Australian Maritime Safety Authority

Section 3: Budgeted financial statements

Section 3 presents budgeted financial statements which provide a comprehensive snapshot of the Department's finances for the 2016–17 Budget year, including the impact of Budget measures and resourcing on financial statements.

3.1: Budgeted financial statements

3.1.1 Explanatory notes and analysis of budgeted financial statements

AMSA is budgeting for an overall budget operating loss of $17.5m. This comprises operating losses of $1.3m, $7.9m, $4.3m and $4.0m from 2016–17 through to 2019–20 respectively. The operating loss is primarily due to a downturn in shipping activity, reducing forecast levy revenue, and implementation costs for the National System for Domestic Commercial Vessel Safety.

To address these budget pressures and maintain the budget within the approved operating loss, AMSA has identified savings strategies that deliver expenditure reductions needed to offset the declining levy revenue.

While establishment costs for the National System for Domestic Commercial Vessel Safety are currently being met from AMSA reserves, an additional funding source will be required to ensure ongoing financial sustainability when AMSA assumes full responsibility for delivery of regulatory services on 1 July 2017.

AMSA's budget is underpinned by a projected retained surplus of approximately $11.0m and projected cash balances of approximately $59.0m which will be sufficient to meet AMSA's commitments as they fall due.

In 2015–16, AMSA is projecting an operating loss of $7.0m, an increase of $2.4m over the approved operating loss budget of $4.6m. This is driven by a continued downturn in shipping activity which has resulted in a downward revision of levy revenue. Despite this result, AMSA will not exceed the approved total operating loss of $24.5m.

AMSA revenue

AMSA's revenue sources are from levies collected from the shipping industry and appropriated under section 48 of the AMSA Act as Special Appropriations to fund AMSA's ship safety and environment protection functions and Community Service Obligation funding from the Australian Government for search and rescue coordination services for persons in aviation or maritime distress in Australia's internationally designated search and rescue region. AMSA receives revenue from independent sources that comprise fees and charges, funding for the National System for Domestic Commercial Vessel Safety, payments from related entities and from interest. In 2016–17, AMSA estimates total revenue of $213.8m compared to $200.0m in the 2015–16 Budget, as summarised in the table following.

AMSA revenue comparison
 2015–16
Budget

($m)
2016–17
Budget

($m)
AMSA revenue sources    
Special appropriations of levies collected from the shipping industry 121.2 120.6
Annual departmental appropriation for search and rescue functions 45.6 54.6
Annual departmental appropriation for search and rescue response 10.9 10.9
Revenue from budget measures 1.0 -
Revenue from independent sources (fees and charges and interest) 21.3 27.7
Total Revenue 200.0 213.8
Revenue from Government: levy funding

AMSA has three levies corresponding to its ship safety and environment protection functions:

  • the Marine Navigation (Regulatory Function) Levy funds AMSA's shipping regulatory functions;
  • the Marine Navigation Levy funds the national network of marine aids to navigation; and
  • the Protection of the Sea Levy funds activities related to pollution and emergency response services.

In 2016–17, levy revenue is estimated to total $120.6m, which is $0.6m less than the 2015–16 Budget. This reduction is primarily due to reduced growth rate in shipping activity. Levy revenue growth for the 2016–17 Budget is 3.3 per cent—down 1.6 per cent from the 4.9 per cent growth projections in the previous Budget.

Revenue from Government

AMSA will receive an annual departmental appropriation of $54.6m in 2016–17 for providing a search and rescue co-ordination service to the community. AMSA will also receive an annual departmental appropriation of $10.9m in 2016–17 to cover the cost of search and rescue incidents.

During 2016–17 AMSA will transition to a new service provider for the dedicated airborne search and rescue capability. The increase in the annual departmental appropriation from 2015–16 reflects the cost of the new contract.

Funding of $1.0m for the ‘National Transport Regulatory reforms’ ceases in 2015–16.

Appropriation comparison between 2016–17 and 2015–16

The table below compares the appropriations between the 2016–17 and 2015–16 Budgets:

 2015–16
Budget

($'000)
2016–17
Budget

($'000)
Appropriation Bill No. 1
Departmental Outputs
Australian Search and Rescue Function 45,606 54,584
Australian Search and Rescue Response 10,928 10,928
National Transport Reform—implementation assistance 975 -
Total 57,509 65,512
Special Appropriations  
Marine Navigation Levy 35,346 34,357
Regulatory Functions Levy 51,582 51,580
Protection of the Sea Levy 35,016 34,291
Total 121,944 120,228
Total Appropriations 179,453 185,740
Revenue from independent sources: sale of goods and services and interest

AMSA may make determinations fixing charges under section 47 of the AMSA Act, which requires these fees and charges to be reasonably related to the costs incurred by AMSA in their provision. AMSA has a range of services with charges based on the average cost of delivering a specific service or the time taken to deliver the service multiplied by a standard hourly rate. These services include:

  • approvals, certificates and determinations for ships, cargo and ship safety equipment;
  • activities involved with issuing certificates of competency to seafarers, including conducting practical oral examinations for navigation and engineering officers; and
  • assessing sea time pre-requisites for qualifications, issuing and renewing coastal pilot licences and services provided by the Australian Shipping Registration Office.

The 2016–17 Budget introduces fee-for-service charges of $0.2m for the accreditation of marine surveyors and ad-hoc fees associated with the National System for Domestic Commercial Vessel Safety.

In 2016–17, AMSA's total estimated revenue from independent sources is $27.7m (up $6.4m compared to $21.3m in 2015–16). This increase is primarily attributable to revenue expected from the anticipated recovery of $8.2m for costs incurred by AMSA in responding to the 2010 Shen Neng 1 pollution incident from the ship's insurers. This revenue is offset by the cessation of the Torres Strait Marine Pathways Program of $1.8m. The total estimate of $27.7m includes the sale of goods and services comprising $22.4m, revenue for the National System for Domestic Commercial Vessel Safety of $3.9m and interest of $1.4m.

Resources for AMSA's output groups

Chart 3.1.1 shows the resources allocated to AMSA's two subprogrammes since 2013–14:

Chart 3.1.1: Trends in resources for AMSA sub-programs

Chart 3.1.1: Trends in resources for AMSA sub-programs

Revenue/expense comparison

Chart 3.1.2 shows the overall trend in AMSA's revenue and expenses since 2013–14. The variation in revenue and expenses since 2013–14 is largely due to:

  • the higher rate of the Protection of the Sea (PSL) Levy in 2013–14;
  • the reduction of the rate of the PSL to 11.25 cents per net registered tonne in 2014–15;
  • revision of revenue projections driven by economic parameters in 2014–15 to 2019–20;
  • implementation costs for the National System for Domestic Commercial Vessel Safety from 2015–16 to 2019–20;
  • cessation of revenue for the National Regulator for Domestic Commercial Vessel Safety collected from various States under interim service arrangements from 2017–18;
  • cessation of state and Northern Territory annual contributions for the implementation of the National System for Domestic Commercial Vessel Safety from 2017–18; and
  • the expected recovery of clean-up costs for the Shen Neng 1 pollution incident from the ship's insurers in 2016–17.
Chart 3.1.2: AMSA revenue and expenses

Chart 3.1.2: AMSA revenue and expenses

3.2: Budgeted financial statements tables

Table 3.1: Comprehensive income statement (showing net cost of services) (for the period ended 30 June)

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

Table 3.3: Departmental statement of changes in equity—summary of movement (Budget year 2016–17)

Table 3.4: Budgeted departmental statement of cash flows (for the period ended 30 June)

Table 3.5: Departmental capital budget statement (for the period ended 30 June)

Table 3.6: Statement of asset movements (Budget year 2016–17)

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Budget 2016–17