Chapter 1: Year in Review

Financial Performance 2015–16

Departmental activities involve the use of assets, liabilities, revenue and expenses controlled or incurred by the Department in its own right. Administered activities involve 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 2015–16, in the section of this report titled ‘Financial Statements’.

Departmental Finances

In 2015–16, the Department reported a surplus on continuing operations of $8.9 million.

Revenue from the Australian Government in 2015–16 increased by $11.5 million. The increase primarily reflects the receipt of funding of $18.8 million for site preparatory works for the Western Sydney Airport.

Other gains in 2015–16 decreased by $15.8 million. The net reduction reflects a gain of $10.4 million in 2015–16 associated with the unwinding of surplus lease provisions and the reversal of lease liabilities for Canberra office accommodation offset by a gain of $26.3 million in 2014–15, primarily due to the unwinding and reversal of surplus lease provisions.

Total expenses decreased by $5.2 million largely due to increased write-downs of assets in 2014–15.

The Department's commitment to financial management continues to be reflected in its financial performance and unqualified financial statements.

Table 1.1 Summary of Departmental Financial Performance and Position ($m)

 2011–122012–132013–142014–152015–16Change last year
Revenue from government   192.5 180.7 231.1 250.2 261.7 11.5
Other revenue   11.7 7.0 5.8 6.7 4.7 (2.0)
Gains   0.8 6.7 8.2 26.3 10.4 (15.8)
Total income   205.0 194.4 245.1 283.1 276.8 (6.3)
Employee and supplier expenses   202.9 189.5 230.4 252.6 253.7 1.1
Depreciation and amortisation   12.6 10.2 11.6 12.5 12.2 (0.3)
Other expenses   1.8 0.9 1.1 8.1 2.0 (6.1)
Total expenses   217.3 200.5 243.0 273.2 268.0 (5.2)
Surplus (Deficit) attributable to the Australian Government    (12.3) (6.1) 2.1 9.9 8.9 (1.0)
Plus non-appropriated depreciation and amortisation expenses   12.6 10.2 11.6 12.5 12.2 (0.3)
Operating result (Loss) attributable to the agency   0.2 4.0 13.7 22.4 21.1 1.4
Financial assets A 93.9 88.0 136.0 130.8 133.5 2.7
Non-financial assets B 44.7 40.0 50.4 35.9 43.5 7.6
Liabilities C 80.4 68.9 106.8 85.9 68.7 (17.2)
Net assets = A + B - C   58.2 59.1 79.6 80.8 108.3 27.5

Asset Management

The Department manages $43.5 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 ($20.8 million) and in-house developed and purchased software ($12.0 million). The increase in non-financial assets is mainly due to the revaluation of office fit out for Canberra office accommodation.

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 Accountable Authority Instructions on asset management. In 2015–16, the Department reviewed and updated its asset policies and procedures for managing and safeguarding assets. Asset registers are maintained and annual stocktakes are undertaken to verify their accuracy.

Administered Finances

Total administered expenditure in 2015–16 was $7.3 billion; of this $3.3 billion was appropriated directly to the Department for grants, subsidies and other administered expenses. The Treasury is appropriated directly for payments to and through states and territories for national partnership agreements.

Major expense items in 2015–16 were:

  • Infrastructure Investment Program ($653.5 million)
  • Local Government Financial Assistance Grants ($1,144.2 million)
  • Infrastructure Growth Package ($350.0 million)
  • Tasmanian Freight Equalisation Scheme ($129.8 million)
  • Payments to corporate Commonwealth entities ($116.2 million)
  • Community Development Grants Fund ($111.2 million), and
  • Services to Indian Ocean Territories ($104.0 million).

In aggregate, administered programs were $198.3 million or 2.6 per cent lower than the latest budgets published in the Department's and the Treasury's 2016–17 Portfolio Budget Statements. Combined expenses in 2015–16 were lower than the prior year by $1.9 billion mainly due to the bring forward of two quarters of payments for the Local Government Financial Assistance Grants Program from 2015–16 to 2014–15.

In 2015–16, non-taxation revenue decreased by $127.9 million mainly due to changes in the profile of funds for the Building Australia Fund ($177.8 million), offset by an increase in interest ($20.1 million) and dividends ($25.9 million). Taxation revenue collected on behalf of the Australian Government increased by $3.1 million.

Administered net assets increased by $246.3 million in 2015–16. This was due mainly to the payment of the second and final instalment for the loan to the ACT Government for loose fill asbestos ($250.0 million) and an increase in the value of non-financial assets primarily as a result of a revaluation, partially offset by a reduction in the value of the investments in Airservices Australia ($119.3 million) and the Australian Rail Track Corporation ($130.1 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)

  2011–122012–132013–142014–152015–16Change last year
Taxation revenue   24.2 24.8 34.4 36.3 39.4 3.1
Non-taxation revenue   2,461.5 1,241.4 1,520.0 536.7 408.9 (127.9)
Gains   - - 0.1 65.7 11.2 (54.5)
Total income   2,485.8 1,266.2 1,554.5 638.7 459.4 (179.3)
Employee and supplier expenses   21.9 18.1 100.4 124.2 137.2 13.0
Depreciation and amortisation   1.1 1.2 29.1 43.8 39.9 (3.8)
Grants   3,136.9 1,816.7 3,431.6 4,799.6 2,908.4 (1,891.2)
Subsidies   145.3 161.5 164.9 187.6 195.7 8.1
Other expenses   0.3 0.3 0.8 54.0 6.2 (47.8)
Total expenses   3,305.7 1,997.8 3,726.9 5,209.2 3,287.5 1,921.7
Financial assets A 4,343.4 4,496.7 4,727.8 5,391.2 5,387.6 (3.6)
Non-financial assets B 68.3 65.2 700.3 647.5 881.3 233.8
Liabilities C 27.4 25.3 66.5 71.6 55.5 (16.1)
Net assets = A + B - C   4,384.3 4,536.6 5,361.6 5,967.1 6,213.4 246.3

Grants

Information on grants awarded by the Department from 1 July 2015 to 30 June 2016 is available at www.infrastructure.gov.au/department/grants/.

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Last Updated: 12 December, 2016