#1SAFA - Investor Update SAFA South Australian Government Financing Authority SOU AUST RALI Government of South Australia January | February 2020#2SOUTH AUSTRALIA 0000 2018-19 ர்ர்ர் Population M per Capita Gross State Product (GSP) SA 1.7m 0.7% growth Australia 25.3m 1.5% growth A$74,873 A$61,965 1.4% growth 2% growth Major exports - mining (copper, lead, uranium) - agriculture (grain, meat fruit and vegetables) - wine - education E Unemployment (Current) 6.3% 5.2% On track to maintain modest surpluses across the forward estimates as the Government focuses on growing jobs, economy SAFA South Australian Government Financing Authority 500 AUST TH OUT OTR Government of South Australia Northern Territory Queensland Western Australia South Australia New South Wales Adelaide Victoria Australian Capital Territory Tasmania 1#3KEY ECONOMIC INDICATORS 0000 2018-19 2019-20 2019-20 2020-21 2021-22 2022-23 Actual Budget Forecast Revised Forecast Projection Projection Projection Australia Gross Domestic Product (GDP) 2.0 2 3/4 2 1/4 2 3/4 3 3 South Australia Gross Domestic Product (GDP) 1.4 2 1/2 13/4 11/4 2 1/4 2 1/4 State Final Demand (SFD) 1.6 2 13/4 2 1/4 2 1/4 2 1/4 Employment 1.4 1 1 1 1 1 Adelaide Consumer Price Index 1.6 13/4 1 3/4 1 3/4 2 2 1/4 SAFA South Australian Government Financing Authority SOU AUST TH Government of OTR South Australia 2#4DELIVERING A SUSTAINABLE BUDGET 2019-20 General Government Sector Forecast 2020-21 Projection 2021-22 Projection 2022-23 Projection Net operating balance Budget 94 105 142 251 MYBR 91 68 176 104 Change since 2019-20 Budget -3 -37 34 -147 Net lending Budget -1,069 -654 -989 -585 MYBR -835 -1,179 -1,187 -766 Change since 2019-20 Budget 234 -525 -198 -181 Net debt Budget MYBR Change since 2019-20 Budget SAFA South Australian Government Financing Authority OUT Government of AUST TH RALI South Australia 9,468 10,752 12,278 13,208 9,284 11,104 12,840 13,980 -184 352 562 772 3#5DELIVERING A SUSTAINABLE BUDGET 2019-20 2020-21 Non-Financial Public Sector Forecast Projection 2021-22 Projection 2022-23 Projection Net operating balance Budget -371 -401 -343 -267 MYBR -390 -344 -208 -306 Change since 2019-20 Budget -19 57 135 -39 Net lending Budget -1,233 -1,018 -1,416 -1,079 MYBR -1,342 -1,686 -1,539 -1,135 Change since 2019-20 Budget -109 -668 -123 -56 Net debt Budget 16,713 18,154 19,949 MYBR Change since 2019-20 Budget SAFA South Australian Government Financing Authority 500 AUST TH RALI Government of South Australia 21,271 16,527 18,758 20,792 22,242 -186 604 843 971 4#62019-20 A RESPONSIBLE BUDGET (MYBR Update) Reduce cost of living • Motor vehicle charges ● ESL remissions Fairer tax system . Payroll tax compliance Land tax reforms Standard fees and charges SAFA South Australian Government Financing Authority OUT Government of TH OTR AUST South Australia $Million -100 -200 -300 -400 -500 -600 -700 -800 0 GST REVENUE REDUCTION וווי 2018-19 2019-20 2020-21 2021-22 5#7BUILDING OUR STATE $11.9b Total infrastructure spend over 4 years • Roads • Water and sewerage • Health facilities Schools and VET facilities Public transport • Residential housing SAFA South Australian Government Financing Authority Sou TH OUT Government of OTR South Australia AUST 6#8BUILDING OUR ECONOMY Adelaide City Deal initiative Housing sector package Economic and Business Growth Fund National collaborative research Land tax cuts Space and defence precent Cyber security SAFA South Australian Government Financing Authority SOU TH Government of OTR South Australia AUST 7#9BUILDING OUR ROADS Improve road safety Regional road projects and transport infrastructure upgrades Completion of the North-South Corridor SAFA South Australian Government Financing Authority OUT Government of TH OTR AUST South Australia 8#10BETTER HEALTH SYSTEM & BUILDING SCHOOLS $451m over 5 years to build a sustainable and efficient health system Reactivate the Repatriation General Hospital • Capital upgrades to government schools Additional support for TAFE SA High-speed internet for government schools SAFA South Australian Government Financing Authority SOU AUST TH Government of OTR South Australia 9#11PROTECTING & SECURING OUR ENVIRONMENT $52.4m over 4 years to protect metropolitan and regional coastlines $11.8m to upgrade the Great South Ocean Walk, Glenthorne National Park and other park renewal projects $12m package to assist councils and the waste management industry to modernise Support for the River Murray SAFA South Australian Government Financing Authority OUT Government of OTRA South Australia TH AUST 10#12BUILDING STRONGER COMMUNITIES PROTECTING OUR CULTURAL HERITAGE Significant new investment to support housing across the state and deliver better services to South Australian children and their families • New Aboriginal Art and Cultures Gallery • Fund facilities and maintenance upgrades to state tourist attractions SAFA South Australian Government Financing Authority AUST OUT Government of OTR South Australia 11#13BUILDING SAFER COMMUNITIES Increased funding for Emergency Services to: Upgrade police communications centre Progress the government's counter terrorism enhanced rapid response capability Implement the second stage of the district policing model • Meet new heavy vehicle compliance standards for the Country Fire Service, and new personal protective equipment for the Metropolitan Fire Service SAFA South Australian Government Financing Authority OUT Government of US TH South Australia 12#14BUILDING OUR REGIONS •Provide funds to address critical housing needs in remote communities Capital upgrades to regional high schools Replacement of South Australia's dog fence. • New Mount Gambier Community Hub • Remote Areas Energy Supply Scheme SAFA South Australian Government Financing Authority TH OUT Government of OTRA South Australia AUST 13#15SAFA INDICATIVE FUNDING TASK (MYBR Update) Completed $m Maturity Aug 19 Nov 19 500 1000 Aug 24 Billions ($) 7.0 6.0 5.0 Total funding task May 30 4.0 3.0 Dec 19 500 1yr AONIA 2.0 Proposed $m Maturity 1.0 0.0 Kokkol Jan-Mar 20 TBD May 32 -1.0 Actual 2019 Budget 2020 MYBR 2020 Estimate Estimate 2021 2022 Estimate 2023 Apr-Jun 20 TBD 2024/2028 SAFA South Australian Government Financing Authority Sou TH OUT Government of AUST OTR South Australia Short-term funding: ■ 1 year AONIA FRN ■Commercial Paper Term Funding: ■Funding future term maturities ■Pre-funding of SA Public Sector ■SA Public Sector 14#16SAFA'S PROJECTED DEBT PROFILE Projected Outstanding Debt Current 30 Jun 20 30 Jun 21 30 Jun 22 30 Jun 23 Term debt ($b) 18.3 17.8 19.3 22.0 24.5 Short term debt ($b) 2.7 2.0 2.0 2.5 2.5 Total ($b) 21.0 19.8 21.3 24.5 27.0 Term funding requirement ($b) SAFA South Australian Government Financing Authority SOU AUST TH Government of OTR South Australia 1.5 3.0 3.6 2.6 4.6 15#17SAFA'S FUNDRAISING & STRATEGIC OBJECTIVES Funding strategy over 2019-20 continues to focus on domestic Select Lines and short term paper. In addition, SAFA may continue to tap offshore markets for Euro Commercial Paper funding when market conditions are favourable. Select Lines are targeted at $3 billion, extending curve out to 15 years and building the even year lines. Issued $1.5 billion of revised $3 billion requirement for 2019-20 program. • Continue the issuance of AONIA FRN's to replace short term funding. SAFA South Australian Government Financing Authority OUT Government of TH South Australia US 16#18SAFA'S FUNDRAISING & STRATEGIC OBJECTIVES Develop a strategy to create a sustainability framework based on Environmental and Social Governance Framework principles. • Maintain and enhance access to financial markets through bank and investor communication. Monitor and adopt regulatory environment changes. • Assess geo-political risks to market access. Continue to investigate and develop alternative risk free rate benchmark products. SAFA South Australian Government Financing Authority SOU TH Government of OTRA South Australia AUST 17#19ENVIRONMENT, SOCIAL, GOVERNANCE SA generates 55% of its electricity from renewable sources (wind/solar) and is a net exporter of power. • First state to legislate targets to reduce greenhouse emissions. New investment in social housing and better services for SA children and their families by building stronger and safer communities. Delivering a responsible budget and adopting latest uniform presentation framework and accounting standards. SAFA South Australian Government Financing Authority 500 AUST TH OUT Government of South Australia 18#20STATE'S CREDIT RATING Standard & Poor's AA+ Stable Moody's Investors Service Aa1 Stable • Bushfires have limited impact on South Australia's current credit rating. Any impact on the budget is expected to be partially offset by Commonwealth's Disaster Recovery Funding Arrangement, insurance recoveries etc. SAFA South Australian Government Financing Authority 500 AUST TH OUT Government of OTR South Australia 19#21SAFA South Australian Government Financing Authority Website: Email: www.safa.gov.au [email protected] Telephone: +61 8 8226 9840 Mobile: SAFA South Australian Government Financing Authority +61 401 123 943 OUT Government of OTR AUST TH South Australia