Fleet SA

In reply to the Hon. S.C. MULLIGHAN (Lee) (28 July 2021). (Estimates Committee B)

The Hon. R.I. LUCAS (Treasurer): I have been advised the following:

The budgeted dividend from SAFA for 2021-22 is based on an estimated 2021-22 profit after tax of $33.6 million, with profits of $14 million from Treasury, $9.8 million from Fleet SA, and $9.8 million from insurance. The Treasury estimate is based on an increase in the Treasurer's loan and deposit balances. The Insurance and Fleet SA profit estimates are based on standard operating conditions, including an insurance investment return of approximately 5.75 per cent and nil profit from vehicle sales in the Fleet SA portfolio.

Treasury's $14 million and Fleet SA's $9.8 million profits have been included in the dividend estimate, in full. The Insurance portion of the dividend is $9 million, which is based on maintaining the portfolio's solvency.

This is per the SAFA dividend policy to pay 100 per cent of the net profit after tax for its Treasury and Fleet SA operations and 100 per cent of the average net profit after tax (over a rolling five years) for its Insurance operations. In the event of a zero dividend in the rolling five-year average, the amount paid will be any amount over solvency requirements as determined by management, up to a maximum of current year actual or estimated profit. As the insurance operations incurred a loss in 2019-20, the latter provision has been applied.