Financial Performance 2009-10

‘Departmental activities’ involve the use of assets, liabilities, revenue and expenses controlled or incurred by the Department in its own right. ‘Administered activities’ involve the management or oversight by the Department, on behalf of the Australian Government, of items controlled or incurred by the Australian Government.

This section should be read in conjunction with the Department's audited financial statements for 2009–10 which appear in the section of this report entitled ‘Financial Statements’.

Departmental finances

In 2009–10, the Department reported an operating deficit of $0.2 million. This result was within the Department's approved operating deficit of $2.4 million.

Revenue from the Australian Government in 2009–10 reduced by $33.7 million, due mainly to the transfer of appropriation following the establishment of the Australian Transport Safety Bureau (ATSB) as a separate agency, and changes in the funding profile of several measures.

The Department's net assets reduced by $36.4 million, due mainly to the transfer of assets to the ATSB and the return of prior-year appropriation funding to the Department of Finance and Deregulation.

The Department's commitment to financial management continues to be reflected in its financial performance and unqualified financial statements. The Department also continued its strong focus on compliance with the Financial Management and Accountability Act 1997 (FMA Act), and implemented system improvements to enhance its FMA Act compliance regime.

Table 1.1 Summary of departmental financial performance and position ($m)
  2005–06 2006–07 2007–08 2008–09 2009–10 Change
last
year
Revenue from government 217.4 213.3 239.8 242.5 208.8 (33.7)
Other revenue 5.1 4.1 4.5 4.6 7.0 2.4
Gains 1.0 1.1 0.6 0.9 1.0 0.1
Total income 223.5 218.5 244.9 248.0 216.8 (31.2)
Employee and supplier expenses 209.5 208.2 220.5 234.8 201.3 (33.5)
Depreciation 9.7 11.8 13.6 13.6 12.9 (0.7)
Other expenses 4.0 3.2 5.0 2.7 2.8 0.1
Total expenses 223.2 223.2 239.1 251.0 217.0 (34)
Operating result (Loss) 0.3 (4.7) 5.8 (3.0) (0.2) 2.8
Financial assets A 105.0 92.2 98.6 100.9 67.4 (33.5)
Non-financial assets B 63.9 57.7 64.9 71.8 58.7 (13.1)
Liabilities C 51.1 55.1 54.7 68.9 58.6 (10.3)
net assets = A + B - C 117.7 94.8 108.8 103.9 67.5 (36.4)

Note: Historical data prior to 2006–07 reflects the respective year's financial statements as signed off by the Australian National Audit Office at the time. As such, it may not reflect current accounting policies or comparative figures published in later statements. For comparative purposes, figures for 2006–07 have been amended to reflect current accounting policies.

Asset management

The Department manages $58.7 million of non-financial assets comprising several asset classes: land and buildings; property, plant and equipment; intangibles (software); inventories; and other non-financial assets. Of these, the major investments are in land and buildings ($29.3 million) and intangibles ($15.9 million).

The Department's capital program is underpinned by centralised approval processes. Business divisions submit proposals for consideration by the Department's Strategic Information Technology and Security Committee (for IT-related projects) and the Executive (for all other proposals above $50,000). Below this threshold the Chief Financial Officer can consider non-IT project proposals. All decisions are informed by input from the Financial Services Branch.

Assets were independently revalued to market selling price (for leasehold improvements to depreciated replacement cost), with the exception of leasehold make-good assets which were revalued internally on a current market basis.

The Secretary has issued a Chief Executive's Instruction on asset management and the Department has documented asset policies and procedures on the management and safeguarding of assets. Asset registers are maintained and annual stocktakes are undertaken to verify their accuracy.

Administered finances

Total administered expenditure in 2009–10 was $8.4 billion; of this, $4.6 billion was appropriated directly to the Department for grants, subsidies and other administered expenses. Major expense items in 2009–10 were:

  • Nation Building Program ($4,979.3 million)
  • Local Government Financial Assistance Grants ($1,979.9 million)
  • Nation Building Plan for the Future ($411.0 million)
  • Regional and Local Community Infrastructure Program ($332.2 million)
  • Payments to CAC Act bodies ($259.8 million)
  • Tasmanian Freight Equalisation Scheme ($98.3 million), and
  • Interstate Road Transport Fees ($62.5 million).

In aggregate, the administered programs managed by the Department were under-expensed by $216.4 million or 2.6 per cent, against the latest budget published in the 2010–11 Portfolio Budget Statements.

Taxation revenue collected on behalf of the Australian Government increased by $5.0 million in 2009–10, largely due to increased revenue from interstate road transport registrations.

Non-taxation revenue reduced by $489.2 million overall, due mainly to changes in the profile of funds received from the Building Australia Fund ($594.0 million), partially offset by increases in the Australian Maritime Safety Authority levies ($12.5 million), the dividends from Airservices Australia ($10.0 million) and the revenue from Motor Vehicle Standards Regulations fees ($3.6 million).

In 2009–10, administered net assets increased by $582.4 million, due mainly to increases in the net asset value of administered investments in government authorities and companies ($1.1 billion), partially offset by decreases in prepayments balances due to the expensing of some prepayments made in 2005–06 and 2006–07 ($348.8 million) and an increase in payables balances (48.2 million).

The Department of the Treasury (the Treasury) is appropriated directly for payments to and through states and territories for National Partnership Agreements.

Table 1.2 is based on information reported in the Department's financial statements and excludes items for which the Treasury is appropriated directly.

Table 1.2 Summary of administered financial perfomance and position.
  2005–06
$m
2006–07
$m
2007–08
$m
2008–09
$m
2009–10
$m
Change
last
year
Taxation revenue 150.1 77.1 80.7 84.0 89.0 5.0
Non-taxation revenue 135.7 168.3 154.1 1,089.1 599.8 (489.3)
Gains 36.7 0.6 7.7 0.0 0.0 0.0
Total income 322.5 246 242.5 1,173.1 688.8 (484.3)
Grants 3,481.7 4,319.8 4,966.6 8,465.3 3,734.1 (3731.2)
Subsidies 136.3 128 142.4 155.2 147.5 (7.7)
Other expenses 88.9 117.6 123.8 22.2 27.4 5.2
Total expenses 4,066.9 4,565.5 5,232.8 8,642.7 3909.0 (4,733.7)
Financial assets A 2,118.3 1937.3 1,974.1 2,468.9 3461.7 992.8
Non-financial assets B 2,494.7 2,459.4 1,459.5 461.0 98.7 (362.3)
Liabilities C 25.2 31.5 30.3 17.2 65.4 48.2
net assets = A + B - C 4,587.8 4,365.1 3,403.3 2,912.7 3495.1 582.4

Note: Historical data prior to 2006–07 reflects the respective year's financial statements as signed off by the Australian National Audit Office at the time. As such, it may not reflect current accounting policies or comparative figures published in later statements. For comparative purposes, figures for 2006–07 have been amended to reflect current accounting policies.

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Last Updated: 24 October, 2014