The 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 the Government;
- revenue collected by CHA and regarded as Territory revenue. The main types are taxation, untied grants (GST revenue) and fines; and
- 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.
The Territory Government's investment portfolio is formed by pooling the surplus cash balances of the 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:
- To ensure sufficient liquidity is maintained in the Government's cash balances to meet all financial obligations as they fall due; and
- 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 2016, the investment portfolio totalled approximately $935 million.
Medium Term Investment Fund
The Medium Term Investment Fund (MTIF) is a segregated pool of investments held with CHA and commenced on 27 November 2007 with an initial investment of $50 million. The MTIF primarily represents surplus funds that have accumulated and not yet been expended by Territory Government agencies. In November 2014, the fund was increased by $100 million following a review of the CHA investment portfolio guidelines. In May 2016, $100 million were redeemed from the fund to the Infrastructure Development Fund.
The fund is a tailored solution provided by JANA Investment Advisors Pty Ltd and has a relatively conservative investment style with approximately 15% allocated to growth assets in order to achieve its stated objective of producing a superior return over the medium term of two to three years.
NTTC is responsible for monitoring and reporting on the performance of the fund and managing the relationship with the investment manager.
The investment performance of the fund is benchmarked against the Bloomberg AusBond Bank Bill Index.
As at 30 June 2016, the market valuation of the MTIF totalled $81.4 million.
Infrastructure Development Fund
The Infrastructure Development Fund (IDF) is a transitional segregated pool of investments held within the Central Holding Authority. It primarily represents funds received from the sale of Territory Insurance Office which have been accumulated and temporarily invested into financial markets.
The IDF is managed by JANA Investment Advisers via multi-manager sector trusts and has a highly conservative investment approach, with a very small (approximately 5 per cent) allocation to growth assets. The IDF commenced on 26 June 2015 with an initial investment of $210 million and a further $100 million added into the fund in May 2016. The investment performance of the fund is benchmarked against the Bloomberg AusBond Bank Bill Index.
As at 30 June 2016, the IDF had a market value of about $315 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, Colonial First State Global Asset Management 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 Australian Superannuation Survey. This is consistent with the asset allocation mix applied to COSR.
As at 30 June 2016, the market valuations of the COSR fund totalled $654 million.