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Commonwealth of Australia - The Treasury

Annual Report 2014/15

Notes 31 – 33

Note 31: Special Accounts

  Actuarial Services Special Account1   Clean Energy Finance Corporation Special Account2   COAG Reform Fund Special Account3   Services for Other Entities and Trust Money Special Account4
  2015
$’000
2014
$’000
  2015
$’000
2014
$’000
  2015
$’000
2014
$’000
  2015
$’000
2014
$’000
Balance brought forward from previous period 2,446 2,823   868,400    
Increases:                      
Appropriation for reporting period   2,000,000 2,000,000   10,528,522 13,684,519  
Other receipts from rendering of services 2,026 1,817      
Return of capital   50,600    
Receipts from other entities     993,121 1,797,952   1,996
Total increases 2,026 1,817   2,050,600 2,000,000   11,521,643 15,482,471   1,996
Available for payments 4,472 4,640   2,919,000 2,000,000   11,521,643 15,482,471   1,996
Decreases:                      
Departmental                      
Payments made to employees (1,487) (1,406)      
Payments made to suppliers (353) (788)      
Total departmental (1,840) (2,194)      
Administered        
Payments made to States and Territories     (11,521,643) (15,482,471)      
Payments made to the CEFC   (1,131,600)    
Payments made to other entities       (1,996)
Total administered   (1,131,600)   (11,521,643) (15,482,471)   (1,996)
Total decreases (1,840) (2,194)   (1,131,600)   (11,521,643) (15,482,471)   (1,996)
Total balance carried to the next period 2,632 2,446   2,919,000 868,400    

1. Legal authority: Initially Financial Management and Accountability Determination 2006/34 — Actuarial Services Special Account Establishment 2006, taken to have been made under subsection 78(1) of the Public Governance, Performance and Accountability Act 2013.
Purpose: providing actuarial services and advice
Note: Actuarial Services Special Account was established on 1 October 2006. This special account determination is to sunset on 1 October 2016.

2. Appropriation: Public Governance, Performance and Accountability Act 2013, section 80.
Establishing instrument: Clean Energy Finance Corporation Act 2012, section 5.
Purpose: To facilitate increased flows of finance into the clean energy sector.
The return of capital to the Clean Energy Finance Corporation (CEFC) special account represents the return of surplus money from the CEFC to the Commonwealth.

3. Appropriation: Public Governance, Performance and Accountability Act 2013, section 80.
Establishing instrument: COAG Reform Fund Act 2008, section 5
Purpose: For the making of grants of financial assistance to the States and Territories.
Note: The Treasury makes payments to the States and Territories from the COAG Reform Fund special account based on information provided by other Government departments that have policy and program implementation responsibility.

4. Appropriation: Public Governance, Performance and Accountability Act 2013, section 80.
Establishing instrument: Establishment of SOTEM Special Account — Treasury Determination 2012/09
Purpose: To disburse amounts held on trust for the benefit of a person other than the Commonwealth or in connection with services performed on or behalf of other governments and bodies.
Note: Receipt relates to funding received for the establishment of the Global Infrastructure Hub and is being held on trust for this purpose.

Financial System Stability Special Account (Administered)

The Treasury’s ‘Financial System Stability’ special account established under section 70E of the Banking Act 1959 for the making of payments authorised under specified sections of the Banking Act 1959, the Insurance Act 1973 and the Life Insurance Act 1995 and to meet expenses of administering the special account. For the years ended 30 June 2014 and 30 June 2015 this special account had nil balances and no transactions were credited or debited to the account.

Note 32: Reporting of Outcomes

Note 32A: Net Cost of Outcome Delivery

  Outcome 1
  2015
$’000
2014
$’000
Departmental    
Expenses 194,050 190,757
Own-source income 16,246 13,264
Administered    
Expenses 83,777,912 93,776,203
Income 3,855,162 4,185,104
Net cost/(contribution) of outcome delivery 80,100,554 89,768,592

Note 33: Budgetary Reports and Explanations of Major Variances

The following tables provide a comparison of the original budget as presented in the 2014-15 Portfolio Budget Statements (PBS) to the 2014-15 final outcome as presented in accordance with Australian Accounting Standards for the Treasury. The Budget is not audited.

Note 33A: Departmental Budgetary Reports Statement of Comprehensive Income
for the period ended 30 June 2015

  Actual Budget estimate
    Original1 Variance3
  2015
$’000
2015
$’000
2015
$’000
NET COST OF SERVICES      
Expenses      
Employee benefits 122,940 126,603 (3,663)
Suppliers 58,570 52,618 5,952
Grants 2,571 2,224 347
Depreciation and amortisation 9,667 9,247 420
Other 302 302
Total expenses 194,050 190,692 3,358
Own-Source Income      
Own-source revenue      
Sale of goods and rendering of services 10,308 7,638 2,670
Other revenues2 1,287 1,400 (113)
Total own-source revenue 11,595 9,038 2,557
Gains      
Proceeds from sale of assets 9 9
Other gains2 4,642 4,642
Total gains 4,651 4,651
Total own-source income 16,246 9,038 7,208
Net cost of services (177,804) (181,654) 3,850
Revenue from Government 172,767 172,407 360
Surplus / (Deficit) (5,037) (9,247) 4,210
OTHER COMPREHENSIVE INCOME      
Items not subject to subsequent reclassification to net cost of services      
Changes in asset revaluation reserves 976 976
Total other comprehensive income 976 976
Total comprehensive income/(loss) attributable to the Australian Government (4,061) (9,247) 5,186

1. The Treasury’s original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the Treasury’s 2014-15 Portfolio Budget Statements (PBS)).

2. The original budget for these line items has been adjusted to align with the presentation and classification adopted in the final outcome.

3. Between the actual and original budgeted amounts for 2015. Explanations of major variances (that are greater than +/- 10% of the original budget for a line item and greater than +/- $1 million) are provided below.

Explanations of major variances Affected line items

Supplier expenses for 2014-15 were $58.6 million, an increase of $6.0 million compared to the original budget. This change was driven by:

  • the recognition of resources received free of charge relating to secondees ($4.6 million); and
  • the recognition of recoveries from agencies for services rendered ($2.9 million), including the cost of services provided on behalf of Department of Foreign Affairs and Trade for the delivery of the 2014 G20 Trade Ministers’ Meeting.

Estimates for resources received free of charge and cost recovery arrangements have not previously been budgeted as a result of their variable nature. They are however offset by the associated revenue and therefore do not have an impact on the operating result. Estimates for 2014-15 were included in the 2015-16 Budget.

The increase in supplier expenses was partially offset by a decrease in overheads ($1.0 million) and the transfer of funding to the Australian Securities and Investments Commission (ASIC) for the development and implementation of the North Queensland insurance comparison website ($0.6 million).

Suppliers Expenses

Other gains

Sale of goods and rendering of services

Statement of Financial Position
as at 30 June 2015
  Actual Budget estimate
    Original1 Variance3
  2015
$’000
2015
$’000
2015
$’000
ASSETS      
Financial assets      
Cash and cash equivalents 5,152 1,223 3,929
Trade and other receivables 60,141 67,592 (7,451)
Total financial assets 65,293 68,815 (3,522)
Non-financial assets      
Land and buildings 2,500 3,351 (851)
Plant and equipment 8,660 9,347 (687)
Intangibles 12,221 8,240 3,981
Other non-financial assets 3,366 2,665 701
Total non-financial assets 26,747 23,603 3,144
Total assets 92,040 92,418 (378)
LIABILITIES      
Payables      
Suppliers 1,289 2,516 (1,227)
Other payables2 11,484 8,499 2,985
Total payables 12,773 11,015 1,758
Provisions      
Employee provisions2 43,566 48,452 (4,886)
Other provisions 964 964
Total provisions 44,530 48,452 (3,922)
Total liabilities 57,303 59,467 (2,164)
Net assets 34,737 32,951 1,786
EQUITY      
Asset revaluation reserve 6,162 5,186 976
Contributed equity 51,526 54,139 (2,613)
Retained surplus (22,951) (26,374) 3,423
Total equity 34,737 32,951 1,786

1. The Treasury’s original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the Treasury’s 2014-15 Portfolio Budget Statements (PBS)).

2. The original budget for these line items has been adjusted to align with the presentation and classification adopted in the final outcome.

3. Between the actual and original budgeted amounts for 2015. Explanations of major variances (that are greater than +/- 10% of the original budget for a line item and greater than +/- $1 million) are provided below.

Explanations of major variances Affected line items

Cash as at 30 June 2015 was $5.2 million, an increase of $3.9 million compared to the original budget. This increase was the result of the drawdown of funds on 30 June 2015 to meet payment requirements on 1 July 2015.

Trade and other receivables as at 30 June 2015 was $60.1 million, a decrease of $7.5 million compared to the original budget. This change relates to the movement in appropriation receivables, which was driven by:

  • a $2.44 million increase in non-financial assets, reflecting an increase in intangibles of $3.98 million and a decrease in land, buildings, plant and equipment of $1.54 million. The increase in capital expenditure largely reflects the acquisition of information and service management systems to enhance operating efficiencies; and
  • a $4.9 million decrease in employee provisions, relating to the disbursement of leave entitlements to employees who received a severance package.

Cash and cash equivalents

Trade and other receivables

Intangibles

Total payables at 30 June 2015 amounted to $12.8 million, an increase of $1.8 million compared to the original budget. This increase was the result of:

  • a $3.0 million increase in other payables, which was largely driven by an increase in payables to other creditors ($1.1 million, reflecting end of financial year adjustments for accrued expenditure) and an increase in unearned income ($1.3 million, which includes revenue received in advance from agencies for services provided under cost recovery arrangements); and
  • a $1.2 million decrease in suppliers payables, which relates to the timing of invoices received and settled by 30 June 2015.
 

Employee Provisions

Other payables

Suppliers payables

Total equity at 30 June 2015 was $34.7 million, an increase of $1.8 million compared to the original budget. This increase was driven by the change in retained surplus ($3.4 million, reflecting movements in operating results for 2014-15 and 2013-14 relative to the original budget) and partially offset by the change in contributed equity ($2.6 million, resulting from the transfer of equity funding to the ASIC for the development and implementation of the North Queensland Insurance Comparison Website). Retained surplus
Cash Flow Statement
for the period ended 30 June 2015
  Actual Budget estimate
    Original1 Variance2
  2015
$’000
2015
$’000
2015
$’000
OPERATING ACTIVITIES      
Cash received      
Appropriations 173,848 168,571 5,277
Sale of goods and rendering of services 11,348 7,638 3,710
Net GST received from ATO 3,317 3,317
Other 3,018 850 2,168
Total cash received 191,531 177,059 14,472
Cash used      
Employees 126,741 124,603 2,138

Suppliers

57,450 50,232 7,218
Grants 2,571 2,224 347
Other 15 15
Total cash used 186,777 177,059 9,718
Net cash from/(used by) operating activities 4,754 4,754
INVESTING ACTIVITIES      
Cash received      
Proceeds from sale of non-financial assets 21
Total cash received 21 21
Cash used      
Purchase of non-financial assets 7,246 7,986 (740)
Total cash used 7,246 7,986 (740)
Net cash from/(used by) investing activities (7,225) (7,986) 761
FINANCING ACTIVITIES      
Cash received      
Contributed equity — departmental capital budget 5,373 5,373
Contributed equity — equity injections 1,595 2,613 (1,018)
Total cash received 6,968 7,986 (1,018)
Net cash from/(used by) financing activities 6,968 7,986 (1,018)
Net increase/(decrease) in cash held 4,497 4,497
Cash at the beginning of the reporting period 655 1,223 (568)
Cash at the end of the reporting period 5,152 1,223 3,929

1. Treasury’s original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the Treasury’s 2014-15 Portfolio Budget Statements (PBS)).

2. Between the actual and original budgeted amounts for 2015. Explanations of major variances (that are greater than +/- 10% of the original budget for a line item and greater than +/- $1 million) are provided below.

Explanations of major variances Affected line items
The net change in cash held during 2014-15 was $4.5 million, higher than the balanced position in the original budget. The change was predominantly driven by the drawdown of funds on 30 June 2015 to meet payment requirements on 1 July 2015, which increased cash holdings at 30 June 2015 by $3.9 million. The remainder of the net change in cash held relates to increased receipts of unearned income and the timing of payables. Net increase/(decrease) in cash held

Note 33B: Administered Budgetary Reports

Statement of Comprehensive Income
for the period ended 30 June 2015
  Actual Budget estimate
    Original1 Variance2
  2015
$’000
2015
$’000
2015
$’000
NET COST OF SERVICES    
Expenses    
Grants 83,746,819 83,918,126 (171,307)
Interest 3,427 6,849 (3,422)
Write-down and impairment of assets
Foreign Exchange Losses
Other 27,666 1,140 26,526
Total expenses 83,777,912 83,926,115 (148,203)
Income      
Revenue    
Non-taxation revenue
Interest 3,166 7,386 (4,220)
Dividends 1,941,500 1,941,500
Sale of goods and rendering of services 726,299 877,092 (150,793)
COAG revenue from government agencies 993,379 1,858,731 (865,352)
Other 154,189 4,000 150,189
Total non-taxation revenue 3,818,533 2,747,209 1,071,324
Total revenue 3,818,533 2,747,209 1,071,324
Gains    
Foreign exchange 36,629 62,221

(25,592)

Total gains 36,629 62,221

(25,592)

Total income 3,855,162 2,809,430

1,045,732

Net cost of (contribution by) services (79,922,750) (81,116,685) 1,193,935
Surplus (Deficit) (79,922,750) (81,116,685) 1,193,935
OTHER COMPREHENSIVE INCOME    
Items not subject to subsequent reclassification to net cost of services    
Changes in asset revaluation surplus 5,574,357

5,574,357

Total comprehensive income 5,574,357

5,574,357

Total comprehensive income/(loss) (74,348,393) (81,116,685) 6,768,292

1. Treasury’s original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the Treasury’s 2014-15 Portfolio Budget Statements (PBS)).

2. Between the actual and original budgeted amounts for 2015. Explanations of major variances (that are greater than +/- 10% of the original budget for a line item and greater than +/- $1 billion) are provided below.

Explanations of major variances Affected line items
Dividend revenue for 2014-15 was $1,941.5 million compared to a nil original budget. The increase was predominantly a result of the Reserve Bank of Australia (RBA) dividend which was accrued in 2014-15. This was the result of higher RBA earnings, primarily attributable to changes in exchange rates in 2014-15. Dividends
Changes in asset revaluation surplus for 2014-15 totalled $5,574.4 million. These changes relate to the revaluation of investments in controlled entities and companies (RBA, Clean Energy Finance Corporation, Australian Reinsurance Pool Corporation). Changes in asset revaluation surplus
Administered Schedule of Assets and Liabilities
as at 30 June 2015
  Actual Budget estimate
    Original1 Variance2
  2015
$’000
2015
$’000
2015
$’000
ASSETS      
Financial assets      
Cash and cash equivalents 3,719 (3,719)
Trade and other receivables 3,406,908 1,248,939 2,157,969
Investments 32,601,034 32,109,096 491,938
Total financial assets 36,007,942 33,361,754 2,646,188
Non-financial assets      
Other 411 411
Total non-financial assets 411 411
Total assets administered on behalf of Government 36,008,353 33,361,754 2,646,599
LIABILITIES      
Payables      
Grants 591,077 745,613 (154,536)
Other payables 5,634,650 5,085,875 548,775
Unearned income 77,019 111,009 (33,990)
Total payables 6,302,746 5,942,497 360,249
Interest bearing liabilities      
Loans 4,824,704 7,670,732 (2,846,028)
Total interest bearing liabilities 4,824,704 7,670,732 (2,846,028)
Provisions      
Other provisions 1,816,251 651,059 1,165,192
Total provisions 1,816,251 651,059 1,165,192
Total liabilities administered on behalf of government 12,943,701 14,264,288 (1,320,587)
Net assets 23,064,652 19,097,466 3,967,186

1. Treasury’s original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the Treasury’s 2014-15 Portfolio Budget Statements (PBS)).

2. Between the actual and original budgeted amounts for 2015. Explanations of major variances (that are greater than +/- 10% of the original budget for a line item and greater than +/- $1 billion) are provided below.

Explanations of major variances Affected line items
Trade and other receivables as at 30 June 2015 was $3,406.9 million, an increase of $2,158.0 million compared to the original budget. The increase was predominantly a result of the Reserve Bank of Australia (RBA) dividend which was accrued in 2014-15. The RBA dividend reflects higher RBA earnings, primarily attributable to changes in exchange rates in 2014-15. Trade and other receivables
Total loans as at 30 June 2015 were $4,824.7 million, a decrease of $2,846.0 million compared to the original budget. This variance relates to the shift of the IMF Quota increase under the 2010 reform from 2014-15 to 2015-16 as a result of the delay by the United States in implementing these reforms. Loans
Total provisions as at 30 June 2015 were $1,816.3 million, an increase of $1,165.2 million as a result of revision to the 2014-15 estimates to the NDRRA provision to reflect actual reconstruction costs in Queensland. Other provisions