Defence looks to two major indicators to measure its financial performance – its cash based result against its annual appropriation funding and other cash inflows and its departmental operating result presented in the Statement of Comprehensive Income contained within its financial statements.
As outlined in Table 4.1 below, the annual ordinary annual service appropriations ($34.3 billion) and annual other services non-operating appropriation ($4.0 billion) available to Defence for 2019-20 totalled $38.3 billion, an increase of 4.8% in comparison with the prior year. Additional cash inflows in relation to retainable receipts added a further $1.4 billion to funds available to support cash expenditure during the year. Cash payments made across the year totalled $39.4 billion, resulting in a cash underspend of $349.4 million or 0.9% compared to total cash available including appropriations.
Departmental Operating Result
The second indicator is the 2019-20 accrual based result reported in the annual financial statements. After allowing for own-source income, the net cost of services for the year totalled $34.0 billion resulting in a surplus of $0.3 billion or 0.7% of variance to the budgeted net cost of services. Defence is primarily funded through operating departmental appropriation of $34.3 billion. Refer to Appendix A for the 2019-20 Financial Statements.
Defence’s net asset position of $100.8 billion increased by $4.4 billion compared to $96.4 billion in 2018-19. The increase is largely driven by Specialist Military Equipment (SME) asset procurement of $8.8 billion and the adoption of AASB 16 Leases. The new accounting standard brought $1.4 billion on to the Balance Sheet as Right of Use Assets.
In 2019-20 Defence Administered had net cost of services of $8.5 billion, compared to $7.0 billion in 2018-19. The additional expenses are primarily due to an increase in the superannuation defined benefit expense of $1.4 billion to $9.8 billion. Defence recognised $25.6 million in dividends and $41.1 million in competitive neutrality revenue on behalf of the Australian Government from Defence Housing Australia.
In 2019-20, Defence paid $3.0 billion in Defence Force Superannuation payments and the Defence Home Ownership Assistance Scheme.
Actual available appropriation for 2019-20
Payments made 2019-20
Balance remaining 2019-20
DEPARTMENTAL ANNUAL APPROPRIATIONS
Prior year departmental appropriation available
Annual appropriation - ordinary annual services
Receipts retained under PGPA Act - section 74
Total Departmental Annual Appropriations
DEPARTMENTAL OTHER SERVICES - NON-OPERATING APPROPRIATIONS
Prior year- other services - non-operating available
Annual appropriations - other services - non-operating
Total Departmental other services
Total Departmental Resourcing
Defence Force Retirement Benefits Act 1948 Part 1 s. 15D and VIC, s. 82ZJ
Defence Force Retirement and Death Benefits Act 1973 Part XII, s. 125
Military Superannuation and Benefits Act 1991 Part V, s. 17
Defence Force (Home Loan Assistance) Act 1990 Part IV, s. 38
Australian Defence Force Cover Act 2015
Defence Home Ownership Assistance Scheme Act 2008 Part VI, s. 84
Total Special Appropriations
Non-appropriation receipts to special accounts
Total Special Accounts
less departmental appropriations drawn down from annual/special appropriations and credited to special accounts
Total Resourcing and Payments