Centralised Treasury and Investment Policy

The Centralised Treasury and Investment policy centralises the borrowing and investment powers of state entities with the State's central finance agencies, Treasury Corporation of Victoria (TCV) and Victoria Financial Management Corporation (VFMC).

The policy is complemented by Direction 4.5.6 issued by the Minister for Finance under the Financial Management Act 1994 . Subject to several exceptions, the Direction gives legal force to the policy.

Following extensive consultation with its stakeholders, the Government has issued the Direction. The key points of the policy are summarised below:

• The Direction requires state government agencies to undertake all borrowings, investments and financial arrangements with a financial institution that is either a state owned entity or has a credit rating, that is the same as or better than the State of Victoria (subject to specific exceptions).

• Previously, investment balances below $50 000 were exempt. This threshold has been increased to $2 000 000 and now applies to the combined total of all cash balances and all amounts invested by a Public Sector Agency.

• Under the new direction, the Treasurer has the power to issue specific exemptions to public sector agencies.

• While the direction is mandatory, entities can apply for an exemption. Exemption requests should contain the support of the relevant Portfolio Minister, and will need to be sent to the Treasurer for approval.