Department of Agriculture, Water and the Environment
Introduction
Independent Auditor's report
Statement by the Secretary and Chief Finance Officer
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.
Notes to and forming part of the Financial Statements—index
Overview
Departmental Financial Statements
Note 1: Expenses
Note 2: Income
Note 3: Financial Assets
Note 4: Non-Financial Assets
Note 5: Payables
Note 6: Provisions
Note 7: Aggregate Assets and Liabilities
Note 8: Restructuring
Note 9: Contingent Assets and Liabilities
Note 10: Key Management Personnel Remuneration
Note 11: Related Party Disclosures
Note 12: Financial Instruments
Note 13: Appropriations
Note 14: Appropriations – Department of Agriculture
Note 15: Net Cash Appropriation Arrangements
Note 16: Special Accounts
Note 17: Regulatory Charging Summary
Note 18: Assets Held in Trust
Note 19: Budgetary Reporting
Administered Financial Schedules
Note 20: Administered – Expenses
Note 21: Administered – Income
Note 22: Administered – Financial Assets
Note 23: Administered – Non-Financial Assets
Note 24: Administered – Payables
Note 25: Administered – Provisions
Note 26: Administered – Aggregate Assets and Liabilities
Note 27: Administered – Restructuring
Note 28: Administered – Contingent Assets and Liabilities
Note 29: Administered – Financial Instruments
Note 30: Administered – Fair Value Measurements
Note 31: Administered – Appropriations
Note 32: Administered – Appropriations – Department of Agriculture
Note 33: Administered – Special accounts
Note 34: Administered – Regulatory Charging
Note 35: Administered – Budgetary Reporting
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.
- 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.
- Former Department of the Environment and Energy (DoEE).
- 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.
- Right-of-use assets are included in Buildings and Property, Plant and Equipment.
- 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.
- 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 |
- 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 |
- 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 |
- 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 |
- 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 |
- 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 |
- These classes of assets are held at fair value.
- 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
- The carrying amount of computer software included $41 340 652 purchased software and $115 904 990 internally developed software.
- 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 |
- 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.
- 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.
- 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.
- Provisions for lease incentives were reversed under AASB 16 Leases.
- 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 | - |
- 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.
- The net liabilities relinquished to the Department of Industry, Science, Energy and Resources were $4 246 000.
- The net administered assets relinquished to the Department of Industry, Science, Energy and Resources are disclosed at Note 27.
- 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) |
- 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.
- The net assets relinquished to the Department of Agriculture, Water and the Environment were $323 167 609.
- 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).
- 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:
- the financial asset is held in order to collect the contractual cash flows; and
- 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 |
- 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.
- 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.
- In response to the Administrative Arrangement Order (AAO) made on 5 December 2019, $4 347 875 was transferred from the Department of Agriculture.
- 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) | (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 |
- The variance between amounts appropriated in 2020 and appropriation applied is $152 828 000.
- 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.
- The variance between amounts appropriated in 2020 and appropriation applied is ($3 828 000).
- 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) | (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
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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:
- Environment regulatory charging activities: www.environment.gov.au/about-us/accountability-reporting/cost-recovery
- Agriculture regulatory charging activities: www.agriculture.gov.au/fees/cost-recovery
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 | DoA | 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 | DoA | 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 | DoA | 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: | |
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Total own source income was $40.4 million lower than the original budget estimate mainly as a result of: | |
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Statement of Financial Position Total assets was $425.9 million higher than the original budget estimate mainly as a result of: | |
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Total liabilities was $584.0 million higher than the original budget estimate mainly as a result of: | |
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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. |
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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 | - | - | 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 | - |
- 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 |
- 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 |
- 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 |
- 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 | - |
- 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.
- The net assets relinquished to the Department of Industry, Science, Energy and Resources were $21 102 736 586.
- 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.
- 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 |
- 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.
- 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 |
- The department did not measure any non-financial assets at fair value on a non-recurring basis at 30 June.
- 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 |
- These gains are presented in the Schedule of Comprehensive Income under ‘Other gains’ and ‘Depreciation’.
- 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 |
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- In response to the Administrative Arrangement Order (AAO) made on 5 December 2019, $987 683 000 was transferred from the Department of Agriculture.
- 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.
- 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.
- 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.
- 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.
- 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) |
- 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 |
- 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).
- Apropriation Act (No.1) 2016-17 and Supply Act (No.1) 2016-17 self-repealed on 1 July 2019.
- 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).
- Appropriation Act (No.2) 2016-17 and Supply Act (No.2) 2016-17 self-repealed on 1 July 2019.
- 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) |
- 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 | DoA | 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 | DoA | 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:
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Total income was $357.5 million lower than the original budget predominantly as a result of:
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Total other comprehensive income was $52.5 million higher than the original budget, due to:
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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:
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Total liabilities balance was $146.1 million higher than the original budget due to:
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Visit
https://www.transparency.gov.au/annual-reports/department-agriculture-water-and-environment/reporting-year/2019-20-32