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Budget 2011 Home Page 2011 Tax Expenditure Statement - Budget 2011

3 Improving Asset Management

The transparency provided in the inaugural Investment Statement was a necessary precursor, but no guarantee, to achieving ongoing improvements in the management of the Crown's balance sheet. This section signposts several ways in which the Government is working to deliver ongoing improvements in asset management practices.

Enhancing the Visibility of Asset Performance in the Social Portfolio

The social asset portfolio contains assets with significant acquisition and whole-of-life costs. Social assets comprise around 50% ($110.9 billion at 30 June 2010) of the Crown balance sheet and they underpin the delivery of a range of core public services.

It is critical that the Crown maintains robust information about how these assets are performing. Agencies also need reliable information about whether their assets are being used in a cost-effective way to deliver services, and to inform investment and procurement decisions.

A framework for social asset performance reporting

While many social assets serve outcome-specific purposes, the things that matter for performance, such as the capacity and condition of the assets, are broadly consistent across different types of assets. This makes it possible to develop a framework that, at a high level, can be applied across a broad range of assets. We will refine this framework over time.

Figure 3.1 - The social asset reporting framework
Figure 3.1 - The social asset reporting framework.
Source:  The Treasury

The asset reporting framework does not replicate information about strategic outcomes and output reporting in other accountability documents such as Statements of Intent. Rather, the framework aims to fill a gap in the current suite of information. As a key purpose of this information is to enable decision-makers to understand how the assets they control are contributing to the strategic outcomes, the metrics reported should link back to and inform wider reporting on the Government's strategic outcomes and output delivery.

The framework focuses on three key areas of performance, Capacity, Capability and Financial Performance:[14]

Capacity: the productive potential of the assets.

Capacity is informed by indicators of asset availability and utilisation, providing a picture of the productive potential of the assets. This information can be supplemented by information on surplus assets (assets that are unused because they are obsolete or surplus to requirements), and remaining economic life (how much longer the asset can provide the required level of services before a significant upgrade or renewal is required).

Capability: the ability of the assets to meet expected service standards.

Capability is informed by indicators of functionality (how suitable or fit for purpose the asset is for its intended use) and condition (the physical state of the asset).

Financial Performance: the financial flows associated with the asset, using total life costs where possible.

This approach supplements commonly reported financial asset information with physical asset information. It can provide further insights into performance by enabling a more complete picture of asset quality and use.


  • [14]Elements of the framework have been informed by the International Infrastructure Management Manual (Version 3.0, 2006) which has been developed with public and private sector industry input from Australia, New Zealand, the United States, South Africa and the United Kingdom.
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