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Section 3: Explanatory tables and budgeted financial statements

Section 3 presents budgeted financial statements which provide a comprehensive snapshot of agency finances for the Budget year 2008-09. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between the agency and outcome resource statements, movements in administered funds, special accounts and government indigenous expenditure.

3.1: Explanatory tables

3.1.1: Reconciliation of total available appropriation

The Infrastructure resource statement (Table 1.1) details the total available appropriation available to the Department from all sources. For departmental operating appropriations (outputs) this includes carry-forward amounts as well as amounts appropriated at Budget. Under the Government's accrual accounting framework, the Department incurs and is funded for future liabilities, including employee entitlements and other creditors, and future asset replacement. As such, the total amount of departmental operating appropriation available to the Department is unlikely to be fully utilised in the Budget year. Table 3.1.1 reconciles the total estimated available departmental appropriation carried forward and available for 2009-10.

Table 3.1.1: Reconciliation of total available appropriation

3.1.2: Movement of administered funds between years

Administered funds can be provided for a specified period, for example under annual Appropriation Acts. Funds not used in the specified period are subject to review by the Minister for Finance and Deregulation, and may be moved to a future period, in accordance with provisions in legislation. Table 3.1.2 shows the movement of administered funds approved since the 2007-08 Additional Estimates.

Table 3.1.2: Movement of administered funds between years

3.1.3: Special Accounts

Special accounts provide a means to set aside and record amounts used for specified purposes. Special Accounts can be created by a Finance Minister's Determination under the Financial Management and Accountability Act 1997 or under separate enabling legislation. Table 3.1.3 shows the expected additions (receipts) and reductions (payments) for each account used by the Department.

Table 3.1.3: Estimates of Special Account cash flows and balances

3.1.4: Australian Government Indigenous Expenditure

Table 3.1.4: Australian Government Indigenous Expenditure

3.2: Budgeted financial statements

3.2.1: Differences in agency resourcing and financial statements

Infrastructure does not have any significant differences between the resource information presented in the Budget Papers and Portfolio Budget Statements as a result of differences between Australian Accounting Standards (AAS) and Government Finance Statistics (GFS).

The difference between the resource statement in Section 1 and the financial statements contained within Section 3 mainly relates to the timing of accruals for items such as depreciation, employee entitlements and other creditors and debtors, as well as the expensing of prepayments made in prior periods.

3.2.2: 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 2008-09, is provided below.

Departmental

Budgeted departmental income statement

The Department is budgeting for approved operating losses in each financial year from 2007-08 to 2009-10. The losses are attributable to costs associated with planned, but non-ongoing, National Office leasehold improvements and activities the Department has been asked to implement from prior year surpluses.

Total expenses are estimated to be $238.5m in 2008-09, a decrease of $7.4m from the 2007-08 estimated actual. The decrease is primarily due to measures disclosed in the 2008-09 Budget ($7.1m) and the net impact of the transfer of functions to the Attorney-General's Department following the Administrative Arrangements Order of 3 December 2007 ($5.1m).

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 appropriation, and
  • the one-off impact in 2003-04 of expenses related to the recognition of a provision for asbestos-related disease claims.

The increase in expenses between 2004-05 and 2005-06 largely reflects measures associated with transport security activities. The subsequent increase in 2007-08 reflects the impact of measures announced in the 2007-08 Budget.

Budgeted departmental balance sheet

The Department's budgeted net asset position of $91.1m represents a decrease of $3.6m from the 2007-08 estimated actual. The decrease is primarily attributable to an increase in liabilities ($3.8m) associated with employee entitlements and leases.

Total assets are expected to increase by $0.2m to $149.2m.

Chart 3.2: Budgeted assets for 2008-09

Chart 3.2: Budgeted assets for 2008-09

(click on the image to view the larger version)

The Department's primary liability continues to be accrued employee leave entitlements estimated to be $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 $228.1m, representing a decrease of $12.5m from the 2007-08 estimated actual. The decrease is primarily due to:

  • reduced gains ($9.8m);

  • the transfer of revenue items following the Administrative Arrangements Order of 3 December 2007 ($8.4m); and

  • decreased revenue from noise levies collected at Adelaide Airport ($1.9m).

This decrease is partially offset by increased revenue from levies collected under the Protection of the Sea (Shipping Levy) Collection Act 1981 ($3.3m) and fees collected under the Interstate Road Transport Act 1985 ($3.2m).

Administered expenses, such as for grants and subsidies programs, are budgeted at $5 829.7m, representing an increase of $337.8m from the 2007-08 estimated actual and will be incurred for the programs set out at Section 2, Table 2.2 for Outcome 1, Table 2.4 for Outcome 2 and Table 2.6 for Outcome 3. The increase is due to:

  • the movement of funds between years for administered expense programs ($162.7m);
  • the inclusion within the department's administered financial statements from 2008-09 of payments to Portfolio CAC Act bodies in the Infrastructure Portfolio ($95.3m);
  • recognition of expenses associated with prepayments made in 2005-06 and 2006-07 ($43.9m);
  • changes in the funding profile of several administered expense programs ($40.5m); and
  • the impact of measures disclosed in the 2008-09 Budget (-$4.6m).

Chart 3.3: Total administered expenses

Chart 3.2: Budgeted assets for 2008-09

(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 $942.2m to $2 158.1m from the 2007-08 estimated actual. The decrease relates mainly to the expensing of prepayments associated with the AusLink program as milestones are achieved by states and territories ($935.9m) and a reduction in receivables due to loan repayments ($5.2m).

3.2.3: Budgeted financial statements tables

Table 3.2.1: Budgeted departmental income statement (for the period ended 30 June)

Table 3.2.2: Budgeted departmental balance sheet (as at 30 June)

Table 3.2.3: Budgeted departmental statement of cash flows (for the period ended 30 June)

Table 3.2.4: Departmental statement of changes in equity - summary of movement (Budget year 2008-09)

Table 3.2.5: Schedule of budgeted income and expenses administered on behalf of government (for the period ended 30 June)

Table 3.2.6: Schedule of budgeted assets and liabilities administered on behalf of government (as at 30 June)

Table 3.2.7: Schedule of budgeted administered cash flows (for the period ended 30 June)

3.2.4: 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 and 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 programs that are controlled by government and managed, or oversighted, by the Department on behalf of 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 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 when:

  • the risks and rewards of ownership have been transferred to the buyer;
  • the seller retains no managerial involvement nor effective control over the goods;
  • the revenue and transaction costs incurred can be reliably measured; and
  • it is probable that the economic benefits associated with the transaction will flow to the Department.

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 infrastructure, 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 Departments capital program, 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

The main interest bearing liabilities are information technology assets that the Department has procured under finance leases. These 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.

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 3.2.1.

12.Administered expenses

The majority of the Department's administered programs are classified as grants, the most significant being the Local Government Financial Assistance Grants and AusLink programs.

13. Administered assets - financial assets

Comprise primarily the Australian Government's investments in portfolio agencies.

Appendix 3.2.1: Administered income

Appendix 3.2.2: Administered loan repayment

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Budget 2008-09