Optimising Our Performance
WATC is committed to continually improving our high-quality systems, capabilities, processes and practises to optimise performance and achieve our vision and objectives – today and into the future.
WATC operates in a dynamic external environment, which produces a range of risks and opportunities. In optimising WATC’s performance, our Board provides an approved risk management and compliance framework with a clear governance structure for our operations.
Supporting the State’s Creditworthiness
Our two key debt metric goals for balance sheet management to be achieved each year are:
- less than 20 per cent of our debt portfolio maturing within 12 months; and
- maintaining a minimum liquidity coverage ratio of 100 per cent for debt maturing within 12 months.
The achievement of these goals remains an important part of our contribution to the State’s creditworthiness. We regularly review and assess the costs and benefits of our asset and liability management strategy along with the State’s liquidity holdings, working in conjunction with the Department of Treasury who manage the other components of the State’s credit
ratings criteria.
Debt Portfolio Achievements
At 30 June 2021
17.3% debt maturing within 12 months
182.5% liquid asset portfolio cover
With a loan from WATC, the Shire of Katanning purchased a new grader as part of its fleet to maintain road infrastructure across the region
Improving Management of the State’s Balance Sheet
WATC understands the benefit of prioritising and continuously improving management of the State’s balance sheet, particularly in light of our assessment of how market demand dynamics are impacting financial markets and our issuance of Western Australian government bonds.
During 2020–21, we carried out a detailed review and empirical evaluation of various strategies to diversify the State’s debt portfolio. This included assessing costs and benefits of flexible portfolio management with varying:
- floating rates
- term fixed rate exposures
- maturity profile structures.
We will be using this in-depth data to develop a suite of compatible portfolio structures and issuance strategies that we can then evaluate against current practice in balance sheet management.
Risk Management
We completed a comprehensive dynamic risk assessment to identify the key strategic-level risks faced by WATC. This assessment considered the consequence, likelihood, connectivity and velocity of each of these risks. As a topical and contemporary view of the risks we face, it will be used to inform the continual evolution of our risk management strategies.
Re-Evaluating Strategies In Light of COVID-19
Following a detailed review assessing key components of the financial risks associated with our current asset and liability management strategy, we identified an increased risk associated with the annual term debt refinancing requirements that are typically undertaken within a narrow timeframe.
The risk had increased significantly due to the growing size of the State’s balance sheet, and was further exacerbated by potential exposure to financial market shocks such as those experienced during the 2007–08 global financial crisis and the early stages of the COVID-19 pandemic.
We are now considering a series of options to smooth our refinancing requirements over longer timeframes and evolve the management of the State’s liquid assets to improve the financial outcomes for the Government of Western Australia.
Maintaining Operations During COVID-19
Our business continuity plan continued to be tested during COVID-related lockdowns. With no material disruptions, we successfully maintained our operations throughout. We are continuing to evaluate, refine and evolve our business continuity plan based on our experiences.
Structural Improvements
A new Program Management Office was created to bring together disparate functions to interchange ideas, thoughts, information and tacit knowledge, and help enrich our capabilities. While maintaining a holistic view, the new office will assist us in making improvements to business processes, how projects and initiatives are coordinated and delivered, and managing the impact of change.
We also restructured our client services teams to improve how we deliver our products and services to support our clients. The newly formed Corporate Treasury Services branch combined our Client Debt Finance and Investments, and Client Foreign Exchange and Treasury Services branches. The new branch provides a single point of contact for our clients to access all WATC’s corporate treasury products and services.
Optimising Our ICT Systems
Information and communication technology (ICT) remains critical to support our operations, and is even more imperative to be working well 24/7 to facilitate continuity during periods of disruption, as we have experienced over the past 12 months. A new secure remote working facility, improving security and staff remote access to our systems, helped to enable all our people to work from home during COVID-19 lockdowns and while in temporary office accommodation during our office refurbishment.
We continued to upgrade our software and hardware – for security, for maintaining contemporary functionality, and to update capacity and capability. Upgrades to our Quantum treasury management system and client portal commenced during the year. We improved our high-speed communication link with cloud providers, while also adding an alternative communication link pathway to improve back-up and redundancy capabilities.
Cyber security remains a critical component of all our business considerations. An ongoing program of monitoring, evaluating, remediating and improving security remains a priority.
Information Management Road Map
We developed a high-level strategy and prioritised roadmap to facilitate improvements in how we manage information as we shift towards a modern digital workplace and workforce.
Aligned with the requirements of the State Records Office of Western Australia, the roadmap will help us develop a more contemporary and compliant digital information management landscape that ensures visibility and access to all information, alongside improving usability and accessibility.
Looking Forward
- Continue to enhance our cybersecurity capabilities, together with evolving our business continuity and disaster recovery strategies.
- Maturing and evolving our approach to risk management.
- Upgrading our Microsoft Office suite and Quantum core treasury management system to incorporate updated technology and make software and system enhancements. We will also leverage our Quantum system to support ongoing improvements to our processes.
- Improving the security of our client portal by switching to a new platform. Updating our ICT desktop hardware to improve reliability and performance.
- Designing and implementing new information architecture for internal communications and recordkeeping, as part of our Digital Information Strategy.
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