Treasury’s vision is that NSW is 'always a great place to live and work'. The Financial Risk Management team has a strong and transformative role to play in delivering the 'always'. That means helping to create a sustainable State which can meet both expected and unexpected challenges, while at the same time extending its wealth and reputation.
We do that by designing and implementing financial frameworks and platforms and by taking financially aware decisions which enable the State to:
1. Get the most out of the WHOLE of our current spend – ensuring the dollars we spend today always deliver the outcomes they are expected to – in the most effective and efficient way.
2. Get the most out of ALL of our assets and resources (that sit on our balance sheet) – turning underutilised assets into ones which stimulate growth into the future.
This is a change in focus away from an incremental, year to year management of finances at the margin, to risk, investment and performance-informed allocation of resources over multiple years.
This is illustrated in the below diagram.
We are guided by an evidence based, holistic and transparent approach to managing risk and reputation.
Our approach is underpinned by our Risk Appetite Statement which is committed to:
- preservation of the government’s reputation as a sovereign
- the ability of the Government to deliver on its policies and services
- the maintenance of the Triple-A rating.
Gaining a portfolio view of financial risks enables the government to understand the complexities and delve deeper into issues to manage exposures. It will also help to build partnerships across the Public, Private and the Not-for-Profit sectors to better define problems, improve solution design and enhance delivery.
Asset and Liability Committee (ALCO)
In 2015-16 Treasury established an Asset and Liability Committee (ALCO) to help the Government ensure the appropriate forums are established to facilitate financial management reform.
The ALCO draws on the technical and financial market expertise of Treasury Corporation (TCorp) and the private sector by including representatives from these groups as members. Mr Alden Toevs was appointed as an independent member of the ALCO and was more recently joined by Ms Vanessa Wallace.
Independent members provide expertise on the management of market, credit and operations risk. With this expertise, and that of other members of the ALCO, the Government will receive advice on key decisions regarding the State’s assets and liabilities. This is a first for a government agency but is considered best practice in other organisations.
The Government will continue to draw upon commercial best practice where appropriate, to ensure a strong, disciplined and whole-of-government approach to the management of balance sheet and fiscal risks.
For more information about the Financial Risk Management & Transformation program and the Asset and Liability Committee, please contact the Financial Risk Management Team at [email protected].