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 2017–18 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 $22.9m, comprising losses of $14.7m, $4.2m and $4.0m from 2017–18 through to 2019–20 respectively, returning to a balanced budget in 2020–21.

The operating loss is primarily due to the costs of implementing the National System for Domestic Commercial Vessel Safety (National System) and costs to prepare AMSA to deliver the full range of regulatory services under the National System. To a lesser extent, the continued downturn in shipping activity is also reducing forecast levy revenue.

During 2016–17, the commencement date for AMSA to assume full responsibility for the delivery of regulatory services was delayed by one year to 1 July 2018. This decision also delayed the implementation of cost recovery arrangements, although AMSA continues to incur the costs associated with preparing for the transition.

The net direct cost to implement and deliver the National System is estimated to be $74.5m over the budget period. The full cost is not reflected in AMSA's overall budgeted operating loss of $22.9m until such time as agreement is reached regarding the cost recovery arrangements. The unfunded cost of the National System continues to be met from AMSA reserves. Once funding arrangements for the National System are established, this will be reflected in AMSA's forecast.

This budget will result in a retained surplus of $21.1m and an available cash balance of $73.2m by the end of 2020–21.

AMSA revenue

AMSA's revenue sources are 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 also receives revenue from independent sources that comprise fees and charges, payments from related entities and from interest.

In 2017–18, AMSA estimates total revenue of $208.9m compared to $213.8m in the 2016–17 Budget, as summarised in the table following.

AMSA revenue comparison
 2016-17
Budget
($m)
2017-18
Budget
($m)
AMSA revenue sources    
Special appropriations of levies collected from the shipping industry 120.6 123.5
Annual departmental appropriation for search and rescue functions 54.6 58.6
Annual departmental appropriation for search and rescue response 10.9 10.9
Revenue from independent sources (fees and charges and interest) 27.7 15.9
Total Revenue 213.8 208.9
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 2017–18, levy revenue is estimated to total $123.5m, which is $2.9m more than the 2016–17 Budget. This increase is primarily due to growth rate projections in shipping activity.

However, overall levy revenue growth for the 2017-18 Budget is 2.2 per cent—down 1.1 per cent from the 3.3 per cent growth projections in the previous Budget.

Revenue from Government

AMSA will receive an annual departmental appropriation of $58.6m in 2017–18 for providing a search and rescue co‑ordination service to the community. AMSA will also receive an annual departmental appropriation of $10.9m in 2017–18 to cover the cost of search and rescue incidents.

During 2016–17 AMSA transitioned to a new service provider for the dedicated airborne search and rescue capability. The increase in the annual departmental appropriation from 2016–17 reflects the cost of the new contract offset by revised indexation and the Efficiency Dividend of $1.0m.

Appropriation comparison between 2017-18 and 2016-17

The table below compares the appropriations between the 2017–18 and 2016–17 Budgets:

 2016-17
Budget
$'000
2017-18
Budget
$'000
Appropriation Bill No. 1    
Departmental Outputs    
Australian Search and Rescue Function 54,584 58,620
Australian Search and Rescue Response 10,928 10,928
Total 65,512 69,548
Special Appropriations    
Marine Navigation Levy 34,357 35,178
Regulatory Functions Levy 51,580 52,818
Protection of the Sea Levy 34,291 35,111
Total 120,228 123,107
Total Appropriations 185,740 192,655
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 related to issuing certificates of competency to seafarers, including conducting practical oral examinations for navigation and engineering officers; and
  • assessment of sea time pre-requisites for qualifications, issuing and renewing coastal pilot licences and services provided by the Australian Shipping Registration Office.

In 2017–18, AMSA’s total estimated revenue from independent sources is $15.9m (down $11.8m compared to $27.7m in 2016–17). This decrease is primarily attributable to a one-off settlement of $8.1m for costs incurred by AMSA in responding to the 2010 Shen Neng 1 pollution incident, which was budgeted for in 2016–17 but ultimately settled in 2015–16. The withdrawal of Queensland from the National System interim service arrangements has further reduced revenue by $2.8m, noting that there has also been a corresponding reduction in expenses.  Further reductions in revenue are attributable to reduced interest revenue due to fewer funds under investment. The total estimate of $15.9m includes the sale of goods and services comprising $8.8m, revenue for the National System for Domestic Commercial Vessel Safety of $4.1m, reduced interim service arrangements collections of $3.0m and interest of $1.0m.

Resources for AMSA's output groups

Chart 3.1.1 shows the resources allocated to AMSA's two sub-programs since 2014–15:

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 2014–15. The variation in revenue and expenses since 2014–15 is largely due to:

  • the reduction of the rate of the Protection of the Sea (PSL) Levy to 11.25 cents per net registered tonne in 2014–15;
  • revision of revenue projections driven by economic parameters in 2014–15 to 2020–21;
  • implementation costs for the National System for Domestic Commercial Vessel Safety from pre 2014‑15 to 2020–21;
  • the recovery of clean-up costs for the Shen Neng 1 pollution incident in 2015–16.
  • cessation of revenue for the National Regulator for Domestic Commercial Vessel Safety collected under interim service arrangements from 2016–17 for Queensland and from 2018–19 for the remaining states; and
  • cessation of state and Northern Territory annual contributions for the implementation of the National System for Domestic Commercial Vessel Safety from 2018–19.
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 2017–18)

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 2017–18)

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Budget 2017–18