Departmental finances

Expenses

Operating expenditure for 2019–20 was $66.888 million excluding depreciation and amortisation.

Figure 8: Operating expenditure 2019-20

Refer to notes 1.1 Expenses and 1.2 Own-Source Revenue and gains of the financial statements.

Our agency incurred total employee expenses of $39.835 million in 2019–20 compared to $40.205 million in 2018–19. The consistent expenditure between the years is a result of staff levels largely remaining consistent at 313 ASL (315 ASL in 2019) and no increases in salaries under the Enterprise Agreement in response to the COVID-19 pandemic.

With the application of the new accounting standard AASB 16 Leases, supplier expenses no longer include operating lease rentals. Supplier expenses in 2019–20 of $26.780 million remained on par with the previous year ($27.4 million excluding rental expense). Depreciation and amortisation expense for 2019–20 increased from $5.806 million to $7.631 million, predominantly due to implementation of AASB 16 and the recognition of depreciation on the right of use leased asset (office accommodation).

Refer to note 3.2 Non-Financial Assets of the financial statements.

Revenue

The work of our agency is mainly funded by Government appropriation. Government revenue from departmental appropriations reduced slightly to $69.737 million from $69.879 million.

Own source revenue in 2019–20 was $0.473 million, a decrease from 2018–19 due to the completion of projects funded under the Data Integration Partnership Initiative.

Financial position and future financial viability

The agency remains in a sound financial position, with sufficient cash reserves to fund our debts as and when they fall due. As at 30 June 2020, the agency had total equity of $13.7 million, represented by $35.6 million assets offset by $21.9 million of liabilities.

The majority of assets relate to appropriation and other receivables ($19.6 million), leasehold improvements ($8.9 million) and intangibles ($5.1 million). The majority of liabilities relate to employee provisions ($12.4 million) and leases ($6.6 million).

As highlighted in the overview note to the financial statements, the agency has assessed the impact of the pandemic on the financial statements including the potential for movements in the fair value of non-current assets. We concluded that there was no significant impact on transactions and balances recorded in the 2019-20 financial statements.

Based on the key assumptions of continued appropriation funding from Government as the primary funding source of the agency, we expect to continue operations as a going concern for the foreseeable future.

Capital investment

Our capital investment for 2019–20 was $2.9 million.

We continue to invest in the development of our systems to further improve the experience of scheme participants, reduce burden and improve efficiency of the agency. We also invested in a 100% refresh of our laptop fleet and telephony hardware.

Administered finances

Our agency administered the Emissions Reduction Fund, Renewable Energy Target and residual items relating to the carbon pricing mechanism on behalf of the Australian Government in 2019–20.

Administered income

Administered income was $437.7 million and came entirely from the administration of the Renewable Energy Target.

Figure 9: Administered income 2019-20

Refer to the Administered schedule of comprehensive income, for the period ended 30 June 2020 and Note 2.2A: Revenue of the financial statements.

Administered expenses

Administered expenses were $583.1 million predominantly due to the continuing recognition of a provision for refund – large-scale shortfall and the payment for contracts under the Emissions Reduction Fund.

Figure 10: Administered expenses 2019-20

Entity resource statement

The entity resource statement provides additional information about the various funding sources that the agency may draw upon during the year. Appendix B: Entity resource statement and expenses details the resources available to the agency during 2019–20 and sets out the agency’s summary of total expenses for Outcome 1.