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Department of Agriculture, Water and the Environment

Introduction

Independent Auditor's report

Statement by the Secretary and Chief Finance Officer

 In our opinion, the attached financial statements for the year ended 30 June 2020 comply with subsection 42(2) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and are based on properly maintained financial records as per subsection 42(2) of the PGPA Act. In our opinion, at the date of this statement, there are reasonable grounds to believe that the Department of Agriculture, Water and the Environment will be able to pay its debts as and when they fall due. Signed by Andrew Metcalfe AO, Secretary, and Scott Brown, Chief Finance Officer. Dated 16 September 2020.

Overview

Basis of Preparation of the Financial Statements

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013 (PGPA).

The financial statements have been prepared in accordance with the:

  • Public Governance, Performance and Accountability Rule 2014;
  • PGPA (Financial Reporting) Rule 2015 (FRR); and
  • Australian Accounting Standards and Interpretations – Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.

Impact of the Machinery of Government change 2019-20

In 2019-20 the structure of the department has changed through the Administrative Arrangements Orders (AAO’s) issued by the Governor-General of the Commonwealth of Australia. The changes that came into effect were:

  • The National Drought Map function was relinquished to the National Drought and North Queensland Flood Response and Recovery Agency on 5 December 2019.
  • All the functions of the Department of Agriculture were relinquished to the Department of Agriculture, Water and the Environment (formally known as the Department of the Environment and Energy) on 1 February 2020.
  • Climate Change and Energy functions of the former Department of the Environment and Energy were relinquished to the Department of Industry, Science, Energy and Resources (formerly known as the Department of Industry, Innovation and Science) on 1 February 2020.

Financial reporting and accounting disclosures have been prepared in accordance with the requirements AASB 1004 Contributions, Section 26 of the FRR and the Public Governance, Performance and Accountability Rule 2014, which details the reporting and disclosure requirements when a restructure occurs.

The department has prepared a single set of financial statements as if the Department of Agriculture (the old entity) was part of the Department of Agriculture, Water and the Environment (the reporting entity) for the entire reporting period, including financial results attributable to the Climate and Energy functions from 1 July 2019 to 31 January 2020 with 2018-19 comparatives reported separately.

Details of assets and liabilities transferred are included at the Restructuring disclosures at Note 8 and Note 27. The appropriation notes have been prepared separately in accordance with legal authority.

New accounting standards

All other new, revised or amended standards and interpretations that were issued prior to the sign-off date and are applicable in the current reporting period and, apart from the information disclosed below, did not have a material impact and are not expected to have a future material effect on the department’s financial statements.

Standard/ Interpretation

Nature of change in accounting policy, transitional provisions, and adjustment to financial statements

ASB 15 Revenue from Contracts with Customers (AASB 15)

and

AASB 1058 Income of Not-For-Profit Entities (AASB 1058)

AASB 15 and AASB 1058 became effective 1 July 2019 and replaced the requirements of AASB 118 Revenue (AASB 118) and AASB 1004 Contributions (AASB 1004).

AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. AASB 15 replaces AASB 118 and moves from recognising revenue based on ‘risk and reward’ to meeting ‘performance obligations’. The core principle of AASB 15 is to ‘recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.’

The department applies AASB 1058 in circumstances where AASB 15 or no other Australian Accounting Standards are applicable or where consideration paid for an asset is substantially below its fair value.

The application of AASB 15 and AASB 1058 did not result in material changes to the recognition or measurement of revenue for the department. Changes to disclosures have been made where necessary to separate revenues and receivables between revenue with contracts with customers and other revenue subject to AASB 1058 or another standard. Comparatives have been reclassified where necessary for consistency.

AASB 16 Leases (AASB 16)

AASB 16 became effective on 1 July 2019 and replaced AASB 117 Leases (AASB 117).

AASB 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, with options to exclude leases where the lease term is twelve months or less, or where the underlying asset is of low value. AASB 16 substantially carries forward the lessor accounting in AASB 117, with the distinction between operating leases and finance leases being retained. The details of the changes in accounting policies, transitional provisions and adjustments are disclosed below and in the relevant notes to the financial statements.

The department adopted AASB 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings as at 1 July 2019. Accordingly, the comparative information presented for 2019 is not restated and is presented as previously reported under AASB 117 and related interpretations.

Application of AASB 16 Leases

Impact on transition

On transition to AASB 16, the department recognised additional right-of-use assets and additional lease liabilities, recognising the difference in retained earnings. The impact on transition is summarised below:

Impact on Transition of AASB 16

1 July 2019

Departmental

$'000

Right-of-use assets - property, plant and equipment

488 781

Lease liabilities

487 245

Retained earnings

22 932

The following table reconciles the departmental minimum lease commitments disclosed in the department's 30 June 2019 annual financial statements to the amount of lease liabilities recognised on 1 July 2019:

1 July 2019

$'000

Minimum operating lease commitment at 30 June 2019

526 188

Less: GST recognised on lease commitments

(30 861)

Less: short-term leases not recognised under AASB 16

(39 045)

Plus: other

3 486

Plus: effect of extension options reasonable certain to be exercised

36 050

Undiscounted lease payments

495 818

Less: effect of discounting using the incremental borrowing rate as at the date of initial application

(8 573)

Lease liabilities recognised at 1 July 2019

487 245

The lease liabilities were measured at the present value of the remaining lease payments, discounted using the department’s incremental borrowing rate as at 1 July 2019. The department’s incremental borrowing rate is the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions. The weighted-average rate applied was 1.19%.

Comparative Figures

Certain comparative amounts have been reclassified to conform with the current year’s reporting presentation. There has been no impact on the net operating result or net assets as a result of these adjustments.

In 2019-20 the department corrected prior period errors relating to the disclosure of amounts withheld under section 51 of the PGPA Act. The errors were due to a misinterpretation where the department erroneously reduced unspent appropriation balance disclosures for amounts withheld under section 51 of the PGPA Act. However, as directions to withhold amounts under section 51 of the PGPA Act do not legally adjust appropriations the appropriation balances should not have been reduced. The department has retrospectively restated all amounts to comply with the FRR.

Taxation

The department is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST). Revenues, expenses, assets and liabilities are recognised net of GST except where the amount of GST incurred is not recoverable from the Australian Taxation Office and for receivables and payables.

Reporting of Administered activities

Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes. Except where otherwise stated, administered items are accounted for on the same basis and using same policies as for departmental items, including the application of Australian Accounting Standards.

Breach of Section 83 of the Constitution

Section 83 of the Commonwealth of Australia Constitution Act 1900 ("the Constitution") provides that no amount may be paid out of the Consolidated Revenue Fund except under an appropriation by law. In 2019-20, the department identified one special appropriation with statutory conditions for payments which could result in potential breaches of the Constitution.

Total payments of $134.354 million under the Farm Household Support Act 2014 (FHA Act) were made during 2019-20. As at 30 June 2020, $9.156 million worth of overpayments have been recorded as debts, and within this there may be amounts that relate to potential breaches. It should be noted that it is impossible to eliminate the potential for Section 83 breaches for FHA Act payments made by Services Australia on behalf of the department. In the majority of cases, information provided by customers is relied upon to estimate the entitlements paid. This information provided by customers is not always accurate or is subject to circumstances which can result in a breach of Section 83 of the Constitution.

Events after the Reporting Period
Departmental

There have been no events after the reporting period that had the potential to significantly affect the ongoing structure and financial activities of the department.

Administered

There have been no events after the reporting period that had the potential to significantly affect the ongoing structure and financial activities of the department.

Major events impacting the Australian Government in 2019-20

In 2019-20, Australia has faced significant events that have led to unpredicted impacts on the financial statements of Australian Government entities. The events being, the summer bushfires throughout Australia and the world wide Coronavirus (COVID-19) pandemic, which began to transpire around quarter three of this financial year.

COVID-19 has impacted on the activities of the department over the last quarter of 2019-20, leading to a decline in revenue due to the closure of international borders and enforced restrictions. It is anticipated this decline will continue into the next financial year. The department has assessed an immaterial impact on its ability to collect receivables (including accounts receivable, personal benefits receivable, levy receivables) and the carrying amount of non-financial assets). Additional information is included in the department’s Budget disclosure at Note 19 and Note 35.

Also, due to the severity of these events, the Australian Government announced several stimulus packages including financial assistance to businesses and families of those affected. The financial packages announced by the government that involved the department were in response to the extraordinary impact of the above events and amounted to over $380 million from 2019-20 to 2022-23. Payments for measures commencing in 2019-20 were made in quarter four. Payments will continue into the new financial year where applicable. The 2019-20 significant payments made by the department related to:

  • Additional Support for Farm Household Support (FHA) Income Support Recipients [Coronavirus supplement] (additional $550 per fortnight payment) - $19.849 million;
  • COVID-19 Response Package - $11.228 million;
  • Bushfire Response Package – Bushfire Wildlife Recovery Program - $10.600 million; and
  • COVID-19 Economic Stimulus – Stimulus Payments [Payments to Households to support growth] (additional $750 payment) - $5.905 million.

Departmental Financial Statements

Statement of Comprehensive Income for the period ended 30 June 2020

DoEE2

DoA3

20201

2019

2019

Notes

$'000

$'000

$'000

NET COST OF SERVICES

Expenses

Employee benefits

1A

774 785

226 437

541 332

Suppliers

1B

407 532

220 386

264 195

Depreciation and amortisation

4

157 035

51 229

31 782

Grants

1C

7 798

5 104

3 341

Finance costs

1D

14 517

14 085

58

Impairment loss on financial instruments

580

134

1 692

Write-down and impairment of other assets

1E

760

903

1 646

Foreign exchange losses

-

75

-

Other expenses

1F

31 542

67 668

2 036

Total expenses

1 394 549

586 021

846 082

Own-source income

Own-source revenue

Revenue from contracts with customers

2A

405 336

33 137

407 712

Interest

2B

347

-

419

Rental income

2C

1 515

632

882

Other revenue

2D

35 362

9 192

29 518

Total own-source revenue

442 560

42 961

438 531

Gains

Other gains

2E

1 755

177

310

Total gains

1 755

177

310

Total own-source income

444 315

43 138

438 841

Net cost of services

950 234

542 883

407 241

Revenue from Government

818 512

403 939

391 812

Deficit

(131 722)

(138 944)

(15 429)

OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation reserves

(17 935)

(54 339)

-

Total other comprehensive income

(17 935)

(54 339)

-

Total comprehensive loss

(149 657)

(193 283)

(15 429)

The above statement should be read in conjunction with the accompanying notes.

  1. The department has prepared a single set of financial statements as if the Department of Agriculture (the old entity) was part of the Department of Agriculture, Water and the Environment (the reporting entity) for the entire reporting period.
  2. Former Department of the Environment and Energy (DoEE).
  3. Former Department of Agriculture (DoA).

Statement of Financial Position for the period ended 30 June 2020

DoEE

DoA

2020

2019

2019

Notes

$'000

$'000

$'000

ASSETS

Financial assets

Cash and cash equivalents

3A

29 743

15 499

38 547

Trade and other receivables

3B

306 442

98 752

105 131

Other investments

16 000

-

17 500

Total financial assets

352 185

114 251

161 178

Non-financial assets1

Land and buildings

4

619 880

213 022

6 705

Leasehold improvements

4

41 672

21 210

34 001

Property, plant and equipment

4

578 445

503 604

31 449

Heritage and cultural assets

4

72 319

72 319

-

Computer software

4

157 246

23 531

113 492

Inventories

10 004

8 096

2 110

Prepayments

14 281

10 838

6 799

Total non-financial assets

1 493 847

852 620

194 556

Total assets

1 846 032

966 871

355 734

LIABILITIES

Payables

Suppliers

5A

45 762

19 499

45 634

Grants

-

4

-

Other payables

5B

23 771

6 898

12 532

Total payables

69 533

26 401

58 166

Interest bearing liabilities

Leases2

425 452

-

-

Total interest bearing liabilities

425 452

-

-

Provisions

Employee provisions

6A

243 626

78 198

169 916

Other provisions

6B

754 552

695 162

11 846

Total provisions

998 178

773 360

181 762

Total liabilities

1 493 163

799 761

239 928

Net assets

352 869

167 110

115 806

EQUITY

Contributed equity

1 096 405

731 320

163 496

Asset revaluation reserves

403 627

395 897

25 665

Industry reserves

51 903

-

63 112

Accumulated deficit

(1 199 066)

(960 107)

(136 467)

Total equity

352 869

167 110

115 806

The above statement should be read in conjunction with the accompanying notes.

  1. Right-of-use assets are included in Buildings and Property, Plant and Equipment.
  2. Relates to the adoption of AASB 16. The above lease disclosure should be read in conjunction with the accompanying notes: 1B, 1D, 2C and 4.

Statement of Changes in Equity for the period ended 30 June 2020

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

CONTRIBUTED EQUITY

Opening balance

Balance carried forward from previous period

894 816

624 461

149 357

Transactions with owners

Distributions to owners

Restructuring

4 246

-

-

Contributions by owners

Equity injection - Appropriations

132 242

82 381

4 315

Departmental capital budget

65 101

24 478

9 824

Total transactions with owners

201 589

106 859

14 139

Closing balance as at 30 June

1 096 405

731 320

163 496

RETAINED EARNINGS

Opening balance

Balance carried forward from previous period

(1 096 574)

(821 163)

(111 099)

Adjustment on initial application of AASB 9

-

-

(1 149)

Adjustment on initial application of AASB15/AASB 1058

(4 911)

-

-

Adjustment on initial application of AASB 16

22 932

-

-

Comprehensive income

Deficit for the period

(131 722)

(138 944)

(15 429)

Total comprehensive income

(131 722)

(138 944)

(15 429)

Total comprehensive income attributable to Australian Government

(131 722)

(138 944)

(15 429)

Transfers between equity components

11 209

-

(8 790)

Closing balance as at 30 June

(1 199 066)

(960 107)

(136 467)

ASSET REVALUATION RESERVE

Opening balance

Balance carried forward from previous period

421 562

450 236

25 665

Comprehensive income

Other comprehensive income

(17 935)

(54 339)

-

Total comprehensive income

(17 935)

(54 339)

-

Total comprehensive income attributable to Australian Government

(17 935)

(54 339)

-

Closing balance as at 30 June

403 627

395 897

25 665

INDUSTRY RESERVE

Opening balance

Balance carried forward from previous period

63,112

-

54 322

Transfers between equity components

(11 209)

-

8 790

Closing balance as at 30 June

51 903

-

63 112

The above statement should be read in conjunction with the accompanying notes.

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

TOTAL EQUITY

Opening balance

Balance carried forward from previous period

282 916

253 534

118 245

Adjustment on initial application of AASB 9

-

-

(1 149)

Adjustment on initial application of AASB15/AASB 1058

(4 911)

-

-

Adjustment on initial application of AASB 16

22 932

-

-

Adjusted opening balance

300 937

253 534

117 096

Comprehensive income

Deficit for the period

(131 722)

(138 944)

(15 429)

Other comprehensive income

(17 935)

(54 339)

-

Total comprehensive income

(149 657)

(193 283)

(15 429)

Total comprehensive income attributable to Australian Government

(149 657)

(193 283)

(15 429)

Transactions with owners

Distributions to owners

Restructuring

4 246

-

-

Contributions by owners

Equity injection - Appropriations

132 242

82 381

4 315

Departmental capital budget

65 101

24 478

9 824

Total transactions with owners

201 589

106 859

14 139

Transfers between equity components

-

-

-

Closing balance as at 30 June

352 869

167 110

115 806

The above statement should be read in conjunction with the accompanying notes.

Accounting policy

Equity Injections

Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

Industry Reserves

Each cost recovered program holds a separate industry reserve. Programs in surplus are held within the industry reserve balance. Programs in deficit are held against the accumulated deficit of the department.

Cash Flow Statement for the period ended 30 June 2020

DoEE

DoA

2020

2019

2019

Notes

$'000

$'000

$'000

OPERATING ACTIVITIES

Cash received

Appropriations

866 367

482 944

375 119

Sale of goods and rendering of services

397 335

44 657

400 764

Grants

-

51

-

Interest

347

-

-

GST received

45 831

33 787

25 469

Other

119 363

6 285

58 724

Total cash received

1 429 243

567 724

860 076

Cash used

Employees

773 517

236 385

527 915

Suppliers

479 703

271 268

272 696

Interest payments on lease liabilities

5 053

-

-

Grants

9 486

5 121

41 088

Section 74 receipts transferred to OPA

49 708

50 871

-

Other

42 541

1 959

93

Total cash used

1 360 008

565 604

841 792

Net cash from operating activities

69 235

2 120

18 284

INVESTING ACTIVITIES

Cash received

Proceeds from sales of property, plant and equipment

516

84

33

Proceeds from sales of investments

17 500

-

16 500

Interest

74

-

416

Total cash received

18 090

84

16 949

Cash used

Purchase of land and buildings

16 766

-

3 249

Purchase of property, plant and equipment

66 572

183 520

6 134

Purchase of software

41 764

7 717

31 881

Purchase of investments

16 000

-

17 500

Total cash used

141 102

191 237

58 764

Net cash used by investing activities

(123 012)

(191 153)

(41 815)

FINANCING ACTIVITIES

Cash received

Contributed equity

47 113

161 630

20 184

Departmental capital budget

58 273

28 162

9 824

Total cash received

105 386

189 792

30 008

Cash used

Principal payments of lease liabilities1

59 831

-

-

Other financing cash used

16 081

-

-

Total cash used

75 912

-

-

Net cash from financing activities

29 474

189 792

30 008

Net increase / (decrease) in cash held

(24 303)

759

6 477

Cash and cash equivalents at the beginning of the reporting period

54 046

14 740

32 069

Cash and cash equivalents at the end of the reporting period

3A

29 743

15 499

38 547

The above statement should be read in conjunction with the accompanying notes.

  1. Total cash outflow for leases for the year ended 30 June 2020 was $97 982 206. It includes Principal payments, interest payments and short term or low value lease payments.

Notes to and forming part of the financial statements: Notes 1–20

Note 1: Expenses

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 1A: Employee Benefits

Wages and salaries

581 466

171 181

387 976

Superannuation:

Defined contribution plans

64 305

19 015

41 405

Defined benefit plans

48 781

16 045

34 891

Leave and other entitlements

73 625

28 938

61 310

Separation and redundancies

4 159

699

3 000

Other employee expenses

23 519

9 032

13 924

Total employee benefits (gross)

795 855

244 910

542 506

Special account administration activities

(21 070)

(18 473)

(1 174)

Total employee benefits (net)

774 785

226 437

541 332

Accounting policy

Employee Benefits

Accounting policies for employee related expenses are contained in Note 6A.

Note 1B: Suppliers

Goods and services supplied or rendered

Contractors and consultants

128 112

73 370

51 152

IT services

100 689

39 793

50 079

General goods and services

41 871

25 322

17 879

Property operating expense

29 207

9 265

21 131

Travel

22 841

8 751

25 942

Analytical testing

11 998

-

11 161

Inventory consumed

11 936

10 546

-

Office equipment, stores and consumables

10 113

3 132

7 462

Staff development and recruitment

9 101

2 609

8 157

Legal expenditure

8 825

2 656

5 606

Quarantine services

3 311

-

4 739

Total goods and services supplied or rendered

378 004

175 444

203 308

Goods supplied

63 016

17 108

46 299

Services rendered

314 988

158 336

157 009

Total goods and services supplied or rendered

378 004

175 444

203 308

Other suppliers

Workers compensation expenses

11 110

3 458

5 953

Operating lease rentals1

-

53 322

55 419

Short-term leases

33 531

-

-

Low value leases

93

-

-

Total other suppliers

44 734

56 780

61 372

Total suppliers (gross)

422 738

232 224

264 680

Special account administration activities

(15 206)

(11 838)

(485)

Total suppliers (net)

407 532

220 386

264 195

  1. The department has applied AASB 16 using the modified retrospective approach and therefore comparative information has not been restated and continues to be reported under AASB 117. The above lease disclosure should be read in conjunction with the accompanying notes: Statement of Financial Position, 1D, 2C, and 4.

The department has short-term lease commitments of $8 135 853 as at 30 June 2020.

Accounting Policy

Short-term leases and leases of low-value assets

The department has elected not to recognise right-of-use assets and lease liabilities for short-term leases of assets that have a lease term of 12 months or less and leases of low-value assets (less than $10 000). The department recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 1C: Grants

Public sector:

Australian Government entities (related parties)

634

43

522

State and Territory Governments

3 003

678

445

Private sector:

Non-profit organisations

1 326

10

2 078

For profit organisations

64

1 461

119

Universities

1 052

841

-

Individuals

33

46

-

Overseas

1 301

1 974

177

Community grant hub charges

390

51

-

Total grants (gross)

7 803

5 104

3 341

Special account administration activities

(5)

-

-

Total grants (net)

7 798

5 104

3 341

Note 1D: Finance Costs

Interest on lease liabilities1

5 053

-

-

Unwinding of discount rates on makegood provision

9 464

14 083

58

Other interest payments

-

2

-

Total finance costs

14 517

14 085

58

  1. Relates to the adoption of AASB 16. The above lease disclosure should be read in conjunction with the accompanying notes: Statement of Financial Position, 1B, 2C, and 4.

Note 1E: Write-Down and Impairment of Other Assets

Impairment of intangibles

194

-

1 414

Impairment on inventories

-

676

165

Impairment of plant and equipment

57

-

-

Impairment of leasehold improvements

132

-

50

Write-off of non-financial assets

377

227

17

Total write-down and impairment of other assets

760

903

1 646

Note 1F: Other Expenses

Refunds of Prior Year Revenue

12 070

-

-

Remission of fees

-

-

1 941

Increase in base restitution provision

18 668

65 711

-

Official Development Assistance

804

1 579

93

Other

-

378

-

Loss from asset sales:

Carrying value of assets sold

-

-

35

Proceeds from sale

-

-

(33)

Total other expenses

31 542

67 668

2 036

Accounting policy

Special account administration activities

The activities of the National Environment Protection Council Special Account, the National Heritage Trust of Australia Account, the Ozone Protection and SGG Account, and the Water Efficiency Labelling Scheme Account are included in the department’s administered financial statements.

In accordance with the department’s cash management practices, the department makes some payments initially from the departmental bank account, including for employees, suppliers and grants costs. Such payments are subsequently adjusted to record payments as though they had been paid directly from the special account in accordance with the PGPA Rule. For transparency purposes the department has shown the grossed-up amounts and an offsetting amount for each relevant departmental note. No amounts have been transferred from a special account to a departmental annual appropriation.

In 2019-20, the department paid a total of $36 280 125 (2019: DoEE $30 310 216, DoA $1 658 359) that was later adjusted as payments made from special accounts.

Note 2: Income

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Own-Source Revenue

Note 2A: Revenue from contracts with customers

Rendering of services

405 295

33 137

407 705

Sale of goods

41

-

7

Total revenue from contract with customers1

405 336

33 137

407 712

  1. The department has applied AASB 15 using the modified retrospective approach and therefore comparative information has not been restated and continues to be reported under AASB 118.

Disaggregation of revenue from contracts with customers

Cost recovery activity

Biosecurity arrangement

250 536

Food export arrangement

91 299

Plant export arrangement

17 904

Live animal export arrangement

8 423

Other cost recovery

18 393

Other services

18 781

Total revenue from contract with customers

405 336

Accounting policy

Regulatory Cost Recovery Activities

The department’s main source of revenue from contracts with customers is from the cost recovery of regulatory activities, including biosecurity, food export, plant export and live animal export arrangements. The department uses a combination of regulatory fees and charges depending on the charging legislation which governs the relevant activity.

The department’s charging framework ensures that all user groups contribute to the biosecurity regulatory system. Those user groups that use more regulatory resources contribute more to the regulatory framework, reflecting their higher usage of the system. All regulatory charging undertaken by the department is undertaken in accordance with the relevant charging legislation and is consistent with the requirements set out in the Australian Government Charging Framework. For further information refer to Note 17.

Fees are used to recover the costs of direct intervention and certification activities undertaken for particular importers or regulated entities. The nature of the interventions and certifications is short term and the department recognises revenue at a point in time on completion of services.

Cost recovery charges are imposed when activities are provided to a group of individuals or organisations. This recovers costs not directly linked to a specific individual or organisation but form part of the costs of the overall biosecurity regulatory system. This provides individuals access to the system and permission to undertake import and export activities.

From an accounting standards perspective, the department considers the charges to be akin to licences or permits. Payment by users provides them with permission to access the system. The department has opted to recognise the revenue using the short term recognition exemption applicable to licences as the permissions provided are short term for a financial year or for a specific export or import.

Other services

The department also has other revenue from general contracts that are enforceable through legal or equivalent means and have specific performance obligations that transfer goods or services to a customer. Contracts are considered to be enforceable where there are specific rights specified in the agreement, the parties can reasonably be expected to act on their obligations.

The department provides services to other entities and individuals including undertaking functions or incurring costs on behalf of other Australian Government entities in accordance with Memorandum of Understandings.

Revenue is recognised over time as costs are incurred where the department is entitled to recover the costs or point in time on completion of services depending on the nature of the services being provided

A contract liability for unearned revenue is recorded for obligations under contracts for which payment has been received in advance. Contract liabilities unwind as “revenue from contracts with customers” upon satisfaction of the performance obligations under the terms of the contract. The department reports contract liabilities as unearned income in Note 5B.

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 2B: Interest

Deposits

347

-

419

Total interest

347

-

419

Accounting policy

Interest revenue is recognised using the effective interest method.

Note 2C: Rental Income

Sub-leasing right-of-use assets1

1 515

632

882

Total rental income

1 515

632

882

Operating Leases

The department has sub-leases for commercial and staff rental housings. Most of the sub-leases arrangements are in hold over period and the risk associated with any rights it retains in underlying assets is low.

Maturity Analysis of Operating Lease Income Receivables

2020

$'000

Within 1 year

70

One to two years

25

Total undiscounted lease payments receivable

95

  1. Relates to the adoption of AASB 16. The above lease disclosure should be read in conjunction with the accompanying notes: Statement of Financial Position, 1B, 1D, and 4.

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 2D: Other Revenue

Resources received free of charge

ANAO audit fee

1 000

598

570

Mickleham Post Entry Quarantine Facility1

-

-

13 827

Other

1 702

2 770

1 154

Grants received

70

51

-

Insurance and other recoveries

3 730

5 429

-

Levies

11 544

-

10 471

Agricultural levies administration

4 722

-

-

State contributions

4 458

-

1 751

Research contributions

2 634

-

-

Repayment of prior year grant expenditure

1 254

141

-

Other

4 248

203

1 745

Total other revenue

35 362

9 192

29 518

  1. In 2019, the former Department of Agriculture recognised the Mickelham Post Entry Quarantine Facility as a resource received free of charge from the Department of Finance and accounted for the arrangement under AASB 117. As a result of the application of AASB 16 from 1 July 2019, the resource received free of charge is no longer reported.

Accounting policy

Resources Received Free of Charge

Resources received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government entity as a consequence of a restructuring of administrative arrangements or as contributions by owners.

Gains

Note 2E: Other Gains

Assets now recognised

5

51

101

Write-down of provisions and payables

744

28

169

Gain from asset sales:

Proceeds from sale

516

-

-

Carrying value of assets sold

(354)

-

-

Carrying value of liability derecognised

13

-

40

Reversal of impairment losses - financial asset

488

-

-

Other

343

98

-

Total other gains

1 755

177

310

Accounting policy

Sale of Assets

Gains from the disposal of assets are recognised when control of the asset has passed to the buyer.

Other Gains

Gains may be realised or unrealised and are recognised on a net basis.

Revenue from Government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the department gains control of the appropriation. Appropriations receivable are recognised at their nominal amounts.

Note 3: Financial Assets

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 3A: Cash and Cash Equivalents

Cash in special accounts

25 266

10 140

35 288

Cash on hand or on deposit

4 477

5 359

3 259

Total cash and cash equivalents

29 743

15 499

38 547

Note 3B: Trade and Other Receivables

Goods and services receivables in connection with

Goods and services

50 185

11 814

35 897

Total goods and services receivables

50 185

11 814

35 897

Appropriations receivables

Operating

113 212

45 554

65 805

Departmental capital budget

8 846

2 018

-

Equity injection

120 359

34 710

520

Total appropriations receivables

242 417

82 282

66 325

Other receivables

Statutory receivables

9 648

4 036

3 298

Interest

123

-

197

Other

7 679

754

3 383

Total other receivables

17 450

4 790

6 878

Total trade and other receivables (gross)

310 052

98 886

109 100

Less impairment loss allowance

(3 610)

(134)

(3 969)

Total impairment loss allowance

(3 610)

(134)

(3 969)

Total trade and other receivables (net)

306 442

98 752

105 131

During the 2020 financial year, credit terms for goods and services were within 30 days (2019: 30 days).

Accounting policy

Financial Assets

Trade receivables, loans and other receivables that are held for the purpose of collecting the contractual cash flows where the cash flows are solely payments of principal and interest and are not provided at below market rates, are subsequently measured at amortised cost using the effective interest method adjusted for any loss allowance.

Note 4: Non-Financial Assets

Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles

Land and Buildings1

Leasehold Improvements1

Heritage and cultural2

Other property, plant and equipment1

Computer Software3

Total

$’000

$’000

$’000

$’000

$’000

$’000

DoEE as at 1 July 2019

Gross book value

236 120

27 533

72 500

94 468

79 753

510 374

Work in progress

20 463

1 066

-

436 726

12 135

470 390

Accumulated depreciation, amortisation and impairment

(43 561)

(7 389)

(181)

(27 590)

(68 357)

(147 078)

DoEE total as at 1 July 2019

213 022

21 210

72 319

503 604

23 531

833 686

DoA as at 1 July 2019

Gross book value

6 873

52 154

-

48 313

149 361

256 701

Work in progress

-

1 392

-

2 768

46 399

50 559

Accumulated depreciation, amortisation and impairment

(168)

(19 545)

-

(19 632)

(82 268)

(121 613)

DoA total as at 1 July 2019

6 705

34 001

-

31 449

113 492

185 647

Recognition of right of use assets on initial application of AASB164

477 731

-

-

11 050

-

488 781

Adjusted total as at 1 July 2019

697 458

55 211

72 319

546 103

137 023

1 508 114

Additions

By purchase

11 351

4 993

-

66 577

12 676

95 597

Internally developed

-

-

-

-

29 088

29 088

Right-of-use assets

3 686

-

-

2 244

-

5 930

Restructuring

-

(1 645)

-

(69)

(2 883)

(4 597)

Restructuring for right-of-use assets

(6 407)

-

-

(14)

-

(6 421)

Impairments recognised in the net cost of services

-

(132)

-

(57)

(194)

(383)

Reclassification

(15)

(450)

-

(2 179)

2 644

-

Depreciation and amortisation expense

(23 869)

(16 289)

-

(28 016)

(20 932)

(89 106)

Depreciation on right-of-use assets

(62 324)

-

-

(5 605)

-

(67 929)

Other movements

-

-

-

-

-

-

Disposals

By write-off

-

(16)

-

(185)

(176)

(377)

By sale

-

-

-

(354)

-

(354)

Total as at 30 June 2020

619 880

41 672

72 319

578 445

157 246

1 469 562

Total as at 30 June 2020 represented by:

Gross book value

250 266

74 199

72 500

162 910

258 854

818 729

Work in progress

24 526

2 810

-

482 195

53 042

562 573

Accumulated depreciation, amortisation and impairment

(67 598)

(35 337)

(181)

(74 335)

(154 650)

(332 101)

Total as at 30 June 2020

207 194

41 672

72 319

570 770

157 246

1 049 201

Carrying amount of right-of-use assets4

412 686

-

-

7 675

-

420 361

  1. These classes of assets are held at fair value.
  2. Land, buildings and other property, plant and equipment that met the definition of a heritage and cultural item were disclosed in the heritage and cultural asset class
  3. The carrying amount of computer software included $41 340 652 purchased software and $115 904 990 internally developed software.
  4. Relates to the adoption of AASB 16. The above lease disclosure should be read in conjunction with the accompanying notes: Statement of Financial Position, 1B, 1D, and 2C.

Disposal of non-financial assets

No significant land, buildings or leasehold items are expected to be sold or disposed of within the next 12 months.

No significant heritage or cultural items are expected to be sold or disposed of within the next 12 months.

No significant property, plant and equipment items are expected to be sold or disposed of within the next 12 months.

No significant software items are expected to be sold or disposed of within the next 12 months.

Contractual commitments for the acquisition of property, plant, equipment and intangible assets

Capital commitments relate to contractual payments for new assets and assets under construction. Commitments are GST inclusive where relevant.

2019-20 Capital Commitments

< 1 year

1 year to 5 years

> 5 years

Total

$'000

$'000

$'000

$'000

Buildings

964

-

-

964

Leasehold Improvements

94

-

-

94

Plant and Equipment

78 816

-

-

78 816

Intangibles

1 838

604

-

2 442

Total commitments

81 712

604

-

82 316

2018-19 Capital Commitments

< 1 year

1 year to 5 years

> 5 years

Total

$'000

$'000

$'000

$'000

Buildings

2 678

-

-

2 678

Leasehold Improvements

-

-

-

-

Plant and Equipment

99 188

-

-

99 188

Intangibles

235

-

-

235

Total commitments

102 101

-

-

102 101

Comparative figures are represented solely by the former Department of the Environment and Energy figures. The former Department of Agriculture disclosed no capital commitments in 2018-19.

The Plant and Equipment capital commitments under 1 year for 2018-19 included $96 million of payments for the new Antarctic Icebreaker RSV Nuyina. The majority of this amount remains a commitment at 30 June 2020 due to delays in commissioning the ship mainly as a result of travel restrictions caused by COVID-19.

Accounting policy

Assets are recorded at cost on acquisition except as stated. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring.

Asset Recognition Threshold

Purchases of property, plant and equipment are recognised initially at cost in the Statement of Financial Position. As a result of the machinery of government change, the asset recognition thresholds were reviewed to determine thresholds that the department will apply from 1 July 2020. During 2019-20 the department continued to apply the respective threshold of the predecessor departments as outlined in the following table:

DoEE

DoA

2020

2019

2020

2019

Land and buildings

$50 000

$50 000

$0

$0

Leasehold improvements

$50 000

$50 000

$150 000

$150 000

Property, plant and equipment

$7 000 individual purchases

$7 000 individual purchases

$5 000 individual purchases/ $50 000 group purchases

$5 000 individual purchases/ $50 000 group purchases

Internally developed software

$10 000

$10 000

$200 000

$200 000

Purchased software

$10 000

$10 000

$150 000

$150 000

Heritage and cultural

$0

$0

N/A

N/A

Purchases under the asset recognition thresholds are expensed in the year of acquisition.

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to restoration provisions in property leases taken up by the department where an obligation exists to restore the property to its original condition. These costs are included in the value of the department’s leasehold improvements with a corresponding provision for the restoration recognised.

The department’s intangible assets comprise internally developed software and purchased software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Lease Right of Use (ROU) Assets

Leased ROU assets are capitalised at the commencement date of the lease and comprise of the initial lease liability amount, initial direct costs incurred when entering into the lease less any lease incentives received. These assets are accounted for by the department as separate asset classes to corresponding assets owned outright, but included in the same column as where the corresponding underlying assets would be presented if they were owned.

Lease ROU assets continue to be measured at cost after initial recognition.

Revaluations and fair value measurement

All property, plant and equipment assets are measured at fair value.

Following initial recognition at cost, property, plant and equipment (excluding ROU assets) are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets’ fair values at the reporting date. Independent revaluations for property, plant and equipment are conducted every three years, however further valuations are undertaken dependent upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised in the surplus or deficit. Revaluation decrements for a class of assets are recognised in the surplus or deficit except to the extent that they reverse a previous revaluation increment for that class.

Any accumulated depreciation at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

Recurring and non-recurring fair value measurements – valuation processes

An independent professional valuer conducted a detailed external valuation of non-financial assets (excluding intangibles) for the Department of Agriculture at 30 June 2017 and the Department of the Environment and Energy at 30 June 2018.

An independent professional valuer also conducted a materiality assessment over the department’s combined non-financial asset base at 30 June 2020 and the department has relied upon those outcomes to establish carrying amounts.

A full external valuation will be conducted in financial year 2020-21.

Depreciation and amortisation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the department using, in all cases, the straight-line method of depreciation.

Intangible assets are amortised on a straight-line basis over their anticipated useful life.

As for the assessment undertaken on asset capitalisation thresholds, the department also reviewed the useful lives of the asset classes below as a result of the machinery of government change. Depreciation rates applying to each class of depreciable asset are based on the following useful lives for 2020:

DoEE

DoA

2020

2019

2019

Buildings

3 to 70 years

3 to 70 years

40 to 50 years

Leasehold improvements

Lesser of useful life or lease term

Lesser of useful life or lease term

Lesser of useful life or lease term

Property, plant and equipment

1 to 100 years

1 to 100 years

3 to 15 years

Internally developed software

5 to 12 years

5 to 12 years

5 to 10 years

Purchased software

3 to 17 years

3 to 17 years

3 years

The depreciation rates for ROU assets are based on the commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term.

Impairment

All non-financial assets were assessed for impairment at 30 June 2020. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the department were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use.

Heritage and Cultural

Heritage and cultural assets include the Antarctic Ice Core Collection. The department maintains preservation policies for the Ice Core Collection.

Inventories

All Inventory is held for distribution and valued at cost, adjusted for any loss of service potential.

Costs incurred in bringing each item of inventory to its present location and condition are assigned as follows:

a) raw materials and stores – purchase cost on a first-in-first-out basis;

b) fuel – weighted average cost; and

c) finished goods and work-in-progress – cost of direct materials and labour plus attributable costs that can be allocated on a reasonable basis.

Inventories acquired at no cost or nominal consideration are initially measured at current replacement cost at the date of acquisition.

Inventory valued at $11 935 628 (2019: $10 545 997) (Note 1B Suppliers) held for distribution has been recognised as an expense.

No items of inventory were recognised at fair value less cost to sell. The majority of inventories are expected to be distributed in the next 12 months.

Note 5: Payables

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 5A: Suppliers

Trade creditors and accruals

45 762

18 925

31 201

Operating lease payable

-

574

14 433

Total suppliers

45 762

19 499

45 634

Settlement is usually made within 20 days (2019: 30 days).

Note 5B Other Payables

Salaries and wages

9 963

1 555

3 404

Unearned income

5 132

3 240

2 315

Separations and redundancies

1 918

1 785

931

Superannuation

3 208

265

580

Other

3 550

53

5 302

Total other payables

23 771

6 898

12 532

Accounting policy

Separation and Redundancy

Provision is made for separation and redundancy benefit payments. The department recognises a provision for termination when it has developed a detailed formal plan for the terminations, identified the positions affected, assessed expressions of interest from employees and made formal offers. Separation and redundancy is reported as a payable when an agreement has been reached with the relevant employee.

Superannuation

The majority of the department’s staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the PSS accumulation plan (PSSap). However, some staff have elected to be members of other private superannuation funds.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

The department makes employer contributions to the defined benefits superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The department accounts for the contributions as if they were contributions to defined contribution schemes.

The liability for superannuation recognised at 30 June 2020 represents outstanding contributions.

Note 6: Provisions

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 6A: Employee Provisions

Leave

243 626

78 105

169 916

Separations and redundancies

-

93

-

Total employee provisions

243 626

78 198

169 916

Accounting policy

Liabilities for ‘short-term employee benefits’ and termination benefits due within twelve months of the end of the reporting period are measured at their nominal amounts.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will apply at the time the leave is taken, including the department’s employer superannuation contribution rates to the extent that leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave has been determined by reference to the work of an actuary as at 30 June 2020. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Note 6B: Reconciliation Other Provisions

Antarctic solid waste disposal sites1

Antarctic regions2

Other localities3

Provision for lease incentives4

Other provisions

Total

$'000

$’000

$’000

$’000

$’000

$’000

As at 1 July 2019

279 402

401 265

18 405

7 936

-

707 008

Additional provisions made/(amounts reversed)

10 351

(9 649)

(11)

(7 936)

12 070

4 825

Amounts used

-

-

(425)

-

-

(425)

Amounts transferred as part of restructuring

-

-

(2 223)

-

-

(2 223)

Change in discount rate

8 317

25 265

2 321

-

-

35 903

Unwinding of discount5

4 103

4 853

508

-

-

9 464

Total as at 30 June 2020

302 173

421 734

18 575

-

12 070

754 552

  1. The impact of the change in the valuation and the change in the discount rate on the provision for restoration of the Antarctic solid waste disposal sites were taken to the statement of comprehensive income and are reported under other expenses in Note 1F.
  2. The impact of the change in the valuation and the change in the discount rate on the provision for restoration of Antarctic regions was taken to the asset revaluation reserve.
  3. The impact of the change in the valuation and the change in the discount rate on the provision for other localities was taken to the asset revaluation reserve.
  4. Provisions for lease incentives were reversed under AASB 16 Leases.
  5. Unwinding of the discount associated with the provisions is recorded as finance costs in the Statement of Comprehensive Income.

The valuation of the provisions for restoration of the ‘Antarctic regions’ and ‘Antarctic solid waste disposal sites’ is derived from a costing model developed by an expert valuer in 2017-18. In 2019-20, to ensure the provisions reflected a realistic approach to the restoration of Antarctic areas, the department updated the costing model for changes to key economic and engineering assumptions.

Accounting Policy

Accounting Judgements and Estimates

Australia is a signatory to the Antarctic Treaty 1961, and Australia’s environmental responsibilities under the treaty are contained in Annex III of the Madrid Protocol. The Madrid Protocol requires past and present waste disposal sites in Antarctica be cleaned up by the generators of such wastes.

The values for the Antarctic Solid Waste Disposal Sites, the Antarctic and Sub-Antarctic related restoration obligations and related assets have been arrived at on a best estimate basis. These values have been calculated on an individual asset basis, using a discounted cash flow methodology and therefore the value of the provisions can vary from year to year due to changes in the underlying estimated restoration costs, the assumed methodologies, estimated indexation factors, discount rates at the reporting date, and estimated cash flow timings.

Provision for Restoration Obligations - Antarctic Solid Waste Disposal Sites

This provision represents Australia’s responsibility to clean up the past and present solid waste disposal sites it has generated in Antarctica.

Australia stopped disposing of its station solid waste in Antarctica in the mid 1980’s, and since then all waste has either been returned to Australia for disposal or incinerated on station. A process of gradual removal is in effect. Restoration is expected to be completed by 2049.

The estimate is dependent upon four key parameters/variables: Discount Rate, Cost Escalation Factor, Nominal Cost Estimates and Shipping Assumptions.

2020

2019

Discount rate

1.15%

1.47%

Based on the government bond rate which best reflects the expected period over which restoration activities will be completed. For 2020, this rate is the 14-year Australian government bond rate as at 31 March 2020.

Cost escalation factor

3.06%

2.99%

The 2020 factor is based on the 15 year National BPI Average (Rawlinson’s Building Cost Guide) as at 31 March 2020.

Nominal cost estimates

Key nominal cost drivers were re-assessed by an external consulting engineer as at 30 June 2020. The department re-assesses the estimated nominal costs every five years. The next full review is due in 2022–23.

Shipping assumptions

The shipping assumptions are based on the use of a dedicated icebreaking cargo ship for repatriation of waste contaminants to Australia. Due to the size, operational use and capacity of the selected cargo ship, which costs less per tonnage of cargo compared to other research vessels, the cargo ship costs have been adopted for the shipping in calculating the provision as at 30 June 2020. This assumption will be assessed annually to ensure the most likely scenario is adopted in the model.

Sensitivity calculations for the Discount Rate show that for every 0.1% change in the bond rate the impact on the provision is approximately $4 150 000 (1.4%). For the Cost Escalation Factor for every 0.1% change in the factor the impact is $4 130 000 (1.4%).

Provision for Restoration Obligations – Antarctic and Sub-Antarctic Regions

This provision represents the estimated future costs of decommissioning, dismantling, and expatriation to Australia of all buildings, infrastructure and associated materials and the cost of site rehabilitation at Australia’s Antarctic and sub-Antarctic Stations, within Australian Territories.

The estimate is dependent upon five key parameters/variables: Shipping Assumptions, Discount Rate, Cost Escalation Factor, Asset Replacement Costs and Asset Remaining Useful Lives.

2020

2019

Shipping assumptions

The shipping assumptions are based on the use of the dedicated icebreaking cargo ship for repatriation of demolished assets to Australia. Due to the size, operational use and capacity of the selected cargo ship, which costs less per tonnage of cargo compared to other research vessels, the cargo ship costs have been adopted for the shipping in calculating the provision as at 30 June 2020. The methodology also assumes that the cargo ship would only be commissioned in years where there is a full load of cargo available for collection at the Antarctic and Sub-Antarctic locations, which represents the current most likely scenario should a restoration activity be undertaken. This assumption will be assessed annually to ensure the most likely scenario is adopted in the model.

Discount rate

Variable

Variable

The discount rate is derived for each individual asset based on the expected timing of dismantling, with the closest available year of the government bond rate as at 30 June 2020 used in the calculation.

Cost escalation factor

3.06%

2.99%

Per the Antarctic Solid Waste Disposal Sites.

Asset replacement costs

These are calculated in accordance with the department’s policy in Note 4. An expert valuer has been engaged to provide a valuation of all assets held by the department, including those assets in the Antarctic and Sub-Antarctic region. The updated fair values and useful lives were incorporated into the model to calculate the restoration provision for 30 June 2020.

The remaining useful lives are a key component of the provision model in determining the timing of the planned demolition and repatriation to Australia of each asset.

The two most sensitive variables in the calculation of the provision value are the discount rate and the cost escalation factor. Sensitivity calculations for the Discount Rate show that for every 0.1% change in the bond rate the impact on the provision is approximately $3 650 000 (0.9%). For the Cost Escalation factor for every 0.1% change in the cost escalation factor the impact is $3 760 000 (0.9%).

Provision for Restoration Obligations – Other Localities

The department currently recognises 36 (2019: DoEE 4, DoA 38) provisions for premises requiring restoration to their original condition at the conclusion of the lease. The provisions reflect the present value of this obligation

Note 7: Aggregate Assets and Liabilities

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Assets expected to be recovered in:

No more than 12 months

371 128

132 127

167 798

More than 12 months

1 474 904

834 744

187 936

Total assets

1 846 032

966 871

355 734

Liabilities expected to be settled in:

No more than 12 months

213 502

45 752

98 154

More than 12 months

1 279 661

754 009

141 774

Total liabilities

1 493 163

799 761

239 928

Note 8: Restructuring

Note 8A: Departmental Restructuring

2020

2020

Climate Change and Energy

All functions

Department of Industry, Science, Energy and Resources1,2,3

Department of Agriculture4

$'000

$'000

FUNCTIONS ASSUMED

Assets recognised

Cash and cash equivalents

-

52 021

Trade and other receivables

-

263 995

Other investments

-

17 500

Land, Buildings and leasehold improvements

-

181 919

Property, plant and equipment

-

27 636

Computer software

-

119 233

Inventories

-

2 110

Prepayments

-

12 488

Total assets recognised

-

676 901

Liabilities recognised

Suppliers

-

15 665

Other payables

-

26 163

Leases

-

139 230

Employee provisions

-

169 168

Other provisions

-

3 508

Total liabilities recognised

-

353 734

Net assets assumed

-

323 168

Income assumed

Recognised by the receiving entity

-

199 272

Recognised by the losing entity

-

646 966

Total income assumed

-

846 238

Expenses assumed

Recognised by the receiving entity

-

391 874

Recognised by the losing entity

-

476 886

Total expenses assumed

-

868 760

FUNCTIONS RELINQUISHED

Assets relinquished

Cash and cash equivalents

16 081

-

Trade and other receivables

678

-

Property, plant and equipment

8 135

-

Intangibles

2 883

-

Prepayments

717

-

Total assets relinquished

28 494

-

Liabilities relinquished

Suppliers

259

-

Other payables

3 074

-

Leases

6 491

-

Employee provisions

20 693

-

Other provisions

2 223

-

Total liabilities relinquished

32 740

-

Net liabilities relinquished

4 246

-

  1. Climate Change and Energy functions of the former Department of the Environment and Energy were relinquished to the Department of Industry, Science, Energy and Resources (formerly known as the Department of Industry, Innovation and Science) as a result of the Administrative Arrangement Order on 1 February 2020.
  2. The net liabilities relinquished to the Department of Industry, Science, Energy and Resources were $4 246 000.
  3. The net administered assets relinquished to the Department of Industry, Science, Energy and Resources are disclosed at Note 27.
  4. The National Drought Map function was relinquished to the National Drought and North Queensland Flood Response and Recovery Agency following a decision of the Prime Minister, effective 5 December 2019. No assets or liabilities were transferred.

Note 8B: Departmental Restructuring - Department of Agriculture

2020

All functions

Department of Agriculture, Water and the Environment1,2,3

$'000

FUNCTIONS RELINQUISHED

Assets relinquished

Cash and cash equivalents

52 021

Trade and other receivables

263 995

Other investments

17 500

Land, Buildings and leasehold improvements

181 919

Property, plant and equipment

27 636

Computer software

119 233

Inventories

2 110

Prepayments

12 488

Total assets relinquished

676 901

Liabilities relinquished

Suppliers

15 665

Other payables

26 163

Leases

139 230

Employee provisions

169 168

Other provisions

3 508

Total liabilities relinquished

353 734

Net (assets) relinquished

(323 168)

  1. All functions of the Department of Agriculture were relinquished to the Department of Agriculture, Water and the Environment (formerly known as the Department of Environment and Energy) as a result of the Administrative Arrangement Order on 1 February 2020.
  2. The net assets relinquished to the Department of Agriculture, Water and the Environment were $323 167 609.
  3. The net administered assets relinquished to the Department of Agriculture, Water and the Environment are disclosed at Note 27.

Note 9: Contingent Assets and Liabilities

Claims for damages or costs

2020

2019

$'000

$'000

Contingent assets

Balance from previous period

2 911

2 734

New contingent assets recognised

2 784

3 438

Re-measurement

(10)

5

Assets realised

(2 911)

(3 266)

Total contingent assets

2 774

2 911

Net contingent assets (liabilities)

2 774

2 911

Quantifiable Contingencies

At 30 June 2020 the department had contingent assets of $2.774 million (2019: $2.911 million). This amount relates to:

  • insurance recoveries for losses arising from insured events and insurance claims which are still pending at 30 June 2020; and
  • a litigation matter in which the department is a party for which the department may receive its costs associated with defending this legal challenge.

Unquantifiable Contingencies

At 30 June 2020 the department is involved in a number of legal claims for which the Department may receive its costs. It is not possible to estimate the amounts of any eventual recoveries in relation to these claims.

At 30 June 2020, the department had a number of legal claims lodged against it for damages and costs. The department is responding to these claims in accordance with its obligations under the Legal Services Directions 2017. It is not possible to estimate the amount of any eventual payments in relation to these matters.

The department has unquantifiable contingencies in relation to potential under or overpayment of superannuation resulting from interpretations of Enterprise Agreements and other employee arrangements. A quantifiable contingency has not yet been determined and uncertainty exists

On 2 June 2020 the Federal Court of Australia handed down judgment in relation to the claim for the compensation for alleged losses due to the temporary suspension of exports of live animals to Indonesia that was put in place on 7 June 2011. The Court found in favour of the lead applicant. The Commonwealth has decided not to appeal the decision. The quantum of any damages and the ongoing claims of class members are still matters before the Court. The Department of Finance, which has responsibility for Comcover (the Australian Government’s general insurance fund), has assumed insurance responsibility for the potential claims under its insurance arrangements with the department.

Accounting policy

Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the relevant notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

Note 10: Key Management Personnel Remuneration

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the department, directly or indirectly. This includes those personnel who have temporarily performed the relevant roles for a period of twelve weeks or more. The department has determined the key management personnel to be all Ministers and Assistant Ministers of the department, the Secretary and members of the Executive Board. Key management personnel remuneration is reported in the table below:

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Department of Agriculture, Water and the Environment

Short-term employee benefits

4 099

2 144

3 258

Post-employment benefits

609

346

515

Other long-term benefits

117

101

81

Termination benefits

334

-

-

Total key management personnel remuneration expenses1

5 159

2 591

3 854

The total number of key management personnel that are included in the above table is 16, being five substantive officers for the whole period, eight substantive officers for part of the year and three officers that acted for more than 12 weeks of the period (DoEE 2019: five, being four substantive officers for the full year and one officer that acted more than six weeks of the year and was later substantive for the rest of the year. DoA 2019: 13, being four substantive officers for the full year, six substantive officers for part of the year, one officer that acted for more than eight weeks of the year and was later substantive for part of the year and two acting officers for part of the year).

  1. The above key management personnel remuneration excludes the remuneration and other benefits of the Ministers and Assistant Ministers of the department. The Ministers’ and Assistant Minister’s remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the department.

Note 11: Related Party Disclosures

Related party relationships

The department is an Australian Government controlled entity. Related parties to the department are Key Management Personnel, including the Ministers and Assistant Ministers of the department and other Australian Government entities.

Transactions with related parties

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. These transactions have not been separately disclosed in this note.

Giving consideration to relationships with related entities, and transactions entered into during the reporting period, the department has determined there are no related party transactions that require separate disclosure (2019: Nil).

Note 12: Financial Instruments

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 12A: Categories of Financial Instruments

Financial assets at amortised cost

Negotiable securities - certificates of deposit

16 000

-

17 500

Cash and cash equivalents

29 743

15 499

38 547

Trade and other receivables (net)

54 377

12 434

35 508

Total financial assets at amortised cost

100 120

27 933

91 555

Total financial assets

100 120

27 933

91 555

Financial Liabilities

Financial liabilities measured at amortised cost

Trade creditors

45 762

18 925

31 201

Grants payable

-

4

-

Lease liabilities

425 452

-

-

Total financial liabilities measured at amortised cost

471 214

18 929

31 201

Total financial liabilities

471 214

18 929

31 201

At 30 June 2020, there are 10 (2019: 11) certificates of deposit maturing at different dates within the next 12 months. Interest rates range from 1.00% to 1.85% (2019: 2.20% to 2.77%) payable upon maturity.

Note 12B: Net Gains or Losses from Financial Assets

Held-to-maturity investments

Interest revenue

347

-

419

Net gain on held-to-maturity investments

347

-

419

Financial assets at amortised cost

Impairment

(580)

(134)

(1 692)

Net losses on financial assets at amortised cost

(580)

(134)

(1 692)

Net gains / (losses) on financial assets

(233)

(134)

(1 273)

Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest earned on the financial asset.

Accounting policy

Financial assets

Under AASB 9 Financial Instruments the department classifies its financial assets in the following categories:

a) financial assets at fair value through profit or loss;

b) financial assets at fair value through other comprehensive income; and

c) financial assets measured at amortised cost.

The classification depends on both the department’s business model for managing the financial assets and contractual cash flow characteristics of the item on initial recognition. Financial assets are recognised when the department becomes a party to the contract and, as a consequence, has legal right to receive or a legal obligation to pay cash and derecognised when the contractual rights to the cash flows from the financial asset expire or are transferred upon a trade date.

Financial Assets at Amortised Cost

Financial assets included in this category need to meet two criteria:

  1. the financial asset is held in order to collect the contractual cash flows; and
  2. the cash flows are solely payments of principal and interest (SPPI) on the principal outstanding amount.

Amortised cost is determined using the effective interest method.

Effective Interest Method

Income is recognised on an effective interest rate basis for financial assets that are recognised at amortised cost.

Financial Assets at Fair Value Through Other Comprehensive Income (FVOCI)

Financial assets measured at fair value through other comprehensive income are held with the objective of both collecting contractual cash flows and selling the financial assets and the cash flows meet the SPPI test.

Any gains or losses as a result of fair value measurement or the recognition of an impairment loss allowance is recognised in other comprehensive income.

Financial Assets at Fair Value Through Profit or Loss (FVTPL)

Financial assets are classified as financial assets at fair value through profit or loss where the financial assets either doesn’t meet the criteria of financial assets held at amortised cost or at FVOCI (i.e. mandatorily held at FVTPL) or may be designated.

Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest earned on the financial asset.

Impairment of Financial Assets

Financial assets are assessed for impairment at the end of each reporting period based on Expected Credit Losses, using the simplified approach which measures the loss allowance based on an amount equal to lifetime expected credit losses where risk has significantly increased, or an amount equal to 12-month expected credit losses if the risk has not increased.

The department has used the simplified approach for trade, contract and lease receivables. This approach always measures the loss allowance as the amount equal to the lifetime expected credit losses.

A write-off constitutes a derecognition event where the write-off directly reduces the gross carrying amount of the financial asset.

Financial liabilities

Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or ‘other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’. All of the department’s financial liabilities are categorised as other financial liabilities.

Financial Liabilities at Amortised Cost

Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis.

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

All payables are expected to be settled within 12 months except where indicated.

Note 13: Appropriations

The following tables represents the appropriations of the former DoEE including Climate Change and Energy functions from 1 July 2019 until 31 January 2020; and the merged Department of Agriculture, Water and the Environment from 1 February 2020 until 30 June 2020.

Note 13A: Annual and Unspent Appropriations ('Recoverable GST exclusive')

2020

2019

$'000

$'000

Ordinary annual services

Annual appropriation

Annual Appropriation - Operating

498 316

403 939

Capital Budget1

58 241

24 478

Section 74 receipts

49 708

47 219

Section 75 transfers2

142 058

-

Total available appropriation

748 323

475 636

Appropriation applied (current and prior years)

(674 719)

(485 450)

Variance

73 604

(9 814)

Opening unspent appropriation balance

52 930

62 744

Closing unspent appropriation balance

126 534

52 930

Balance comprises appropriations as follows:

Appropriation Act (No. 1) 2018-19

-

47 572

Appropriation Act (No. 1) 2019-20

122 057

-

Cash at bank

4 477

5 358

Total unspent appropriation - ordinary annual services

126 534

52 930

Other Services - equity

Annual appropriation

Annual Appropriation

127 119

86 249

Section 75 transfers3

4 348

-

Total available appropriation

131 467

86 249

Appropriation applied (current and prior years)

(45 818)

(161 630)

Variance

85 649

(75 381)

Opening unspent appropriation balance

38 578

113 959

Closing unspent appropriation balance

124 227

38 578

Balance comprises appropriations as follows:

Appropriation Act (No. 2) 2017-18- Non Operating - Equity Injection

3 868

3 868

Appropriation Act (No. 2) 2018-19- Non Operating - Equity Injection

-

34 710

Appropriation Act (No. 2) 2019-20 - Non Operating - Equity Injection

66 653

-

Supply Act (No. 2) 2019-20 - Non Operating - Equity Injection

41 989

-

Appropriation Act (No. 4) 2019-20 - Non Operating - Equity Injection

11 717

-

Total unspent appropriation - other services - equity4

124 227

38 578

Total unspent appropriation

250 761

91 508

  1. Departmental Capital Budgets are appropriated through Appropriation Acts (No.1,3,5). They form part of the ordinary annual services, and are not separately identified in the Appropriation Acts.
  2. In response to the Administrative Arrangement Order (AAO) made on 5 December 2019, $76 564 433 was transferred to Department of Industry, Science, Energy and Resources, $1 157 804 was transferred to the National Drought and North Queensland Flood Response and Recovery Agency and $219 780 161 was transferred from the Department of Agriculture.
  3. In response to the Administrative Arrangement Order (AAO) made on 5 December 2019, $4 347 875 was transferred from the Department of Agriculture.
  4. The unspent other services appropriation is shown inclusive of Section 51 withholdings against Appropriation Act (No. 2) 2017-18 of $3 868 000.

Note 13B: Special Appropriations ('Recoverable GST exclusive')

Appropriation applied

Authority

2020

2019

$'000

$'000

Public Governance, Performance and Accountability Act 2013, s. 58 (National Residue Survey)
Prior year investments redeemed in current year ($7 000 000), Redemptions of current year investments (gross) (nil).

(5 500)

-

Total special appropriations applied

(5 500)

-

Note 14: Appropriations – Department of Agriculture

The following tables represents the appropriations of the former DoA from 1 July 2019 until 31 January 2020.

Note 14A: Annual and Unspent Appropriations ('Recoverable GST exclusive') - Department of Agriculture

2020

2019

$'000

$'000

Annual appropriation

Annual Appropriation - Operating1

394 986

391 812

Annual Appropriation - Capital budget1,2

9 793

9 824

PGPA Act Section 74 receipts1

15 434

13 123

Total available appropriation

420 213

414 759

Appropriation applied (current and prior years)1

(267 385)

(396 789)

Variance

152 828

17 970

Opening unspent appropriation balance

69 064

51 094

Closing unspent appropriation balance

221 892

69 064

Balance comprises appropriations as follows:

Appropriation Act (No. 1) 2018-19

-

56 667

Appropriation Act (No. 3) 2018-19

-

9 138

Supply Act (No. 1) 2019-20

12 239

-

Appropriation Act (No. 1) 2019-20

207 541

-

Cash on hand - Appropriation Act (No.1) 2018-19

-

3 259

Cash on hand - Appropriation Act (No.1) 2019-20

2 112

-

Total unspent appropriation - ordinary annual services

221 892

69 064

Other Services - equity

Annual appropriation

Annual Appropriation - Equity injection3

5 123

7 273

Prior years Appropriation Acts repealed

-

(2 959)

Total available appropriation

5 123

4 314

Appropriation applied (current and prior years)3

(1 295)

(20 184)

Variance

3 828

(15 870)

Opening unspent appropriation balance

520

16 390

Closing unspent appropriation balance

4 348

520

Balance comprises appropriations as follows:

Appropriation Act (No. 2) 2018-19

437

520

Supply Act (No. 2) 2019-20

418

-

Appropriation Act (No. 2) 2019-20

3 493

-

Total unspent appropriation - other services - equity

4 348

520

Total unspent appropriation4

226 240

69 584

  1. The variance between amounts appropriated in 2020 and appropriation applied is $152 828 000.
  2. Departmental Capital Budgets are appropriated through Appropriation Acts (No.1,3,5). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts.
  3. The variance between amounts appropriated in 2020 and appropriation applied is ($3 828 000).
  4. Unspent appropriation of $224 128 000 (excluding cash on hand) was transferred to the Department of Agriculture, Water and the Environment (formerly known as the Department of the Environment and Energy) as a result of the Administrative Arrangement Order on 1 February 2020 (in accordance with PGPA Act Section 75 transfers).

Note 14B: Special Appropriations ('Recoverable GST exclusive') - Department of Agriculture

Appropriation applied

Authority

2020

2019

$'000

$'000

Public Governance, Performance and Accountability Act 2013, s. 58 (National Residue Survey)
Prior year investments redeemed in current year ($10 500 000), Redemptions of current year investments (gross) (nil).

(10 500)

(17 500)

Total special appropriations applied

(10 500)

(17 500)

Note 15: Net Cash Appropriation Arrangements

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Total comprehensive loss attributable to the department

(149 657)

(193 283)

(15 429)

Plus: depreciation/amortisation expenses previously funded through revenue appropriation1

73 442

51 229

17 078

Plus: depreciation right-of-use assets

67 929

-

-

Less: principal repayments - leased assets

(59 831)

-

-

Total comprehensive loss plus depreciation/amortisation expenses previously funded through revenue appropriations

(68 117)

(142 054)

1 649

Add back: changes in asset revaluation reserve

17 935

54 339

-

Operating loss attributable to the department

(50 182)

(87 715)

1 649

1. The department’s depreciation charges for 2020 were comprised of:

  • amounts funded by cost recovery arrangements totalling $15 663 655 (2019: $14 704 271); and
  • unfunded totalling $141 371 720 (2019: DoEE $51 229 401, DoA $17 077 835).

From 2010-11, the Government introduced net cash appropriation arrangements where revenue appropriations for depreciation/amortisation expenses ceased. Entities now receive a separate capital budget provided through equity appropriations. Capital budgets are appropriated in the period when cash payment for capital expenditure is required.

The inclusion of depreciation/amortisation expenses related to ROU leased assets and the lease liability principle repayment amount reflects the cash impact on implementation of AASB 16 Leases, it does not directly reflect a change in appropriation arrangements.

Note 16: Special Accounts

Australian Quarantine and Inspection Service Special Account (AQIS)1

National Residue Survey Account (NRS)2

Energy Special Account3

2020

2019

2020

2019

2020

2019

$'000

$'000

$'000

$'000

$'000

$'000

Balance brought forward from previous period

34 209

28 974

1 079

1 113

10 140

13 604

Increases

537 246

527 277

28 909

28 475

10 054

7 907

Total increases

537 246

527 277

28 909

28 475

10 054

7 907

Available for payments

571 455

556 251

29 988

29 588

20 194

21 511

Decreases

(548 335)

(522 042)

(27 842)

(28 509)

(20 194)

(11 371)

Total decreases

(548 335)

(522 042)

(27 842)

(28 509)

(20 194)

(11 371)

Total balance carried to the next period

23 120

34 209

2 146

1 079

-

10 140

Balance made up of:

Cash held in the Official Public Account

21 025

30 521

2 146

1 079

-

10 140

Cash held in entity bank accounts

2 095

3 688

-

-

-

-

Total balance carried to the next period

23 120

34 209

2 146

1 079

-

10 140

The following special account is appropriated under Public Governance, Performance and Accountability Act 2013 section 80

Special Account

Establishing Instrument

Purpose

2. National Residue Survey Account

National Residue Survey Administration Act 1992 section 6 (1)

For the purposes of conducting national residue surveys and to provide for collection of the NRS levy imposed by various acts.

The following special accounts are appropriated under Public Governance, Performance and Accountability Act 2013 section 78

Special Account

Establishing Instrument

Purpose

1. Australian Quarantine and Inspection Service Special Account

Financial Management and Accountability Determination 2010/11 – Australian Quarantine and Inspection Service Special Account Establishment 2010

For expenditure relating to the provision of quarantine and inspection services and payment of moneys to the Consolidated Revenue Fund as agreed to by the relevant Minister and Minister for Finance.

3. Energy Special Account

PGPA Act (Energy Special Account 2015-Establishment) Determination 2015/07

For the purposes of conducting activities that contribute to policy development in the energy and resources sectors.

This account is non-interest bearing.

As a result of the Administrative Arrangement Order on 1 February 2020, this special account was transferred to Department of Industry, Science, Energy and Resources.

Note 17: Regulatory Charging Summary

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Amounts applied

Departmental

Annual appropriations

114 296

7 786

80 507

Own source revenue

397 173

-

408 991

Total amounts applied

511 469

7 786

489 498

Expenses

Departmental

528 172

7 593

491 885

Total expenses

528 172

7 593

491 885

Revenue

Departmental

388 519

97

409 557

Total revenue

388 519

97

409 557

Amounts written off

Departmental

220

-

2 061

Total amounts written off

220

-

2 061

Competitive Neutrality

The department operates a number of cost recovery arrangements across the Biosecurity, Export Certification and other business service areas in accordance with the Australian Government Charging Framework and are not for profit activities. The department is not subject to competitive neutrality arrangements for this reason.

Departmental Regulatory Charging Activities

  • Dairy Exports Program Services

  • National Residue Survey Services

  • Fish and Egg Export Program Services

  • Grain and Seed Export Program Services

  • Hazardous Waste Permits

  • Passenger Program Services

  • Horticulture Exports Program Services

  • Post Entry Plant Quarantine Program Services

  • Import Clearance Program Services

  • Sea Dumping Permit Applications

  • Levies Revenue Service

  • Seaports Program Services

  • Live Animal Export Program Services

  • Voluntary Product Stewardship Accreditation

  • Meat Export Program Services

  • Wildlife Trade Permits

  • Non-road Spark Ignition Engines and Equipment (NRSIEE)

  • Ozone Protection and Synthetic Greenhouse Gas Management Program

  • Environmental Assessments under the Environmental Protection and Biodiversity Conservation Act 1999

  • Non-Prescribed Goods Export Program Services

The following regulatory charging activities were transferred to the Department of Industry, Science, Energy and Resources on 1 February 2020. This note accounts for these activities for the period 1 July 2019 to 31 January 2020.

  • Application Fees to vary Fuel Standards
  • Commercial Building Disclosure
  • Greenhouse and Energy Minimum Standards

Documentation (Cost Recovery Implementation Statements) for the above activities is available at:

Industry Rebates and Program Results

The former Department of Agriculture cost recovered activities including biosecurity, export certification, quota management and National Residue Survey are maintained on a program basis with many of the programs aligning to an industry sector. The management of each program, including the establishment of the level and structure of fees and charges, is conducted in consultation with an Industry Consultative Committee, as applicable, and the Department of Finance.

Where fees and charges are collected for a cost recovered program exceed its costs during a financial year, the excess revenue is reported in total comprehensive income (loss) for the period. The amount of excess revenue is transferred from retained earnings into an industry reserve.

Note 18: Assets Held in Trust

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

The Department holds monies in trust on behalf of Environment Protection Authority Victoria in relation to management of Hazardous Wastes, Substances and Pollutants program.

Monetary assets – Services for other entities and trust monies

As at 1 July

365

365

-

Receipts

365

-

-

Payments

(365)

-

-

Total as at 30 June

365

365

-

Total monetary assets held in trust

365

365

-

The old special account, Services for Other Entities and Trust Moneys – Department of the Environment, Water, Heritage and the Arts Special Account Establishment 2010, was repealed on 9 April 2020. The new special account, Environment SOETM Special Account 2020, commenced on 9 April 2020. An amount equal to the closing balance of the old special account was credited to the new special account on 9 April 2020, refer to Note 33 for more information.

Note 19: Budgetary Reporting

Note 19A: Statement of Comprehensive Income Budgetary Reporting

Actual

DoEE
Original
Budget

DoA
Original
Budget

Variance to Original Budget

2020

2020

2020

2020

$'000

$'000

$'000

$'000

NET COST OF SERVICES

Expenses

Employee benefits

774 785

235 539

511 695

27 551

Suppliers

407 532

245 984

313 902

(152 354)

Depreciation and amortisation

157 035

1 050

29 905

126 080

Grants

7 798

45 750

2 044

(39 996)

Finance costs

14 517

17 100

77

(2 660)

Impairment loss on financial instruments

580

-

-

580

Write-down and impairment of other assets

760

-

919

(159)

Other expenses

31 542

400

-

31 142

Total expenses

1 394 549

545 823

858 542

(9 816)

Own-Source Income

Own-source revenue

Revenue from contract with customers

405 336

38 442

405 932

(39 038)

Interest

347

711

382

(746)

Rental income

1 515

-

-

1 515

Other revenue

35 362

-

37 524

(2 162)

Total own-source revenue

442 560

39 153

443 838

(40 431)

Gains

Other gains

1 755

-

1 618

137

Total gains

1 755

-

1 618

137

Total own-source income

444 315

39 153

445 456

(40 294)

Net cost of services

950 234

506 670

413 086

30 478

Revenue from Government

818 512

441 902

396 848

(20 238)

Deficit attributable to the Australian Government

(131 722)

(64 768)

(16 238)

(50 716)

OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation reserves

(17 935)

-

-

(17 935)

Total other comprehensive income

(17 935)

-

-

(17 935)

Total comprehensive loss attributable to the Australian Government

(149 657)

(64 768)

(16 238)

(68 651)

Note 19B: Statement of Financial Position Budgetary Reporting

Actual

DoEE
Original
Budget

DoA
Original
Budget

Variance to Original Budget

2020

2020

2020

2020

$'000

$'000

$'000

$'000

ASSETS

Financial assets

Cash and cash equivalents

29 743

8 377

24 819

(3 453)

Trade and other receivables

306 442

69 012

84 746

152 684

Other investments

16 000

-

16 000

-

Total financial assets

352 185

77 389

125 565

149 231

Non-financial assets

Buildings

619 880

250 903

34 243

334 734

Leasehold improvements

41 672

-

-

41 672

Property, plant and equipment

578 445

709 021

23 191

(153 767)

Heritage and cultural assets

72 319

-

-

72 319

Computer software

157 246

35 034

139 343

(17 131)

Inventories

10 004

7 793

2 275

(64)

Prepayments

14 281

6 562

8 822

(1 103)

Total non-financial assets

1 493 847

1 009 313

207 874

276 660

Total assets

1 846 032

1 086 702

333 439

425 891

LIABILITIES

Payables

Suppliers

45 762

19 860

16 862

9 040

Grants

-

21

-

(21)

Other payables

23 771

4 657

46 339

(27 225)

Total payables

69 533

24 538

63 201

(18 206)

Interest Bearing Liabilities

Leases

425 452

-

-

425 452

Total interest bearing liabilities

425 452

-

-

425 452

Provisions

Employee provisions

243 626

73 739

138 947

30 940

Other provisions

754 552

595 230

13 459

145 863

Total provisions

998 178

668 969

152 406

176 803

Total liabilities

1 493 163

693 507

215 607

584 049

Net assets

352 869

393 195

117 832

(158 158)

EQUITY

Contributed equity/capital

1 096 405

907 940

181 413

7 052

Asset revaluation reserves

403 627

450 236

25 665

(72 274)

Industry reserves

51 903

-

54 322

(2 419)

Retained earnings

(1 199 066)

(964 981)

(143 568)

(90 517)

Total equity

352 869

393 195

117 832

(158 158)

Note 19C: Cash Flow Statement Budgetary Reporting

Budget estimate

Actual

DoEE
Original

DoA
Original

Variance to Original

2020

2020

2020

2020

$'000

$'000

$'000

$'000

OPERATING ACTIVITIES

Cash received

Appropriations

866 367

443 820

400 440

22 107

Sale of goods and rendering of services

397 335

38 442

404 382

(45 489)

Interest

347

-

382

(35)

Net GST received

45 831

-

27 180

18 651

Other

119 363

-

19 851

99 512

Total cash received

1 429 243

482 262

852 235

94 746

Cash used

Employees

773 517

235 539

513 341

24 637

Suppliers

479 703

245 273

321 669

(87 239)

Interest payments on lease liabilities

5 053

-

-

5 053

Grants

9 486

1 050

2 044

6 392

Section 74 receipts transferred to OPA

49 708

-

-

49 708

Other

42 541

400

-

42 141

Total cash used

1 360 008

482 262

837 054

40 692

Net cash from operating activities

69 235

-

15 181

54 054

INVESTING ACTIVITIES

Cash received

Proceeds from sales of property, plant and equipment

516

-

-

516

Proceeds from sales of financial instruments

17 500

-

16 500

1 000

Interest

74

-

-

74

Total cash received

18 090

-

16 500

1 590

Cash used

Purchase of land and buildings

16 766

23 593

3 366

(10 193)

Purchase of property, plant and equipment

66 572

124 471

5 611

(63 510)

Purchase of software

41 764

24 687

24 913

(7 836)

Purchase of investments

16 000

-

16 000

-

Total cash used

141 102

172 751

49 890

(81 539)

Net cash used by investing activities

(123 012)

(172 751)

(33 390)

83 129

FINANCING ACTIVITIES

Cash received

Contributed equity

47 113

114 263

5 123

(72 273)

Departmental capital budget

58 273

58 488

9 843

(10 058)

Total cash received

105 386

172 751

14 966

(82 331)

Cash used

Principal payments of lease liabilities

59 831

-

-

59 831

Other financing cash used

16 081

-

-

16 081

Total cash used

75 912

-

-

75 912

Net cash from financing activities

29 474

172 751

14 966

(158 243)

Net increase / (decrease) in cash held

(24 303)

-

(3 243)

(21 060)

Cash and cash equivalents at the beginning of the reporting period

54 046

8 377

28 062

17 607

Cash and cash equivalents at the end of the reporting period

29 743

8 377

24 819

(3 453)

Budget Variance Commentary

The following tables provide a comparison of the original budget as presented in the 2019-20 Portfolio Budget Statements (PBS) to the 2019-20 final outcome as presented in accordance with Australian Accounting Standards for the department. The Budget is not audited. Explanations of major variances are provided below.

Variances are considered to be ‘major’ based on the following criteria:

  • the variance between budget and actual is greater than +/- 10% of the original budget and +/- $10 million for a line item; or
  • the variance between budget and actual is greater than +/-2% of the relevant sub-total (i.e. total expenses, total income, total assets or total liabilities) and +/- $10 million; or
  • an item below this threshold but is considered important for the reader’s understanding or is relevant to an assessment of the discharge of accountability and to an analysis of performance of the department.

Major variances and explanations

Affected line items

Statement of Comprehensive Income

Total expenses were $9.8 million lower than the original budget estimate mainly as a result of:

  • Higher than budgeted employee benefits expenses of $27.6 million due to increases in employee provisions as a result of a decrease in the 10 year government bond rate and pay increases as a result of former Department of Agriculture staff transferring to the department’s Enterprise Agreement; offset by reduced employee expenses relating to Climate Change and Energy functions relinquished to the Department of Industry, Science, Energy and Resources.

  • Employee benefits expense

  • Higher than budgeted depreciation and amortisation expenses of $81.4 million due to the creation of right-of-use assets under the implementation of AASB 16 Leases.

  • Depreciation and amortisation expense

  • The restoration provision for Antarctic solid waste disposal was reviewed and updated for changes in key economic and engineering assumptions in 2019-20 increasing expenses by $18.7 million, the changes were not budgeted.

  • Other expenses

  • Offset by lower than budgeted suppliers expense of $152.3 million as a result of Climate Change and Energy functions relinquished to the Department of Industry, Science, Energy and Resources; the removal of operating lease expenses under the implementation of AASB 16 Leases; and general expenditure reductions relating to activities affected by the COVID-19 pandemic.

  • Suppliers

Total own source income was $40.4 million lower than the original budget estimate mainly as a result of:

  • Revenue from contracts with customers was $39.0 million lower than the original budget primarily due to lower rendering of services revenue relating to activities affected by the COVID-19 pandemic and the reclassification of special account administration activities from revenue to contra expenses.

  • Revenue from contract with customers

Statement of Financial Position

Total assets was $425.9 million higher than the original budget estimate mainly as a result of:

  • Trade and other receivables balance was $157.5 million higher than the original budget due to delays in payments for the new Antarctic Icebreaker RSV Nuyina and other appropriations not spent due to reduced activities affected by the COVID-19 pandemic.

  • Trade and other receivables

  • Non-financial asset balances was $277.8 million higher than the original budget due to the creation of right-of-use assets under the implementation of AASB 16 Leases.

  • Land and buildings
  • Leasehold improvements
  • Property, plant and equipment

Total liabilities was $584.0 million higher than the original budget estimate mainly as a result of:

  • Interest bearing liabilities was $425.5 million higher than the original budget due to the impact of AASB 16 Leases on the lease liability balance.

  • Leases

  • Employee provisions balance was $30.9 million higher than the original budget due to significant increases in employee provisions as a result of a decrease in the 10 year government bond rate and pay rises.

  • Employee provisions

  • Other provisions were $145.9 million higher than the budget as the provisions for Antarctic solid waste disposal and make good were reviewed and updated for changes in key economic and engineering assumptions in 2019-20.

  • Other provisions

Cash Flow Statement

In addition to the variances above, which also impacted on the cash received and used, the net decrease in cash held during 2019-20 was $21.1 million higher than budget. The variance from budget primarily relates to the transfer of the Energy Special Account balance to the Department of Industry, Science, Energy and Resources and reduced cash in the Australian Quarantine and Inspection Service Special Account due to the impact of the COVID-19 pandemic on cost recovery revenue collections.

  • Net increase/(decrease) in cash held

Administered Financial Schedules

Administered Schedule of Comprehensive Income for the period ended 30 June 2020

DoEE

DoA

2020

2019

2019

Notes

$'000

$'000

$'000

NET COST OF SERVICES

Expenses

Levy disbursements and Commonwealth contributions

20A

819 872

-

867 369

Grants

20B

314 470

153 549

125 922

Payments to corporate Commonwealth entities

20C

362 324

221 401

173 711

Suppliers

20D

220 863

198 692

32 692

Direct personal benefits - Income support for farmers

134 377

-

114 155

Assets transferred to related entities

21G

-

-

407 243

Depreciation and amortisation

23

7 918

12

7 747

Concessional loan discount

143 156

-

21 945

Impairment loss on financial instruments

20E

3 429

10

1 403

Write-down and impairment of assets

20F

28 195

33 321

3 155

Other expenses

494

-

-

Total expenses

2 035 098

606 985

1 755 342

Income

Revenue

Taxation revenue

Levies and charges

21A

474 261

4 114

564 064

Other taxes

-

109

-

Total taxation revenue

474 261

4 223

564 064

Non-taxation revenue

Revenue from contracts with customers

21B

19 560

7 414

-

Fees

21C

-

20 041

1 620

Interest

21D

21 349

2

23 976

Dividends

21E

108 500

139 950

-

Other revenue

21F

16 883

979

10 832

Total non-taxation revenue

166 292

168 386

36 428

Total revenue

640 553

172 609

600 492

Gains

Reversal of impairment losses

23

36 903

58 909

6 955

Other gains

21G

81 251

407 243

249 461

Total gains

118 154

466 152

256 416

Total income

758 707

638 761

856 908

Net cost of services

1 276 391

(31 776)

898 434

OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation reserves

16 318

-

9 229

Items subject to subsequent reclassification to net cost of services

Gains/(losses) on financial assets at fair value through other comprehensive income

36 175

3 775 197

101 323

Total other comprehensive income

52 493

3 775 197

110 552

Total comprehensive gain/(loss)

(1 223 898)

3 806 973

(787 882)

The above statement should be read in conjunction with the accompanying notes.

Administered Schedule of Assets and Liabilities as at 30 June 2020

DoEE

DoA

2020

2019

2019

Notes

$'000

$'000

$'000

ASSETS

Financial assets

Cash and cash equivalents

22A

1 896 517

6 263 040

902 105

Trade, taxation and other receivables

22B

1 030 855

12 419

877 005

Investments in corporate Commonwealth entities

22C

1 175 958

16 052 167

501 545

Total financial assets

4 103 330

22 327 626

2 280 655

Non-financial assets

Land

23

582

-

1 467

Infrastructure

23

537 868

-

527 029

Plant and equipment

23

1 820

-

1 836

Flooding easements

23

814

-

814

Heritage and cultural

23

976

987

-

Water entitlements

23

4 011 959

3 770 081

133 842

Inventories

23B

11 078

11 145

-

Prepayments

9 336

141

11 226

Total non-financial assets

4 574 433

3 782 354

676 214

Total assets administered on behalf of Government

8 677 763

26 109 980

2 956 869

LIABILITIES

Payables

Levy disbursements and Commonwealth contributions

24A

93 075

-

153 348

Grants

24B

8 512

6 977

3 550

Suppliers

58 016

48 122

718

Personal benefits - Income support to farmers

2 725

-

2 470

Corporate Commonwealth entities

17 735

-

-

Other payables

35

-

54

Total payables

180 098

55 099

160 140

Provisions

Loan commitments to farm businesses

25A

95 278

-

17 881

Total provisions

95 278

-

17 881

Total liabilities administered on behalf of Government

275 376

55 099

178 021

Net assets

8 402 387

26 054 881

2 778 848

The above statement should be read in conjunction with the accompanying notes.

Administered Reconciliation Schedule for the period ended 30 June 2020

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Opening assets less liabilities as at 1 July

28 833 729

21 938 125

2 474 877

Adjustment on initial application of AASB 9

-

-

(7 542)

Adjusted opening assets less liabilities

28 833 729

21 938 125

2 467 335

Net cost of services

Income

758 707

638 761

856 908

Expenses

Payments to entities other than corporate Commonwealth entities

(1 672 774)

(385 584)

(1 581 631)

Payments to corporate Commonwealth entities

(362 324)

(221 401)

(173 711)

Other comprehensive income

Revaluations transferred to reserves

Non-financial assets

16 318

-

9 229

Investments in corporate Commonwealth entities

36 175

3 775 197

101 323

Transfers (to)/from the Australian Government

Appropriation transfers from Official Public Account

Administered assets and liabilities appropriations

427 479

-

202 945

Annual appropriations

Payments to entities other than corporate Commonwealth entities

672 280

388 901

169 982

Payments to corporate Commonwealth entities

203 480

50 082

175 664

Special appropriations (limited)

Payments to corporate Commonwealth entities

150 589

171 500

-

Special appropriations (unlimited)

Payments to entities other than corporate Commonwealth entities

662 703

40

702 722

Payments to corporate Commonwealth entities

308 706

-

292 139

Special account statutory credits

355 581

6 291

320 000

Appropriation transfers to Official Public Account

Transfers to Official Public Account

(885 071)

(307 031)

(763 465)

Restructuring

27A

(21 102 737)

-

-

Personal Benefits - Withholding

(454)

-

(592)

Closing assets less liabilities as at 30 June

8 402 387

26 054 881

2 778 848

The above statement should be read in conjunction with the accompanying notes.

Accounting Policy

Administered Cash Transfers to and from the Official Public Account (OPA)

Revenue collected by the department for use by the Government rather than the department is administered revenue. Collections are transferred to the OPA which is maintained by the Department of Finance. Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of Government. These transfers to and from the OPA are adjustments to the administered cash held by the department on behalf of the Government and reported as such in the schedule of administered cash flows and in the administered reconciliation schedule.

Administered Cash Flow Statement for the period ended 30 June 2020

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

OPERATING ACTIVITIES

Cash received

Taxes

495 753

1 660

557 795

Sales of goods and rendering of services

21 313

6 255

-

Dividends

108 500

139 950

-

Fees and fines

-

20 268

-

GST received

125 130

61 037

27 807

Interest

153

2

-

Other

12 712

791

13 486

Total cash received

763 561

229 963

599 088

Cash used

Levy disbursements and Commonwealth contributions

893 622

-

815 217

Grants

377 046

163 262

189 121

Suppliers

221 781

170 896

27 878

Personal benefits

134 354

-

112 338

Payments to corporate Commonwealth entities

344 589

221 401

175 664

Other

572

40

18

Total cash used

1 971 964

555 599

1 320 236

Net cash used by operating activities

(1 208 403)

(325 636)

(721 148)

INVESTING ACTIVITIES

Cash received

Repayments of loans

122 292

60

106 182

Investments

-

98 550

-

Interest received from loans

18 427

-

21 900

Total cash received

140 719

98 610

128 082

Cash used

Loan advances

390 550

-

34 569

Corporate Commonwealth entity investments

269 480

600 181

-

Purchase of water entitlements

17 661

-

159 945

Total cash used

677 691

600 181

194 514

Net cash used by investing activities

(536 972)

(501 571)

(66 432)

Net decrease in cash held

(1 745 375)

(827 207)

(787 580)

Cash and cash equivalents at the beginning of the reporting period

7 165 145

6 780 464

589 698

Cash from Official Public Account for

Appropriations

2 425 237

610 523

1 543 452

Special accounts

355 581

6 291

320 000

Total cash from Official Public Account

2 780 818

616 814

1 863 452

Cash to Official Public Account for:

Appropriations

885 071

307 031

763 465

Special accounts transferred due to restructure

5 419 000

-

-

Total cash to Official Public Account

6 304 071

307 031

763 465

Cash and cash equivalents at the end of the reporting period

1 896 517

6 263 040

902 105

The above statement should be read in conjunction with the accompanying notes.

Notes to and forming part of the Financial Statements: Notes 20–36

Note 20: Administered – Expenses

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 20A: Levy Disbursements and Commonwealth Contributions

Levy disbursements

Corporate Commonwealth entities

156 592

-

181 918

Other

337 695

-

367 271

Commonwealth Contributions

Corporate Commonwealth entities

140 847

-

120 410

Other

184 738

-

197 770

Total levy disbursements and Commonwealth contributions

819 872

-

867 369

Note 20B: Grants

Non-profit organisations

141 754

65 571

64 904

Australian Government entities (related parties)

63 239

17 113

24 220

Local Governments

18 361

3 770

15 038

For profit organisations

36 656

21 377

10 779

State and Territory Governments

15 920

8 471

5 732

Individuals

5 385

7 324

65

Universities

28 509

22 447

4 414

Other

3 220

6 092

-

Overseas

1 426

1 384

770

Total grants

314 470

153 549

125 922

Accounting policy

The department administers a number of grant and subsidy schemes on behalf of the Government. Grant and subsidy liabilities are recognised to the extent that (i) the services required to be performed by the grantee have been performed or (ii) the grant eligibility criteria have been satisfied, but payments due have not been made.

When the Government enters into an agreement to make these grants and subsidies but services have not been performed or criteria satisfied, this is considered a commitment.

Note 20C: Payments to Corporate Commonwealth Entities

Australian Renewable Energy Agency

148 868

173 963

-

Murray-Darling Basin Authority

87 973

-

106 206

Director of National Parks

50 161

47 438

-

Australian Pesticides and Veterinary Medicines Authority

23 563

-

25 532

Wine Australia

26 062

-

15 924

Regional Investment Corporation

15 477

-

12 555

AgriFutures Australia

10 220

-

12 479

Fisheries Research and Development
Corporation

-

-

1 015

Total payments to corporate Commonwealth entities

362 324

221 401

173 711

Accounting policy

Payments to corporate Commonwealth entities from amounts appropriated for that purpose are classified as administered expenses, equity injections or loans of the department. The appropriation to the department is disclosed in Note 31 and Note 32.

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 20D: Suppliers

Goods and services supplied or rendered

Regional Land payments

88 293

82 064

-

Contractors

27 848

38 915

4 866

NHT implementation costs

21 772

20 865

-

Membership fees

18 772

-

18 517

Statutory fees and charges

17 121

17 482

-

OPSGG implementation costs

12 753

12 037

-

Consultants

9 788

3 740

906

Reef Trust implementation costs

7 654

2 921

-

General goods and services

6 032

4 223

3 122

Oil stock tickets

4 580

6 278

-

Securing the Future of Jabiru Township

2 544

-

-

Administration charge - loans

2 001

-

4 871

Advertising

1 095

9 868

-

Legal services

610

275

410

Travel

-

24

-

Total goods and services supplied or rendered

220 863

198 692

32 692

Goods supplied

419

188

750

Services rendered

220 444

198 504

31 942

Total goods and services supplied or rendered

220 863

198 692

32 692

Total supplier expenses

220 863

198 692

32 692

Accounting Policy

Regional Land payments

Regional Land payments were made under National Landcare Program to protect, conserve and provide for the productive use of Australia’s water, soil, plants and animals and the ecosystems in which they live and interact, in partnership with governments, industry and communities.

Membership fees

Expenses associated with annual fees for Australia's participation in international organisations, councils and forums.

Statutory fees and charges

Statutory fees and charges associated with annual fees and water delivery charges for the management of the Commonwealth Environmental Water Holdings.

NHT implementation costs

The NHT implementation costs represents funding provided to the Department of Agriculture, Water and the Environment, the Department of Industry, Science, Energy and Resources, Great Barrier Reef Marine Park Authority, the Department of Environment and Science (Queensland) and Torres Strait Regional Authority to cover costs associated with implementation of Natural Heritage Trust of Australia’s (NHT) activities.

OPSGG implementation costs

The OPSGG implementation costs represents funding provided to the Department of Agriculture, Water and the Environment to cover costs associated with the implementation of Ozone Protection and Synthetic Greenhouse Gas (OPSGG) activities.

Reef Trust implementation costs

The Reef Trust implementation costs represents funding provided to the Department of Environment and Science (Queensland) and Great Barrier Reef Marine Park Authority to cover costs associated with the implementation of Reef Trust activities.

Securing the Future of Jabiru Township

The balance represents funding provided to the Director of National Parks to cover costs associated with removing asbestos and other contaminated material from Jabiru.

Administration charge - loans

Administrative fees are paid to the jurisdictions for the delivery of administrative services relating to loans. These services include establishment, application processing, customer service and record keeping activities.

2020

2019

2019

$'000

$'000

$'000

Note 20E: Impairment Loss Allowance on Financial Instruments

Impairment on loans

3 429

-

1 139

Impairment on trade and other receivables

-

10

264

Total impairment loss on financial instruments

3 429

10

1,403

Note 20F: Write-Down and impairment of assets

Impairment on water assets

24 470

33 321

-

Impairment on financial assets

1 149

-

1 668

Debt waiver of personal benefits receivable

584

-

792

Debt waiver - levies and charges

862

-

575

Write-off of non-financial assets

1 130

-

120

Total write-down and impairment

28 195

33 321

3 155

Note 21: Administered – Income

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Revenue

Taxation Revenue

Note 21A: Levies and Charges

Primary industry levies

456 683

-

549 871

Primary industry charges

13 331

-

14 193

Other indirect levies

4 247

4 114

-

Total levies and charges

474 261

4 114

564 064

*The above chart excludes other indirect levies

Accounting policy

Levies and Charges

The department collects, administers and disburses agricultural levies and charges on behalf of Australia’s primary industries. Agriculture levies collected by the department are disbursed, in conjunction with any relevant Commonwealth contribution, to research and development corporations and authorities for biosecurity preparedness, emergency plant pest and animal disease responses, marketing, research and development and residue testing.

Agriculture levies revenue are recognised on an accrual basis when the following conditions apply.

  • the levy payer/commodity group can be reliably identified;
  • the amount of levy payable can be reliably measured; and
  • it is probable that the levy payable will be collected.

The amount of the levies revenue accrual recognised relies on the estimation of the amount of probable future levy return lodgements, which relate to leviable commodity transactions that have occurred in the current financial year, with reference to production in prior year and current year forecasts provided by the industries services bodies.

Other indirect levies represents import levies collected under the Ozone Protection and Synthetic Greenhouse Gas (OPSGG) Management Act 1989 and levies collected on the import of non-road spark ignition engines and equipment (NRSIEE) under the Product Emissions Standards Act 2017.

DoEE

DoA

2020

2019

2019

Non-Taxation Revenue

$'000

$'000

$'000

Note 21B: Revenue from contracts with customers

Sale of goods

97

6 125

-

Rendering of services

19 463

1 289

-

Total revenue from contract with customers1

19 560

7 414

-

  1. The department has applied AASB 15 using the modified retrospective approach and therefore comparative information has not been restated and continues to be reported under AASB 118. Timing of transfer of goods and services is recognised at a point in time.

Major product / service line:

Regulatory fees

18 727

Service delivery

736

Sales of inventory

97

Total

19 560

Accounting policy

Revenue

All administered revenues relate to ordinary activities performed by the department on behalf of the Australian Government. As such, administered appropriations are not revenues of the department, who oversees distribution, or expenditure of the funds as directed.

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 21C: Fees

Licence fees

-

581

-

OPSGG Fees

-

11 337

-

EPBC Fees

-

3 795

-

WELS Fees

-

-

1 620

EPBC Contributions

-

1 321

-

GEMS Fees

-

2 315

-

Other fees from regulatory services

-

692

-

Total fees1

-

20 041

1 620

  1. The department has applied AASB 15 using the modified retrospective approach and therefore comparative information has not been restated and continues to be reported under AASB 118. The above items are now primarily included in Note 21B

Note 21D: Interest

Loans

17 628

2

23 483

Unwinding of concessional loan discount

3 568

-

475

Other interest

153

-

18

Total interest

21 349

2

23 976

Note 21E: Dividends

Snowy Hydro Limited Dividends

108 500

139 950

-

Total dividends

108 500

139 950

-

Note 21F: Other Revenue

Refunds of prior year payments

11 139

205

7 931

Infringement notices

3 110

40

1 878

Contributions from State and Territory Governments

251

511

-

Resources received free of charge

60

60

-

Other

2 323

163

1 023

Total other revenue

16 883

979

10 832

Accounting policy

Infringement notices

The department’s infringement notices are primarily Biosecurity penalties, fines and forestry import charges collected by the Department of Home Affairs. As reporting is the responsibility of the principal department, these collections are recognised in the department's financial statements as administered items.

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Gains

Note 21G: Other Gains

Resources received free of charge - water entitlements

77 942

407 243

247 665

Joint operation gains

2 657

-

1 245

Change in fair value through profit or loss

378

-

432

Reversal of impairment losses - financial asset

262

-

-

Other

12

-

119

Total other gains

81 251

407 243

249 461

Accounting policy

Resources Received Free of Charge

Contributions of assets at no cost or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government entity as a consequence of a restructuring of administrative arrangements. Water entitlement assets valued at $77 942 000 were acquired in 2020 (2019: $247 665 000) for no cost under the Sustainable Rural Water Use and Infrastructure Program (SRWUIP) program and are included in asset additions in Note 23.

In 2018-19 water entitlement assets valued at $407 243 000 were received free of charge by the Department of the Environment and Energy from the Department of Agriculture and were recognised when title was registered with related state registries. The departments merged in 2019-20 and therefore no transfer of water entitlement assets is required.

Note 22: Administered – Financial Assets

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 22A: Cash and Cash Equivalents

Cash in special accounts1

1 876 361

6 263 040

901 073

Cash on hand or on deposit

20 156

-

1 032

Total cash and cash equivalents

1 896 517

6 263 040

902 105

  1. Excludes balance of the Special Account for Services for Other Entities and Trust Moneys which is at Note 33.

Note 22B: Trade, Taxation and Other receivables

Goods and services receivables

Goods and services

1 086

551

1 975

Total goods and services receivables

1 086

551

1 975

Taxation receivables

Levies and charges

64 721

-

86 854

Indirect tax

2 828

2 812

-

Other tax

91

183

-

Total taxation receivables

67 640

2 995

86 854

Loans

State and Territory Governments

586 626

-

706 177

Farm businesses

349 188

-

23 570

Total loans

935 814

-

729 747

Other receivables

Fees

-

980

-

Statutory receivables

19 434

7 786

51 407

Personal benefits

9 156

-

7 538

Emergency response receivables

7 093

-

6 469

Interest receivable from loans

4 766

-

5 565

Other receivables

2 175

466

-

Total other receivables

42 624

9 232

70 979

Total trade, taxation and other receivables (gross)

1 047 164

12 778

889 555

Less impairment loss allowance

Goods and services receivables

(383)

(10)

(811)

Taxation receivables

(1 975)

(92)

(1 739)

Loans

(11 685)

-

(8 256)

Other receivables

(2 266)

(257)

(1 744)

Total impairment loss allowance

(16 309)

(359)

(12 550)

Total trade, taxation and other receivables (net)

1 030 855

12 419

877 005

Credit terms for goods and services were within 30 days (2019: 30 days).

Reconciliation of the Impairment Allowance

Movements in relation to 2020

Goods and services

Taxation receivables

Loans

Other receivables

Total

$'000

$'000

$'000

$'000

$'000

As at 1 July 2019

(821)

(1 831)

(8 256)

(2 001)

(12 909)

(Increase) / decrease recognised in net cost of services

438

(144)

(3 429)

(265)

(3 400)

Total as at 30 June 2020

(383)

(1 975)

(11 685)

(2 266)

(16 309)

Movements in relation to 2019

Goods and services

Taxation receivables

Loans

Other receivables

Total

$'000

$'000

$'000

$'000

$'000

As at 1 July 2018

(287)

(1 950)

(410)

(1 892)

(4 539)

Amounts restated through opening retained earnings

(835)

-

(6 707)

-

(7 542)

Amounts written off

-

-

-

22

22

(Increase) / decrease recognised in net cost of services

301

119

(1 139)

(131)

(850)

Total as at 30 June 2019

(821)

(1 831)

(8 256)

(2 001)

(12 909)

Loans to State and Territory Governments

At 30 June 2020, five loan schemes were in place for loans to State and Territory Governments. State and Territory loan schemes are closed and no longer accept loan applications. Loans to State and Territory Governments were made under the Farm Finance and Drought loan schemes for periods up to 5 years and the Dairy Recovery, Drought Recovery and Farm Business loan schemes for up to 10 years.

Loans are subject to biannual impairment assessments. No security is required on these loans to government agencies, but a charge over assets is registered by jurisdictions issuing the loans to farmers. If a State or Territory Government is unable to recover loans provided to program recipients, the respective liability to the Commonwealth will be reviewed in accordance with the applicable loan agreements.

Principal is repaid in full at maturity for the 5 year loans, and is partially amortised during years 6 – 10 of the 10 year loans (with balance paid at maturity). Interest rates were fixed with a 6 monthly review period. Effective interest rates averaged 2.89% (2019: 3.71%) for Farm Finance loans, 2.38% (2019: 3.20%) for Drought loans, 2.10% (2019: 2.73%) for Dairy Recovery and Drought Recovery loans, and 2.28% (2019: 3.14%) for Farm Business loans. Interest payments to the Commonwealth are due on the 10th day of the month following collection.

Loans to Farm Businesses

At 30 June 2020, four loan schemes were in place for loans provided to farm businesses and farm-related small businesses supporting primary production managed through the Regional Investment Corporation (RIC). Loans were made under the Farm Investment, Drought, AgRebuild and AgBiz loan schemes for periods up to 10 years.

Loans are subject to biannual impairment assessments. Farm businesses must provide security on these loans. If the RIC are unable to recover loans provided to program recipients, the respective liability to the Commonwealth will be reviewed in accordance with section 11 of the Regional Investment Corporation Operating Mandate Direction 2018.

Principal is partially amortised during years 6 – 10 (with balance paid at maturity). Interest rates were fixed with a 6 monthly review period. Effective interest rates averaged 1.49% (2019: 3.64%) for RIC loans. Interest payments are due on the 10th day of the month following collection.

Accounting Judgements and Estimates

Loans to State and Territory Governments and Farm Businesses

The impairment provision for the loans provided to State and Territory Governments and farm businesses has been calculated using an Expected Credit Loss (ECL) methodology and represents a best estimate of the potential loss that may arise in the event of loan default. The ECL calculation is a result of three key parameters:

  • Probability of default (PD) - the likelihood of a loan recipient defaulting on repayment obligations,
  • Loss given default (LGD) - the financial loss to the Commonwealth if a loan defaults; and
  • Risk overlays - the uncertainty inherent in the loan portfolio.

The value of the provision varies from year to year due to changes in loan recipient’s ability to repay which, in turn, may be impacted by macroeconomic factors, commodity prices, interest rates, and input prices. The department engaged an independent expert to ensure the provision is consistent with commercial practices and appropriate loan provisioning parameters. Due to the uncertainty of the impact of COVID-19 a conservative approach has been applied where an additional risk overlay has been included.

Emergency response receivables

Emergency response receivables relate to arrangements where the Commonwealth initially funds an affected industry’s share of the response to emergency plant pest or animal disease incursions. The industry must ensure that the Commonwealth is repaid within a reasonable period (usually defined as within 10 years). These receivables are usually repaid through statutory biosecurity levies. As there are no fixed repayment amounts, and only a maximum period of time in which to repay, these receivables are held at fair value through profit or loss. To estimate the fair value of the receivable balance, the department uses a discounted cash flow approach to adjust the receivable to the net present value of the anticipated cash flows.

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 22C: Investments in Corporate Commonwealth Entities

AgriFutures Australia

53 812

-

26 643

Australian Pesticides and Veterinary Medicines Authority

33 771

-

16 826

Cotton Research and Development Corporation

30 495

-

38 784

Fisheries Research and Development Corporation

26 984

-

28 671

Grains Research and Development Corporation

217 260

-

258 844

Murray-Darling Basin Authority

123 948

-

102 848

Regional Investment Corporation

7 566

-

8 016

Wine Australia

20 976

-

20 913

Director of National Parks

227 276

247 070

-

Sydney Harbour Federation Trust

433 870

381 995

-

Australian Renewable Energy Agency

-

103 034

-

Clean Energy Finance Corporation

-

4 820 068

-

Snowy Hydro Limited

-

10 500 000

-

Total investments in corporate Commonwealth entities

1 175 958

16 052 167

501 545

All other investments are expected to be recovered in more than 12 months.

Accounting policy

Administered Investments

Administered investments in subsidiaries, joint ventures and associates are not consolidated because their consolidation is relevant only at the Whole of Government level.

Administered investments are not held-for-sale and measured at their fair value through other comprehensive income as at 30 June 2020. Fair value has been taken to be the Australian Government’s proportional interest in the net assets of the investment as at the end of the reporting period.

In 2018-19, Snowy Hydro Limited was valued using the Discounted Cash Flow (DCF) method, with the valuation provided by an independent valuer at 30 June 2019. The DCF valuation was supported by a cross-check using the Capitalisation of Future Maintainable Earnings method based on an analysis of share trading in energy generation companies.

Losses on financial assets at fair value were $24 533 000 (2019: Gain $3 876 520 000) in the Administered Schedule of Comprehensive Income. In 2020, the balance was predominately affected by the transfer of Snowy Hydro Limited, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency to the Department of Industry, Science, Energy and Resources on 1 February 2020, refer Note 27.

Note 23: Administered – Non-Financial Assets

Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles

Land

Infrastructure

Plant and equipment

Flooding easements

Heritage and cultural1

Water entitlements

Total

$’000

$’000

$’000

$’000

$’000

$’000

$’000

DoEE as at 1 July 2019

Gross book value

-

-

-

-

998

3 820 713

3 824 510

Accumulated depreciation, amortisation and impairment

-

-

-

-

(11)

(50 632)

(53 442)

DoEE total as at 1 July 2019

-

-

-

-

987

3 770 081

3 771 068

DoA as at 1 July 2019

Gross book value

1 467

876 133

4 607

814

-

139 594

1 022 615

Accumulated depreciation, amortisation and impairment

-

(349 104)

(2 771)

-

-

(5 752)

(357 627)

DoA total as at 1 July 2019

1 467

527 029

1 836

814

-

133 842

664 988

Adjusted total as at 1 July 2019

1 467

527 029

1 836

814

987

3 903 923

4 436 056

Additions

144

2 093

420

-

-

95 603

98 260

Revaluations recognised in other comprehensive income

-

16 318

-

-

-

-

16 318

Impairments recognised in the net cost of services

-

-

-

-

-

(24 470)

(24 470)

Reversal of impairments recognised in the operating result

-

-

-

-

-

36 903

36 903

Depreciation expense

-

(7 572)

(335)

-

(11)

-

(7 918)

Disposals:

By write-off

(1 029)

-

(101)

-

-

-

(1 130)

Total as at 30 June 2020

582

537 868

1 820

814

976

4 011 959

4 554 019

Total as at 30 June 2020 represented by:

Gross book value

582

905 860

4 664

814

998

4 055 910

4 971 627

Accumulated depreciation and impairment

-

(367 992)

(2 844)

-

(22)

(43 951)

(417 608)

Total as at 30 June 2020

582

537 868

1 820

814

976

4 011 959

4 554 019

  1. Property, plant and equipment that met the definition of a heritage and cultural item was disclosed in the heritage and cultural asset class.

Disposal of non-financial assets

No property, plant and equipment or intangibles is expected to be sold or disposed of within the next 12 months.

Revaluations of non-financial assets

Revaluations are conducted in accordance with the revaluation policy.

Infrastructure assets held by the River Murray Operation (RMO) joint operation are revalued by an independent, external valuer on a three year cycle. For the year ended 30 June 2020 an internal management valuation, using the relevant Rawlinson’s Building Price Index, was performed by the Murray-Darling Basin Authority (MDBA). Refer to the Joint Operations section below for more information on joint operation arrangements. A revaluation increment of $16 318 000 (2019: increment of $9 229 000) was recognised by the department.

All increments and decrements were credited to the asset revaluation surplus by asset class and included in the other comprehensive income section of the Administered Schedule of Comprehensive Income. No decrements were expensed.

Contractual commitments for the acquisition of property, plant, equipment and intangible assets

There were no contractual commitments for the acquisition of water entitlements as at 30 June 2020 (2019: Nil).

There were no contractual commitments for the acquisition of property, plant and equipment as at 30 June 2020.

Joint operations

The Australian Government is a joint operator in the following jointly controlled operations and assets:

Share of Output

DoEE

DoA

Principal

2020

2019

2019

activity

%

%

%

River Murray Operations joint operation

Asset Management

20

-

20

Living Murray Initiative joint operation

Asset Management

20

-

20

The Australian Government’s interest, as a joint operator, in assets employed in the above joint operations is detailed below. The amounts are included in the financial statements under their respective asset categories:

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Joint Operations

Non-current assets

Land

River Murray Operations

582

-

1 467

Infrastructure

River Murray Operations

537 868

-

527 029

Plant and equipment

River Murray Operations

1 820

-

1 836

Flooding easements

River Murray Operations

814

-

814

Water entitlements

Living Murray Initiative

134 586

-

133 435

Total non-current assets

675 670

-

664 581

Total assets

675 670

-

664 581

Accounting policy

Joint Operations

The Australian Government is an operator of jointly controlled assets held in the RMO and Living Murray Initiative (LMI) joint operations. The Australian Government has control over its share of future economic benefits through its 20% share of the jointly controlled assets. The Australian Government recognises its share of the jointly controlled assets in its financial statements, classified according to the nature of the assets, its share of any liabilities incurred in respect of the joint operation and any income from the sale or use of its share of the output of the joint operation, together with its share of any expenses incurred by the joint operation.

Land, plant and equipment and flooding easements

Land, plant and equipment, and flooding easements assets recognised by the department represent the Commonwealth Government's share in the RMO.

RMO land, plant and equipment, and flooding easements are carried at cost, consistent with the FRR.

Infrastructure

Infrastructure assets recognised by the department represent the Commonwealth Government's share in the RMO.

RMO infrastructure assets are recorded at fair value in accordance with AASB 116 Property, Plant and Equipment, and AASB 13 Fair Value Measurement. Infrastructure assets are valued by an independent external valuer on behalf of the RMO every three years. In the intervening two years of the revaluation cycle, values are assessed by means of an internal management valuation. The latter is an indexation based valuation using the relevant Building Price Index.

Heritage and Cultural Assets

Australia has a long history of involvement with Antarctica spanning more than 100 years and over that time the department has accumulated a large collection of Antarctic heritage artefacts, artworks, images, and objects.

The department has classified these items as heritage and cultural assets due to their heritage value. The department has adopted appropriate curatorial and preservation polices for these assets. These items have limited useful lives and are depreciated.

The department's curatorial and preservation policies are publicly available at: http://www.antarctica.gov.au/environment/cultural-heritage/managing

Impairment

Administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards. Water assets were assessed for impairment at 30 June 2020.

Depreciation

Depreciable infrastructure and plant and equipment assets are written-down over their estimated useful lives using the straight-line method of depreciation.

DoEE

DoA

2020

2019

2019

Infrastructure

up to 400 years

-

up to 400 years

Plant and equipment

3 to 80 years

-

3 to 80 years

Heritage and cultural

100 years

100 years

-

Water Entitlements

The department acquires water entitlements in the Murray Darling Basin to achieve the Government's environmental policy objectives under the Water Act 2007. Water entitlements are acquired in two ways, by direct purchase or ‘free of charge’.

Under the Federal Financial Relations Framework, National Partnership Payments are processed centrally by the department of the Treasury and paid directly to each state treasury for delivery of services, including water efficiency projects that generate water savings.

State Treasuries are responsible for distributing the funding within their jurisdiction. In the Commonwealth, the Treasurer is accountable for the appropriations, estimates and payments under the framework. For National Partnership agreements, the primary responsibility for policy is with the relevant portfolio Minister. The department receives water entitlements 'free of charge' in accordance with the terms and conditions of payments made by the Treasury under the National Partnership on Water for the Future (refer to Note 21G).

Under the various water-related programs, there are a number of projects which improve the efficiency of irrigation infrastructure and generate savings in the use of water. As part of these arrangements, the Australian Government will receive a share of that water saving in the form of water entitlements for use in delivering the Government's environmental watering objectives.

Water entitlements received ‘free of charge’ are recognised as gains at their fair value using a valuation hierarchy. The valuation hierarchy prioritises recent comparable Commonwealth water purchases, followed by recent comparable prices on State registers, and may then require a cost-benefit analysis before an external or in-house valuation is undertaken. Comparable prices may include water entitlements for the equivalent category of entitlement (trading zone and security type) and excludes non-market or low value trades.

Once the department has finalised water entitlements as an asset in use, the Water Act 2007 requires the department to transfer the entitlements to the Commonwealth Environmental Water Holder. In 2018‑19 the former Department of Agriculture recognised the transfer of the asset as an expense and the former Department of the Environment and Energy recognised the transfer as a gain in accordance with the FRR. In 2019-20, under the merger of the departments, no gain or expense is required to be recognised.

The department's remaining water entitlement holdings are as a result of the LMI joint operation and entitlements that are not yet classified as in use.

Water Entitlements Impairment Testing

The department values water entitlements at cost, in the absence of an active market, in accordance with AASB 138 Intangible Assets. Water entitlements are classified as indefinite life intangible assets as there is no foreseeable limit to the period over which the assets are expected to generate future economic benefits. Consistent with AASB 136 Impairment of Assets and the FRR, they are subject to annual impairment testing.

Under AASB 136, the impairment test is carried out by comparing the carrying amount (per the department's asset register) to the recoverable amount of the water entitlements. The recoverable amount of the water entitlements is the higher of fair value less costs to sell and value in use. The recoverable amount calculation is performed at the lowest practical level, taking into account the quality and availability of data.

The department's valuation methodology calculates the recoverable amount of the water entitlements based on the best information available to reflect the amount that the department could obtain from the disposal of the water entitlements in an arm's length transaction between knowledgeable, willing parties. This approach is consistent with AASB 136.

The determination of impairment and impairment reversal is conducted annually based on the price provided an independent expert. The independent valuer considers the use of multiple data sources, such as:

  • the water registry data (with appropriate adjustments);
  • registry or broker data for catchments that have similar characteristics to the catchment in which the department holds water;
  • broker pricing data;
  • the department’s own data on the value of entitlements; and
  • evidence of other market participants.

An impairment loss recognised in prior periods will be reversed if there is any indication that the impairment may no longer exist or may have decreased. The increased carrying amount attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years.

Data from State registers has been relied upon to determine the impairment and the fair value of the water entitlements received ‘free of charge’ as required by the valuation hierarchy. As noted in an audit of trade prices published by MDBA this data contains uncertainties over its accuracy. The department has addressed this by excluding non-market or low value trades. To ensure the validity of the impairment and fair value of the water entitlements received ‘free of charge’ the department undertook additional reviews using broker data from an independent consultant. The broker data was sourced from surveys of water brokers and trading exchanges and supports the department’s calculations.

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 23B: Inventories

Inventories held for sale

Finished goods

11 078

11 145

-

Total inventories held for sale

11 078

11 145

-

Total inventory

11 078

11 145

-

Accounting policy

National Halon Bank

In accordance with the Government’s National Halon Management Strategy, the Government operates the National Halon Bank (NHB). Halons are fire-fighting agents whose ozone depleting potential is ten times greater than that of chlorofluorocarbons. Under State and Territory legislation, the continued use of halon in non-essential equipment has been banned.

The NHB stores decommissioned halon for destruction or reclamation, and to meet Australia’s essential use needs or until an alternative is found for all current uses.

There are two categories of Halon holdings:

  • Strategic reserve; and
  • Deposited halon.

The halon stored in the NHB is a resource controlled by the Government and from which economic benefits are expected to flow to the Government. The current holdings of halon are recognised as inventory. A program of work is underway to review Australia’s critical use halon needs and ensure the management approach for the NHB is efficient and effective. This will involve reviewing and clarifying current NHB contractual arrangements; developing estimates of future halon needs and reviewing options for longer term halon management.

Note 24: Administered – Payables

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 24A: Levy Disbursements and Commonwealth Contributions

Levy disbursements

34 744

-

52 113

Commonwealth contributions

58 331

-

101 235

Total levy disbursements and Commonwealth contributions

93 075

-

153 348

Note 24B: Grants

Non-profit organisations

3 826

2 368

3 244

State and Territory Governments

789

1 558

92

Australian Government entities (related parties)

-

-

50

Local Governments

691

1 318

-

Universities

2 641

1 074

-

Individuals

345

345

-

Overseas

110

-

-

For profit organisations

110

142

164

Other

-

172

-

Total grants

8 512

6 977

3 550

All grants and suppliers are expected to be settled in no more than 12 months.

Settlement of grants was made according to the terms and conditions of each grant. This was usually within 30 days of grant recipients meeting their performance or eligibility criteria.

Settlement of suppliers was usually made within 20 days (2019: 30 days).

Note 25: Administered – Provisions

Note 25A: Loan Commitments to Farm Businesses

Loans to Farm Businesses

As at 1 July 2019

17 881

Additional commitments made

94 581

Commitments used

(17 184)

Total as at 30 June 2020

95 278

Accounting policy

Concessional loan commitments represent the concessional cost of commitments to provide loan advances at a below-market interest rate. Commitments to Farm Businesses and Farm-Related Small Businesses reflect the concessional cost of loan advances that were committed, but not paid, by the Regional Investment Corporation on behalf of the department as at 30 June 2020. All advances are expected to be paid in the 2020-21 financial year.

Accounting Judgements and Estimates

Concessional loan commitments are initially measured at their fair value, calculated as the present value of cash flows associated with loan advances committed, but not paid, at the time the commitment is made, discounted at the commercial market interest rate. The provision is subsequently measured at amortised cost and reduced for the concessional component as each loan is advanced.

Note 26: Administered – Aggregate Assets and Liabilities

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Assets to be recovered in:

No more than 12 months

2 137 251

6 275 788

1 218 523

More than 12 months

6 540 512

19 834 192

1 738 346

Total assets

8 677 763

26 109 980

2 956 869

Liabilities to be settled in:

No more than 12 months

275 376

55 099

178 021

Total liabilities

275 376

55 099

178 021

Note 27: Administered – Restructuring

Note 27A: Administered Restructuring

2020

2020

Climate Change and Energy

All Functions

Department of Industry, Science, Energy and Resources1,2

Department of Agriculture3,4

$'000

$'000

FUNCTIONS ASSUMED

Assets recognised

Cash and cash equivalents

-

1 253 868

Trade, taxation and other receivables

-

985 287

Investments in corporate Commonwealth entities

-

505 257

Land

-

1 467

Infrastructure

-

527 029

Plant and equipment

-

1 836

Flooding easements

-

814

Water entitlements

-

141 129

Prepayments

-

16 627

Total assets recognised

-

3 433 314

Liabilities recognised

Levy disbursements and Commonwealth contributions

-

150 116

Grants

-

248

Suppliers

-

319

Loan commitments to farm businesses

-

37 298

Total liabilities recognised

-

187 981

Net assets recognised

-

3 245 333

Income assumed

Recognised by the receiving entity

-

205 393

Recognised by the losing entity

-

383 327

Total income assumed

-

588 720

Expenses assumed

Recognised by the receiving entity

-

672 001

Recognised by the losing entity

-

873 390

Total expenses assumed

-

1 545 391

FUNCTIONS RELINQUISHED

Assets relinquished

Cash and cash equivalents

5 419 000

-

Trade and other receivables

206

-

Other investments

15 683 409

-

Prepayments

190

-

Total assets relinquished

21 102 805

-

Liabilities relinquished

Suppliers

68

-

Total liabilities relinquished

68

-

Net assets relinquished

21 102 737

-

  1. The Climate Change and Energy functions were relinquished to the Department of Industry, Science, Energy and Resources as a result of the Administrative Arrangement Order effective 1 February 2020.
  2. The net assets relinquished to the Department of Industry, Science, Energy and Resources were $21 102 736 586.
  3. All functions of the Department of Agriculture were relinquished to the Department of Agriculture, Water and the Environment (formerly known as the Department of Environment and Energy) as a result of the Administrative Arrangement Order on 1 February 2020.
  4. The net assets assumed from the Department of Agriculture were $3 245 333 000.

Note 27B: Administered Restructuring - Department of Agriculture

2020

All functions

Department of Agriculture, Water and the Environment1

$'000

FUNCTIONS RELINQUISHED

Assets relinquished

Cash and cash equivalents

1 253 868

Trade, taxation and other receivables

985 287

Investments in corporate Commonwealth entities

505 257

Land

1 467

Infrastructure

527 029

Plant and equipment

1 836

Flooding easements

814

Water entitlements

141 129

Prepayments

16 627

Total assets relinquished

3 433 314

Liabilities relinquished

Levy disbursements and Commonwealth contributions

150 116

Grants

248

Suppliers

319

Loan commitments to farm businesses

37 298

Total liabilities relinquished

187 981

Net assets relinquished

3 245 333

  1. All functions of the Department of Agriculture were relinquished to the Department of Agriculture, Water and the Environment (formerly known as the Department of Environment and Energy) as a result of the Administrative Arrangement Order on 1 February 2020.
  2. The net assets relinquished to the Department of Agriculture, Water and the Environment were $3 245 333 000.

Note 28: Administered – Contingent Assets and Liabilities

Indemnities

2020

2019

$'000

$'000

Contingent liabilities

Balance from previous period

100 000

100 000

Obligations expired

(100 000)

-

Total contingent liabilities

-

100 000

Net contingent liabilities

-

(100 000)

Quantifiable Contingencies

The above table contains $0 of contingent liabilities (2019: $100,000,000) in respect to indemnities provided by the Australian Government to the board of directors and senior management of Low Carbon Australia Limited. These related to functions that have been transferred to the Department of Industry, Science, Energy and Resources and are no longer reported by the department.

Unquantifiable Contingencies

The Australian Government encourages expenditure on research and development to increase the competitiveness and sustainability of industries within Australia. Under several Acts, the Commonwealth provides contributions to a number of nominated entities responsible for undertaking research and development activities in respect of portfolio industries. These contributions are typically made on a matching basis. Under legislation, entities are eligible for matching contributions which are subject to annual “caps” based on the total cumulative amount of levies collected, amounts spent on qualifying research and development and the annual level of the determined gross value of production. The operation of these annual caps can result in annual entitlements being limited to less than full cumulative levy collections and/or cumulative qualifying research and development expenditure. However, unpaid balances may still be claimable, depending on the level of the caps determined in future years and are therefore carried forward from year to year.

At 30 June 2020, the Commonwealth had a maximum potential liability in respect of matching payments of approximately $714 million (2019: $659 million). The Commonwealth's actual future liability is contingent on a combination of several currently indeterminable independent factors which are beyond the control of both the department and the recipient entities, in particular the future annual levels of levy collections and determined gross values of production. The likelihood of meeting the eligibility requirements and the amount of future payments is uncertain. Hence, the total liability is considered unquantifiable.

Accounting policy

Indemnities

The maximum amounts payable under the indemnities given is disclosed above. At the time of completion of the financial statements, there was no reason to believe that the indemnities would be called upon, and no recognition of any liability was therefore required.

Note 29: Administered – Financial Instruments

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 29A: Categories of Financial Instruments

Financial assets at amortised cost

Cash and cash equivalents

1 896 517

6 263 040

902 105

Goods and services

703

541

1 164

Loans

924 129

-

721 491

Other receivables

1 766

1 189

-

Interest receivable from loans

4 766

-

5 565

Total financial assets at amortised cost

2 827 881

6 264 770

1 630 325

Financial assets at fair value through profit or loss

Emergency response receivables

7 093

-

6 469

Total financial assets at fair value through profit or loss

7 093

-

6 469

Financial assets at fair value through other comprehensive income

Investments in corporate Commonwealth entities

1 175 958

16 052 167

501 545

Total financial assets at fair value through other comprehensive income

1 175 958

16 052 167

501 545

Total financial assets

4 010 932

22 316 937

2 138 339

Financial Liabilities

Financial liabilities measured at amortised cost

Trade creditors

58 016

48 122

718

Grants payable

8 512

6 977

3 550

Total financial liabilities at amortised cost

66 528

55 099

4 268

Total financial liabilities

66 528

55 099

4 268

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 29B: Net Gains or Losses on Financial Assets

Financial assets at amortised cost

Interest revenue

21 349

2

23 976

Impairment

(3 429)

(10)

(1 403)

Concessional loan discount

(143 156)

-

(21 945)

Net gain/ (losses) on financial assets at amortised cost

(125,236)

(8)

628

Financial assets at fair value through profit and loss

Gains recognised in income statement

378

-

432

Net gain / (loss) on financial assets at fair value through profit and loss

378

-

432

Financial assets at fair value through other comprehensive income

Gains/(losses) recognised in equity

36 175

3,775,197

101 323

Snowy Hydro Limited Dividends

108 500

139,950

-

Net gain / (loss) on financial assets at fair value through other comprehensive income

144,675

3 915 147

101 323

Net gain/(loss) on financial assets

19,439

3 915 139

101 951

Note 29C: Net Gains or Losses on Financial Liabilities

There are no net gains or losses on financial liabilities.

Note 29D: Fair Value of Financial Instruments

Financial assets

The net fair value of all monetary assets approximate their carrying amounts.

Financial liabilities

The net fair values of all monetary financial liabilities are approximated by their carrying amounts. Grants payable are recognised when a present obligation to another party is entered into and the amount can be reliably measured.

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Note 29E: Credit Risk

Loans

Maximum exposure to credit risk (excluding any collateral or credit enhancement)

Financial assets carried at amount not best representing maximum exposure to credit risk

Loans

999 671

-

699 238

Total financial assets carried at amount not best representing maximum exposure to credit risk

999 671

-

699 238

The department's maximum exposure to credit risk is reduced significantly where the collateral held as security over all concessional loans is reflected in the impairment provision. If the fair value of security held were considered, the maximum exposure to the department is reduced to $135 973 903 (2019: DoEE $nil, DoA $143 391 635).

The department has engaged an independent expert in credit provisioning to assist in assessing the credit risk of the concessional loans portfolio.

  • It has been determined that the credit risk of portfolio has not increased significantly since initial recognition. An assessment of individual loans internal credit risk ratings was undertaken and consideration given to the level of interest arrears within the reporting period.
  • In alignment with commercial lending institutions in Australia default has been defined as being either 90+ days in interest arrears or non-repayment of the principal balance at the loan maturity date.
  • The department assesses credit risk on a collective basis where each loans Internal Risk Rating has been mapped to S&P Global Credit Ratings. Each mapped Internal Risk Rating is assigned a Probability of Default reflective of the estimated credit risk of each collective group of loans. Where specific loans are approaching default through missed interest payments, an additional credit risk premium is applied.
  • The Internal Risk Ratings of individual loans are determined through both historical and forward-looking information.
  • In measuring the Expected Credit Loss, an additional model overlay to conservatively reflect the uncertainty of COVID-19 on loan performance has been applied. The reasonableness of the overlay will be considered in 2020-21 as further information on the impact on loan performance is available.
  • Since initial recognition of the outstanding loan schemes, no loans have been written-off.

Other financial assets

The administered activities of the department were not exposed to a high level of credit risk as the majority of financial assets are cash and cash equivalents, advances and loans, goods and services receivables, other receivables and investments in government controlled and funded entities.

The department is exposed to credit risk through its financial assets of loans, goods and services receivables and other receivables. Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the department. The department considers a financial asset to be in default when contractual payments are 150 days past due for administered items and 90 days for Natural Heritage Trust of Australia special account items. However, the department may also consider a financial asset to be in default when internal or external information indicates that the department is unlikely to receive the outstanding contractual amounts.

Credit risk is managed by undertaking background and credit checks prior to allowing a debtor relationship.

In addition, the department has policies and procedures that guide debt recovery techniques that are to be applied. The department held no collateral to mitigate against credit risk.

The department's provision matrix for Expected Credit Loss of trade receivables includes:

  • Use historical credit loss experience;
  • Specify fixed provision rates depending on the number of days past due;
  • Segment if appropriate depending on loss patterns for different customer segments; and
  • Adjust historical rates to reflect information about current conditions, and reasonable and supportable forecasts of future economic condition.

The department has allocated $16 309 000 (2019: DoEE $359 000, DoA $12 550 000) to the impairment loss allowance for loans, sales of goods and services receivables and other receivables.

The department did not allocate an impairment allowance in 2017-18 on loans and other receivables from Snowy Hydro Limited. The loans provided to South Australian Government were fully repaid in December 2018 and the other receivable from Snowy Hydro Limited was settled in October 2018.

The carrying amount of loans and goods and services receivables, net of impairment losses, represents the department's maximum exposure to credit risk as $938 327 000 (2019: DoEE $1 730 000, DoA $734 689 000).

Note 29F: Liquidity Risk

The majority of the department's administered financial liabilities are trade creditors and grants payable. The exposure to liquidity risk is based on the notion that the department will encounter difficulty in meeting its obligations associated with administered liabilities. This is highly unlikely due to appropriation funding mechanism available to the department and internal policies and procedures to ensure appropriate resources exist to meet any financial obligations.

All financial liabilities are payable within one year for both current and prior financial years.

Note 29G: Market Risk

Currency risk

Currency risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The department holds basic administered financial instruments that do not expose the department to currency risk.

Interest rate risk

Interest rate risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest-bearing items in the Administered Schedule of assets and liabilities include ‘Loans to State and Territory Governments’ and ‘Loans to Farm Businesses’, where interest earnt totals $17 628 000 (2019: $23 483 000). Each loan scheme applies a variable interest rate reset twice a year subject to material changes in the average Commonwealth bond rate. The interest rates are set at a concessional rate according to intended outcomes of the program which currently includes a 2 year interest free period for all Drought, AgBiz and AgRebuild loans offered through the Regional Investment Corporation.

Other price risk

The department’s administered activities are not exposed to other price risk. The administered investments are not traded on the Australian Stock Exchange. The department does not hold any other financial instruments that would be exposed to other price risk.

Note 30: Administered – Fair Value Measurements

The following tables provide an analysis of assets and liabilities that are measured at fair value. The remaining assets and liabilities disclosed in the statement of financial position do not apply the fair value hierarchy.

The different levels of the fair value hierarchy are defined below.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at measurement date

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3: Unobservable inputs for the asset or liability.

Note 30A: Fair Value Measurements

Fair value measurements at the end of the reporting period by hierarchy for assets and liabilities in 2020

Fair value measurements at the end of the reporting period

DoEE

DoA

Category (Level 1, 2 or 3)

2020

2019

2019

Valuation Technique(s) and Inputs Used

$'000

$'000

$'000

Financial assets

Other receivables

7 093

-

6 469

Level 3

Discounted cash flow

Investments in corporate Commonwealth entities

1 175 958

5 552 167

501 545

Level 3

Net asset balance

Investments in corporate Commonwealth entities

-

10 500 000

-

Level 3

Discounted cash flow

Total financial assets

1 183 051

16 052 167

508 014

Non-financial assets

Infrastructure

537 868

-

527 029

Level 3

Depreciated replacement cost

Heritage and cultural

976

987

-

Level 2

Market Approach

Total non-financial assets

538 844

987

527 029

Total fair value measurements

1 721 895

16 053 154

1 035 043

  1. The department did not measure any non-financial assets at fair value on a non-recurring basis at 30 June.
  2. The current use of all non-financial assets is considered their highest and best use.

Note 30B: Reconciliation for recurring Level 3 fair value measurements

Financial assets

Other receivables

Other investments

DoEE

DoA

DoEE

DoA

2020

2019

2019

2020

2019

2019

$'000

$'000

$'000

$'000

$'000

$'000

Opening balance

6 469

-

10 236

16 553 712

11 676 789

400 222

Total gains/(losses) recognised in net cost of services1

378

-

432

-

-

-

Total gains/(losses) recognised in other comprehensive income2

-

-

-

36 175

3 775 197

101 323

Equity injections

-

-

-

269 480

600 181

-

Advances

2 753

-

1 862

-

-

-

Repayments

(2 507)

-

(6 061)

-

-

-

Restructuring

-

-

-

(15 683 409)

-

-

Closing balance

7 093

-

6 469

1 175 958

16 052 167

501 545

Non-financial assets

Infrastructure

Total

DoEE

DoA

DoEE

DoA

2020

2019

2019

2020

2019

2019

$'000

$'000

$'000

$'000

$'000

$'000

Opening balance

527 029

-

524 541

17 087 210

11 676 789

934 999

Total gains/(losses) recognised in net cost of services1

(5 479)

-

(6 741)

(5 101)

-

(6 309)

Total gains/(losses) recognised in other comprehensive income2

16 318

-

9 229

52 493

3 775 197

110 552

Equity injections

-

-

-

269 480

600 181

-

Advances

-

-

-

2 753

-

1 862

Repayments

-

-

-

(2 507)

-

(6 061)

Restructuring

-

-

-

(15 683 409)

-

-

Closing balance

537 868

-

527 029

1 720 919

16 052 167

1 035 043

  1. These gains are presented in the Schedule of Comprehensive Income under ‘Other gains’ and ‘Depreciation’.
  2. These gains are presented in the Schedule of Comprehensive Income under ‘Gains on financial assets at fair value through other comprehensive income’ and ‘Changes in asset revaluation reserves’.

Note 31: Administered – Appropriations

Note 31A: Annual and Unspent Appropriations ('Recoverable GST exclusive')

The following tables represents the appropriations of the former DoEE including Climate Change and Energy functions from 1 July 2019 until 31 January 2020; and the merged Department of Agriculture, Water and the Environment from 1 February 2020 until 30 June 2020.

2020

2019

$'000

$'000

Ordinary annual services

Annual appropriations

Operating

426 162

411 200

Payments to corporate Commonwealth entities/companies

66 238

49 901

Section 74 receipts

631

14

Section 75 transfers2

229 610

-

Total available appropriation

722 641

461 115

Appropriation applied (current and prior years)

(560 369)

(420 368)

Variance5

162,272

40,747

Opening unspent appropriation balance

91 400

242 983

Prior year section 75 transfers3

387 195

-

Prior year Corporate transfers4

1 782

-

Prior years Appropriation Acts repealed

(27 744)

(192 330)

Closing unspent appropriation balance

614 905

91 400

Balance comprises appropriations as follows:1

Appropriation Act (No. 1) 2016-17

-

27 545

Appropriation Act (No. 3) 2016-17

-

91

Supply Act (No. 1) 2016-17

-

108

Appropriation Act (No. 1) 2017-18

99 046

9 558

Appropriation Act (No. 3) 2017-18

40 698

-

Appropriation Act (No. 5) 2017-18

50

-

Appropriation Act (No. 1) 2018-19

245 567

41 230

Appropriation Act (No. 1) 2018-19 - AGWA

1 775

-

Appropriation Act (No. 1) 2018-19 - MDBA

7

-

Appropriation Act (No. 3) 2018-19

55 767

12 868

Supply Act (No. 1) 2019-20

6 479

-

Appropriation Act (No. 1) 2019-20

142 825

-

Appropriation Act (No. 3) 2019-20

4 956

-

Appropriation Act (No. 5) 2019-20 - APVMA

17 735

-

Total unspent appropriation - ordinary annual services

614 905

91 400

Other services

Annual Appropriation

Annual appropriation - Administered assets and liabilities

373 000

-

Payments to corporate Commonwealth entities/companies

2 055

181

Section 75 transfers6

155 234

-

Total available appropriation

530 289

181

Appropriation applied (current and prior years)

(192 877)

(181)

Variance9

337 412

-

Opening unspent appropriation balance

-

-

Prior year section 75 transfers7

987 683

-

Closing unspent appropriation balance

1 325 095

-

Balance comprises appropriations as follows:8

Appropriation Act (No. 2) 2017-18

310 491

-

Appropriation Act (No. 2) 2018-19

649 221

-

Appropriation Act (No. 4) 2018-19

20 000

-

Appropriation Act (No. 2) 2019-20

90 277

-

Appropriation Act (No. 4) 2019-20

235 000

-

Cash at bank - Appropriation Act (No. 2) 2019-20

20 106

-

Total unspent appropriation - other services

1 325 095

-

Total unspent appropriation

1 940 000

91 400

  1. The unspent annual appropriation is shown inclusive of Section 51 withholdings against Appropriation Act (No 1) 2017-18 of $73 680 000, Appropriation Act (No 3) 2017-18 of $40 698 000, Appropriation Act (No 5) 2017-18 of $50 000, Appropriation Act (No 1) 2018-19 of $245 507 000, Appropriation Act (No 3) 2018-19 of $55 767 000, Supply Act (No 1) 2019-20 of $5 581 000 and Appropriation Act (No 1) 2019-20 of $5 582 000.
  2. In response to the Administrative Arrangement Order (AAO) made on 5 December 2019, $33 700 000 was transferred to Department of Industry, Science, Energy and Resources . A total of $263 310 000 was transferred from the Department of Agriculture, which included $39 824 000 for Corporate Commonwealth Entities.
  3. In response to the Administrative Arrangement Order (AAO) made on 5 December 2019, $12 560 000 was transferred to Department of Industry, Science, Energy and Resources and $399 755 000 was transferred from the Department of Agriculture.
  4. In response to the Administrative Arrangement Order (AAO) made on 5 December 2019, $1 775 000 for Australian Grape and Wine Authority and $7 000 for Murry-Darlin Basin Authority was transferred from the Department of Agriculture. Both these amounts are Section 51 withholdings.
  5. The variance of $162 272 000 comprises of unspent current year appropriations $171 995 000 offset by prior years appropriation applied in 2020 $9 723 000. The current year unspent appropriation includes $11 163 000 in quarantines, $17 735 000 appropriation for Australian Pesticides and Veterinary Medicines Authority and $143 097 000 in appropriation subject to MoF process.
  6. In response to the Administrative Arrangement Order (AAO) made on 5 December 2019, $138 000 000 was transferred to Department of Industry, Science, Energy and Resources. A total of $293 234 000 was transferred from the Department of Agriculture, which included $3 713 000 for Corporate Commonwealth Entities.
  7. In response to the Administrative Arrangement Order (AAO) made on 5 December 2019, $987 683 000 was transferred from the Department of Agriculture.
  8. The unspent other services appropriation is shown inclusive of Section 51 withholdings against Appropriation Act (No 2) 2017-18 of $170 492 000 and Appropriation Act (No 2) 2018-19 of $277 144 000.
  9. The variance of $337 412 000 is comprised of unspent current year appropriations of $345 383 000 offset by prior years appropriation applied in 2020 of $7 971 000. The variance is due to longer than anticipated loan settlement lead times arising from both an administrative perspective and due to an option available to farm businesses to delay settlement by up to 6 months from the date of final approval.
  10. Appropriation Act (No 1) 2016-17, Appropriation Act (No 3) 2016-17 and Supply Act (No 1) 2016-17 self-repealed on 1 July 2019.
  11. Appropriation Act (No 1) 2017-18, Appropriation Act (No 3) 2017-18 and Appropriation Act (No 5) 2017-18 will self-repeal on 1 July 2020.
  12. Appropriation Act (No 2) 2017-18 will self-repeal on 1 July 2020.

Note 31B: Special Appropriations ('Recoverable GST exclusive')

Authority

Appropriation applied

2020

2019

$'000

$'000

Agricultural and Veterinary Chemicals (Administration) Act 1992

(13 750)

-

Assistance for Severely Affected Regions (Special Appropriation) (Coronavirus Economic Response Package) Act 2020

(4 589)

-

Australian Animal Health Council (Live-stock Industries) Funding Act 1996

(3 653)

-

Australian Meat and Live-stock Industry Act 1997

(94 006)

-

Australian Renewable Energy Agency Act 2011

(146 000)

(171 500)

Dairy Produce Act 1986

(27 684)

-

Egg Industry Service Provision Act 2002

(4 915)

-

Farm Household Support Act 20141

(68 653)

-

Forestry Marketing and Research and Development Services Act 2007

(4 695)

-

Horticulture Marketing and Research and Development Services Act 2000

(52 361)

-

Pig Industry Act 2001

(8 945)

-

Plant Health Australia (Plant Industries) Funding Act 2002

(3 624)

-

Primary Industries Research and Development Act 1989

(116 305)

-

Public Governance, Performance and Accountability Act 2013

(305)

(40)

Sugar Research and Development Services Act 2013

(1 050)

-

Wine Australia Act 2013

(13 072)

-

Wool Services Privatisation Act 2000

(21 125)

-

Total special appropriations applied

(584 732)

(171 540)

  1. The amount of $68 653 000 (2019: nil) was transferred to Services Australia.

The following special appropriations had no transactions and budgets during the reporting and comparative years:

  • Australian Meat and Live-stock Industry (Repeals and Consequential Provisions) Act 1997
  • Dairy Industry Service Reform Act 2003
  • Egg Industry Service Provision (Transitional and Consequential Provisions) Act 2002
  • Horticulture Marketing and Research and Development Services (Repeals and Consequential Provisions) Act 2000
  • Public Governance, Performance and Accountability (Consequential and Transitional Provisions) Act 2014
  • Sewerage Agreements Act 1973
  • Sewerage Agreements Act 1974
  • Water Act 2007

Note 32: Administered – Appropriations – Department of Agriculture

The following tables represents the appropriations of the former DoA from 1 July 2019 until the 31 January 2020.

Note 32A: Annual and Unspent Appropriations ('Recoverable GST exclusive') - Department of Agriculture

2020

2019

$'000

$'000

Ordinary annual services

Annual Appropriation

Annual Appropriation - Operating1

437 890

587 848

PGPA Act section 74 receipts1

-

15 408

Prior years Appropriation Acts repealed

(121 155)

(201 727)

Total available appropriation

316 735

401 529

Appropriation applied (current and prior years)1

(178 123)

(334 493)

Variance

138 612

67 036

Opening unspent appropriation balance

526 235

459 199

Closing unspent appropriation balance

664 847

526 235

Balance comprises appropriations as follows:

Appropriation Act (No.1) 2016-172

-

101 433

Supply Act (No.1) 2016-172

-

19 722

Appropriation Act (No.1) 2017-18

89 897

89 897

Appropriation Act (No.3) 2017-18

40 698

40 698

Appropriation Act (No.5) 2017-18

50

50

Appropriation Act (No.1) 2018-19

215 125

217 582

Appropriation Act (No.3) 2018-19

55 767

56 797

Appropriation Act (No.1) 2019-20

197 324

-

Supply Act (No.1) 2019-20

65 986

-

Cash on hand - Appropriation Act (No.1) 2018-19

-

56

Total unspent appropriation - ordinary annual services

664 847

526 235

Other services

Annual Appropriation

Annual appropriation - Administered assets and liabilities3

507 425

715 478

Prior years Appropriation Acts repealed4

(40 128)

(69 103)

Total available appropriation

467 297

646 375

Appropriation applied (current and prior years)3

(224 909)

(194 012)

Variance

242 388

452 363

Opening unspent appropriation balance

1038 529

586 166

Closing unspent appropriation balance

1 280 917

1 038 529

Balance comprises appropriations as follows:

Supply Act (No.2) 2016-174

-

25 128

Appropriation Act (No.2) 2016-174

-

15 000

Appropriation Act (No.2) 2017-18

310 491

317 491

Appropriation Act (No.2) 2018-19

657 192

659 977

Appropriation Act (No.4) 2018-19

20 000

20 000

Appropriation Act (No.2) 2019-20

293 234

-

Cash on hand - Appropriation Act (No.2) 2018-19

-

933

Total unspent appropriation - other services

1 280 917

1 038 529

Total unspent appropriation5

1 945 764

1 564 764

  1. The variance between amounts appropriated in 2020 and appropriation applied is $259 767 000. This is due to unspent current year appropriations ($263 310 000) offset by prior years appropriation applied in 2020 ($3 543 000).
  2. Apropriation Act (No.1) 2016-17 and Supply Act (No.1) 2016-17 self-repealed on 1 July 2019.
  3. The variance between amounts appropriated in 2020 and appropriation applied is $282 516 000. This is comprised of unspent current year appropriations ($293 234 000) offset by prior years appropriation applied in 2020 ($10 718 000).
  4. Appropriation Act (No.2) 2016-17 and Supply Act (No.2) 2016-17 self-repealed on 1 July 2019.
  5. Unspent appropriation of $1 945 764 transferred to the Department of Agriculture, Water and the Environment (formerly known as the Department of the Environment and Energy) as a result of the Administrative Arrangement Order on 1 February 2020 (in accordance with PGPA Act Section 75 transfers).

Note 32B: Special Appropriations ('Recoverable GST exclusive') - Department of Agriculture

Appropriation applied

2020

2019

Authority

$'000

$'000

Agricultural and Veterinary Chemicals (Administration) Act 1992

(19 550)

(28 500)

Australian Animal Health Council (Live-stock Industries) Funding Act 1996

(3 731)

(7 787)

Australian Meat and Live-stock Industry Act 1997

(118 783)

(216 985)

Dairy Produce Act 1986

(25 751)

(54 884)

Egg Industry Service Provision Act 2002

(5 985)

(11 428)

Farm Household Support Act 20141

(65 701)

(112 381)

Forestry Marketing and Research and Development Services Act 2007

(5 378)

(11 947)

Horticulture Marketing and Research and Development Services Act 2000

(59 701)

(107 020)

Pig Industry Act 2001

(11 967)

(23 362)

Plant Health Australia (Plant Industries) Funding Act 2002

(3 983)

(9 849)

Primary Industries Research and Development Act 1989

(125 500)

(228 792)

Public Governance, Performance and Accountability Act 2013

(551)

(657)

Sugar Research and Development Services Act 2013

(26 469)

(29 406)

Wine Australia Act 2013

(20 529)

(32 812)

Wool Services Privatisation Act 2000

(43 686)

(96 406)

Total special appropriations applied

(537 265)

(972 216)

  1. The amount of $65 701 000 (2019: $112 381 000) was transferred to Services Australia.

The following special appropriations had no transactions and budgets during the reporting and comparative years:

  • Australian Meat and Live-stock Industry (Repeals and Consequential Provisions) Act 1997
  • Dairy Industry Service Reform Act 2003
  • Egg Industry Service Provision (Transitional and Consequential Provisions) Act 2002
  • Horticulture Marketing and Research and Development Services (Repeals and Consequential Provisions) Act 2000
  • Public Governance, Performance and Accountability (Consequential and Transitional Provisions) Act 2014
  • Sewerage Agreements Act 1973
  • Sewerage Agreements Act 1974
  • Water Act 2007

Note 33: Administered – Special accounts

Natural Resources Management1

Water for the Environment Special Account2

Water Efficiency Labelling Scheme Account3

2020

2019

2020

2019

2020

2019

$'000

$'000

$'000

$'000

$'000

$'000

Balance brought forward from previous period

-

2 590

895 522

581 846

4 589

4 272

Increases

400

350 000

320 000

2 198

1 901

Total increases

-

400

350 000

320 000

2 198

1 901

Available for payments

-

2 990

1 245 522

901 846

6 787

6 173

Decreases

(2 990)

(6 350)

(6 324)

(1 505)

(1 584)

Total decreases

-

(2 990)

(6 350)

(6 324)

(1 505)

(1 584)

Total balance carried to the next period

-

-

1 239 172

895 522

5 282

4 589

Balance made up of:

Cash held in the Official Public Account

-

-

1 239 172

895 522

5 282

4 589

Total balance carried to the next period

-

-

1 239 172

895 522

5 282

4 589

Water Resources Special Account 20164

Environmental Water Holdings Special Account5

National Environment Protection Council Special Account6

2020

2019

2020

2019

2020

2019

$'000

$'000

$'000

$'000

$'000

$'000

Balance brought forward from previous period

947

975

55 068

39 151

5 631

5 716

Increases

704

183

41 216

39 355

958

816

Total increases

704

183

41 216

39 355

958

816

Available for payments

1 651

1 158

96 284

78 506

6 589

6 532

Decreases

(325)

(211)

(26 682)

(23 438)

(1 175)

(901)

Total decreases

(325)

(211)

(26 682)

(23 438)

(1 175)

(901)

Total balance carried to the next period

1 326

947

69 602

55 068

5 414

5 631

Balance made up of:

Cash held in the Official Public Account

1 326

947

69 602

55 068

5 414

5 631

Total balance carried to the next period

1 326

947

69 602

55 068

5 414

5 631

Natural Heritage Trust of Australia Account7

Ozone Protection and SGG Account8

Reef Trust Special Account 20149

2020

2019

2020

2019

2020

2019

$'000

$'000

$'000

$'000

$'000

$'000

Balance brought forward from previous period

446 442

419 386

32 330

31 332

44 569

5 879

Increases

182 208

165 392

14 275

13 726

41 371

73 444

Total increases

182 208

165 392

14 275

13 726

41 371

73 444

Available for payments

628 650

584 778

46 605

45 058

85 940

79 323

Decreases

(164 037)

(138 336)

(14 157)

(12 728)

(27 451)

(34 754)

Total decreases

(164 037)

(138 336)

(14 157)

(12 728)

(27 451)

(34 754)

Total balance carried to the next period

464 613

446 442

32 448

32 330

58 489

44 569

Balance made up of:

Cash held in the Official Public Account

464 613

446 442

32 448

32 330

58 489

44 569

Total balance carried to the next period

464 613

446 442

32 448

32 330

58 489

44 569

Clean Energy Finance Corporation10

Services for Other Entities and Trust Moneys11

Environment SOETM Special Account 202012

2020

2019

2020

2019

2020

2019

$'000

$'000

$'000

$'000

$'000

$'000

Balance brought forward from previous period

5 679 000

6 279 000

365

365

-

-

Increases

240 000

-

-

-

365

-

Total increases

240 000

-

-

-

365

-

Available for payments

5 919 000

6 279 000

365

365

365

-

Decreases

(5 919 000)

(600 000)

(365)

-

-

-

Total decreases

(5 919 000)

(600 000)

(365)

-

-

-

Total balance carried to the next period

-

5 679 000

-

365

365

-

Balance made up of:

Cash held in the Official Public Account

-

5 679 000

-

365

365

-

Total balance carried to the next period

-

5 679 000

-

365

365

-

The following special accounts are appropriated under Public Governance, Performance and Accountability Act 2013 section 80

Special Account

Establishing Instrument

Purpose

1. Natural Resources Management

Natural Resources Management (Financial Assistance) Act 1992 section 11

For the purposes of granting financial assistance in connection with projects relating to natural resources management.

2. Water for the Environment Special Account

Water Act 2007 section 86AB

For the purpose of improving the water efficiency of irrigation infrastructure and improving delivery and storage of environmental water supply within the Murray Darling Basin.

The Water for the Environment Special Account increases related to statutory credits in Water Act 2007 section 86AG.

3. Water Efficiency Labelling Scheme Account

Water Efficiency Labelling and Standards Act 2005 section 64

For the purpose of conserving water by reducing demand through the provision of water efficiency information about water-using products and promoting the adoption of efficient water-saving techniques.

5. Environmental Water Holdings Special Account

Water Act 2007; section 111

For the purpose of performing the functions of the Commonwealth Environmental Water Holder.

The expenses of administering the Account do not include the cost of salaries of the Commonwealth Environmental Water Holder or the staff referred to in section 116.

This account is non-interest bearing.

6. National Environment Protection Council Special Account

National Environment Protection Council Act 1994; section 53

For the purposes of performing the functions of the NEPC Council and NEPC committee.

This account is interest bearing.

7. Natural Heritage Trust of Australia Account

Natural Heritage Trust of Australia Act 1997 (NHT Act) section 4

For the purpose of administering environmental protection, supporting sustainable and natural resources management projects as specified by the NHT Act.

This account earns interest at the rate of interest earned by the Commonwealth as at the end of the financial year on deposits held with the Reserve Bank of Australia.

In accordance with section 42 of the NHT Act, the department has ensured that the balance of the account has not fallen below the base amount.

8. Ozone Protection and SGG Account

Ozone Protection and Synthetic Greenhouse Gas Management Act 1989, section 65B

For the purpose of administering ozone protection and synthetic greenhouse gas regulations and research and the National Halon Bank

This account is non-interest bearing

10. Clean Energy Finance Corporation

Clean Energy Finance Corporation Act 2012, section 45

For the purposes of making payments to CEFC and ARENA as authorised by the nominated Minister.

This account is non-interest bearing.

As a result of the Administrative Arrangement Order effective 1 February 2020, this special account was transferred to Department of Industry, Science, Energy and Resources.

BAF (Building Australia Fund) Energy Portfolio Special Account

Nation-building Funds Act 2008 section 75

For the year ended 30 June 2020, the account had a nil balance and there were no transactions debited or credited to it during the current or prior reporting period.

For the purpose of making payments in relation to the creation or development of energy infrastructure.

The establishing NBF Act was repealed on 12 December 2019.

National Cattle Disease Eradication Account

National Cattle Disease Eradication Act 1991 section 4

For the year ended 30 June 2020, the total balance carried to the next period was $15 161 (2019: $15 161). There were no transactions debited or credited to the account during the current or prior reporting period.

For the purpose of the eradication of any disease of cattle that is endemic in Australia.

Building Australia Fund Water Portfolio Special Account

Nation-building Funds Act 2008 section 82

For the year ended 30 June 2020, the account had a nil balance and there were no transactions debited or credited to it during the current or prior reporting period.

For the purpose of creating and developing water infrastructure.

The establishing NBF Act was repealed on 12 December 2019.

Drought Resilience Special Account

Future Drought Fund Act 2019 section 33

For the year ended 30 June 2020, the account had a nil balance and there were no transactions debited or credited to it during the current reporting period.

For the purpose of making payments associated with projects, research, advice, service and technology that will work towards achieving drought resilience.

The following special accounts are appropriated under Public Governance, Performance and Accountability Act 2013 section 7

Special Account

Establishing Instrument

Purpose

4. Water Resources Special Account 2016

PGPA Act (Water Resources Special Account 2016 - Establishment) Determination 2016/01

For the purpose of supporting inter-governmental activities relating to water.

9. Reef Trust Special Account 2014

PGPA Act (Reef Trust Special Account 2014) Determination 01

For the purposes of improving water quality and the coastal habitat, addressing threats to the environment and protecting, repairing or mitigating damage to the Great Barrier Reef World Heritage Area.

This account is non-interest bearing.

11. Services for Other Entities and Trust Moneys

Financial Management and Accountability Determination 2010/02 – Services for Other Entities and Trust Moneys – Department of the Environment, Water, Heritage and the Arts Special Account Establishment 2010

For the disbursement of amounts held in trust or otherwise for the benefit of a person other than the Commonwealth and for services relating to other governments and bodies that are not FMA Act agencies.

This account is non-interest bearing. The account was repealed on 9 April 2020. An amount equal to the closing balance was credited to the new special account – Environment SOETM Special Account 2020 on 9 April 2020. See note 18 for more information.

12. Environment SOETM Special Account 2020

PGPA Act Determination (Environment SOETM Special Account 2020)

For the disbursement of amounts held in trust or otherwise for the benefit of a person other than the Commonwealth and for services relating to other governments and bodies including Commonwealth entities.

This account is non-interest bearing. The new special account commenced on 9 April 2020. An amount equal to the closing balance of the old special account was credited into this new special account on 9 April 2020. The closing balance represents the amounts held in trust. See note 18 for more information.

Note 34: Administered – Regulatory Charging

DoEE

DoA

2020

2019

2019

$'000

$'000

$'000

Amounts applied

Administered

Annual appropriations

1 080

2 217

-

Special appropriations (including special accounts)

196

-

221

Total amounts applied

1 276

2 217

221

Expenses

Administered

13 622

13 634

2 545

Total expenses

13 622

13 634

2 545

Revenue

Administered

23 237

23 091

1 804

Total revenue

23 237

23 091

1 804

Administered revenue includes contributions from State and Territory and Overseas Governments. The DoEE comparative has been restated to include New Zealand Government contribution of $157 000 under the Greenhouse and Energy Minimum Standard arrangement.

Administered Regulatory Charging Activities

  • Environmental Assessments under the Environmental Protection and Biodiversity Conservation Act 1999
  • Hazardous Waste Permits
  • Non-road Spark Ignition Engines and Equipment (NRSIEE)
  • Ozone Protection and Synthetic Greenhouse Gas Management Program
  • Voluntary Product Stewardship Accreditation
  • Water Efficiency Labelling and Standards Scheme
  • Wildlife Trade Permits

The following regulatory charging activities were transferred to the Department of Industry, Science, Energy and Resources on 1 February 2020. This note accounts for these activities for the period 1 July 2019 to 31 January 2020.

  • Application Fees to vary Fuel Standards
  • Commercial Building Disclosure
  • Greenhouse and Energy Minimum Standards

Documentation (Cost Recovery Implementation Statements) for the above activities is available at:

· Water Efficiency Labelling and Standards Scheme: www.waterrating.gov.au/about/review-evaluation/cost-recovery-impact-statement

· Environment regulatory charging activities: www.environment.gov.au/about-us/accountability-reporting/cost-recovery

Note 35: Administered – Budgetary Reporting

Note 35A: Schedule of Administered Comprehensive Income Budgetary Reporting

Budget estimate

Actual

DoEE
Original

DoA
Original

Variance to Original

2020

2020

2020

2019

$'000

$'000

$'000

$'000

Expenses

Levy disbursements and Commonwealth contributions

819 872

-

867 853

(47 981)

Grants

314 470

316 632

402 561

(404 723)

Payments to corporate Commonwealth entities

362 324

327 766

144 670

(110 112)

Suppliers

220 863

118 482

40 341

62 040

Direct personal benefits - Income support for farmers

134 377

-

59 712

74 665

Assets transferred to related entities

-

-

155 000

(155 000)

Depreciation and amortisation

7 918

12

7 759

147

Concessional loan discount

143 156

-

111 729

31 427

Impairment loss on financial instruments

3 429

-

-

3 429

Write-down and impairment of assets

28 195

-

-

28 195

Other expenses

494

-

-

494

Total expenses

2 035 098

762 892

1 789 625

(517 419)

Income

Revenue

Taxation revenue

Levies and charges

474 261

-

550 750

(76 489)

Other taxes

-

85

95 000

(95 085)

Total taxation revenue

474 261

85

645 750

(171 574)

Non-taxation revenue

Revenue from contract with customers

19 560

-

-

19 560

Fees

-

23 158

-

(23 158)

Interest

21 349

-

48 210

(26 861)

Dividends

108 500

217 800

-

(109 300)

Other revenue

16 883

7 041

19 120

(9 278)

Total non-taxation revenue

166 292

247 999

67 330

(149 037)

Total revenue

640 553

248 084

713 080

(320 611)

Gains

Reversal of impairment losses

36 903

-

-

36 903

Other gains

81 251

155 000

-

(73 749)

Total gains

118 154

155 000

-

(36 846)

Total income

758 707

403 084

713 080

(357 457)

Net cost of services

1 276 391

359 808

1 076 545

(159 962)

OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation reserves

16 318

-

-

16 318

Items subject to subsequent reclassification to net cost of services

-

Gains/(losses) on financial assets at fair value through other comprehensive income

36 175

-

-

36 175

Total other comprehensive income

52 493

-

-

52 493

Total comprehensive loss

(1 223 898)

(359 808)

(1 076 545)

212 455

Note 35B: Schedule of Administered Assets and Liabilities Budgetary Reporting

Budget estimate

Actual

DoEE
Original

DoA
Original

Variance to Original

2020

2020

2020

2019

$'000

$'000

$'000

$'000

ASSETS

Financial assets

Cash and cash equivalents

1 896 517

5 573 678

826 643

(4 503 804)

Trade, taxation and other receivables

1 030 855

49 025

1 547 739

(565 909)

Investments in corporate Commonwealth entities

1 175 958

13 037 738

390 444

(12 252 224)

Total financial assets

4 103 330

18 660 441

2 764 826

(17 321 937)

Non-financial assets

Land

582

-

1 467

(885)

Infrastructure

537 868

-

508 863

29 005

Plant and equipment

1 820

-

1 061

759

Flooding easements

814

-

814

-

Heritage and cultural

976

974

-

2

Water entitlements

4 011 959

4 380 191

127 335

(495 567)

Inventories

11 078

11 233

-

(155)

Prepayments

9 336

215

8 261

860

Total non-financial assets

4 574 433

4 392 613

647 801

(465 981)

Total assets administered on behalf of Government

8 677 763

23 053 054

3 412 627

(17 787 918)

LIABILITIES

Payables

Levy disbursements and Commonwealth contributions

93 075

-

109 329

(16 254)

Grants

8 512

7 150

2 531

(1 169)

Suppliers

58 016

8 718

298

49 000

Personal benefits - Income support to farmers

2 725

-

654

2 071

Corporate Commonwealth entities

17 735

-

-

17 735

Other payables

35

481

72

(518)

Total payables

180 098

16 349

112 884

50 865

Provisions

Loan commitments to farm businesses

95 278

-

-

95 278

Total provisions

95 278

-

-

95 278

Total liabilities administered on behalf of Government

275 376

16 349

112 884

146 143

Net assets

8 402 387

23 036 705

3 299 743

(17 934 061)

Budget Variance Commentary

The following tables provide a comparison of the original budget as presented in the 2019-20 Portfolio Budget Statements (PBS) to the 2019-20 final outcome as presented in accordance with Australian Accounting Standards for the department. The Budget is not audited. Explanations of major variances are provided below.

Variances are considered to be ‘major’ based on the following criteria:

  • the variance between budget and actual is greater than +/- 10% of the original budget and +/- $10 million for a line item; or
  • the variance between budget and actual is greater than +/- 2% of the relevant sub-total (i.e. total expenses, total income, total assets or total liabilities) and +/- $10 million; or
  • an item below this threshold but is considered important for the reader’s understanding or is relevant to an assessment of the discharge of accountability and to an analysis of performance of the department.

Major variances and explanations

Affected line items

Administered Schedule of Comprehensive Income

Total expenses were $517.4 million lower than the original budget predominantly as a result of:

  • Lower than budgeted grant expenses of $241.8 million due to delays by Basin states in bringing forward efficiency measures projects and project delays and COVID-19 impacts in the SRWUIP.
  • Lower than budgeted grant, supplier and payments to corporate Commonwealth entities expenses of $166.8 million due to the Climate Change and Energy functions relinquished to the Department of Industry, Science, Energy and Resources.
  • Offsetting variances in grant and supplier expenses of $89.0 million relating to the Regional Land Partnership program, as expenses were originally budgeted as grant expenses and actual expenses related to supplier expenses.
  • Higher than budgeted payments to corporate Commonwealth entities of $17.7 million due to additional COVID-19 funding made available to the Australian Pesticides and Veterinary Medicines Authority.
  • Higher than budgeted personal benefits expenses of $74.7 million was primarily due to an increase in recipients, a one-off supplementary payment announced at Portfolio Additional Estimates, and coronavirus economic stimulus and supplements expenses.

  • Total expenses
  • Grant expenses
  • Payments to corporate Commonwealth entities
  • Supplier expenses
  • Personal benefits expense

  • Lower than budgeted assets transferred to related entities of $155.0 million. As a result of the machinery of government changes water entitlements are now held solely by the department and no transfers are required.
  • Higher than budgeted concessional loan discount expense of $31.4 million driven by increased loan activity and the introduction of a two year interest free period.
  • Higher than budgeted write-down and impairment of assets of $28.2 million primarily due to water entitlement impairments not budgeted for.

  • Assets transferred to related entities expenses
  • Concessional loan discount expense
  • Write-down and impairment of assets

Total income was $357.5 million lower than the original budget predominantly as a result of:

  • Lower than budgeted levies and charges revenue of $76.5 million over a number of industries, in particular:
    • Lower than budgeted wheat, coarse grains, oilseeds and grain legumes levies and charges of $34.6 million as a result of decreased production due to prolonged drought conditions and decreased prices largely due to excess global wheat supplies; and
    • Lower than budgeted wool levies of $20.0 million primarily due to a decrease in the marketing and R&D component of the wool levy and export charge from 2 per cent to 1.5 per cent.
  • Lower than budgeted other taxes of $95.1 million primarily due to the Australian Government’s decision not to proceed with the Onshore Biosecurity Levy.
  • Offsetting variances in revenue from contracts with customers and fees and fines, due to the adoption of AASB 15 and AASB 1058.
  • Lower than budgeted interest revenue of $26.9 million is primarily due to lower than expected loan settlements in 2018-19 and 2019-20 and the introduction of a two year interest free period.

  • Total income
  • Levies and charges
  • Other taxes
  • Revenue from contracts with customers
  • Fees
  • Interest

  • Lower than budgeted dividends of $109.3 million was due to the Australian Government’s investment in Snowy Hydro Limited transferring to the Department of Industry, Science, Energy and Resources as part of the machinery of government changes effective 1 February 2020.
  • Higher than budgeted reversal of impairment losses of $36.9 million primarily due to the reversal of prior year impairments on water entitlements not budgeted for.
  • Lower than budgeted other gains of $73.7 million was primarily due to:
    • No resources received free of charge recognised in 2019-20 compared to a budgeted amount of $155.0 million due the machinery of government changes;
    • Partially offset by higher than anticipated water received through infrastructure programs of $77.1 million.

  • Dividends
  • Reversal of impairment losses
  • Other gains

Total other comprehensive income was $52.5 million higher than the original budget, due to:

  • increases to the net assets of portfolio corporate Commonwealth entities of $36.2 million;
  • Higher than budgeted changes in asset revaluation reserves of $16.3 million of the River Murray Operation joint operation.

  • Total other comprehensive income
  • Gains on financial assets through other comprehensive income

Administered Schedule of Assets and Liabilities

Total assets balance was $17 787.9 million lower than the original budget. This variance was predominantly due to:

  • Lower than budgeted cash and cash equivalents of $5 059.0 million and investments in corporate Commonwealth entities of $12 391.1 million as a result of Climate Change and Energy functions relinquished to the Department of Industry, Science, Energy and Resources.
  • Cash and cash equivalents have been partially offset by a higher than budgeted balance of the water for the Environment special account of $417.3 million primarily due to delays by Basin states in bringing forward efficiency measures projects.
  • Lower than budgeted trade, taxation and other receivables balance of $565.9 million primarily due to lower than anticipated loans to farm businesses managed by the Regional Investment Corporation.
  • Lower than budgeted water entitlements of $495.6 million due to a $448.6 million lower opening position compared to budget, and $137.3 million lower than expected purchase of water entitlements, due to delays by Basin states in bringing forward efficiency measures and delays in accreditation of water resource plans, partially offset by $77.9 million higher than anticipated water recovery through infrastructure programs.

  • Cash and cash equivalents
  • Trade, taxation and other receivables
  • Investments in corporate Commonwealth entities
  • Water entitlements

Total liabilities balance was $146.1 million higher than the original budget due to:

  • Higher than budgeted total payables of $50.9 million mainly due to the timing of payments for the Regional Land Partnership program; and
  • Higher than budgeted loan commitments to farm businesses of $95.3 million for loans that have been approved but are yet to be settled. The department expects all approved loans to be settled in 2020-21.

  • Total payables
  • Loan commitments to farm businesses