Financial management and capital intentions

Our Four-year Plan outlines how we intend to manage cost pressures through finding efficiencies and innovation and improving productivity, through projects such as Simplification.

In order to effectively cost, improve and predict business processes, we need an in-depth understanding of our relevant cost drivers. In developing cost models, from initiatives such as the Data Hub, we will be able to better monitor the return on investment and realise the benefits of our services.

A comprehensive view of current cost drivers will help with the Simplification Project’s aim to simplify the way we process transactions for financial assistance.

Capital intentions

The Ministry’s asset portfolio had a book value of approximately $356 million as at 30 June 2014.

The Ministry has a Ten-year Capital Plan in place and each year we conduct a capital expenditure planning process. This ensures that capital investment is targeted to meet business needs and assets are appropriately replenished. We assess our performance by ensuring expenditure is in accordance with the Ministry’s Ten-year Capital Plan.

Over the next four years, our significant capital investments will include:

• Simplification Project
• IT – strategic action plan and business enablement projects
• IT – core assets and data centre migration
• IT – Social Housing
• National Office relocation.

Asset management

We have adopted the Treasury’s capital asset management framework. This framework supports quality information being available for decision-making, financial planning and performance monitoring purposes. We will maintain a strong focus on ensuring the effective and efficient use of our capital resources.

Property

We operate out of 224 locations nationwide. We have a property maintenance plan to ensure our property is prudently managed.

We will continue to review our national office and regional accommodation needs to ensure all our spending provides value for money and is linked to the delivery of effective services. This includes collaborating across government, where appropriate, to ensure the most efficient use of property to deliver government services.

The operating cost to maintain our property footprint is expected to rise. In order to mitigate part of this, we have adopted a long-term strategic plan that will enable more effective management of our portfolio. Over time, we aim to reduce our property footprint by up to 39 per cent.

We are managing our property portfolio in accordance with the principles, guidelines and standards developed by the Property Management Centre of Expertise, ensuring a continued strategic alignment with the business.

Forecast capital expenditure