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2 Financial overview

2.1 2016‑17 Budget

Funding

Our funding is primarily derived from:

  • state motor vehicle taxes, particularly the motor vehicle weight tax and heavy vehicle charges
  • funding received through the state budget to deliver recurrent and capital works, including Rebuilding NSW4 and Restart NSW5 allocations
  • federal government contributions for state and national capital road projects
  • own-source funds from the sales of goods and services, tolling, maritime fees and charges, and cash balances.

For 2016‑17, our funding allocation to meet the expenditure program was $6.47 billion (Figure 6). This excludes non-cash revenues such as asset recognition and valuation adjustments.

Table 2: Funding from 2014‑15 to 2016‑17
Funding source6 2014‑15($'m) 2015‑16($'m) 2016‑17($'m)
Own-source funds 829 803 897
Federal Government 1,475 1,649 1,777
NSW Government (inclusive of): 3,226 4,111 3,797
Budget and grant funding 1,354 2,120 1,718
Motor vehicle taxes (state) 1,872 1,991 2,079
Total 5,530 6,563 6,471

Figure 6: Revenue and funding - July 2016 to June 2017

  1. Rebuilding NSW is a 10-year plan to invest $20 billion in new infrastructure from the proceeds of the electricity network transactions, Commonwealth Government Asset Recycling Initiative payments and investment earnings. This investment stimulates productivity across NSW, reduces congestion and supports communities.
  2. Restart NSW is one component of Rebuilding NSW. Infrastructure NSW is responsible for assessing and recommending Restart NSW projects.
  3. Government funding excludes non-cash revenue.

Expenditure

More than 97 per cent of our recurrent and capital expenditure is distributed across the following program areas that deliver services and infrastructure to our customers:

  • growth and improvement program to develop and deliver new or upgraded road and maritime infrastructure to optimise the safety, efficiency and effectiveness of the road and maritime networks
  • asset maintenance program to ensure the state's road and maritime assets meet the required safety, performance and operational standards in the delivery of customer services and access for regional communities, and enable safe, efficient and reliable services for customers
  • services and operations program to enable the safe, efficient and reliable movement of people and goods by various transport modes across the state's road and maritime networks.

Our expenditure in 2016‑17 also included M5 cashback refund for private vehicle travellers, financing costs associated with the Sydney Harbour Tunnel and redundancy costs incurred in delivering efficiencies and improvements (Figure 7).

For 2016‑17, expenditure amounts to $6.47 billion, which includes NorthConnex public-private partnership contributions, but excludes non-cash items such as depreciation and amortisation and asset transfers.

Table 3: Expenditure from 2014‑15 to 2016‑17
Area of expenditure 2014‑15 ($’m) 2015‑16 ($’m) 2016‑17 ($’m)
Growth and improvement 2,898 3,883 3,871
Asset maintenance 1,513 1,449 1,449
Services and operations (inclusive of): 968 1,074 992
M5 cashback refund 81 99 109
Finance costs 43 35 36
Redundancy 27 23 14
Total 5,530 6,563 6,471

Figure 7: Expenditure - July 2016 to June 2017

2.2 Financial performance snapshot

We operate under NSW Treasury's Financial Management Framework to carry out policy regulatory and service delivery functions that enable safe and efficient journeys throughout NSW. For financial reporting and policy framework purposes, our activities are considered to be within the general government sector as classified by NSW Treasury.

In 2016‑17:

  • net result7 of $2.5 billion was seven per cent better than the budget target of $2.3 billion due to a combination of higher revenue and lower expenses
  • net result this year was $651 million lower than last year's net result of $3.2 billion. This is mainly due to lower grants from Transport for NSW and a net increase from losses on disposal of land- and road-related assets
  • total expenses were stable at $3.7 billion remaining within one per cent when compared to last year
  • net assets8 increased by $3.5 billion to $84.2 billion. This is due to capital spend of $4.2 billion, revaluation increments of $0.9 billion offset by depreciation of $1.6 billion.

For a more detailed view of our financial performance for the period 1 July 2016 to 30 June 2017, refer to the financial statements in Volume 2 of this report.

  1. Net result refers to revenue minus operating expenses.
  2. Net assets of $84.2 billion included both current assets and non-current assets minus liabilities. Non-current assets included property, plant and equipment, private sector provided infrastructure and intangible assets. Current assets included cash and cash equivalent, receivable, inventories and non-current assets classified as held for sale.

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