Hon Paul Fletcher MP Minister for Communications, Cyber Safety and the Arts Parliament House Canberra ACT 2600
On behalf of the Council of the Australian National Maritime Museum, I am pleased to present the museum’s annual report for the financial year ended 30 June 2020.
This report has been prepared and is submitted to you in accordance with all applicable obligations of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), including section 46, which requires that you table the report in the Parliament. The report includes the museum’s audited financial statements and the annual performance statement as required by the PGPA Act.
This report was considered by the Council on 2 September 2020. The members of Council accept the report as a fair and accurate representation of the museum’s performance during the 2019–20 financial year.
As required by section 10 of the Public Governance, Performance and Accountability Rule 2014, I certify that:
the museum has prepared fraud risk assessments and fraud control plans
the museum has in place appropriate fraud prevention, detection, investigation and reporting mechanisms that meet its specific needs
the Council has taken all reasonable measures to appropriately deal with fraud relating to the museum.
This report highlights the extraordinary results achieved by the museum’s director and staff in 2019–20 but also demonstrates the challenges of this most unusual year.
Minister, the Council’s focus this year has been on various strategic priorities, including the museum’s funding and growth, as well as finances and risk. Some of the matters considered by Council include the management of COVID-19, the Encounters 2020 program (commemorating the 250th anniversary of Cook’s first Pacific voyage), the Rhode Island Marine Archaeology Project, the Maritime Museums of Australia Project Support Scheme, optimisation of the museum’s site and the museum’s People and Culture Strategic Plan.
For the record, I note that the museum has given a high priority to implementation of public health measures to combat the spread of COVID-19. To this end, the museum closed to the general public in response to guidance from the State and Commonwealth Governments from 24 March and reopened on 22 June 2020. Regrettably, for reasons of public health and safety, we were unable to proceed with many aspects of the Encounters 2020 program, particularly the circumnavigation of Australia by the Endeavour replica or our search for Cook’s Endeavour in Newport, Rhode Island. The disruptions to our operations, while necessary for public health, have adversely affected self-generated revenue, visitation, outreach and research. But on the upside, we quickly transitioned to a virtual offer and this resulted in significant growth in online audiences.
Overall, the museum has achieved good results against key performance measures for visitation, outreach, education, growing and providing access to the National Maritime Collection and supporting Indigenous maritime heritage, and progress has been made on each of the strategic priorities set out in the museum’s corporate plan for 2019–23.
In 2019–20, total expenses were $43M, which was 9.5% lower than budgeted, primarily due to the suspension of the Encounters 2020 program, including the circumnavigation of Australia by the Endeavour replica, and savings measures implemented in the final quarter of the year to offset the lost revenue impacts associated with COVID 19. Total revenue was $40.1M, of which $19.7M (42.8% excluding one-offs) was self-generated. Excluding the Collection Development Acquisition Budget (CDAB) depreciation-related loss that the museum is able to incur, approval for a forecast operating loss of $1.324M was sought despite significant cuts to discretionary expenditure and ambition. Subsequent to this application being made, the museum’s final result improved to a profit of $900K (excluding CDAB depreciation) due to a successful insurance claim being made by the museum for lost revenue impacts associated with COVID-19. Notably, this position was also able to be reached without any reductions in APS employees.
I must emphasise the deep financial impact of COVID-19 on government agencies like the museum with a strong commercial focus. You will recall that in 2018–19, the museum generated some 45% of revenue from non-government sources and our ambition was to exceed 50% in 2019–20. COVID-19 made this target impossible to achieve. Ironically, the museum has been a victim of its own success to a degree in that, despite its really young age, it has one of the highest percentages of self-generated income of any Australian cultural institution. In a COVID-19 world, therefore, assuming government support remains at constant levels, the ANMM will have lost a far greater percentage of its revenues than institutions that rely more heavily on government funding.
Minister, we are doing our very best to navigate these challenging times without turning to government for additional support, and despite this still are being able to maintain the museum as one of Australia’s premier cultural institutions. However, I must advise that we estimate that due to COVID-19, total own-source revenue in 2020–21 will decrease by $10M (or around 45%) from previous years. This downward revision comes on top of the already challenging revenue environment (such as reductions in operating grants, reduced interest returns and increased depreciation expenditure). To manage this situation, we will need to implement further significant expenditure cuts in discretionary areas and anticipate seeking approval to incur an operating loss next year, covered by reserves, so as to balance our budget.
While I am confident the museum will come out of the crisis leaner and smaller, but still healthy and performing, we are increasingly reliant upon the expertise and support of our Councillors, director, museum staff, volunteers, Members and donors.