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Overview of Financial Performance

An analysis of the Departments departmental and administered financial statements for 200102 is provided below. The Departments financial statements begin at page 231 and the resource summary of the Departments price of outputs and administered programmes is provided at page 227.

Departmental

Financial performance

Increased operating surplus- up $17.9 million from 2000-01 and $11.7 million from budget - due to reduced expenses. DOTARS achieved an operating surplus for 2001-02 of $34.9 million before allowing for the $24.6 million capital use charge (CUC) for assets employed. This surplus was $17.9 million greater than the surplus in 2000-01 and $11.7 million greater than budgeted surplus. The surplus is attributable to lower than projected expenses and in particular the approved carryover of $6.4 million for the Stronger Regions Programme.

Table 19: Summary of the 200102 result in comparison with the 200001 result and the 200102 budget

Result

Variation

Budget

Variation

on 2000-01

on Budget

$000

(%)

$000

(%)

Revenue from Government

213 008

+12

225 798

-6

Own source revenue

17 366

-4

12 348

+41

Total Revenue

230 374

+10

238 146

-3

Employee Expenses

76 597

+11

75 638

+1

Supplier Expenses

93 153

+8

125 603

-26

Depreciation

11 231

-6

13 349

-16

Other Expenses

14 536

-46

346

+4201

Total Expenses

195 517

+1

214 936

-9

Operating Result

34 857

+105

23 210

+50

Revenue increased by 10 per cent from 2000-01 due to:

Total revenue of $230.4 million was up $21.6 million from 2000-01 but down $7.8 million from budget. This revenue consists of Appropriation from Government of $212.8 million and own source revenue, comprising sales of goods and services and interest, of $17.4 million.

  • Appropriations from Government increased by $22.3 million from 2000-01 primarily due to:
~new measures, and

~ funding for new measures: Stronger Regions ($11.2 million); Rapid Route Recovery ($1.4 million) and Assistance to Stranded Passengers ($1.9 million); and

~the transfer of new functions to the Department.

~ transfers of funding from the Department of Employment and Workplace Relations and the Department of Finance and Administration as a result of the machinery of government changes in November 2001 ($7.4 million).

  • Own source revenue decreased by $0.8 million from 2000-01 due primarily to lower interest rates.

The decrease in total revenue from the original budget estimate is attributable to a $12.7 million reduction in appropriation revenue due to the cessation of the Very High Speed Train (VHST) project, which was partially offset by higher than anticipated income on the Indian Ocean Territories (IOTs) ($6.2 million) as a result of increased activity.

Total Expenses increased marginally from 2000-01, but were 9 per cent lower than budget due to the cessation and deferral of some activities.

Total operating expenses of $195.5 million were consistent with 2000-01, increasing by only 1 per cent. However, total operating expenses were $19.4 million or 9 per cent lower than budgeted. This decrease is primarily attributable to the cessation of the VHST project ($12.7 million), and the deferral of expenses in relation to the Stronger Regions Programme to 2002-03 ($6.4 million) for which appropriation revenue was received in 2001-02.

The main items comprising total operating expenses are employee expenses ($76.6 million, up 1 per cent from budget) and payments to suppliers ($93.2 million, down 26 per cent from budget).

Financial Position

Net equity position
increased as a
result of the
operating surplus.

The Department's net equity position increased to $223.5 million, representing an increase of $9 million from 2000-01. The increase was as a result of the operating surplus, which was partially offset by adjustments flowing from the 2001 Administrative Arrangements Orders.

Total assets increased by $11.3 million.

Total assets were $263.8 million, representing an $11.3 million increase from 2000-01. The increase is primarily attributable to increases in infrastructure, plant and equipment on the IOTs ($8.6 million) in accordance with the islands' asset management plan, and increased investment in intangibles relating to computer software applications ($6.2 million). These were partially offset by a $4 million reduction in cash and investments.

Figure 8: Departmental Assets as at 30 June 2002

Figure 8: Departmental Assets as at 30 June 2002

Primary liability, employee entitlements,
increased by $4 million to $26.8 million

Total liabilities increased by $2.3 million from 2000-01 to $40.3 million. The Department's primary liability continues to be employee provisions, as a result of accruing leave entitlements for staff. This liability increased by $4 million to $26.8 million, primarily due to the transfer of 84 staff to the Department as a result of the machinery of government changes in November 2001 and the impact of the Department's new Certified Agreement. This increase was partially offset by a reduction in provisions for long service leave following an actuarial review of the value of these liabilities.

Cash Flows

Cash held decreased to $32.8 million.

The Department decreased its cash balance, comprising cash at bank and investments, by $4 million to $32.8 million during the year. These cash reserves are required to fund the Department's approved 'carry-over' of $6.4 million operating expenses for the Stronger Regions Programme; for asset replacement, in particular the purchase of property, plant and equipment to maintain the delivery of services to the Indian Ocean Territories; and to meet employee leave liabilities incurred since the introduction of accrual budgeting on 1 July 1999.

Figure 9 : Departmental Net Cash Flows

Figure 9 : Departmental Net Cash Flows

Administered

Revenue and Expenses

The Department administers programmes on behalf of its Ministers with an expense budget of $3,625.3 million in 200102.

Table 20: Summary of actual expenses in comparison with the budget

Result

Budget

Variation

on Budget

$000

$000

(%)

Non-Appropriation Revenue

351 602

327 988

+7

Grants

3 365 959

3 412 124

-1

Subsidies

92 281

95 589

-3

Goods and Services

65 552

117 597

-44

Total Expenses

3 523 792

3 625 310

-3

Non-appropriation revenue increased by $23.6 million due to increased levy collections.

Total non-appropriation revenue for 2001-02 was $351.6 million, an increase of $23.6 million from budget. The increase is primarily due to increased collections of the Air Passenger Ticket Levy ($38.8 million) and unanticipated dividends from the Australia River Company ($6.4 million). The increased revenue was partially offset by a reduction in reimbursements for the Dairy Regional Assistance Programme ($10 million) and reduced dividends from Airservices Australia ($12.3 million).

Expenses decreased by
$101.5 million, primarily due to programme underspends.

Total expenses of $3,523.8 million represented a $101.5 million decrease against budget, due mainly to:

  • savings from programme underspends ($84.5 million), primarily attributable to the Natural Disaster Relief Arrangements and the Upgrade of the Mainline Interstate Railway Track programmes; and
  • change in timing of the implementation and completion of programmes in 2001-02 for which funds were rephased to 2002-03 and later years ($74.5 million).
These reductions were partially offset by an increase in expenses due to a change in the accounting policy for the treatment of grant payments ($66.4 million).

Assets and Liabilities

Total assets decreased by $334.8 million due to a decrease in investments

Total administered assets decreased by $334.8 million from budget to $935.8 million. This was mostly due to the transfer of investments for the National Rail Corporation ($293.6 million) and the Australian River Company ($38 million) to the Department of Finance and Administration, and a $66.4 million reduction in non-financial assets due to a change in the accounting policy for the recognition of prepayments. These reductions were partially offset by a $30 million increase in investments due to the non-receipt of an anticipated capital repayment from Airservices Australia.

Note: In accordance with changes in accounting policy, appropriation receivable is no longer reported in the notes to the Financial Statements. Therefore, for comparative purposes, amounts relating to appropriation receivable have been excluded from the above analysis.

Figure 10: Administered assets as at 30 June 2002

Figure 10: Administered assets as at 30 June 2002

Total liabilities increased by $25.5 million due to an increase in grants and other payables.

Total administered liabilities were $140.4 million, representing an increase of $25.5 million against budget due to an increase in grants and other payables by administered programmes.