Section 5 : Budgeted Financial Statements
5.1 Analysis of budgeted financial statements
An analysis of AMSA's budgeted financial statements, as reflected in the budgeted departmental financial statements and administered schedules for 2005-06, is provided below.
Statement of Financial Performance
AMSA has four main sources of income:
- levy funding
- Community Service Obligation (CSO) funding
- sales of goods and services, and
AMSA is budgeting for a net surplus in 2005-06 of $0.9m.
The major part of AMSA's revenue arises from the three levies corresponding to AMSA's three major functions in ship safety regulation (the Regulatory Functions Levy), provision of the national network of marine aids to navigation (the Marine Navigation Levy), and management of the National Plan to Combat Pollution of the Sea by Oil and Other Noxious and Hazardous Substances (the Protection of the Sea Levy).
AMSA anticipates that the total amount of levies collected from the shipping industry in 2005-06 to be around $49.2m. These are appropriated under Section 48 of the Australian Maritime Safety Authority Act 1990 as special appropriations. The 2005-06 total levy collection is expected to be $3.3m higher than the projected total of $45.9m in 2004-05 resulting from growth in the overall levy revenue in 2005-06 in line with higher levels of shipping activity flowing from continued strong demand forecast in commodity exports.
The Australian Maritime Safety Authority Act 1990 (section 2A) states that one of its objectives is to promote efficient provision of AMSA services. Since its inception, AMSA has substantially consolidated its asset base and adopted a range of management strategies making considerable efficiency gains in service delivery. This provides regular opportunities to reduce levy rates on an ongoing basis as reflected in the overall downward trend in the Marine Navigation and Regulatory Functions levy rates.
Community Service Obligation Funding
AMSA receives an annual departmental appropriation for providing a search and rescue co ordination service to the community with the amount appropriated for 2005-06 being $24.5m. This includes $2.1m being allocated to AMSA in 2005-06 Budget from the total $54.7m additional funding over four years for further initiatives to strengthen AMSA's search and rescue capability, including:
Contracting four turbine engine dedicated search and rescue aircraft, with three of the aircraft based in Far North Queensland, southwest and southeast Australia, respectively and the fourth providing coverage for maintenance and back-up to ensure continuity of service. The four aircraft will be capable of day and night search, on-scene coordination, homing to distress beacons, and deploying emergency supplies to people in distress.
Improving communications and other search and rescue equipment for existing aircraft that are used for search and rescue operations on an opportunity basis.
These measures complement the initiatives announced in the 2004-05 Budget from a total funding package of $18.9m over four years including:
- Contracting a dedicated turbine engine aircraft in Darwin with the capability to deliver lifesaving equipment and fitted with surface search radar and night search camera
- Upgrading of AMSA's Rescue Coordination Centre to an Emergency Response Centre including improved communication and search coordination systems
- Assisting existing contracted search and rescue aviation operators to address new aviation regulatory requirements planned for introduction in 2005, and
- Developing a new system to deliver lifesaving equipment from turbine engine pressurised aircraft.
AMSA also receives an annual administered appropriation to cover the cost of search and rescue incidents (mainly comprising aircraft/helicopter hire) estimated at $6.2m in 2005-06 compared to $5.8m for 2004-05.
Fees for Service and Interest
AMSA may make determinations fixing charges under section 47 of the Australian Maritime Safety Authority Act 1990. Section 47(12) requires AMSA's fees and charges to be reasonably related to the costs incurred, or to be incurred, by AMSA in their provision. AMSA provides a range of marine services for which it makes a charge based on the average cost of delivering a specific service or the time taken to deliver the service multiplied by a standard hourly rate. Charges may also include waiting time, travelling expenses and cancellation fees associated with particular services.
AMSA marine services include: inspection of ships, cargo, and ships' safety equipment; activities involved with issuing qualifications (certificates of competency) to seafarers (conducting oral practical examinations for navigating and engineering officers and assessing sea time prerequisites for qualifications); issuing and renewing coastal pilot licences; and services provided by the Shipping Registration Office.
In 2005-06, AMSA's total estimated revenue from independent sources is $3.7m, compared to a total of $2.9m in 2004-05 Budget. This includes fees and charges amounting to $2.2m ($2.2m in 2004-05) and interest of $1.5m ($0.7m in 2004-05).
5.2 Budgeted financial statements tables
Table 5.4: Departmental capital budget statement
5.3 Notes to the financial statements
1. Accounting policy
The budgeted financial statements have been prepared on an accrual accounting basis, having regard to Statements of Accounting Concepts, and in accordance with:
- The Finance Minister's Orders
- Australian Accounting Standards
- Other authoritative pronouncements of the Australian Accounting Standards Board, and
- The Consensus Views of the Urgent Issues Group.
2. Departmental and administered items
Agency assets, liabilities, revenues and expenses are those items that are controlled by AMSA that are used in producing its outputs and include:
- infrastructure, plant and equipment used in providing goods and services
- liabilities for employee entitlements
- revenue from appropriations or independent sources in payment for outputs, and
- employee, supplier and depreciation expenses incurred in providing agency outputs.
Administered items are those items incurred in providing programs that are controlled by the government and managed, or oversighted, by AMSA on behalf of the government. Administered expenses included live search and rescue response activities and administered revenues are appropriated from government.
3. Departmental revenue
Revenue from government represents the purchase of outputs from AMSA by the government and is recognised to the extent that it has been received into AMSA's bank account.
Revenue from other sources, representing sales from goods and services, is recognised at the time that it is imposed on customers.
4. Departmental expenses - employees
Payments and net increases in entitlements to employees for services rendered in the financial year.
5. Departmental Expenses - Suppliers
Payments to suppliers for goods and services used in providing agency outputs.
6. Departmental Expenses - Depreciation and Amortisation
Depreciable property plant and equipment, buildings and intangible assets are written-off to their estimated residual values over their estimated useful life to AMSA, using straight-line calculation method.
7. Departmental Assets - Financial Assets
The primary financial asset relates to receivables. Financial assets are used to fund AMSA's capital programme, employee entitlements, creditors and to provide working capital.
8. Departmental Assets - Non-Financial Assets
These items represent future economic benefits that AMSA will consume in producing outputs. The reported value represents the purchase price paid less depreciation incurred to date in using the asset.
9. Departmental Liabilities - Provisions and Payables
Provision has been made for AMSA's liability for employee entitlements arising from services rendered by employees. This liability includes unpaid annual leave, long service leave and sick leave.
Provision has also been made for unpaid supplier expenses as at balance date.
10. Administered Assets - Financial Assets
Comprise primarily cash.