B. Budgetary Variance Reporting
The below table provides explanations for significant variances between Finance’s original budget estimates, as published in the 2020-21 Portfolio Budget Statements and the actual financial performance and position for the year.
Note Reference | Affected line Items | Explanation |
B1 General insurance activities | Insurance claims expenses Outstanding insurance claims Special account cash held in the OPA | Insurance claims expenses and provision were impacted in 2020-21 due to several prior year individual Liability claims. These movements were partially offset by a favourable experience against the Property portfolio in relation to prior year weather events. |
B2 Finance Owned Estate | Non-financial asset write-downs and impairments Gains Buildings Investment property Assets held for sale Return of equity - special accounts Contributed equity/capital | Events that have impacted the financial performance of the Finance Owned Estate include: · Revaluation decrements for investment property (recognised in surplus/deficit) associated with significant capital works · Delays in divestments planned for 2020-21 impacting gains, assets classified as held for sale and return of equity - special accounts · Transfer of the final stage of the Villawood Detention Facility Redevelopment Project to the Department of Home Affairs impacting building asset balances and contributed equity/capital. |
B3 Lapsing appropriations | Other departmental undrawn Contributed equity/capital | Capital appropriations receivable and contributed equity/capital were lower than originally budgeted for mainly due to lapsing appropriations for completed prior year projects. |
B4 Investment funds | Investment funds revenues, expenses and gains Investment funds assets and liabilities Investment funds distributions | The net asset balance for the investment funds is higher than originally budgeted primarily due to: · Higher than expected investment and earnings, mainly from gains · Payments to the states and territories from the DisabilityCare Australia Fund (the Fund) were lower than estimate reflecting that no payments were made from the Fund to Western Australia (WA) as WA are yet to sign a full Scheme bilateral agreement with the Commonwealth. |
B5 Defence Housing Australia (DHA) loans | Cash and cash equivalents Loans | During 2020-21, DHA loans were transferred from the Department of Defence and are now managed through a special account to support more flexible debt funding arrangements. This change was reflected in the 2020-21 Additional Estimates budget. |
B6 Superannuation | Superannuation provisions | For budget reporting purposes, the discount rate used by actuaries in preparing the Long Term Cost Reports (LTCRs) is used to value the superannuation liability. The use of the LTCR rate reduces the volatility in reported liabilities that would occur from year to year if the long term government bond rate were used. Consistent with Australian Accounting Standards, the superannuation liability and expense are valued using the long term government bond rate as at 30 June and 1 July respectively for the purpose of financial reporting. Any change in the rates used for budget and financial reporting purposes significantly impacts on the superannuation provisions and superannuation expense. |
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https://www.transparency.gov.au/annual-reports/department-finance/reporting-year/2020-21-41