Chapter 1: Year in Review—Continued

Financial Performance 2012–13

‘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 2012–13 which appear in the section of this report titled ‘Financial Statements’.

Departmental Finances

From 1 July 2010, the Department no longer receives appropriation for depreciation and amortisation expenses. As a result, in 2012–13 the Department reported a deficit attributable to the Australian Government of $6.1 million. Had the Department received funding for depreciation and amortisation expenses, a small surplus of $4.0 million would have been reported.

Revenue from the Australian Government in 2012–13 decreased by $11.8 million, due mainly to changes in the funding profile of several measures, in particular the cessation of funding for the High Speed Rail Study.

Other revenue in 2012–13 decreased by $4.7 million, due mainly to a reduction in the cost recovery for shared services provided to the Department of Regional Australia, Local Government, Arts and Sport.

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 ($)

2008–09 2009–10 2010–11 2011–12 2012–13 Change last year
Revenue from government 242.5 208.8 188.9 192.5 180.7 (11.8)
Other revenue 4.6 7.0 15.9 11.7 7.0 (4.7)
Gains 0.9 1.0 1.4 0.8 6.7 5.9
Total income 248.0 216.8 206.2 205.0 194.4 (10.6)
Employee and supplier expenses 234.8 201.3 202.3 202.9 189.5 (13.5)
Depreciation 13.6 12.9 12.4 12.6 10.2 (2.4)
Other expenses 2.7 2.8 3.8 1.8 0.9 (0.9)
Total expenses 251.0 217.0 218.4 217.3 200.5 (16.8)
Surplus (Deficit) attributable to the Australian Government (3.0) (0.2) (12.2) (12.3) (6.1) 6.2
Plus non-appropriated depreciation and amortisation expenses - - 12.4 12.6 10.2 (2.4)
Operating result (Loss) attributable to the agency (3.0) (0.2) 0.2 0.2 4.0 3.8
Financial assets A 100.9 67.4 85.6 93.9 88.0 (5.8)
Non-financial assets B 71.8 58.7 53.3 44.7 40.0 (4.7)
Liabilities C 68.9 58.6 72.0 80.4 68.9 (11.5)
Net assets = A + B - C 103.9 67.5 66.9 58.2 59.1 1.0

Asset Management

The Department manages $40.0 million of non-financial assets comprising several asset classes: land and buildings; property, plant and equipment; intangibles (software); and other non-financial assets. Of these, the major investments are in land and buildings ($18.9 million) and in-house developed and purchased software ($9.9 million). The fall in non-financial assets was mainly due to depreciation, partially offset by asset acquisitions.

The Department's capital program is underpinned by centralised approval processes. All capital proposals are considered by the Executive. IT related projects are first submitted to the Department's Strategic Information Technology and Security Committee for consideration and recommendation to the Executive.

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 2012–13 was $4.2 billion; of this $2.0 billion was appropriated directly to the Department for grants, subsidies and other administered expenses. The Department of the Treasury (the Treasury) is appropriated directly for payments to and through states and territories for National Partnership Agreements.

Major expense items in 2012–13 were:

  • Nation Building Program ($2,357.3 million)
  • Nation Building Plan for the Future ($1,082.8 million)
  • Payments to CAC Act bodies ($337.3 million)
  • Tasmanian Freight Equalisation Scheme ($111.0 million)
  • Regional Infrastructure Fund ($104.2 million), and
  • Interstate Road Transport Fees ($75.8 million).

In aggregate, administered programs were $32.6 million or 0.8 per cent lower than the latest budgets published in the Department's and the Treasury's 2013–14 Portfolio Budget Statements. Combined expenses in 2012–13 were lower than the prior year by some $3.9 billion due mainly to fluctuations in the funding profile of projects delivered under the Nation Building Investment Program ($2.5 billion) and the Building Australia Fund ($1.3 billion).

In 2012–13, non-taxation revenue decreased by $1.2 billion overall, due mainly to changes in the profile of funds received from the Building Australia Fund ($1,255.1 million), partially offset by an increase in refunds of prior year payments ($32.0 million). Taxation revenue collected on behalf of the Australian Government increased by $0.5 million.

Administered net assets increased by $152.4 million in 2012–13, due mainly to increases in the net asset value of administered investments in government authorities and companies ($155.2 million).

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 performance and position ($m)

2008–09 2009–10 2010–11 2011–12 2012–13 Change last year
Taxation revenue 26.7 23.0 22.8 24.2 24.8 0.5
Non-taxation revenue 1,146.4 665.8 1,042.6 2,461.5 1,241.4 (1,220.1)
Total income 1,173.1 688.8 1,065.4 2,485.8 1,266.2 1,219.6
Grants 8,465.3 3,734.1 1,781.3 3,136.9 1,816.7 (1,320.3)
Subsidies 155.2 147.5 150.1 145.3 161.5 16.2
Other expenses 22.2 27.4 30.6 23.4 19.6 (3.8)
Total expenses 8,642.7 3,909.0 1,962.1 3,305.7 1 997.8 (1 307.9)
Financial assets A 2,468.9 3,461.7 4,302.7 4,343.4 4 496.7 153.4
Non-financial assets B 461.0 98.7 89.0 68.3 65.2 (3.1)
Liabilities C 17.2 65.4 25.6 27.4 25.3 (2.2)
Net assets = A + B - C 2,912.7 3,495.1 4,366.1 4,384.2 4 536.6 152.4

Spatial Reporting

Table 1.3 illustrates a summary of actual expenditure for selected grants programs in the infrastructure and transport portfolio disaggregated between regional Australia, non-regional and non-specific location for the 2012–13 financial year. It does not include grants programs where payments are made to the states and territories or for grants programs of less than $50.0 million.

The infrastructure and transport portfolio made a substantial contribution to regional Australia in 2012–13 through various grant programs including, but not limited to, the programs outlined in the following table.

Table 1.3 Regional and non-regional expenditure disaggregated for infrastructure and transport portfolio 2012–13 ($m)

Program Category Budget Estimated 2012–13
(a)
Actual Estimated 2012–13
(b)
Variation
(a-b)
Department of Infrastructure and Transport
Program 1.1: Infrastructure Investment Regional 256 256 0
Nation Building Roads to Recovery Non-regional 94 94 0
Non-specific - - -
Nation Building Program Investment Regional - - -
(ARTC and Road and Rail Research) Non-regional 45 41 4
Non-specific 11 7 4
Program 2.2: Surface Transport Regional 112 111 1
Tasmanian Freight Equalisation Scheme Non-regional - - -
Non-specific - - -
Total- Department of Infrastructure and Transport Regional 368 367 1
Non-regional 139 135 4
Non-specific 11 7 4
Regional 368 367 1
Non-regional 139 135 4
Portfolio Total Non-specific 11 7 4

Note: The Budget Estimate 2012–13 numbers represent the latest budget amount for the respective programs as disclosed in the Department of Infrastructure and Transport Portfolio Budget Statements 2013–14.

The Roads to Recovery program provided funding directly to local councils for road works chosen by the councils and to states and territories for roads in areas where there are no councils. Each funding recipient has a set allocation of funding over the life of the program.

The Tasmanian Freight Equalisation Scheme helped alleviate the sea freight cost disadvantage incurred by shippers of eligible non-bulk goods moved by sea between Tasmania and mainland Australia. Its objective is to provide Tasmanian industries with equal opportunities to compete in mainland markets, recognising that, unlike their mainland counterparts, Tasmanian shippers do not have the option of transporting goods interstate by road or rail. The Australian Government committed to the scheme $114.3 million in 2012–13 and $356.2 million in the forward years.

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Last Updated: 10 November, 2014