Note 1: Budgetary Reports and Variances
The following tables provide a comparison of the budget as presented in the 2019–20 Portfolio Budget Statements (PBS) to the 2019–20 final outcome as presented in accordance with the Australian Accounting Standards for the department. The budget is not audited. Explanations of major variances are provided below.
1.1A Departmental budgetary reports
Original 1 | |||
Budget | Actual | Variance 2 | |
2020 | 2020 | 2020 | |
$'000 | $'000 | $'000 | |
NET COST OF SERVICES | |||
EXPENSES | |||
Employee benefits | 171,557 | 238,229 | 66,672 |
Suppliers | 78,848 | 71,358 | (7,490) |
Grants | − | 414 | 414 |
Finance costs | − | 5,439 | 5,439 |
Write-down and impairment of assets and other expenses | − | 11,402 | 11,402 |
Depreciation and amortisation | 14,951 | 15,339 | 388 |
Depreciation on right-of-use assets | − | 28,045 | 28,045 |
Total expenses | 265,356 | 370,226 | 104,870 |
OWN SOURCE INCOME | |||
Own-source revenue | |||
Revenue from contracts with customers | 116,405 | 147,644 | 31,239 |
Other revenue | − | 495 | 495 |
Total own-source revenue | 116,405 | 148,139 | 31,734 |
Gains | |||
Other gains | 495 | 1,134 | 639 |
Total gains | 495 | 1,134 | 639 |
Total own-source income | 116,900 | 149,273 | 32,373 |
Net cost of services | 148,456 | 220,953 | 72,497 |
Revenue from government - departmental appropriations | 138,818 | 213,111 | 74,283 |
Surplus/(Deficit) before income tax on continuing operations | (9,638) | (7,842) | 1,793 |
Income tax expense/(benefit) | − | (230) | (230) |
Surplus/(Deficit) after income tax on continuing operations | (9,638) | (7,612) | 2,026 |
Total comprehensive income/(loss) attributable to the Australian Government | (9,638) | (7,612) | 2,026 |
1 The department's original budgeted financial statements that was first presented to Parliament in respect of the reporting period (i.e. from the department's 2019–20 Portfolio Budget Statements (PBS)).
2 Between the actual and original budgeted amounts for 2020. Totals reflect amount over/(under) revised budget. Explanations of major variances are provided further below.
Original 1 | |||
Budget | Actual | Variance 2 | |
2020 | 2020 | 2020 | |
$'000 | $'000 | $'000 | |
ASSETS | |||
Financial assets | |||
Cash and cash equivalents | 40,775 | 16,271 | (24,504) |
Trade and other receivables | 82,138 | 172,682 | 90,544 |
Total financial assets | 122,913 | 188,953 | 66,040 |
Non-financial assets | |||
Land and buildings | 31,991 | 355,345 | 323,354 |
Heritage and cultural | 3,774 | 3,774 | − |
Property, plant and equipment | 11,677 | 21,781 | 10,104 |
Intangibles - computer software | 15,419 | 18,549 | 3,130 |
Other non-financial assets | 3,445 | 5,376 | 1,931 |
Total non-financial assets | 66,306 | 404,825 | 338,519 |
Total assets | 189,219 | 593,778 | 404,559 |
LIABILITIES | |||
Payables | |||
Suppliers | 20,392 | 15,802 | (4,590) |
Other payables | 28,515 | 21,070 | (7,445) |
Total payables | 48,907 | 36,872 | (12,035) |
Interest bearing liabilities | |||
Leases | − | 329,265 | 329,265 |
Total interest bearing liabilities | − | 329,265 | 329,265 |
Provisions | |||
Employee provisions | 48,585 | 92,510 | 43,925 |
Makegood provisions | − | 722 | 722 |
Other provisions | 116 | − | 116 |
Total provisions | 48,701 | 93,232 | 44,531 |
Total liabilities | 97,608 | 459,369 | 361,761 |
Net assets | 91,611 | 134,409 | 42,798 |
1 The department's original budgeted financial statements that was first presented to Parliament in respect of the reporting period (i.e. from the department's 2019–20 Portfolio Budget Statements (PBS)).
2 Between the actual and original budgeted amounts for 2020. Totals reflect amount over/(under) revised budget. Explanations of major variances are provided further below.
Original 1 | |||
Budget | Actual | Variance 2 | |
2020 | 2020 | 2020 | |
$'000 | $'000 | $'000 | |
CONTRIBUTED EQUITY/CAPITAL | |||
Opening balance | |||
Balance carried forward from previous period | 220,846 | 222,165 | 1,319 |
Adjusted opening balance | 220,846 | 222,165 | 1,319 |
Transactions with owners | |||
Distributions to owners | |||
Distribution of equity | 4,600 | − | (4,600) |
Contributions by owners | |||
Departmental Capital Budget | 6,168 | 10,531 | 4,363 |
Equity injection - Appropriations | 20 | 20 | − |
Restructuring | (20,857) | 6,387 | 27,244 |
Total transactions with owners | (10,069) | 16,938 | 27,007 |
Closing balance as at 30 June | 210,777 | 239,103 | 28,326 |
RETAINED EARNINGS | |||
Opening balance | |||
Balance carried forward from previous period | (152,646) | (148,400) | 4,246 |
Adjustment for prior period | − | (181) | (181) |
Adjustment on initial application of AASB 16 | − | 24,910 | 24,910 |
Adjusted opening balance | (152,646) | (123,671) | 28,975 |
Comprehensive Income | |||
Surplus/(Deficit) after income tax on continuing operations | (9,638) | (7,612) | 2,026 |
Total comprehensive income | (9,638) | (7,612) | 2,026 |
Transactions with owners | |||
Distributions to owners | |||
Dividends | 16,529 | − | (16,529) |
Closing balance as at 30 June | (145,755) | (131,283) | 14,472 |
ASSET REVALUATION RESERVE | |||
Opening balance | |||
Balance carried forward from previous period | 26,589 | 26,589 | − |
Adjusted opening balance | 26,589 | 26,589 | − |
Closing balance as at 30 June | 26,589 | 26,589 | − |
TOTAL EQUITY | |||
Opening balance | |||
Balance carried forward from previous period | 94,789 | 100,354 | 5,565 |
Adjustment for prior period | − | (181) | (181) |
Adjustment on initial application of AASB 16 | − | 24,910 | 24,910 |
Adjusted opening balance | 94,789 | 125,083 | 30,294 |
Comprehensive Income | |||
Surplus/(Deficit) after income tax on continuing operations | (9,638) | (7,612) | 2,026 |
Total comprehensive income | (9,638) | (7,612) | 2,026 |
Transactions with owners | |||
Distributions to owners | |||
Dividends | 16,529 | − | (16,529) |
Distribution of equity | 4,600 | − | (4,600) |
Contributions by owners | |||
Departmental Capital Budget | 6,168 | 10,531 | 4,363 |
Equity injection - Appropriations | 20 | 20 | − |
Restructuring | (20,857) | 6,387 | 27,244 |
Total transactions with owners | 6,460 | 16,938 | 10,478 |
Closing balance as at 30 June | 91,611 | 134,409 | 42,798 |
1 The department's original budgeted financial statements that was first presented to Parliament in respect of the reporting period (i.e. from the department's 2019–20 Portfolio Budget Statements (PBS)).
2 Between the actual and original budgeted amounts for 2020. Totals reflect amount over/(under) revised budget. Explanations of major variances are provided further below.
Original 1 | |||
Budget | Actual | Variance 2 | |
2020 | 2020 | 2020 | |
$'000 | $'000 | $'000 | |
OPERATING ACTIVITIES | |||
Cash received | |||
Revenue from contracts with customers | 145,760 | 158,786 | 13,026 |
Appropriations | 140,595 | 406,422 | 265,827 |
GST received | − | 6,840 | 6,840 |
Total cash received | 286,355 | 572,048 | 285,693 |
Cash used | |||
Employees | 171,292 | 219,172 | 47,880 |
Suppliers | 114,672 | 94,922 | 19,980 |
Grants | − | 414 | 414 |
Interest payments on lease liabilities | − | 5,437 | 5,437 |
Section 74 receipts transferred to Official Public Account | − | 216,592 | 216,592 |
Total cash used | 285,964 | 536,307 | 250,343 |
Net cash from/(used by) operating activities | 391 | 35,741 | 35,350 |
INVESTING ACTIVITIES | |||
Cash used | |||
Purchase of land and buildings | 2,100 | 3,518 | 1,418 |
Purchase of property, plant and equipment | 3,981 | 5,727 | 1,746 |
Purchase of intangibles and internally developed intangibles | 4,707 | 6,071 | 1,364 |
Total cash used | 10,788 | 15,316 | 4,528 |
Net cash used by investing activities | (10,788) | (15,316) | (4,528) |
FINANCING ACTIVITIES | |||
Cash received | |||
Contributed equity | 10,788 | 10,551 | (237) |
Total cash received | 10,788 | 10,551 | (237) |
Cash used | |||
Principal payments of lease liabilities | − | 20,643 | 20,643 |
Total cash used | − | 20,643 | 20,643 |
Net cash from/(used by) financing activities | 10,788 | (10,092) | (20,880) |
Net increase/(decrease) in cash held | 391 | 10,333 | 9,942 |
Cash and cash equivalents at the beginning of the reporting period | 40,384 | 5,938 | (34,446) |
Cash and cash equivalents at the end of the reporting period | 40,775 | 16,271 | (24,405) |
1 The department's original budgeted financial statements that was first presented to Parliament in respect of the reporting period (i.e. from the department's 2019–20 Portfolio Budget Statements (PBS)).
2 Between the actual and original budgeted amounts for 2020. Totals reflect amount over/(under) revised budget. Explanations of major variances are provided further below.
The following tables provide a comparison of the budget as presented in the 2019–20 Portfolio Budget Statements (PBS) to the 2019–20 final outcome as presented in accordance with the Australian Accounting Standards for the department. The budget is not audited.
Under the AAO of 29 May 2019, industrial relations functions and programs were transferred to the department from the former Department of Employment, Skills, Small and Family Business with effect from 1 July 2019 (administered items) and 25 July 2019 (departmental items).
Explanations of major variances are provided below.
Affect line items | Variance Amount $‘000 | Explanation of major variance |
Statement of Comprehensive Income | ||
Employee benefits | 66,672 | The variance is primarily due to the transfer of industrial relations functions following the Administrative Arrangements Order (AAO) of 29 May 2019. Employees associated with these functions and programs transferred to the department on 25 July 2019. In addition, an increase in demand for Australian Government Solicitor (AGS) services led to higher salaries and revenue. |
Suppliers | (7,490) | The variance is primarily due to the adoption of AASB 16 Leases on 1 July 2019 which had the effect of reducing the department's operating lease expenditure significantly in 2019–20. This decrease was partially offset by the transfer of industrial relations functions and programs following the AAO of 29 May 2019. |
Finance costs | 5,439 | The variance is due to the adoption of AASB 16 Leases on 1 July 2019 and represents the interest component of leases paid in 2019–20. |
Write-down and impairment of assets and other expenses | 11,402 | The variance is primarily due to Act of Grace payments made during 2019–20. In addition, staffing resources were provided free of charge to other agencies during the financial year as part of the Government's response to COVID-19. |
Depreciation on right-of-use assets | 28,045 | The variance is primarily due to the adoption of AASB 16 Leases by the department on 1 July 2019. |
Revenue from contracts with customers | 31,239 | The variance is due to an increase in demand for AGS services during the financial year. |
Revenue from government – departmental appropriations | 74,293 | The variance is primarily due to the transfer of industrial relations functions following the AAO of 29 May 2019 and additional funding provided at Additional Estimates. |
Statement of Financial Position | ||
Cash and cash equivalents | (24,504) | The variance is primarily due to the closure of the AGS Special Account on 30 June 2019. The AGS retained $44.015m of the Special Account balance (refer Note 3.2). |
Trade and other receivables | 90,544 | The variance is primarily due to unspent prior year appropriation associated with the transfer of industrial relations functions following the AAO of 29 May 2019 (refer Note 6.1B). |
Land and buildings | 323,354 | The variance is primarily due to the adoption of AASB 16 Leases on 1 July 2019 (refer Note 6.2A). |
Property, plant and equipment | 10,104 | The variance is primarily due to the adoption of AASB 16 Leases on 1 July 2019 (refer Note 6.2A). |
Other payables | (7,445) | The variance is primarily due to the adoption of AASB 16 Leases on 1 July 2019 (refer Note 6.3B). |
Leases | 329,265 | The variance is primarily due to the adoption of AASB 16 Leases on1 July 2019 (refer Note 6.4A). |
Employee provisions | 43,925 | The variance is primarily due to the transfer of industrial relations functions following the AAO of 29 May 2019 (refer Note 2.2A). |
Cash Flow Statement | ||
Revenue from contracts with customers | 13,026 | The variance is due to an increase in demand for AGS services during the financial year. |
Appropriations | 265,827 | The variance primarily reflects AGS s74 receipts returned to the Official Public Account (OPA) during the financial year following the closure of the AGS Special Account on 30 June 2019. In addition, the variance also reflects appropriation drawdowns from the OPA associated with industrial relations functions following the Administrative Arrangements Order (AAO) of 29 May 2019. |
Employees | 47,880 | The variance is primarily due to the transfer of industrial relations functions following the Administrative Arrangements Order (AAO) of 29 May 2019. Employees associated with these functions and programs transferred to the department on 25 July 2019. Additionally, there was increase in AGS staffing costs which is consistent with an increase in AGS revenue. |
Suppliers | (19,980) | The variance is primarily due to the introduction of AASB 16 Leases on 1 July 2019 which reclassified lease payments from operating activities to financing activities. |
Interest payments on lease liabilities | 5,437 | The variance is primarily due to the transition to AASB 16 Leases on 1 July 2019. |
Section 74 receipts transferred to the Official Public Account | 216,592 | The variance is primarily reflects AGS s74 receipts returned to the Official Public Account (OPA) during the financial year following the closure of the AGS Special Account on 30 June 2019. |
Principal payments of lease liabilities | 20,643 | The variance is primarily due to the adoption of AASB 16 Leases on 1 July 2019 which reclassified lease payments from operating activities to financing activities. |
1.1B Administered budgetary reports
Original 1 | |||
Budget | Actual | Variance 2 | |
2020 | 2020 | 2020 | |
$'000 | $'000 | $'000 | |
NET COST OF SERVICES | |||
EXPENSES | |||
Employee benefits | 21,251 | 23,146 | 1,895 |
Suppliers | 130,889 | 133,194 | 2,305 |
Subsidies | 3,497 | 150,843 | 147,346 |
Personal benefits | 808 | 176,536 | 175,728 |
Grants | 324,481 | 385,543 | 61,602 |
Finance costs | − | 206 | 206 |
Write-down and impairment of assets and other expenses | 20 | 6 | (14) |
Payments to corporate Commonwealth entities | 16,538 | 22,497 | 5,959 |
Depreciation and amortisation | 8,133 | 2,548 | (5,585) |
Depreciation on right-of-use assets | − | 3,433 | 3,433 |
Total expenses | 505,617 | 897,952 | 392,335 |
INCOME | |||
Revenue | |||
Taxation revenue | |||
Levies | − | 147,349 | 147,349 |
Total taxation revenue | − | 147,349 | 147,349 |
Non-taxation revenue | |||
Revenue from contracts with customers | 2,768 | 2,676 | (92) |
Recoveries - personal benefit recoveries | − | 137,625 | 137,625 |
Other non-taxation revenue | 1,039 | 5,458 | 4,419 |
Total non-taxation revenue | 3,807 | 145,759 | 141,952 |
Total own-source revenue administered on behalf of Government | 3,807 | 293,108 | 289,301 |
Net cost of services | 501,810 | 604,844 | 100,034 |
Deficit on continuing operations | (501,810) | (604,844) | 103,034 |
OTHER COMPREHENSIVE INCOME | |||
Items not subject to subsequent reclassification to net cost of services | |||
Actuarial gains/losses on defined benefit plans - former Solicitor-Generals' pensions | − | 1,137 | 1,137 |
Items subject to subsequent reclassification to net cost of services | |||
Gains/(losses) on financial assets through other comprehensive income | − | (178,579) | (178,579) |
Gains/(losses) on financial liabilities through other comprehensive income | − | 98,015 | 98,015 |
Total other comprehensive income | − | (79,427) | (79,427) |
Total comprehensive loss attributable to the Australian Government | (501,810) | (684,271) | (182,461) |
1 The department's original budgeted financial statements that were first presented to Parliament in respect of the reporting period (i.e. the department's 2019–20 Portfolio Budget Statements (PBS)).
2 Between the actual and original budgeted amounts for 2020. Totals reflect amount over/(under) revised budget. Explanations of major variances are provided further below.
Original 1 | |||
Budget | Actual | Variance 2 | |
2020 | 2020 | 2020 | |
$'000 | $'000 | $'000 | |
ASSETS | |||
Financial assets | |||
Cash and cash equivalents | 1,638 | 1,633 | (5) |
Trade and other receivables | 1,375 | 20,879 | 19,504 |
Equity accounted investments | 401,216 | 569,641 | 168,425 |
Total financial assets | 404,229 | 592,153 | 187,924 |
Non-financial assets | |||
Land and buildings | 6,433 | 22,553 | 16,120 |
Property, plant and equipment | 3,517 | 947 | (2,570) |
Intangibles | 882 | 131 | (751) |
Other non-financial assets | 425 | 10,220 | 9,795 |
Total non-financial assets | 11,257 | 33,851 | 22,594 |
Total assets administered on behalf of Government | 415,486 | 626,004 | 210,518 |
LIABILITIES | |||
Payables | |||
Suppliers | 3,093 | 10,839 | 7,746 |
Personal benefits | − | 157 | 157 |
Grants | 4,132 | − | (4,132) |
Subsidies | − | 13,086 | (13,086) |
Other payables | 26 | 2,094,027 | 2,094,001 |
Total payables | 7,251 | 2,118,109 | 2,110,858 |
Interest bearing liabilities | |||
Leases | − | 12,996 | 12,996 |
Total interest bearing liabilities | − | 12,996 | 12,996 |
Provisions | |||
Superannuation provision - former Solicitor-Generals' pensions | 5,912 | 4,802 | (1,110) |
Makegood provisions | 363 | 363 | - |
Total provisions | 6,275 | 5,165 | (1,110) |
Total liabilities administered on behalf of Government | 13,526 | 2,136,270 | 2,122,744 |
Net assets/(liabilities) | 401,960 | (1,510,266) | (1,912,226) |
1 The department's original budgeted financial statements that were first presented to Parliament in respect of the reporting period (i.e. the department's 2019–20 Portfolio Budget Statements (PBS)).
2 Between the actual and original budgeted amounts for 2020. Totals reflect amount over/(under) revised budget. Explanations of major variances are provided further below.
The following tables provide a comparison of the budget as presented in the 2019–20 Portfolio Budget Statements (PBS) to the 2019–20 final outcome as presented in accordance with the Australian Accounting Standards for the department. The budget is not audited.
Under the AAO of 29 May 2019, industrial relations functions and programs were transferred to the department from the former Department of Employment, Skills, Small and Family Business with effect from 1 July 2019 (administered items) and 25 July 2019 (departmental items).
Explanations of major variances are provided below.
Affected line items | Variance Amount $‘000 | Explanation of major variance | |
Administered Schedule of Comprehensive Income | |||
Subsidies | 147,346 | The variance is primarily due to the payment of levies to the Coal Mining Industry (Long Service Leave Funding) Corporation (CMIC) during 2019-20 as a result of the transfer of industrial relations functions following the Administrative Arrangements Order (AAO) of 29 May 2019 (refer Note 5.1B). | |
Personal benefits | 175,728 | The variance is primarily due to the payment of financial assistance for certain unpaid employment entitlements under the Fair Entitlements Guarantee Act 2012 as a result of the transfer of industrial relations functions following the AAO of 29 May 2019 (refer Note 5.1C). | |
Grants | 61,062 | The variance is primarily due to the payment of grants to Comcare during the financial year as a result of the transfer of the industrial relations functions following the AAO of 29 May 2019 (refer Note 5.1D). The grant payments are made in relation to the Asbestos-related Claims (Management of Commonwealth Liabilities) Act 2005 and the Safety, Rehabilitation and Compensation Act 1988 (refer Note 5.1D). | |
Payments to corporate Commonwealth entities | 5,959 | The variance is primarily due to the payments to Comcare during 2019–20 as a result of the transfer of industrial relations functions following the AAO of 29 May 2019 (refer Note 5.1G). | |
Depreciation and amortisation | (5,585) | The variance is primarily due to the actual asset acquisitions associated with the Royal Commissions being less than budgeted resulting in a lower actual depreciation expense. | |
Depreciation on right-of-use assets | 3,433 | The variance is due to the adoption of AASB 16 Leases on 1 July 2019. | |
Levies | 147,349 | The variance is primarily due to the collection of levies under the Coal Mining Industry (Long Service Leave) Administration Act 1992 as a result of the transfer of the industrial relations functions following the AAO of 29 May 2019 (refer Note 5.2A). | |
Recoveries – personal benefit recoveries | 137,625 | The variance is primarily due to the recovery of monies under the Fair Entitlement Guarantee Act 2012 as a result of the transfer of industrial relations functions following the AAO of 29 May 2019 (refer Note 5.2C). | |
Gains/(losses) on financial assets through other comprehensive income | (178,579) | The variance is primarily due to the decrease in the value of the department's administered investment in CMIC as at 30 June 2020. | |
Gains/(losses) on financial liabilities through other comprehensive income | 98,015 | The variance is due to the transfer of the industrial relations functions following the AAO of 29 May 2019 and relates to the movement in the Comcare payable as at 30 June 2020 (refer Note 7.3E). | |
Administered Schedule of Assets and Liabilities | |||
Trade and other receivables | 19,504 | The variance is primarily due to the recovery of monies under the Coal Mining Industry (Long Service Leave) Administration Act 1992 and the Fair Entitlement Guarantee Act 2012 as a result of the transfer of industrial relations functions following the AAO of 29 May 2019 (refer Note 7.1B). | |
Equity accounted investments | 168,425 | The variance is primarily due to a reduction in the value of the Commonwealth's investment in the CMIC and Comcare as a result of the transfer of industrial relations functions following the AAO of 29 May 2019 (refer Note 7.1C). | |
Land and buildings | 16,120 | The variance is due to the adoption of AASB 16 Leases for leases entered into during 2019–20 held by the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability (refer Note 7.2A). | |
Other non-financial assets | 9,795 | The variance is primarily due to the Commonwealth's annual contribution to an international organisation. This is a result of the transfer of industrial relations functions following the AAO of 29 May 2019 (refer Note 7.2C). | |
Suppliers | 7,746 | The variance is primarily due to the transfer of industrial relations functions following the AAO of 29 May 2019 and the establishment of the Royal Commission into National Natural Disaster Arrangements in February 2020 (refer Note 7.3A). | |
Grants | (4,132) | The variance is due to all 2019–20 grant payments being paid at 30 June 2020 (refer Note 7.3C). | |
Subsidies | 13,086 | The variance is due to the payment of the subsidy to the CMIC as a result of the transfer of industrial relations functions following the AAO of 29 May 2019 (refer Note 7.3D). | |
Other payables | 2,094,001 | The variance is primarily due to the amount payable to Comcare by the Commonwealth for workers compensation claims and management of asbestos related personal injury common law claims against the Commonwealth as a result of the transfer of industrial relations functions following the AAO of 29 May 2019 (refer Note 7.3E). | |
Leases | 12,996 | The variance is primarily due to the transition to AASB 16 Leases on 1 July 2019 (refer Note 7.4A). | |
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