Go to top of page

B. Budgetary Variance Reporting

The below table provides explanations for significant variances between Finance’s original budget estimates, as published in the 2018-19 Portfolio Budget Statements and the actual financial performance and position for the year.

Note Reference

Affected line Items


B1 Non-defence domestic property portfolio

Domestic property portfolio expenses

Non-financial asset write-downs and impairments




Investment property

Return of equity - special accounts

Asset revaluation reserve

Events that have impacted the financial performance associated with the Commonwealth's non-defence domestic property portfolio include:

  • Revaluation gains from independent valuations for land, buildings and investment property arising from strong market conditions particularly for the Commonwealth Law Courts (various states) and Post Entry Quarantine facilities
  • Gains from the divestment of properties including Customs House (Sydney, NSW), with the proceeds payable to the Consolidated Revenue Fund as a 'Return of equity - special accounts'
  • Reclassification of properties as held for sale resulting from the Commonwealth's continued divestment strategy
  • Underspends for domestic property portfolio expenses on Commonwealth owned properties due primarily to reallocation of funding to high priority capital works

B2 General insurance activities

Insurance claims expenses

Outstanding insurance claims

Premium revenue

The outstanding insurance claims liability is independently valued each year and is subject to inherent uncertainty in the estimation process as the ultimate outcome of claims is subject to events that have not yet occurred.

Claim expenses were impacted in 2018-19 due to the development of several large property claims arising from storm damage and other events. These movements were partially offset by a general decrease in the amount provisioned in the Liability portfolio where overall experience for very large claims had been more favourable than expected.

A decrease in premium revenue collected was reflective of a review of risks applicable for offshore property assets.

B3 Post-employment benefits

Employee benefits

Employee provisions

The provision has been updated for post-employment benefits for certain entitlements for former Prime Ministers, including staff, office and vehicle costs, where future recurrent expenditure assumptions are set having regard to historical data and adjusted for inflation.

B4 Superannuation

Superannuation expense

Superannuation provisions

Budget variances are due to differences in the discount rates used for budgeting and financial reporting.

The budgeted superannuation provision and expense use the discount rate in the Long Term Cost Reports to reduce volatility that would occur if the long-term government bond rate, which is required by AAS for financial reporting, was applied.

Any change in the rates used for budget and financial reporting purposes significantly impacts on the superannuation provisions and superannuation expense.

B5 Investment funds

Investment funds distributions

Investment funds revenues, expenses and gains

Investment funds assets and liabilities

Due to the volatile nature of investment markets it is difficult to predict the final outcomes and values of some individual line items such as foreign exchange gains and losses. For budgeting of net asset balances, earnings and expenditure, Finance forecasts at an aggregated level.

The net asset balance for the investment funds is higher than originally budgeted for due to:

  • Cessation of the Building Australia Fund and Education Investment Fund not occurring due to delays in the passage of the enabling legislation through Parliament
  • Establishment of the Aboriginal and Torres Strait Islander Land and Sea Future Fund on 1 February 2019
  • Ongoing negotiations on the National Partnership Agreement for the DisabilityCare Australia Fund. As a consequence, only partial reimbursements were provided to the states in 2018-19 and no reimbursement was provided to the Commonwealth
  • Better than expected financial performance of the funds.