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Financial performance

Introduction

In 2019–20 we implemented initiatives to improve financial management across the Department of Agriculture, Water and the Environment. These included integrating financial reporting and a review and consolidation of financial policies and procedures. The initiatives supported the integration of financial capability and resource allocation to meet the needs of the new department.

Revenue from the provision of cost-recovered services funds a significant portion of departmental expenditure. In 2019–20 the impact of the COVID-19 pandemic had a negative effect on the amount of revenue collected. We continued our focus in this area to ensure services are efficient and appropriately funded.

Our 2019–20 internal budget aligned to the Department of Agriculture, Water and the Environment Portfolio Additional Estimates Statements 2019–20 (PAES), with an approved deficit position. The 2019–20 full-year result was a deficit of $50.2 million after allowable losses.

Table 16 summarises the department's entity resource statement for 2019–20. For further details on the department's resourcing, see Appendix B: Entity resource and outcome statements.

Table 16 Entity resource statement subset (2019–20)

Actual available appropriation for 2019–20

$’000

Payments made

2019–20

$’000

Balance remaining

2019–20

$’000

(a)

(b)

(a)–(b)

Departmental

Annual appropriations – Ordinary annual services

1,070,750

944,216

126,534

Annual appropriations – Other services – Non‑operating

171,340

47,113

124,227

Total departmental annual appropriations

1,242,090

991,329

250,761

Departmental special appropriations

16,000

16,000

Total special appropriations

16,000

16,000

Special accounts

605,556

580,290

25,266

Total special accounts

605,556

580,290

25,266

Less departmental appropriations drawn from annual/special appropriations and credited to special accounts

(153,065)

(153,065)

Total departmental resourcing

A

1,710,581

1,434,554

276,027

Administered

Annual appropriations – Ordinary annual services

924,750

738,492

186,258

Annual appropriations – Other services – Non‑operating

1,295,245

417,786

877,459

Annual appropriations – other services – specific payments to States, ACT, NT and local government

Annual appropriations – other services – new administered expenses

Total administered annual appropriations

2,219,995

1,156,278

1,063,717

Administered special appropriations

1,121,997

1,121,997

Total administered special appropriations

1,121,997

1,121,997

Special accounts

2,618,043

741,682

1,876,361

Total special accounts receipts

2,618,043

741,682

1,876,361

Less administered appropriations drawn from annual/special appropriations and credited to special accounts

(258,267)

(258,267)

Less payments to corporate entities from annual/special appropriations

(680,510)

(662,775)

(17,735)

Total administered resourcing

B

5,021,258

2,098,915

2,922,343

Total resourcing and payments for Department of Agriculture, Water and the Environment

A+B

6,731,839

3,533,469

3,198,370

Revenue

Our own-source revenue for 2019–20 was $444.3 million. The department had appropriation revenue of $818.5 million.

Figure 25 shows the actual own-source revenue for 2019–20 and budgeted revenue figures from 2020–21, as per the 2019–20 PAES.

Figure 25 Own-source revenue, 2019–20 to 2022–23 A column graph showing actual and forecast own-source revenue for the Department of Agriculture, Water and the Environment. In 2019-20 actual revenue was $444 million. In 2020-21 revenue is forecast to be $501 million. In 2021-22 revenue is forecast to be $498 million. In 2022-23, revenue is forecast to be $494 million.
​​The department's own-source income is mainly derived from its regulatory cost-recovery activities. Figure 26 shows the breakdown of our contract revenue by cost-recovery.
Figure 26 Revenue from contracts with customers, by cost-recovery activity, 2019–20 A bar graph showing cost-recovery revenue for 2019-20. Revenue from other services was $18.8 million. Revenue from other cost recovery arrangements was $18.4 million. Revenue from live animal exports arrangements was $8.4 million. Revenue from plant export arrangements was $17.9 million. Revenue from food export arrangements was $91.3 million. Revenue from biosecurity arrangements was $250.5 million.
Note: 'Other Cost Recovery' comprised the International mail, Offshore, Passenger and National Residue Survey arrangements. 'Other Services' includes Public Governance, Performance and Accountability Act 2013, s.74 receipts from ABARES, biosecurity plant and animal health, and Antarctic programs.

Departmental expenses

Our expenses totalled $1,394.5 million in 2019–20 against the revised budget of $1,406.4 million published in the 2019–20 PAES. This is the first budget available for the new department.

Figure 27 shows the actual departmental operating expenses for 2019–20 and budgeted expenditure figures from 2020–21, as per the 2019–20 PAES.

Figure 27 Departmental expenses, 2019–20 to 2022–23 A column graph showing actual and forecast departmental expenses for the Department of Agriculture, Water and the Environment. In 2019-20 actual expenses were $1,395 million. In 2020-21 expenses are forecast to be $1,426 million. In 2021-22 expenses are forecast to be $1,331 million. In 2022-23, expenses are forecast to $1,280 million.

Cost-recovery reserves

We operate a number of cost-recovery arrangements across biosecurity, export certification and other services in accordance with the Australian Government charging framework.

Figure 28 outlines the cost-recovery reserve balances at the end of 2019–20.

Figure 28 Cost-recovery reserve balances at 30 June 2020 A bar graph showing cost-recovery reserve balances at 30 June 2019-20. The live animal exports arrangement had a deficit of $30.4 million. The horticultural exports arrangement had a deficit of $8.8 million. The post entry quarantine arrangement had a deficit of $7 million. The meat export arrangement had a deficit of $2.4 million. The dairy export arrangement had a deficit of $1.8 million. The grain and seed exports arrangement had a deficit of $1.2 million. the non-prescribed goods arrangement had a balance of zero. The seafood and eggs arrangement had a surplus of $0.8 million. The seaports arrangement had a surplus of $4.7 million. The National Residue Survey arrangement had a balance of $18.6 million. The import clearance arrangement had a surplus of $27.7 million.
Note: Only surplus reserves are recorded in the department's financial statements.

Managing our assets

Departmental activities

Our major investments are in land, buildings, heritage and cultural assets, ICT hardware and software and right of use assets. At 30 June 2020 our asset base was valued at $1,469.6 million. Of this:

  • $695.2 million are assets located in the Australian Antarctic Territory. During 2019–20 we managed and maintained Australia's Antarctic stations – Casey, Davis and Mawson – and a research station on sub-Antarctic Macquarie Island.
  • $420.4 million are right of use (ROU) assets, which were accounted for as the department's assets for the first time in 2019–20. The majority of these assets relate to property leases for office accommodation, laboratories, data facilities and residences in remote locations. ​For more information see the department's 2019–20 financial statements Overview.

We make strategic investments to maintain and improve services to the government and to clients, consistent with government priorities and ongoing business needs. We manage capital investment through a comprehensive process that involves multiple governance bodies. The process is designed to help prioritise and evaluate capital proposals and ensure investments are made effectively.

Following the machinery of government changes, the response to COVID-19 and the need to support flexible work arrangements, the department is in the process of strengthening governance arrangements for, and ensuring the sustainability of, its ICT investments. One of our integration activities will be centralising ICT asset management systems in order to provide greater visibility of ICT asset utilisation, cost and maintenance across the department.

Administered activities

Commonwealth environmental water holdings

The department manages Commonwealth environmental water holdings, which are recorded on state government water registers. The water entitlements are classified as indefinite life intangible assets and are subject to annual impairment testing in accordance with Australian Accounting Standard AASB 138 Intangible Assets.

Heritage and cultural assets – Antarctic collection

Australia has a history of involvement with Antarctica spanning more than 100 years. Over that time we have accumulated a large collection of Antarctic heritage artefacts, artworks, images and objects. We have classified these items as heritage and cultural assets because of their heritage value, and adopted appropriate curatorial and preservation policies for these assets. More information about cultural heritage management in Antarctica is on our website.

Administered program performance

In 2019–20 we managed administered assets of $8,677.8 million on behalf of the Australian Government. This largely comprised $4,011.9 million in water entitlements and $2,111.8 million in loans and investments in 10 portfolio entities.

Administered income for 2019–20 was $758.7 million. The main source of administered income is primary industry levies and charges.

Administered expenditure for 2019–20 was $2,035.1 million. These expenses are primarily made up of:

  • levy disbursements and Commonwealth contributions
  • grants
  • payments to corporate entities
  • income support for farmers
  • concessional loan discounts.