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Financial performance

Our 2018–2021 finance strategy supports the department to build an efficient and sustainable organisation, contributing to an internationally competitive and sustainable agricultural sector towards 2021. In particular, the strategy aims to ensure our cost-recovered services, which represent more than half of departmental expenditure, are efficient and appropriately funded.

In 2018–19, we implemented a number of initiatives to improve financial management. All of the initiatives have supported improved financial capability and strategic decision-making on the allocation of resources to meet changing business needs, ensuring the department is financially sustainable.

The largest single initiative was the implementation of our new financial management information system which went live on 1 July 2018. This has provided more timely and flexible reporting through real time dashboards, higher quality information to facilitate more informed decision making; and productivity improvements through a more integrated and efficient system.

We also continued to deliver on targeted red tape reduction strategies. Initiatives included making improvements in internal processes to promote self-service for staff, automation of expense management reporting previously done manually; and changes to processes to ensure better accountability or demonstrated requirement for international travel.

Our 2018–19 internal budget aligned to the Portfolio Budget Statements with an expected balanced budget (consistent with allowable losses). The 2018–19 full-year result is in a surplus of $1.6 million after allowable losses.

Table 12 provides the department’s entity resource statement subset summary current report period (2018–19). This is a new requirement for financial performance reporting, and is a mandated template as part of the shift to digital annual reporting through the Australian Government’s Transparency Portal.

Table 12 Entity resource statement subset summary current report period (2018–19)

Actual available appropriation for 2018–19

$’000

Payments made

2018–19

$’000

Balance remaining

2018–19

$’000

(a)

(b)

(a)–(b)

Departmental

Annual appropriations – ordinary annual services

465,853

396,789

69,064

Annual appropriations – other services – non–operating

20,704

20,184

520

Total Departmental Annual Appropriations

486,557

416,973

69,584

Departmental special appropriations

17,500

17,500

0

Total departmental special appropriations

17,500

17,500

0

Special accounts

585,839

550,551

35,288

Total special accounts

585,839

550,551

35,288

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

(130,286)

(130,286)

0

Total departmental resourcing

A

959,610

854,738

104,872

Administered

Annual Appropriations – Ordinary Annual Services

725,441

334,492

Annual Appropriations – Other Services –Non–operating

1,092,414

194,012

898,402

Total administered annual appropriations

1,817,855

528,504

Administered special appropriations

972,216

972,216

Total administered special appropriations

972,216

972,216

Special accounts

912,182

11,109

901,073

Total special accounts

912,182

11,109

901,073

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

(320,000)

(320,000)

Less payments to corporate entities from annual/special appropriations

(463,815)

(463,815)

Total administered resourcing

B

2,918,438

728,014

Total resourcing and payments for Department of Agriculture

A+B

3,878,048

1,582,752

Revenue

In 2018–19, our revenue increased by $21.6 million from 2017–18 to $832.3 million. The increase was primarily due to higher sales of goods and services revenue of $8.1 million and increased appropriation revenue of $11.1 million.

Figure 12 shows the own source revenue received by the department over the past 6 years and budgeted own source revenue from 2019–20 as per the Portfolio Budget Statements 2019–20.

Figure 12 Own source revenue, 2013–14 to 2022–23

In 2018-19 our own source revenue was $441 million, compared to $381 million in 2013-14. Own source revenue is projected to rise to $460 million in 2022-23.Total sales of goods and rendering of services revenue (including cost recovery) collected in 2018–19 was $409.4 million. Figure 13 shows the breakdown by cost recovery arrangement.

Figure 13 Sale of goods and rendering of services revenue by cost recovery activity, 2018–19

The majority of revenue from sale of goods and rendering of services was our Biosecurity cost recovery arrangement, which generated $251 million. Other significant arrangements were the Food Export Arrangement ($93.5 million), Plant Export Arrangement ($18.6 million) and the Passenger, Mail and Offshore Arrangement ($11.2 million) Note: ‘Other’ includes PGPA s. 74 receipts for biosecurity plant and animal health programs.

Departmental expenses

Our expenses totalled $847.7 million in 2018–19 against an original budget of $818.4 million (Portfolio Budget Statements 2018–19).

Figure 14 shows the trend of departmental operating expenses over the past 6 years, and budgeted expenditure figures from 2019–20 as per the Portfolio Budget Statements 2019–20.

Figure 14 Departmental expenses, 2013–14 to 2022–23

Departmental expenses have increased from $710 million in 2013-14 to $848 million in 2018-19. Expenses are projected to increase slightly to $857 by 2022-23.Note: Budget influx in 2015 is mainly due to Water Resources machinery of government changes and Agricultural Competitiveness White Paper measures.

Cost recovery reserves

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

Figure 15 outlines the cost recovery reserve balances at the end of the year.

Figure 15 Cost recovery reserve balances at 30 June 2019

The department operated 12 cost recovery arrangements in 2018-19. Their balances ranged from a surplus of $39 million for the Import Clearance Arrangement to a deficit of $18.2 million for the Live Animal Exports Arrangement.Note: Surplus reserves are recorded in the industry reserves balance as reported in the Statement of Changes in Equity in the department’s financial statements.

Asset management

As at 30 June 2019 our asset base was valued at $185.6 million. Our major investments are in land, buildings and ICT hardware and software.

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

In 2018–19 we developed the 2018–2022 ICT Strategy to help us take the first steps towards digital transformation. One of our ICT strategic priorities is for improving our strategic ICT investment. To ensure our return on investment in ICT is optimised in the future, we will focus on implementing improvements that result in more sustainable services, improved partnering and smarter engagement.

A significant portion of our expenditure is related to property leases and property maintenance costs. We maintain around 110 sites across Australia ranging from office accommodation to post-entry quarantine facilities, laboratories, data facilities and residences in remote locations.

Administered program performance

We have a range of administered programs, the material ones being:

  • A Competitive Agriculture Sector—boosting farm profits through rural research and development
  • Stronger Farmers, Stronger Economy—improvements to access premium markets—improve biosecurity
  • Communities Combating Pests and Weeds Impacts During Drought Program
  • Rural Financial Counselling Service
  • Farm Household Allowance
  • Sustainable Rural Water Use and Infrastructure Program (SRWUIP).

We managed administered assets of $2,956.9 million on behalf of the government. This largely comprised $729.7 million in loans and investments in 8 portfolio entities of $501.5 million.

Administered revenue received for 2018–19 was $600.5 million, a decrease of $11.8 million on the 2017–18 revenue figure of $612.3 million. This result is mainly due to decreased non-taxation revenue of $9.9 million. Additionally, other gains of $256.4 million are recognised in 2018–19, primarily relating to the recognition of water entitlement assets received free-of-charge under the SRWUIP.

Administered expenditure for 2018–19 was $1,755.3 million, an increase of $193.8 million on the 2017–18 expenditure figure of $1,561.5 million.