1. NSWALC MONEY STORY

2. How much is in the NSWALC Account As at the end of 2007-08 the balance was $ 614,461,000

3. How We Are Going?

4. Governance Structure NSWALC Board Investment Committee Governance Committee Audit Committee Finance Committee Independent Chair Two Board Members CEO : CFO : CIO Advisors Investment Charter Investment Policy Statement Risk Management Plan Regulatory parameters

5. Spending Policy Ensure the maintenance of an Intergenerational Trust. Provide confidence that the fund is well governed and prudent. A spending policy maintains the balance between the interest of the current and future beneficiaries. Smooth expenditure. Clear signal when reduction is required.

6. SPENDING RULE Future Spend = [ 70% x Indexed spending in the previous year] + [30% x NSWALC Account Balance x 5%] ( 5% - Long Term Spending Rate)

7. Click to edit Master text styles –Second level Third level –Fourth level »Fifth level 7 Investment Objective Achieve a return (net of investment expense) of at least 5% p.a. plus CPI over a rolling 5 year period We must practically achieve around a 8-9% return per year

8. Click to edit Master text styles –Second level Third level –Fourth level »Fifth level 8 Why ?  NSWALC is a long term investor  Sustainable and perpetual investment portfolio  To provide sufficient growth and income to meet the needs of the network  To provide for the next generation  Therefore the longer term investment horizon

9. Land Tax Revenue ceased on 31/12/98

10. The Money Story First 15 YEARS 7.5% of NSW Government Land tax Revenue provided to NSWAC under the NSWALRA Total Allocation from Land Tax Revenue over 15 years - $ 537,010,000 Allocation to the Investment Fund from Land Tax Revenue - $ 268,505,000 Allocation to the Administrative Fund from Land Tax Revenue - $ 268,505,000

11. The Money Story Investment Fund Land Tax - $ 268,505,000 Interest/Income - $ 345,956,000 $ 614,461,000 (Approximate figures) Growth of Fund over Government Allocation 129 % The value of the investment now more than double the original allocation provided by government

12. The Money Story Post 31 December 1998 The income stream from the investment fund which became available to NSWALC Income from the Investment Fund drawn down 1998-2008 : $ 238,502,000 This amount of money that has been drawn from the Investment Fund to meet the costs of the Administration of NSWALC, RALC’s and LALC’s, since 1998.

13. The Money Story Comparative Allocations between NSWALC and R/LALC’s from 1983 to 2008 NSWALC $ 210,485,00042% R/LALC’s $ 289,827,00058% TOTAL $ 500,312,000 This is the amount of money that has been spent since 1983.

14. Total Budget $ 41.5M

15. Future Scenario The prospect for the immediate future is not as good as the outcomes from previous years has been. A reduction in income is expected the next few years. Seeking to limit expenditure to 5% of the fund balance That is we need to trim at least the NSWALC Budget significantly.

16. Practical Philosophy Must provide for the future as well as the present. NSWALC is required to adopt a –trustee, –fiduciary, –custodian role. Sustainability Must ensure the funds are there for our children and our childrens’ children