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User guide to the portfolio budget statements

Untitled Document
Purpose of the Portfolio Budget Statements
How to read the Portfolio Budget Statements
Portfolio Budget Statements road map
Departmental and administered items
Appropriations in the accrual budgeting framework
Components of agency financial statements
Rounding Convention

Purpose of the Portfolio Budget Statements

The purpose of the 2006-07 Portfolio Budget Statements (PBS) is to inform Senators and Members of Parliament of the proposed allocation of resources to Government outcomes by agencies within the Portfolio. Agencies receive resources from the annual appropriation bills, special appropriations, standing appropriations (including special accounts) and revenue from other sources.

A key role of the PBS is to facilitate the understanding of proposed annual appropriations in Appropriation Bills No.1 and No.2 2006-07. In this sense, the PBS are officially Budget Related Papers and are declared by the Appropriation Bills to be 'relevant documents' to the interpretation of the Bills according to section 15AB of the Acts Interpretation Act 1901.

The PBS provide information, explanation and justification to enable Parliament to understand the purpose of each outcome proposed in the Bills.

As required under Section 12 of the Charter of Budget Honesty Act 1998, non-general government sector entities are not consolidated into the Commonwealth general government sector fiscal estimates and, accordingly, these entities are not reported in the PBS.

The format of the PBS is consistent with Department of Finance and Administration guidelines. However, additional information has been included to better assist Senators and Members understand how Budget funding contributes to the achievement of the desired Portfolio outcomes. In this context, the agencies of the Portfolio welcome comments, suggestions or general feedback on the 2006-07 PBS.

How to read the Portfolio Budget Statements

The PBS are presented in three parts, aligned in several ways to the Budget Papers, as outlined below.

User Guide to the Portfolio Budget Statements

An introduction, explaining the purpose of the PBS, the structure of the document, and styles and conventions used.

Portfolio Overview

A brief overview of the Portfolio. Portfolio outcomes are depicted in a chart outlining the structure of the outcomes to which the Portfolio contributes. This includes a table for Australian Government Indigenous Expenditures for the Portfolio.

Agency Budget Statements

For each agency within the Portfolio, a budget statement is presented in five sections:

Section 1: Overview A brief overview of the agency.
Section 2: Resources A reconciliation of agency resourcing information from the 2005-06 Mid Year Economic and Fiscal Outlook to the 2006-07 Budget. Includes key changes to the agency's estimates and a table of appropriations and other revenue sources for both administered and departmental appropriations.
Section 3: Outcomes A brief description of the agency's outcomes and, where applicable, Budget measures in summary form. Details the contribution of the agency's outputs to the outcome, performance information for the outcome(s), outputs and administered items, and planned evaluations. Notes upcoming competitive tendering and contracting that is of a material or sensitive nature. Links the resources appropriated to their application to the agency's outputs and to administered items.
Section 4: Other reporting requirements Includes purchaser-provider and cost recovery components.
Section 5: Budgeted financial statements The agency's budgeted financial statements in accrual format, covering the Budget year, the previous year and three out-years.
Glossary Explains key terms.
Index Alphabetical guide to the PBS.

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Portfolio Budget Statements road map

Comprehensive information on all government decisions announced in the Budget are in Budget Paper No. 2, Budget Measures 2006-07. The PBS include Budget appropriations for this Budget in each agency's Table 2.2, Agency measures.

The following chart shows the parts of the PBS which relate to specific Budget papers.

Budget Paper PBS equivalent
Budget Paper No. 1: Budget Strategy and Outlook
Statement 1: Fiscal Strategy and Budget Priorities
Overview of the fiscal and economic outlook

Portfolio Overview
Portfolio structure

Agency Budget Statements
Section 1: (Agency) Overview
Section 2: (Agency) Resources for 2006-07

Statement 2: Fiscal Outlook
Budget aggregates and variations to the fiscal balance estimates
Agency Budget Statements
Section 2: (Agency) Resources for 2006-07
Statement 10: AAS Financial Statements
Accrual financial statements for the general government sector
Agency Budget Statements
Section 5: (Agency ) Budgeted financial statements
Budget Paper No. 2: Budget Measures
Budget revenue, expense and capital measures Agency Budget Statements
Section 2: (Agency) Resources for 2006-07
Budget Paper No. 3: Federal Financial Relations
Information on the Australian Government's relations with states, territories and local government, in particular, Specific Purpose Payments (SPPs) Agency Budget Statements
Section 2: (Agency) Resources for 2006-07
Section 3: (Agency) Outcomes
Budget Paper No. 4: Agency Resourcing
Resourcing for Australian Government agencies, including Appropriation Bills Agency Budget Statements
Section 2: (Agency) Resources for 2006-07

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Departmental and administered items

Under the Australian Government's accrual-based budgeting framework, and consistent with Australian Accounting Standards, transactions that agencies decide (departmental transactions) are separately budgeted for and reported on from transactions agencies make on behalf of others (administered transactions). This ensures that the transactions decided by agencies are reported separately from other transactions in their accounts.

Departmental items

Assets, liabilities, revenues and expenses in relation to an agency or authority that are controlled by the agency. Departmental expenses include employee and supplier expenses and other administrative costs, which are incurred by the agency in providing its goods and services.

Administered items

Revenues, expenses, assets and liabilities that are managed by an agency or authority on behalf of the Government according to set government directions. Administered expenses include subsidies, grants and personal benefit payments and administered revenues include taxes, fees, fines and excises.

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Appropriations in the accrual budgeting framework

In the accrual budgeting framework, separate annual appropriations are provided for:

  • Departmental price of outputs appropriations: representing the government's funding for outputs from agencies
  • Departmental capital appropriations: for investments by the government for either additional equity or loans to agencies or payments from previous years' outputs
  • Administered expense appropriations: for the estimated administered expenses relating to an existing outcome, a new outcome or a Specific Purpose Payment to the states, and
  • Administered capital appropriations: for increases in administered equity through funding non-expense administered payments.

Special appropriations fund the majority of payments from the Consolidated Revenue Fund (especially those that are entitlement driven or involve transfers to state governments). The appropriation framework is discussed further in the introduction to Budget Paper No. 4: Agency Resourcing 2006-07.

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Components of agency financial statements

Reporting requirements for budgeted financial statements differ between agencies (for example, according to whether the agency participates in administered transactions). Therefore, not all agencies are required to report against all schedules.

The budgeted financial statements contain the estimates prepared in accordance with the requirements of the government's financial budgeting and reporting framework, including the principles of the Australian Accounting Standards and Statements of Accounting Concepts, as well as specific guidelines issued by the Department of Finance and Administration. They show the planned financial performance for the 2006-07 Budget year and each of the forward years from 2007-08 to 2009-10. The statements also include the estimated actual for 2005-06 for comparative purposes.

The schedules included in the budgeted financial statements for 2006-07 are as follows:

Statement/Schedule Purpose
Budgeted departmental income statement Shows the expected financial results for the agency. Identifies full accrual expenses and revenues, which highlights whether the agency is operating at a sustainable level.
Budgeted departmental balance sheet The financial position of the agency. It helps decision makers to track the management of assets and liabilities.
Budgeted departmental statement of cash flows Provides information on the extent and nature of cash flows by categorising them into expected cash flows from operating activities, investing activities and financing activities.
Budgeted departmental statement of changes in equity - summary of movement This is a new statement for Portfolio Budget Statements that represents the movement of parent entity (the Commonwealth) interest in the agency. The statement has been prepared to reflect the net operating result, movements of capital return and additional capital injections from the Commonwealth.
Departmental capital budget statement Shows all planned departmental capital expenditure (capital expenditure on non financial assets), whether funded through capital appropriations for additional equity or borrowings, or from funds from internal sources.
Departmental property, plant, equipment and intangibles - summary of movement Shows budgeted acquisitions and disposals of non financial assets during the Budget year.
Schedule of budgeted income and expenses administered on behalf of government Identifies the main revenues and expenses administered on behalf of government.
Schedule of budgeted assets and liabilities administered on behalf of government Shows the assets and liabilities administered on behalf of government.
Schedule of budgeted administered cash flows Shows cash flows administered on behalf of government.
Schedule of administered capital budget Shows details of planned administered capital expenditure.
Schedule of property, plant, equipment and intangibles - summary of movement Discloses details of movements in administered non financial assets.

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Rounding Convention

Unless otherwise stated the convention used in this document is to round amounts to the nearest million dollars. All 'totals' are the rounded additions of unrounded figures and, therefore, may not be the strict sums of the figures presented in the text or tables.

Where variance percentages would exceed +/-100%, they are shown as +/-100%.


The contact officer for financial enquiries regarding the PBS is:

Mr Simon Ash
Chief Financial Officer
Department of Transport and Regional Services
Phone: (02) 6274 6260
Fax: (02) 6274 6695
E-mail: simon.ash@dotars.gov.au

The contact officer for all other enquiries regarding the PBS is:

Ms Sharon Field
General Manager, People and Planning
Department of Transport and Regional Services
Phone: (02) 6274 7077
Fax: (02) 6274 6519
E-mail: sharon.field@dotars.gov.au

A copy of this document can be located on the Australian Government Budget website at: http://www.budget.gov.au or on the Department of Transport and Regional Services website at: www.dotars.gov.au/dept/budget

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Budget 2006-07

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