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Department of Transport and Regional Services


SECTION 3: BUDGETED FINANCIAL STATEMENTS

ANALYSIS OF BUDGETED FINANCIAL STATEMENTS

An analysis of the Department's budgeted financial statements, as reflected in the budgeted departmental financial statements and administered schedules for 2006-07, is provided below.

Departmental

Budgeted departmental income statement

The Department is budgeting for a break even operating result for 2006-07.

Total revenues and expenses are estimated to be $220.9m, an increase of $0.1m from Budget. The increase is primarily as a result of increased funding from estimates adjustments ($0.1m).

Chart 3.1: Total departmental expenses

Chart 3.1: Total departmental expenses
(click on the image to view the larger version)

The significant drop in expenses from 2003-04 to 2004-05 largely reflects two factors:

  • expenses associated with the provision of services to the Indian Ocean Territories, which were transferred from departmental to administered appropriations, and
  • the one-off impact in 2003-04 of expenses related to the recognition of a provision for asbestos-related disease claims.

Budgeted departmental balance sheet

The Department's budgeted net asset position of $95.7m represents a decrease of $22.1m from the 2005-06 actual. The decrease is primarily attributable to the transfer of non financial assets associated with the Jervis Bay Territory programme ($25.6m) to administered.

Total assets are expected to decrease by $21.6m to $147.3m from the 2005-06 actual. The decrease reflects, in large part, the transfer of assets associated with the Jervis Bay Territory programme.

Chart 3.2: Budgeted assets for 2006-07

Chart 3.2: Budgeted assets for 2006-07
(click on the image to view the larger version)

The Department's primary liability continues to be accrued employee leave entitlements of $36.8m.

Administered

Schedule of budgeted income and expenses administered on behalf of government

The Department administers the collection of taxes, fees and fines, other non-taxation revenue and interest and dividends estimated at $194.6m, representing a decrease of $22.3m from Budget. The decrease is primarily due to:

  • the cessation of the stevedoring levy from 1 June 2006 ($20.0m), and
  • the cessation of the aircraft noise levy at Sydney Airport from 1 July 2006 ($9.0m).

The decrease in revenue is partially offset by increased Interstate Road Transport registration charges ($4.0m) and increased revenue from the Indian Ocean Territories programme ($1.6m).

Administered expenses, such as for grants and subsidies programmes, are budgeted at $4 568.7m, representing an increase of $34.1m from the Budget and will be incurred for the programmes set out at Section 2, Table 2.2.1 for Outcome 1 and Table 2.2.2 for Outcome 2. The increase is largely due to:

  • parameter adjustments ($19.4m)
  • the timing of payments made under the Canberra International Airport - runway strengthening programme ($13.2m)
  • revised estimates for the Services to Indian Ocean Territories programme ($12.0m)
  • measures disclosed since the 2006-07 Budget ($0.5m), and
  • other estimates adjustments ($1.0m).

The increase is partially offset by the movement of funding for programmes between years, resulting in a lower level of expenses in 2006-07 ($12.0m).

Chart 3.3: Total administered expenses

Chart 3.3 : Total administered expenses
(click on the image to view the larger version)

Schedule of budgeted assets and liabilities administered on behalf of government

Total assets are expected to decrease by $136.2m from the 2005-06 actual to $4 476.7m. The decrease relates mainly to the timing of payments to the states and territories associated with the AusLink programme ($207.9m) and the timing of payments relating to the Canberra International Airport - runway strengthening programme ($13.2m). The decrease is partially offset by an increase in receivables relating to concessional loan advances provided under the Natural Disaster Relief Arrangements programme ($80.0m) in response to the impact of Tropical Cyclone Larry and the transfer of assets associated with the Jervis Bay Territory programme.

Total liabilities are expected to increase by $5.9m from the 2005-06 actual to $31.1m. The increase primarily reflects an increase in payables attributable to the Local Government Financial Assistance Grants programme ($9.1m), partially offset by other adjustments, including the flow on effects of the 2005-06 actuals ($3.2m).

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BUDGETED FINANCIAL STATEMENTS TABLES

Table 3.1: Budgeted departmental income statement (for the period ended 30 June)

Table 3.2: Budgeted departmental balance sheet (as at 30 June)

Table 3.3: Budgeted departmental statement of cash flows (for the period ended 30 June)

Table 3.4: Departmental statement of changes in equity - summary of movement (Budget year 2006-07)

Table 3.5: Departmental capital budget statement

Table 3.6: Departmental property, plant, equipment and intangibles - summary of movement (Budget year 2006-07)

Table 3.7: Schedule of budgeted income and expenses administered on behalf of government (for the period ended 30 June)

Table 3.8: Schedule of budgeted assets and liabilities administered on behalf of government (as at 30 June)

Table 3.9: Schedule of budgeted administered cash flows (for the period ended 30 June)

Table 3.10: Schedule of administered capital budget

Table 3.11: Schedule of administered property, plant, equipment and intangibles - summary of movement (Budget year 2006-07)

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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 the Department that are used by the Department in producing its outputs and include:

  • computers, 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 programmes that are controlled by the government and managed, or oversighted, by the Department on behalf of the government. Administered expenses included grant payments and subsidies, and administered revenues include levies, fees and fines.

3. Departmental revenue
Revenue from government represents the purchase of outputs from the Department by the government and is recognised to the extent that it has been received into the Department'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 the Department, using the straight-line calculation method.

7. Departmental assets - financial assets
The primary financial asset relates to receivables. Financial assets are used to fund the Department's capital programme, employee entitlements, creditors and to provide working capital.

8. Departmental assets - non-financial assets
These items represent future economic benefits that the Department 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 - interest bearing liabilities
Property lease incentives that the Department has received. These incentives are written-off over the life of the lease.

10. Departmental liabilities - provisions and payables
Provision has been made for the Department's liability for employee entitlements arising from services rendered by employees. This liability includes unpaid annual leave and long service leave. No provision has been made for sick leave because the level of sick leave taken is less on average than the amount which employees are entitled to each year.

Provision has also been made for unpaid supplier expenses as at balance date.

11. Administered revenue
Details of the range of taxation and non-taxation revenue collected by the Department are provided at Appendix 3.1.

12. Administered expenses
The majority of the Department's administered programmes are classified as grants, the most significant being: Local Government Financial Assistance Grants; AusLink; Natural Disaster Relief Arrangements; and Regional Partnerships.

13. Administered assets - financial assets
Comprise primarily the Australian Government's investments in Portfolio agencies.

Appendix 3.1: Administered income

Appendix 3.2: Administered loan repayments

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