Defence looks to two major indicators to measure its financial performance: the cash-based result against its annual appropriation funding and other cash inflows; and the result presented in the Statement of Comprehensive Income in the financial statements in this Annual Report. In 2019–20, Defence delivered a small cash underspend of $0.3 billion or 0.9 per cent compared to our annual cash-based funding from all sources, and a similar surplus attributable to the Australian Government of $0.3 billion or 0.7 per cent.

These results reflect a strong focus on financial performance in a year punctuated by significant and unplanned events including our response to the COVID-19 pandemic and our support to the Australian community throughout the bushfire crisis. These events had some impact on our activities, including minor underspends in our capital acquisition programs, offset in part by higher operating and sustainment expenses as we pivoted towards supporting the Australian industry during the second half of the financial year. Workforce expenditure trending slightly below budget, in line with lower than budgeted ADF and APS numbers, also contributed to the underspend and
surplus results.

Financial performance is discussed in more detail in Chapter 4. The financial statements are in Appendix A: Financial statements.