial basis but their operations are not guaranteed by the Crown and do not make the Territory liable for their debts, liabilities or obligations. The funds are used to finance capital and operating expenditure requirements.

Local government councils

Loans to local government councils represent borrowings by municipal, regional and shire councils situated throughout the 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 government councils are first assessed by the Local Government division in the Department of the Chief Minister and Cabinet, and must carry the support and recommendation of the minister prior to being submitted for approval to the Treasurer.

As at 30 June 2023, there were no loans outstanding to local government councils.

Other government organisations

Loans to other government organisations represent borrowings by non financial public sector organisations with which the Territory Government has an association.

As at 30 June 2023, there were no loans outstanding to other government organisations.

Central Holding Authority

CHA is the 'parent body' within the Department of Treasury and Finance that represents the government's interest in government-controlled entities.

CHA records on behalf of the Territory Government:

• assets and liabilities controlled by the government and managed by agencies on behalf of government
• revenue collected by CHA and regarded as Territory revenue. The main types are taxation, untied grants (e.g. GST revenue) and fines
• 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 government owned corporations, and the centrally managed employee costs of superannuation and long service leave.

Investment portfolio

The Territory Government's investment portfolio is formed by pooling the surplus cash balances of 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 NTTC in managing the Territory'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
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 term deposits, 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 2023, the investment portfolio totalled $966 million.

Conditions of Service Reserve

The Conditions of Service Reserve (COSR) is a segregated pool of investments held within CHA.

The funds are held at the discretion of the Treasurer and are intended for purposes such as meeting the Territory Government's unfunded superannuation liabilities. The funds are managed by three fund managers – AMP Capital Investors, Vanguard Australia and JANA Investment Advisors.

NTTC 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 Morningstar Market Index Performance. This is consistent with the asset allocation mix applied to COSR.

As at 30 June 2023, the market valuation of COSR totalled about $1.19 billion.