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	Contents

• Introduction
• Key performance achievements
• About us
• Under Treasurer's report
• Our performance - the year in review
  • Financial and economic policy
  • Government-owned corporations performance and governance
  • Economic and statistical research
  • Taxation
  • Gambling
  • Superannuation
  • Shared service implementation - SSIO
  • Shared service implementation - CorpTech
• Our outputs
  • Financial and economic policy
  • Government-owned corporations performance and governance
  • Economic and statistical research
  • Taxation
  • Gambling
  • Superannuation
  • Shared service implementation - SSIO
  • Shared service implementation - CorpTech
• Our people shaping solutions
  • Our workforce profile
  • Developing our people
  • Engaging employees
  • Building flexible and diverse work environment
  • Recognising our people
  • Creating a safe and healthy workplace
• Corporate governance
• Financial summary
• Financial statements
• Appendix
• Feedback form
• PDF version of the Annual Report 2004-05

Our outputs

Government-owned corporations performance and governance

The Office of Government Owned Corporations (OGOC), established in 2000, supports and advises shareholding Queensland Government Ministers on the State's ownership and administration of 18 Government-owned corporations (GOCs). This includes ensuring a strategic approach to policy development for GOCs, monitoring performance and ensuring GOCs comply with relevant legislation. With the 18 GOCs in Queensland operating in energy, transport and water among other essential infrastructure, OGOC deals with a varying range of complex issues.

Vision and mission

To manage the State's interest in its GOCs in aiming to maximise the State Government's investment return, build shareholder value and ensure appropriate corporate governance.

Structure

Deputy Under Treasurer Tim Spencer

• Office of Government Owned Corporations
  • Executive Director Peter Dann
    • Deputy Executive Director Pauline Sutherland
    • Director, Energy John Frazer
    • Director, Transport, Resources and Corporate Lynne Bulloch
    • Director, Industrial Relations, Policy and Coordination Wally Lee

Output performance highlights

Output performance highlights

Measures	Target	Actual
Quantity
Number of GOC statements of corporate intent completed	19	*18
Number of performance monitoring reports completed	76	72
Quality
Percentage of Ministerial correspondence prepared to agreed Treasury standards	95%	95%
Timeliness
Percentage of statements of corporate intent received and reviewed within the scheduled timeframe	100%	100%
Percentage of GOC investment proposals assessed within agreed timeframes	100%	100%
Cost
Cost of monitoring and governing per GOC	$0.13M	*$0.17M

* Difference due to reduction in number of GOCs from 19 to 18 on 1 July 2004, resulting from the merger of Gladstone Port Authority and Rockhampton Port Authority to form Central Queensland Ports Authority.

Highlights

Highlights

Strategic business priority	Highlights	The year ahead
Assist shareholding Ministers in setting performance targets for GOCs.	Supported shareholding Ministers in finalising performance agreements (statements of corporate intent) with GOCs. Collected $982 million of dividends and tax equivalents from GOCs to fund Government services.	Collect $938 million in forecast revenue to fund Government services.
Provide clear guidance on the State's risk tolerance and assess the risks and returns faced by GOCs in pursuing business and investment strategies.	Assessed 23 GOC investment proposals to a total value of $2.1 billion.	Assess GOC capital programs to a total budgeted value of $3.6 billion.
Ensure GOCs comply with all relevant policies.	Conducted review of GOC corporate governance practices. Completed review of GOC financial risk management policies.	Finalise corporate governance guidelines and work with GOCs to understand and apply the guidelines.

Key issues facing the output

• Increasing levels of competition in the markets in which GOCs operate, where GOCs have traditionally operated as monopoly service providers.
• Ensuring appropriate GOC governance arrangements reflect best practice to meet growing public expectations of accountability and performance from GOCs.
• Facilitating GOCs' investment in large infrastructure projects to ensure safe, quality and timely service delivery.

Strategic business priorities

Strategic business priority - Assist shareholding Ministers in setting performance targets for GOCs.

• Finalised statements of corporate intent on schedule

  In 2004-05, we worked with GOCs to finalise their statements of corporate intent for 2005-06 in a timely manner. All GOC statements of corporate intent were agreed to by the GOC boards and shareholding Ministers by 30 June 2005.

  In the year ahead, we aim to review the format and content of statements of corporate intent with a view to improving the general efficiency as a performance agreement.

• Benefits returned to the community

  Treasury collected GOC sector dividends and tax equivalent payments of $982 million for the State Government in 2004-05, with the major contributions coming from the energy and rail GOCs. These dividends and tax equivalents were directed to fund essential Government services for the Queensland community.

  In 2005-06, returns from GOCs are expected to be $938 million. Higher returns are expected over the long term and will provide a significant funding source to deliver services for Queenslanders and to meet the State Government's priorities.

• Adapted new financial reporting standards with success

  We continued to work closely with GOCs to assess the financial and operational impact of the adoption of the Australian equivalents to International Financial Reporting Standards (IFRS). The introduction of IFRS represents a change in generally accepted accounting principles and practice, and we are monitoring GOCs in their move to adapt to the new financial reporting environment.

  In the year ahead, we will continue to work with GOCs to assess the impact of the new standards and advise shareholding Ministers accordingly.

Strategic business priority - Provide clear guidance on the State's risk tolerance and assess the risks and returns faced by GOCs in pursuing business options and strategies.

• Ensured and maintained GOCs' commercial growth

  We assessed 23 GOC investment proposals to a total value of $2.1 billion to identify any potential risks to the State and to confirm risk management strategies. The major investment proposals we assessed included Queensland Rail's purchase of the CRT national freight logistics business, the Port of Brisbane Corporation Fisherman Island Berth 10 project, Stanwell Corporation's Emu Downs Wind Farm project and the ENERGEX Wambo Power Station financial arrangement. We perform these assessments to ensure the investment is commercially viable and manages risks so that, ultimately, GOCs prosper and grow, and continue to deliver shareholder value.

  In 2005-06, we will continue to assess GOC investment proposals with other shareholding Ministers' departments.

• Helped the State Government stay informed on the key issues

  We monitored enterprise bargaining processes and outcomes for GOCs by being involved in employment and industrial relations planning, consulting on significant industrial relations issues and through the State Government's approval of enterprise agreements. This monitoring ensured shareholding Ministers were kept informed of significant emerging employment and industrial relations issues.

  In the year ahead, we will continue to monitor GOC industrial relations activities and plans.

• Supported GOCs' capital expenditure

  We administered equity injections totalling approximately $160 million on behalf of shareholding Ministers in 2004-05 to support the large capital expenditure programs a number of the GOCs are now carrying out.

  We will continue to support shareholding Ministers by evaluating capital expenditure programs and administering the GOCs' equity injection requirements in 2005-06. The total budgeted capital expenditure of the GOC sector for 2005-06 is approximately $3.6 billion.

Strategic business priority - Assess GOC performance.

• Conducted strategic and performance reviews

  As part of a program which began in 2002-03 that assesses the performance of the State's GOCs individually, we completed a detailed assessment of one GOC in 2004-05. These assessments focus on financial performance, market environment and strategic direction. We will continue the program of strategic assessments in 2005-06.

  In line with this business priority, we also completed the quarterly performance monitoring reports for each GOC.

Strategic business priority - Ensure GOCs comply with all relevant policies.

• Major survey achieved positive results

  We conducted a comprehensive survey of corporate governance and risk management practices in GOCs, which covered the extent to which GOCs had adopted recommendations of the Australian Stock Exchange and the Auditor-General in relation to corporate governance. The sound results of the survey allowed us to assess the effectiveness of GOC practices and develop corporate governance guidelines for GOCs. In the coming year, these guidelines wil be finalised and we will assist GOCs to understand and apply them and monitor compliance.

• Worked with stakeholders

  We engaged Queensland Treasury Corporation to conduct a comprehensive review of GOC financial risk management policies. This review enabled us to provide feedback to GOCs about how their policies could be improved, and in the year ahead, OGOC will continue to work with GOCs to improve their financial policies.

By investing in infrastructure today, we're helping to shape the Smart State's future export potential for Queensland's tomorrow.

Shaping the future of coal in Queensland

It is a key part of Treasury's role to assess risks and returns faced by GOCs in pursuing business and investment strategies. Looking out for risks, returns, timing and viability in investment proposals for our coal supply infrastructure is important to the State's future.

This year, we assessed the proposed feasibility studies for the Ports Corporation of Queensland Abbott Point expansion and the Queensland Rail Northern missing link project. In addition, the Central Queensland Ports Authority further expansion of RG Tanna terminal and the SunWater Gattonvale offstream storage projects were assessed.

Working with GOCS, we evaluated and approved proposals for projects to a total of more than $1 billion. The improvements to infrastructure will enhance the quality supply of coal for exporting and ensure that Queensland's $8 billion coal industry can meet current and future export demand.

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© The State of Queensland (Queensland Treasury) 2005.

Queensland Government