Government financing the centralised approach

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Government financing the centralised approach
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Agenda

• TCVs role
• Business model
• Financial market activities
• Market conditions implications for TCV
• Concluding comments

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TCVs Role

• Central financing authority and adviser for the
  State of Victoria
• financial institution for the benefit of the
  state and state related entities
• activities enhance the financial position of the
  state and state related entities
• services provided in effective, efficient and
  competitive manner
• Ongoing and functional participant in Melbourne
  financial markets

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Stakeholders
Treasurer of Victoria
Government departments, authorities GBEs
Department
Treasury Corporation of Victoria
of Treasury
Board of Directors
and Finance
Financial
Investors
Markets
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Key Business Objectives

• Provide financing and advisory services to enable
  clients to manage their funding needs, debt
  portfolios, cash management and financial risks
• Offer tailor made loan facilities providing
  protection from undue interest rate risk
• Accept deposits and provide investment products
  offering competitive returns
• Guarantee liquidity to the state
• Monitor states financial risk and assume and
  manage those risks as appropriate

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Financial Market Activities
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Funding Strategy

• TCV finances its client activities through the
  issue of Victorian government guaranteed debt
• Four core funding programs
• domestic Hotstocks
• Euro Medium Term Notes
• Euro Commercial Paper
• domestic Promissory Notes

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Program Management Strategy

• Maintain an active presence in domestic and
  international financial markets
• Maintain relevant skill base
• Promote liquidity
• Target level of outstandings
• Actively manage risk arising on balance sheet

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Investor Relations

• TCV is the conduit between the State of Victoria
  and financial markets
• single interface delivers consistency and
  achieves economies of scale
• arms length structure ensures independence but
  allows for the exchange of information
• facilitate interaction through conduct of regular
  program of investor relation activities

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Role as an employer

• 57 employees, predominately drawn from the
  private sector
• Highly skilled and diverse workforce
• Strong focus on training and development and
  internal promotion where practical
• Attract expatriate Victorians home
• Strong relationship with local universities

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Market Conditions implications for TCV
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Market Conditions and Implications for TCV

• Decline of risk-free asset class
• Alternative government funding methodologies
• Sustainable government surpluses
• 100 million annual surplus commitment
• 2003-04 surplus estimated at 652 million
• Renewed focus on infrastructure investment

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Concluding comments
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Concluding comments

• Fundamental financial objective for State of
  Victoria stability
• maintain AAA rating
• deliver sustainable budget surpluses
• invest in infrastructure without compromising
  fiscal management
• manage financial risks effectively and
  efficiently
• TCV as the states financial institution actively
  participates in the Melbourne financial markets
  to facilitate its role in the delivery of
  financial stability

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• Bill Whitford
• Managing Director
• Treasury Corporation of Victoria
• Level 12
• 1 Collins Street
• Melbourne Vic 3000
• Tel [phone]
• Fax [phone]
• Email w.whitford_at_tcv.vic.gov.au
• Internet www.tcv.vic.gov.au

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• www.tcv.vic.gov.au