Department of Infrastructure and Regional Development
Departmental Budget Variances Commentary

Budget Variances Commentary

Statement of Comprehensive Income

Expenses

Employee benefits expenses are under budget by $12.6 million or 9% mainly due to lower than anticipated Average Staffing Levels through delays in filling vacant positions and changes in the discount rate used to value long service leave provisions (see employee provisions below).

Supplier expenses are under budget by $10.5 million or 8% mainly due to:

  1. the deferral of expenditure on the new Western Sydney Airport project to the 2017–18 financial year; and
  2. the reclassification of environmental management costs required under the Western Sydney Airport plan of $5 million to administered expenses.

Grant expenses reflect non-reciprocal contributions that were originally budgeted as supplier expenses.

Depreciation and amortisation expenses are under budget by $2.8 million or 23% due to the revaluation and extension of useful lives of leasehold improvement assets at 30 June 2016, recognised after the estimates for 2016–17 were prepared.

Finance costs reflect the unwinding of makegood provisions in office leases. The variance is due to the waiver of makegood requirements for new office leases in Canberra (see other provisions below).

No budget allowance was made for write-down and impairment of assets as these expenses cannot be reliably predicted.

Income

Revenue from Government is under budget by $17.3 million or 7% to reflect amounts withheld under s51 of the PGPA Act associated with the deferral and reclassification of expenses for the Western Sydney Airport project (see Note 5.1A).

Statement of Financial Position

Financial assets are over budget by $30.1 million mainly due to an increase in appropriation receivables at 30 June 2017 arising from the opening balance and retention of funds to meet increased accrued expenses and capital expenditure in 2017–18.

Non-financial assets are over budget by $9.3 million mainly due to:

  1. a revaluation of leasehold improvement assets at 30 June 2016, recognised after estimates for 2016–17 were prepared; partially offset by
  2. a revaluation decrement to other property, plant and equipment assets during 2016–17.

Payables are over budget by $5.8 million or 28% due to a higher level of accrued expenses at 30 June 2017 than budgeted for the Western Sydney Airport project.

Employee provisions are $1.3 million or 3% under budget mainly due to a change in the discount rate used to determine the present value of long service leave provisions.

Other provisions are under budget by $8.3 million mainly due to the waiver of makegood requirements for major Canberra offices as a result of new lease agreements.

Statement of Changes in Equity

Total equity is over budget by $43 million or 61% mainly due to changes in accumulated results and asset revaluations at 30 June 2016, recognised after estimates for 2016–17 were prepared.

Cash Flow Statement

Variances in the Cash Flow Statement are broadly consistent with the variances explained above for income and expenses. The variance in cash used for investing activities reflects the deferral of capital projects into 2017–18.

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