Annual Reporting Reform

NSW Treasury have developed the new GSF Act Annual Reporting framework, which will apply for annual reports prepared after 1 July 2023. The framework has been created following consultation with the sector and takes a principles-based approach.

Background

As part of the staged implementation of the GSF Act, annual reporting requirements in the GSF Act will replace those in the current Annual Reporting Acts from 1 July 2023. This means that from the financial year 2022-23 onwards, reporting GSF Agencies and universities will prepare annual reports under the GSF Act. The Annual Reporting Acts will, in turn, be repealed.

Transitioning from the Annual Reporting Acts to the GSF Act has provided an opportunity to reform the format and content of annual reports.

What’s changed?

The new Annual Reporting requirements will be staged over the next two annual reporting cycles to support the sector transition. This will allow agencies time to understand and adapt to changes to the framework, as well as allow appropriate consultation on all elements of the Annual Reporting Framework.

For the financial year 2022-23:

  • The same agencies will be required to prepare annual reports as were required to prepare them under the previous framework
  • The majority of the information to be included in the annual reports remains unchanged, with updates to how it is presented and some new categories
  • Two new items are recommended - Sustainability-related disclosures (Sustainability) and Costs and Benefits associated with Machinery of Government changes (Financial Performance) as outlined in section 1.5.

For the financial year 2023-24:

  • All reporting GSF Agencies (as defined in section 7.3 of the GSF Act) will be required to prepare annual reports, unless exempt under a principles and risk-based exemption framework. The exemptions framework will seek to appropriately balance costs of preparing with necessary accountability and transparency, including in relation to sustainability and climate risk reporting. NSW Treasury plans to develop, in consultation with the sector, criteria for the principles and risk-based exemption framework ahead of 1 July 2023.
  • Reporting GSF Agencies must adopt the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations and begin climate-related disclosures for financial year 2023-24. Adopting TCFD-aligned reporting is recommended but not required for financial year 2022-23.

Treasury Next Steps

This annual reporting framework is being shared with the preparing agencies now to provide them with as much time as possible to become familiar with the framework and start collecting the required information and data.

Based on the framework, NSW Treasury will also start developing the required regulations, Treasurer’s directions, policies and guidelines. Subject to the Treasurer’s and Executive Council’s approval, the regulations and Treasurer’s Directions will be scheduled to be published early in 2023 and commence at the same time as the GSF Act annual reporting provisions on 1 July 2023.

NSW Treasury plans to develop, in consultation with the sector, criteria for the principles and risk-based exemption framework ahead of 1 July 2023. This risk-based exemption framework will include considerations of climate risk in assessing eligibility for exemptions. For financial year 2023-24 and beyond, all reporting GSF Agencies who prepare financial statements will also need to prepare annual reports, unless exempt.

The new annual reporting framework will be assessed after its first reporting year to decide whether any changes or improvements are required. This assessment will also consider any changes or developments in global and national reporting standards and guidance, including the International Sustainability Standards Board’s (ISSB) intended release of sustainability and climate-related financial disclosure standards in June 2023.

Treasury will deliver guidance and training to support clusters in preparing their TCFD disclosures. Existing actions under the NSW Climate Change Adaptation Strategy (including the appointment of a climate change risk officer in each cluster) will also support agencies with this disclosure.

Our team at Treasury are here to help you through the transition to the new framework - please direct any questions or feedback to [email protected].

Government sector finance reform

The Government Sector Finance Act 2018 (GSF Act) implementation is under way.

This page provides information about the GSF Act and associated reform to assist agencies with their role in the successful implementation. Agencies should note that the fact sheets and other support material are a guide only and do not replace a familiarity with the legislation.

If you can’t find the information that you require or if you have any questions, please contact [email protected].

 

Treasurer’s Directions under the GSF Act

View Treasurer's Directions

Government Sector Finance Act Fact Sheet

Last updated: 02/03/2023