6.2 STATEMENT OF FINANCIAL POSITION
STATEMENT OF FINANCIAL POSITION
2015–16 $ million |
2016–17 $ million |
2017–18 $ million |
|
Equity |
698.0 |
847.3 |
1 160.0 |
Assets |
2 061.1 |
2 256.2 |
2 808.1 |
Liabilities |
1 363.1 |
1 408.9 |
1 648.1 |
Figure 5: Departmental equity, assets and liabilities
EQUITY
The total equity of the department at 30 June 2018 was $1160 million.
ASSETS
The department’s total assets increased by 24.5 per cent from the end of 2016–17 to $2808.1 million at 30 June 2018. The department’s assets are primarily retained appropriations and non-financial assets.
LIABILITIES
The department’s total liabilities increased by 17 per cent from the end of 2016–17 to $1648.1 million at 30 June 2018. The department’s liabilities primarily relate to accrued payments and staff provisions.
ADMINISTERED ITEMS
In 2017–18 the department collected and transferred $1.6 billion in child support payments between separated parents.
The department recognised $24.5 million in dividends and competitive neutrality payments on behalf of the Australian Government from Australian Hearing.
INDEPENDENT AUDITORS REPORT
FINANCIAL STATEMENTS
For the period ended 30 June 2018
STATEMENT BY THE SECRETARY AND CHIEF FINANCIAL OFFICER
In our opinion, the attached financial statements for the year ended 30 June 2018 comply with subsection 42(2) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and are based on properly maintained financial records per subsection 41(2) of the PGPA Act.
In our opinion, at the date of this statement, there are reasonable grounds to believe that the Department of Human Services will be able to pay its debts as and when they fall due.
STATEMENT OF COMPREHENSIVE INCOME
for the period ended 30 June 2018 |
||||||
Original Budget1 |
||||||
2018 |
2017 |
2018 |
||||
Notes |
$'000 |
$'000 |
$'000 |
|||
NET COST OF SERVICES |
||||||
Expenses |
||||||
Employee benefits |
2,838,219 |
2,811,058 |
2,699,327 |
|||
Supplier expenses |
1,576,230 |
1,458,072 |
2,014,554 |
|||
Depreciation and amortisation |
249,391 |
242,875 |
269,522 |
|||
Write-down and impairment of assets |
18,449 |
92,922 |
124 |
|||
Other expenses |
4,687 |
3,666 |
3,987 |
|||
Total expenses |
4,686,976 |
4,608,593 |
4,987,514 |
|||
Income |
||||||
Own-source revenue |
||||||
Rendering of goods and services |
287,796 |
221,962 |
206,097 |
|||
Rental income |
19,870 |
11,762 |
10,346 |
|||
Other revenue |
396 |
6,051 |
- |
|||
Total own-source revenue |
308,062 |
239,775 |
216,443 |
|||
Gains |
||||||
Resources received free of charge |
2,907 |
3,472 |
2,766 |
|||
Reversal of previous asset write-down and impairment |
2,843 |
1,187 |
- |
|||
Other gains |
1,642 |
365 |
- |
|||
Total gains |
7,392 |
5,024 |
2,766 |
|||
Total income |
315,454 |
244,799 |
219,209 |
|||
Net cost of services |
(4,371,522) |
(4,363,794) |
(4,768,305) |
|||
Revenue from government |
4,297,066 |
4,201,599 |
4,498,783 |
|||
Deficit |
(74,456) |
(162,195) |
(269,522) |
|||
OTHER COMPREHENSIVE INCOME |
||||||
Items not subject to subsequent reclassification to net cost of services |
||||||
Changes in asset revaluation reserve |
20,162 |
37,587 |
- |
|||
Total other comprehensive income |
20,162 |
37,587 |
- |
|||
Total comprehensive deficit2 |
(54,294) |
(124,608) |
(269,522) |
1Budget reported in the 2017-18 Portfolio Budget Statements published in May 2017.
2Depreciation and amortisation expenses are not funded through revenue appropriations. Entities receive a separate capital budget provided through equity appropriations. Capital budgets are appropriated in the period when cash payment for capital expenditure is required.
The above statement should be read in conjunction with the accompanying notes.
STATEMENT OF FINANCIAL POSITION
as at 30 June 2018 |
||||||
Original Budget1 |
||||||
2018 |
2017 |
2018 |
||||
Notes |
$'000 |
$'000 |
$'000 |
|||
ASSETS |
||||||
Financial assets |
||||||
Cash |
14,802 |
11,133 |
20,000 |
|||
Trade and other receivables |
1,589,736 |
1,143,866 |
962,675 |
|||
Total financial assets |
1,604,538 |
1,154,999 |
982,675 |
|||
Non-financial assets |
||||||
Land and buildings |
376,772 |
354,554 |
292,912 |
|||
Plant and equipment |
300,072 |
194,743 |
185,310 |
|||
Software |
390,830 |
360,721 |
594,484 |
|||
Other non-financial assets |
135,870 |
191,201 |
89,811 |
|||
Total non-financial assets |
1,203,544 |
1,101,219 |
1,162,517 |
|||
Total assets |
2,808,082 |
2,256,218 |
2,145,192 |
|||
LIABILITIES |
||||||
Payables |
||||||
Suppliers |
618,979 |
412,902 |
352,860 |
|||
Lease incentives |
87,378 |
81,209 |
36,447 |
|||
Employee benefits |
33,844 |
30,879 |
43,869 |
|||
Other payables |
7,764 |
5,521 |
4,016 |
|||
Total payables |
747,965 |
530,511 |
437,192 |
|||
Provisions |
||||||
Employee provisions |
867,119 |
849,230 |
847,025 |
|||
Other provisions |
32,972 |
29,182 |
27,800 |
|||
Total provisions |
900,091 |
878,412 |
874,825 |
|||
Total liabilities |
1,648,056 |
1,408,923 |
1,312,017 |
|||
Net assets |
1,160,026 |
847,295 |
833,175 |
|||
EQUITY |
||||||
Parent entity interest |
||||||
Contributed equity |
2,317,526 |
1,950,501 |
2,330,570 |
|||
Reserves |
186,402 |
166,240 |
128,654 |
|||
Accumulated deficit |
(1,343,902) |
(1,269,446) |
(1,626,049) |
|||
Total parent entity interest |
1,160,026 |
847,295 |
833,175 |
|||
Total equity |
1,160,026 |
847,295 |
833,175 |
1Budget reported in the 2017-18 Portfolio Budget Statements published in May 2017.
The above statement should be read in conjunction with the accompanying notes.
STATEMENT OF CHANGES IN EQUITY
for the period ended 30 June 2018 |
||||||
Original Budget1 |
||||||
2018 |
2017 |
2018 |
||||
Notes |
$'000 |
$'000 |
$'000 |
|||
CONTRIBUTED EQUITY |
||||||
Balance carried forward from previous period |
1,950,501 |
1,676,574 |
1,979,491 |
|||
Adjusted opening balance |
1,950,501 |
1,676,574 |
1,979,491 |
|||
Distributions to owners |
||||||
Returns of capital |
||||||
Restructuring |
- |
10 |
- |
|||
Contributions by owners |
||||||
Departmental capital budget |
188,996 |
164,675 |
188,996 |
|||
Equity injection - appropriations |
178,029 |
109,242 |
162,083 |
|||
Total transactions with owners |
367,025 |
273,927 |
351,079 |
|||
Total as at 30 June |
2,317,526 |
1,950,501 |
2,330,570 |
|||
RESERVES |
||||||
Balance carried forward from previous period |
166,240 |
128,653 |
128,654 |
|||
Changes in asset revaluation reserve |
20,162 |
37,587 |
- |
|||
Total as at 30 June |
186,402 |
166,240 |
128,654 |
|||
ACCUMULATED DEFICIT |
||||||
Balance carried forward from previous period |
(1,269,446) |
(1,107,251) |
(1,356,527) |
|||
Deficit for the period |
(74,456) |
(162,195) |
(269,522) |
|||
Total as at 30 June |
(1,343,902) |
(1,269,446) |
(1,626,049) |
|||
Total equity as at 30 June |
1,160,026 |
847,295 |
833,175 |
1Budget reported in the 2017-18 Portfolio Budget Statements published in May 2017.
The above statement should be read in conjunction with the accompanying notes.
CASH FLOW STATEMENT
for the period ended 30 June 2018 |
||||||
Original Budget1 |
||||||
2018 |
2017 |
2018 |
||||
Notes |
$'000 |
$'000 |
$'000 |
|||
OPERATING ACTIVITIES |
||||||
Cash received |
||||||
Appropriations |
4,399,469 |
4,571,262 |
4,967,868 |
|||
Rendering of goods and services |
282,832 |
274,302 |
221,193 |
|||
GST received |
166,088 |
160,018 |
204,821 |
|||
Other |
64,109 |
31,376 |
45,718 |
|||
Total cash received |
4,912,498 |
5,036,958 |
5,439,600 |
|||
Cash used |
||||||
Employees |
2,836,540 |
2,879,210 |
2,728,880 |
|||
Suppliers2 |
1,539,173 |
1,731,675 |
2,235,491 |
|||
Other |
5,567 |
4,713 |
3,000 |
|||
Borrowing and other financing costs |
58 |
- |
- |
|||
Competitive neutrality |
406 |
371 |
497 |
|||
Returns to the official public account |
513,138 |
466,036 |
471,732 |
|||
Total cash used |
4,894,882 |
5,082,005 |
5,439,600 |
|||
Net cash from/used by operating activities |
17,616 |
(45,047) |
- |
|||
INVESTING ACTIVITIES |
||||||
Cash received |
||||||
Proceeds from sale of plant and equipment |
109 |
340 |
- |
|||
Total cash received |
109 |
340 |
- |
|||
Cash used |
||||||
Purchase of buildings, plant and equipment2 |
243,792 |
122,032 |
126,221 |
|||
Purchase of software2 |
139,693 |
80,447 |
224,858 |
|||
Total cash used |
383,485 |
202,479 |
351,079 |
|||
Net cash used by investing activities |
(383,376) |
(202,139) |
(351,079) |
|||
FINANCING ACTIVITIES |
||||||
Cash received |
||||||
Contributed equity - departmental capital budget |
183,996 |
164,675 |
188,996 |
|||
Contributed equity - capital injection |
185,433 |
71,238 |
162,083 |
|||
Total cash received |
369,429 |
235,913 |
351,079 |
|||
Net cash from financing activities |
369,429 |
235,913 |
351,079 |
|||
Net increase in cash held |
3,669 |
(11,273) |
- |
|||
Cash at the beginning of the reporting period |
11,133 |
22,406 |
20,000 |
|||
Cash at the end of the reporting period |
14,802 |
11,133 |
20,000 |
1Budget reported in the 2017-18 Portfolio Budget Statements published in May 2017.
2Reclassification of $53.2 million in 2016-17 from purchases of buildings, plant and equipment and purchases of software to supplier payments.
The above statement should be read in conjunction with the accompanying notes.
ADMINISTERED SCHEDULE OF COMPREHENSIVE INCOME
for the period ended 30 June 2018 |
||||||
Original Budget1 |
||||||
2018 |
2017 |
2018 |
||||
Notes |
$'000 |
$'000 |
$'000 |
|||
NET COST OF SERVICES |
||||||
Expenses |
||||||
Child support maintenance expenses |
1,492,212 |
1,450,026 |
1,476,389 |
|||
Write-down and impairment of assets |
95,993 |
115,931 |
96,841 |
|||
Total expenses |
1,588,205 |
1,565,957 |
1,573,230 |
|||
Income |
||||||
Non-taxation revenue |
||||||
Child support maintenance revenue |
1,576,208 |
1,543,529 |
1,572,887 |
|||
Dividends |
11,595 |
15,526 |
13,421 |
|||
Competitive neutrality revenue |
12,935 |
15,121 |
15,044 |
|||
Fees and fines |
8,814 |
8,439 |
9,225 |
|||
Other revenue |
- |
419 |
- |
|||
Total non-taxation revenue |
1,609,552 |
1,583,034 |
1,610,577 |
|||
Gains |
||||||
Reversal of previous asset impairment |
12,162 |
21,897 |
- |
|||
Total gains |
12,162 |
21,897 |
- |
|||
Total income |
1,621,714 |
1,604,931 |
1,610,577 |
|||
Net contribution by services |
33,509 |
38,974 |
37,347 |
|||
Surplus |
33,509 |
38,974 |
37,347 |
|||
OTHER COMPREHENSIVE INCOME |
||||||
Items subject to subsequent reclassification to net cost of services |
||||||
Gain on investment |
7,508 |
6,854 |
- |
|||
Total comprehensive income |
41,017 |
45,828 |
37,347 |
|||
1Budget reported in the 2017-18 Portfolio Budget Statements published in May 2017.
The above statement should be read in conjunction with the accompanying notes.
ADMINISTERED SCHEDULE OF ASSETS AND LIABILITIES
as at 30 June 2018 |
||||||
Original Budget1 |
||||||
2018 |
2017 |
2018 |
||||
Notes |
$'000 |
$'000 |
$'000 |
|||
ASSETS |
||||||
Financial assets |
||||||
Cash and cash equivalent |
135,175 |
133,145 |
660 |
|||
Child support receivables |
835,210 |
806,298 |
896,487 |
|||
Investment – Australian Hearing |
72,214 |
64,706 |
57,852 |
|||
Other receivables |
7,184 |
9,120 |
10,264 |
|||
Total assets administered on behalf of the Australian Government |
1,049,783 |
1,013,269 |
965,263 |
|||
LIABILITIES |
||||||
Payables |
||||||
Recovery of compensation payable |
82,809 |
82,805 |
- |
|||
Child support and other payables |
31,664 |
28,928 |
27,555 |
|||
Child support payments received in advance |
20,702 |
21,411 |
17,981 |
|||
Total payables |
135,175 |
133,144 |
45,536 |
|||
Provisions |
||||||
Child support maintenance provisions |
832,638 |
803,758 |
894,199 |
|||
Total provisions |
832,638 |
803,758 |
894,199 |
|||
Total liabilities administered on behalf of the Australian |
967,813 |
936,902 |
939,735 |
|||
Net assets |
81,970 |
76,367 |
25,528 |
|||
1Budget reported in the 2017-18 Portfolio Budget Statements published in May 2017.
The above statement should be read in conjunction with the accompanying notes.
ADMINISTERED RECONCILIATION SCHEDULE
for the period ended 30 June 2018 |
|||
2018 |
2017 |
||
$'000 |
$'000 |
||
Opening assets less liabilities as at 1 July |
76,367 |
72,041 |
|
Net contribution by services |
|||
Income |
1,621,714 |
1,604,931 |
|
Expenses to other than corporate Commonwealth entities |
(1,588,205) |
(1,565,957) |
|
Other comprehensive income |
|||
Gain on investment |
7,508 |
6,854 |
|
Transfers to/from Australian Government |
|||
Appropriation transfers from the official public account |
|||
Special accounts (unlimited) |
|||
Payments to other than corporate Commonwealth entities1 |
37,089 |
38,839 |
|
Annual appropriation |
|||
Payments to other than corporate Commonwealth entities |
1,103 |
1,050 |
|
Appropriation transfers to the official public account |
(73,606) |
(81,391) |
|
Closing assets less liabilities as at 30 June |
81,970 |
76,367 |
|
Income administered and managed on behalf of the Australian Government is administered income. Collections are transferred to the official public account maintained by the Department of Finance. Conversely, cash is drawn from the official public account to make payments under appropriations (including from special accounts). These transfers to and from the official public account are reported in the administered cash flow statement, in this schedule and through the special accounts. |
1Amounts relate to s77 & s78 of the Child Support (Registration and Collection) Act 1988 credited directly to the Child Support Special account.
The above schedule should be read in conjunction with the accompanying notes.
ADMINISTERED CASH FLOW STATEMENT
for the period ended 30 June 2018 |
|||||
2018 |
2017 |
||||
Notes |
$'000 |
$'000 |
|||
OPERATING ACTIVITIES |
|||||
Cash received |
|||||
Child support |
1,463,520 |
1,417,319 |
|||
Health compensation receipts |
295,779 |
297,786 |
|||
Competitive neutrality |
13,697 |
16,611 |
|||
Dividends |
12,688 |
15,962 |
|||
Fees and fines |
8,840 |
7,967 |
|||
Other |
898 |
1,106 |
|||
Total cash received |
1,795,422 |
1,756,751 |
|||
Cash used |
|||||
Child support |
1,461,376 |
1,411,404 |
|||
Health compensation payments |
295,775 |
288,841 |
|||
Other |
827 |
816 |
|||
Total cash used |
1,757,978 |
1,701,061 |
|||
Net cash from operating activities |
37,444 |
55,690 |
|||
Cash at the beginning of the reporting period |
133,145 |
118,957 |
|||
Cash from the official public account |
|||||
Appropriations |
38,192 |
39,889 |
|||
Total cash from the official public account |
38,192 |
39,889 |
|||
Cash to the official public account |
|||||
Appropriations |
(37,954) |
(40,005) |
|||
Other |
(35,652) |
(41,386) |
|||
Total cash to the official public account |
(73,606) |
(81,391) |
|||
Cash at the end of the reporting period1 |
135,175 |
133,145 |
|||
The above statement should be read in conjunction with the accompanying notes.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
For the period ended 30 June 2018
TABLE OF CONTENTS
Section |
Page |
Overview |
12 |
A: Financial Performance |
14 |
A1: Expenses |
14 |
A2: Income |
16 |
A3: Administered - Expenses |
16 |
A4: Administered - Income |
17 |
B: Financial Position |
18 |
B1: Financial Assets |
18 |
B2: Non-Financial Assets |
19 |
B3: Fair Value Measurement |
21 |
B4: Payables |
22 |
B5: Provisions |
23 |
B6: Administered - Financial Assets |
24 |
B7: Administered - Fair Value Measurement |
25 |
B8: Administered - Payables |
26 |
B9: Administered - Provisions |
26 |
C: Funding |
27 |
C1: Appropriations |
27 |
C2: Special Accounts |
30 |
C3: Regulatory Charging |
31 |
D: Other Items |
32 |
D1: Contingent Assets and Liabilities |
32 |
D2: Budgetary Reporting |
33 |
D3: Administered - Budgetary Reporting |
33 |
D4: Key Management Personnel Remuneration |
34 |
D5: Related Party Disclosures |
34 |
D6: Events After the Reporting Period |
34 |
OVERVIEW
Objectives of the Department of Human Services
The department is an Australian Government controlled not-for-profit entity. The department delivers social and health related services, through its Centrelink, Medicare and Child Support programmes. The department builds on its foundation of service excellence to improve the delivery of services to the Australian community. Through close collaboration with the community and partner agencies, the department plays an active role in developing new approaches to social and health related policy and service delivery.
The contribution of the department to the Australian Government’s agenda is reflected in its outcome statement which is to:
Support individuals, families and communities to achieve greater self-sufficiency; through the delivery of policy advice and high quality accessible social, health and child support services and other payments; and support providers and businesses through convenient and efficient service delivery.
The department’s activities contributing to this outcome are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, revenue and expenses controlled or incurred by the department in its own right. Administered activities involve the management and oversight by the department, on behalf of the Australian Government, of items controlled or incurred by the Australian Government.
The continued existence of the department is dependent on government policy and on continuing funding by the Parliament for the department's administration and programmes.
Basis of preparation of the financial statements
The financial statements are required by section 42 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and are general purpose financial statements.
The financial statements have been prepared in accordance with the:
- PGPA Act Financial Reporting Rule 2015 (FRR), updated for reporting periods ending on or after 1 July 2017 and
- Australian Accounting Standards Reduced Disclosure Requirements and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.
The financial statements are presented in Australian dollars and values are rounded unless disclosure of the full amount is specifically required.
Revenues, expenses, assets and liabilities are recognised net of GST except:
- where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
- for receivables and payables.
Unless otherwise stated, administered revenue, expenses, assets, liabilities and cash flows reported in the administered schedules and related notes are accounted for on the same basis, using the same policies as for departmental items and relate to: child support; fees and fines; dividends; and competitive neutrality items.
Taxation
The department is exempt from all forms of taxation except fringe benefits tax and the goods and services tax.
New Australian accounting standards
Adoption of new Australian accounting standard requirements
New and revised accounting standards and interpretations that were issued prior to the signing of the financial statements and were applicable to the current reporting period did not have a material financial impact and are not expected to have significant future financial impact on the department’s financial statements.
Future accounting standard requirements
The department will apply AASB 16 Leases from
2019-20. The standard will require the net present value of payments under most operating leases to be recognised as assets and liabilities. An initial assessment indicates that the implementation of the standard will have a substantial impact on the financial statements. The department has commenced the analysis to quantify the impact, however, further work is required before the full impact is finalised.
The department will also apply AASB 9 Financial Instruments from 2018-19; and AASB 15 Revenue from Contracts with Customers and AASB 1058 Income for Not-for-Profit Entities from 2019-20. These standards are not expected to have a material impact on the transactions and balances recognised in the financial statements.
Commonwealth expenditure
The Australian Government continues to have regard to developments in case law, including the High Court’s most recent decision on Commonwealth expenditure in Williams v Commonwealth [2014] HCA 23, as they contribute to the larger body of law relevant to the development of Commonwealth programmes. In accordance with its general practice, the Australian Government will continue to monitor and assess risk and decide on any appropriate actions to respond to risks of expenditure not being consistent with constitutional or other legal requirements. As at 30June2018 the department has assessed that it has no spending activities having a high or medium constitutional risk.
Breach of section 83 of the Constitution
Section 83 of the Constitution provides that no amount may be paid out of the Consolidated Revenue Fund except under an appropriation made by law. Payments made which are not supported by an appropriation are not consistent with section 83 of the Constitution.
It is impractical for the department to completely eliminate the potential for non-compliance with section 83. The department has not identified any instances of non-compliance resulting from serious mismanagement. There have been a small number of instances of minor non-compliance. The identified non-compliance represents a small proportion of the total payments made, both by value and by volume and was caused by inaccurate customer supplied bank account data and minor administrative errors.
In 2017-18 the department identified 283 payments totaling $35,896.10 from the Child Support Special Account that were not consistent with section 83 of the Constitution. The department undertook recovery action or offsets of an amount against future payments to the customer. As at 30 June 2018 $10,877.77 had been recovered or offset.
In 2017-18 the department identified two payments totaling $13,004.79 from the Recovery of Compensation for Health Care and Other Services Special Account that were not consistent with section 83 of the Constitution. The department undertook recovery action and as at 30 June 2018 $12,949.44 had been recovered.
A: Financial Performance
for the period ended 30 June 2018
A1: Expenses
2018 |
2017 |
||
$'000 |
$'000 |
||
A1.1: Employee benefits |
|||
Wages and salaries |
1,957,935 |
2,003,665 |
|
Superannuation1 |
|||
Defined benefit plans2 |
249,544 |
265,513 |
|
Defined contribution plans |
158,412 |
153,373 |
|
Leave and other entitlements |
423,974 |
361,873 |
|
Separation and redundancies |
45,191 |
24,351 |
|
Other employee expenses |
3,163 |
2,283 |
|
Total employee benefits |
2,838,219 |
2,811,058 |
1Staff of the department are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or non-government superannuation funds. The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap and other non‑government super funds are defined contribution schemes.
2The department made employer contributions to defined benefit superannuation schemes at rates determined by an actuary to be sufficient to meet the current cost to the Australian Government. The department accounts for the contributions as if they were contributions to defined contribution plans.
2018 |
2017 |
||
$'000 |
$'000 |
||
Goods and services supplied or rendered |
|||
Consultants and contractors |
455,701 |
304,800 |
|
IT maintenance1 |
207,810 |
209,515 |
|
Communications |
225,757 |
212,207 |
|
Property operating |
125,880 |
126,833 |
|
Customer related |
49,659 |
57,624 |
|
Travel and motor vehicles |
39,626 |
37,225 |
|
Staff related |
36,052 |
33,841 |
|
Fees and charges |
25,574 |
25,720 |
|
Legal services and compensation |
22,548 |
19,410 |
|
Other |
13,171 |
11,921 |
|
Total goods and services supplied or rendered2 |
1,201,778 |
1,039,096 |
|
Goods supplied |
41,364 |
46,472 |
|
Services rendered |
1,160,414 |
992,624 |
|
Total goods and services supplied or rendered |
1,201,778 |
1,039,096 |
|
Other supplier expenses |
|||
Operating lease rentals - external parties1 |
339,215 |
353,182 |
|
Workers compensation premium |
35,237 |
65,794 |
|
Total other suppliers |
374,452 |
418,976 |
|
Total supplier expenses |
1,576,230 |
1,458,072 |
1Reclassification of $28.8 million in 2016-17 from IT maintenance to operating lease rentals.
2Includes $167.3 million (2017: $153.2 million) in related entity transactions.
Operating lease payments are expensed on a straight line basis which is representative of the pattern of benefits derived from the leased assets.
Lease payments are subject to increases in accordance with upwards movements in the consumer price index, market rates, fixed increase rates or a combination of the aforementioned rates. Lease terms are determined by property use and generally range between one and ten years. Three per cent of office accommodation leases have terms of greater than ten years. Most lease agreements include option terms of three to five years that are exercisable at the Commonwealth's discretion and generally provide for an adjustment of rentals to current market levels upon exercise of an option term.
Lease incentives provided to the department by way of rent free periods, leasehold improvements or cash incentives are recognised as lease incentive liabilities (note B4.2 refers). Lease payments are allocated between a reduction of the lease incentive liabilities and the property rental expense to effect a spreading of the rental expense in accordance with the pattern of benefits derived from the rental properties.
The department makes an immediate allowance for property make-good where required under lease agreements (note B5.2 refers).
A property lease is deemed onerous if it relates to a vacant floor and/or an identifiable and separable portion of a building for which there are no immediate future plans or sub-let arrangements (e.g. a vacant, self-contained floor of a larger building or wing). In these instances a provision for surplus lease space is recognised and subject to annual review (note B5.2 refers).
<1 year |
Between 1-5 years |
>5 years |
Total |
<1 year |
Between 1-5 years |
>5 years |
Total |
|
2018 |
2018 |
2018 |
2018 |
2017 |
2017 |
2017 |
2017 |
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Operating leases1,2 |
368,636 |
967,737 |
398,164 |
1,734,537 |
365,972 |
960,654 |
458,405 |
1,785,031 |
1Contractual obligations comprise property operating, ICT equipment and motor vehicle fleet leases.
2The 2016-17 commitments payable for minimum lease payments have been restated to include lease incentives of $57.9 million previously not disclosed.
2018 |
2017 |
||
$'000 |
$'000 |
||
A1.3: Other expenses |
|||
Resolution of claims |
3,190 |
2,755 |
|
Finance costs |
650 |
540 |
|
Competitive neutrality - state tax equivalent1 |
406 |
371 |
|
Losses from asset disposals |
441 |
- |
|
Total other expenses |
4,687 |
3,666 |
1The department provides Centrepay services which is subject to the Australian Government’s competitive neutrality policy. The department is required to make payroll taxation equivalent payments to the Australian Government.
A2: Income
Own source revenue mainly relates to the provision of shared services to other government entities.
The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.
Gains include incidental transactions and events outside of ordinary operations such as: Contributions of assets at no cost or for nominal consideration; gains arising from the disposal of non-current assets; reversals of provisions, previous asset write-downs and impairment; and resources received free of charge where the services would have been purchased if they had not been donated.
2018 |
2017 |
||
$'000 |
$'000 |
||
A2.1: Resources received free of charge |
|||
Australian Taxation Office |
1,901 |
2,472 |
|
Australian National Audit Office - financial statement audit fee |
980 |
1,000 |
|
Seconded staff |
26 |
- |
|
Total resources received free of charge |
2,907 |
3,472 |
A2.2: Revenue from Government
Amounts appropriated for departmental outputs for the year (adjusted to reflect the department’s funding agreement, formal additions, reductions and restructures) are recognised as revenue from government when the department gains control of the appropriation.
Appropriations receivable are recognised at their nominal amounts (note B1.1 refers).
Amounts appropriated which are designated as equity injections (less any formal reductions) and the departmental capital budget are recognised directly in contributed equity in that year (statement of changes in equity refers).
Income and Expenses Administered on Behalf of Government
A3: Administered - Expenses
Child support maintenance expenses are recognised and measured in line with child support revenue (note A4 refers).
2018 |
2017 |
||
$'000 |
$'000 |
||
A3.1: Write-down and impairment of assets |
|||
Child support maintenance discharge |
61,376 |
70,764 |
|
Child support write-down and impairment of assets |
34,420 |
44,533 |
|
Child support waivers |
139 |
43 |
|
Child support cost recovery discharge |
3 |
- |
|
Other - fees and fines |
55 |
591 |
|
Total write-down and impairment of assets |
95,993 |
115,931 |
|
A4: Administered - Income
All administered revenue is revenue relating to the course of ordinary activities performed by the department on behalf of the Australian Government.
The child support programme acts as the intermediary in the transfer of child support payments, which are collected from the non-custodial parent and then paid to the custodial parent.
Revenue from the assessment and collection of child support is recognised in the administered schedule of comprehensive income at the nominal amounts. The revenue is recognised at the point when a child support assessment, private child support agreement or maintenance court order is registered for collection by the child support registrar under the Child Support (Registration and Collection) Act 1988. In accordance with the Act, the revenue is adjusted when a private settlement is agreed by both parents for a particular period of payment.
Under section 67 of the Child Support (Registration and Collection) Act 1988, a late payment penalty is applied whenever a non-custodial parent fails to make their child support payment to the custodial parent by the due date and where the outstanding maintenance debt exceeds $1,000.
Late payment penalties are recognised as revenue in the administered financial statements at the time the cash is received. Of the $8.8 million of fees and fines revenue in administered income, $8.5 million (2017: $7.8 million) relates to penalty revenue receipts.
The Australian Government owns 100 per cent of the issued share capital of Australian Hearing. Dividends from Australian Hearing are recognised in the administered financial statements and have been paid or are payable to the official public account.
Australian Hearing provides services on a for-profit basis and is subject to the Australian Government’s competitive neutrality policy. Under competitive neutrality arrangements Australian Hearing is required to make payroll tax and income tax equivalent payments to the Australian Government. These amounts are recognised in the administered financial statements and have been paid or are payable to the official public account.
Gains include incidental transactions and events outside of ordinary operations such as reversals of previous asset impairments.
2018 |
2017 |
||
$'000 |
$'000 |
||
A4.1: Reversal of previous asset impairments |
|||
Reversal of impairment - child support |
12,162 |
21,897 |
|
Total reversal of previous asset impairments |
12,162 |
21,897 |
|
B: Financial Position
B1: Financial Assets
Cash is recognised at its nominal amount and includes cash on hand.
2018 |
2017 |
||
$'000 |
$'000 |
||
B1.1: Trade and other receivables |
|||
Trade receivables in connection with |
|||
Goods and services |
82,560 |
62,857 |
|
Total trade receivables |
82,560 |
62,857 |
|
Appropriation receivables |
|||
Existing programmes - operating |
1,471,390 |
1,029,559 |
|
Departmental capital budget |
5,000 |
- |
|
Equity |
30,600 |
38,004 |
|
Funding agreement adjustment - operating |
(57,573) |
(26,477) |
|
Total appropriations receivables |
1,449,417 |
1,041,086 |
|
Other receivables |
|||
Goods and service tax |
58,048 |
40,618 |
|
Total other receivables |
58,048 |
40,618 |
|
Total trade and other receivables (gross) |
1,590,025 |
1,144,561 |
|
Less impairment allowance |
|||
Trade receivables |
(289) |
(695) |
|
Total impairment allowance |
(289) |
(695) |
|
Total trade and other receivables (net) |
1,589,736 |
1,143,866 |
|
Goods and services |
Goods and services |
||
2018 |
2017 |
||
$'000 |
$'000 |
||
As at 1 July |
(695) |
(670) |
|
Additional provisions raised |
(203) |
(574) |
|
Amounts written off |
72 |
63 |
|
Amounts recovered and reversed |
537 |
486 |
|
Total as at 30 June |
(289) |
(695) |
The department classifies its financial assets at the time of initial recognition depending on the nature and purpose of the asset. All receivables are classified as trade and other receivables and are expected to be recovered within 12 months unless otherwise indicated.
Trade receivables are recognised when the department becomes party to an agreement and has the right to receive cash. Trade receivables have 30 day terms (2017: 30 days) and are recognised at the nominal amount due less any impairment allowance. The collectability of debts are reviewed at the end of the reporting period and an impairment allowance is recognised. This includes an allowance for all trade receivables owed by external entities that are more than 90 days overdue.
B2: Non-Financial Assets
Land and buildings |
Plant and equipment |
Software |
Total |
|
$’000 |
$’000 |
$’000 |
$’000 |
|
Total as at 30 June 2017 |
354,554 |
194,743 |
360,721 |
910,018 |
Gross book value |
375,648 |
258,357 |
1,007,340 |
1,641,345 |
Accumulated depreciation and amortisation |
(21,094) |
(63,614) |
(646,619) |
(731,327) |
Total as at 1 July 2017 |
354,554 |
194,743 |
360,721 |
910,018 |
Additions |
||||
Purchases |
88,227 |
167,974 |
26,689 |
282,890 |
Internally developed |
- |
- |
114,792 |
114,792 |
Revaluations recognised in other comprehensive income1 |
27,024 |
(3,027) |
- |
23,997 |
Write-down and impairment recognised in net cost of services2 |
(4,250) |
(830) |
(12,383) |
(17,463) |
Impairment reversal recognised in net cost of services3 |
101 |
- |
2,205 |
2,306 |
Depreciation and amortisation expenses |
(88,895) |
(60,841) |
(99,655) |
(249,391) |
Other movements4 |
11 |
2,604 |
(1,539) |
1,076 |
Disposals |
- |
(551) |
- |
(551) |
Total as at 30 June 20185 |
376,772 |
300,072 |
390,830 |
1,067,674 |
Gross book value |
402,056 |
359,347 |
1,081,699 |
1,843,102 |
Accumulated depreciation and amortisation |
(25,284) |
(59,275) |
(690,869) |
(775,428) |
Total as at 30 June 2018 |
376,772 |
300,072 |
390,830 |
1,067,674 |
1Recognised in changes to asset revaluation reserve and other provisions (property make-good provision).
2Recognised in write down and impairment of assets.
3Recognised in reversal of previous asset write-down and impairment.
4Includes assets recognised for the first time and transferred between classes.
5Includes asset under construction amounts for land and buildings of $67.1 million and software of $122.2 million.
The asset thresholds and useful lives for each asset class remain unchanged from 2017.
Departmental assets |
2018 Useful life |
2018 Threshold |
Land |
Unlimited |
nil |
Buildings |
50 years |
nil |
Leasehold improvements |
Shorter of unexpired lease term or useful life |
$20,000 |
General plant and equipment |
3 to 10 years |
$3,000 |
ICT plant and equipment |
3 to 10 years |
nil |
Purchased software |
5 to 10 years |
$100,000 |
Internally developed software |
5 to 10 years |
$1,000,000 |
Unless otherwise stated, depreciation and amortisation rates are applied on a straight-line basis and rates are reviewed annually, as are useful lives and residual values. Any necessary adjustments are recognised as appropriate. Where material software assets have not been budgeted to be enhanced, replaced, or retired, a minimum remaining useful life of two years is applied.
All property, plant and equipment is reported at fair value (note B3 refers). Cost is considered an acceptable fair value proxy for assets under construction. An indexation test is applied annually to verify that the carrying amount is acceptable. Revaluations are conducted by an independent valuer. In 2017-18 JLL Public Sector valuations (formerly Australian Valuation Solutions) conducted the revaluation of leasehold improvement and make-good relating to leasehold improvements as well as data centre asset classes (2017: revaluation of all leasehold improvement and make-good relating to leasehold improvements).
Software assets are carried at cost less accumulated amortisation and impairment except for software assets under development which are recognised at cost.
All non-financial assets are assessed annually for indicators of impairment and, where appropriate, the asset’s carrying value is adjusted to fair value. In 2017-18, impairment was assessed by management applying professional judgement, supported by the use of an independent service provider. This assessment takes into account how assets are being used and is impacted by factors such as legislative changes, program cessations and platform changes. This has resulted in an impairment expense of $17.5 million (2017: $92.3 million).
<1 year |
Between 1-5 years |
Total |
<1 year |
Between 1-5 years |
Total |
|
2018 |
2018 |
2018 |
2017 |
2017 |
2017 |
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Land and buildings |
1,745 |
- |
1,745 |
1,244 |
- |
1,244 |
Plant and equipment1 |
10,044 |
- |
10,044 |
1,917 |
4,571 |
6,488 |
Software |
249 |
- |
249 |
- |
- |
- |
Total |
12,038 |
- |
12,038 |
3,161 |
4,571 |
7,732 |
1Contractual obligation primarily for the purchase of Information and Communication Technology hardware.
2018 |
2017 |
||
$'000 |
$'000 |
||
B2.2: Other non-financial assets |
|||
Prepayments expected to be amortised |
97,121 |
162,001 |
|
Lease incentives asset1 |
38,749 |
29,200 |
|
Total other non-financial assets |
135,870 |
191,201 |
1As at 30 June 2017, the department’s lease incentive balance did not include future lease incentives relating to 17 leases. The value of unrecognised lease incentives was $29.2 million. The lease incentive balance for 30 June 2017 has been restated to include this amount and a corresponding lease asset recognised in other non-financial assets for 2017 (See note B4.2).
No indicators of impairment were found for other non-financial assets.
B3: Fair Value Measurement
The department adopts a risk-based asset valuation approach to measure non-financial assets at fair value in accordance with AASB 13 Fair Value Measurement. Each class of non-financial assets is subject to a formal independent valuation at least once every three years dependent upon an annual risk assessment. In years where a formal valuation is not undertaken non-financial assets are subject to a desktop review.
Fair value is a market-based, rather than entity specific, measurement. The objective in all cases is to estimate the price at which an orderly transaction to sell the asset would take place between market participants under current market conditions at the measurement date. Where possible, assets are valued based upon observable inputs, such as quoted prices in active markets or other market transactions or information. Where this information is not available, valuation techniques rely upon unobservable inputs.
The different levels of the fair value hierarchy are:
Level 1: Quoted prices (unadjusted) in active markets for identical assets.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset, either directly or indirectly.
Level 3: Unobservable inputs for the asset.
In 2018, level 2 valuations were based on market comparable information. In 2018 and 2017 level 3 valuations were based on depreciated replacement cost and adjusted market comparable information.
A revaluation of non-financial assets was completed in 2018 for leasehold improvements and data centre asset classes in property, plant and equipment (2017: leasehold improvements). Results of the revaluation are disclosed at note B2.1.
The following table provides an analysis of assets that are measured at fair value. The remaining assets disclosed in the statement of financial position do not apply the fair value hierarchy.
Fair value measurements as at 30 June |
For levels 2 and 3 fair value measurements |
||||
2018 |
2017 |
Level |
Valuation techniques1 |
Inputs used |
|
$'000 |
$'000 |
||||
Non-financial assets2 |
|||||
Freehold land and buildings |
7,256 |
7,422 |
2 |
Market |
Adjusted market transactions. |
Freehold land and buildings |
6,900 |
4,545 |
3 |
Market |
Adjusted market transactions. |
Leasehold buildings and |
362,616 |
342,587 |
3 |
Depreciated replacement cost |
Replacement cost new ($/m2), total useful life, remaining useful life and consumed economic benefit/obsolescence of asset. |
Plant and equipment |
188,580 |
122,014 |
2 |
Market |
Adjusted market transactions. |
Plant and equipment |
108,772 |
72,605 |
3 |
Depreciated replacement cost |
Replacement cost new. |
Plant and equipment |
2,720 |
124 |
3 |
Market |
Adjusted market transactions. |
Total non-financial assets |
676,844 |
549,297 |
1In 2018, nil (2017: nil) transferred from level 3 to level 2 due to a change in valuation techniques from depreciated replacement cost to market comparables. In 2018, $43.9 million (2017: nil) transferred from level 2 to level 3 due to a change in observable inputs.
2A reconciliation of movements in property, plant and equipment is included in note B2.1.
B4: Payables
2018 |
2017 |
||
$'000 |
$'000 |
||
B4.1: Suppliers |
|||
Trade creditors and accruals |
539,201 |
327,588 |
|
Operating lease rentals |
79,778 |
85,314 |
|
Total suppliers |
618,979 |
412,902 |
Supplier and other payables are recognised at the present value of expected future cash flows. Trade creditors and accruals are recognised to the extent that the goods and services have been received (irrespective of having been invoiced). Credit terms for goods and services are expected to be settled within 30 days (2017: 30 days).
Lease incentives expected to be settled |
|||
No more than 12 months |
16,871 |
13,163 |
|
More than 12 months |
70,507 |
68,046 |
|
Total lease incentives1 |
87,378 |
81,209 |
1As at 30 June 2017, the department’s lease incentive balance did not include future lease incentives relating to 17 leases. The value of unrecognised lease incentives was $29.2 million. The lease incentive balance for 30 June 2017 has been restated to include this amount and a corresponding lease asset recognised in other non-financial assets for 2017 (See note B2.2).
Unearned income |
7,097 |
4,976 |
|
Fringe benefits tax |
667 |
545 |
|
Total other payables |
7,764 |
5,521 |
B5: Provisions
2018 |
2017 |
||
$'000 |
$'000 |
||
B5.1: Employee provisions |
|||
Leave |
855,300 |
847,959 |
|
Separations and redundancies |
11,819 |
1,271 |
|
Total employee provisions |
867,119 |
849,230 |
The department's leave liability includes provisions for annual and long service leave. No provision is made for personal leave, which is non-vesting.
In accordance with AASB 119 Employee Benefits, recreation and long service leave liabilities are measured at the present value of the estimated future cash outflows. The interest rates used in discounting future cash flows relate to market yields on government bonds which have a comparable term to the leave obligations. In 2016 the department engaged the Australian Government Actuary to undertake a triennial actuarial assessment of the leave provisions taking into account the likely tenure of existing staff, patterns of leave claims and payouts, future salary movements, and discount rates.
The department recognises a provision for separations and redundancies where there is a detailed formal plan that has been communicated to the affected staff.
Movements in other provisions |
||||
Property make-good provision1 |
Surplus lease space provision |
Other |
Total |
|
$’000 |
$’000 |
$’000 |
$’000 |
|
As at 1 July 2017 |
26,824 |
- |
2,358 |
29,182 |
Additional provisions made2 |
3,576 |
88 |
831 |
4,495 |
Amounts used |
(397) |
- |
(327) |
(724) |
Amounts reversed |
(358) |
- |
(215) |
(573) |
Unwinding of discount or change in discount rate |
592 |
- |
- |
592 |
Total as at 30 June 2018 |
30,237 |
88 |
2,647 |
32,972 |
1There are 436 (2017: 449) agreements for the leasing of premises, which have provisions requiring the department to restore the premises to their original condition at the conclusion of the lease.
2The total additional provision includes property make-good revaluations of existing arrangements. The revaluation conducted by Jones Lang LaSalle (JLL) Inc. resulted in a $3.8 million decrement to the asset revaluation reserve less a $0.3 million recognised in goods and services expense (property operating) and other gains.
B6: Administered - Financial Assets
2018 |
2017 |
||
$'000 |
$'000 |
||
B6.1: Cash and cash equivalent |
|||
Cash on hand or on deposit |
162 |
91 |
|
Cash in special accounts |
135,013 |
133,054 |
|
Total cash |
135,175 |
133,145 |
2018 |
2017 |
||
$'000 |
$'000 |
||
Maintenance receivables |
1,529,648 |
1,466,574 |
|
Less: impairment allowance |
(697,011) |
(662,816) |
|
Net maintenance receivables |
832,637 |
803,758 |
|
Customer miscellaneous receivables |
5,868 |
5,801 |
|
Less: impairment allowance |
(4,572) |
(4,542) |
|
Net customer miscellaneous receivables |
1,296 |
1,259 |
|
Client top up receivables |
1,516 |
1,458 |
|
Less: impairment allowance |
(712) |
(727) |
|
Net client top up receivables |
804 |
731 |
|
Cost recovery receivables |
1,882 |
1,878 |
|
Less: impairment allowance |
(1,409) |
(1,328) |
|
Net cost recovery receivables |
473 |
550 |
|
Total child support receivables (net) |
835,210 |
806,298 |
|
Child support receivables (gross) in connection with |
|||
External parties |
1,538,914 |
1,475,711 |
|
Total child support receivables (gross) |
1,538,914 |
1,475,711 |
Child support maintenance receivables and impairment allowance
The child support programme acts as the intermediary in the transfer of child support payments, which are collected from the non-custodial parent and then paid to the custodial parent. The majority of the receivable balance relates to maintenance debt for which the Commonwealth does not have any financial exposure given that the child support programme acts as the intermediary only.
The department actively manages the collection of child support debt on a continual basis and engages the Australian Government Actuary (AGA) annually to perform a review of the impairment allowance for child support maintenance debt.
Since 30 June 2017, changes in collection rates and the discounted mean term have resulted in the impairment allowance for child support maintenance debt changing from 44.39 per cent to 44.83 per cent as at 30 June 2018. This resulted in an increase to the impairment allowance of $6.8 million in 2017-18.
AASB 136 Impairment of Assets requires that payments are discounted at a rate reflecting the estimated timing of the payments. As at 30 June 2018 the AGA’s assessment was that the mean term for child support receivables was approximately five and a half years and the five and a half year bond rate was applied (2017: seven year collection and bond rate).
As at 30 June 2018 the five and a half year bond rate was 2.36 per cent and the ten year bond rate was 2.63 per cent. If the ten year bond rate was applied the result would be a further increase in the impairment allowance of approximately $7.3 million.
Child support penalty receivables
Child support penalty revenue is recognised in the administered financial statements at the time cash is received not when the debt is raised (note A4 refers). As at 30 June 2018, amounts not recorded in the financial statements included: Total outstanding penalty debt $902.6 million (2017: $853.4 million); penalty debts raised during 2017-18, $131.4 million (2017: $130.2 million); and total penalty debts remitted, written off, waived or discharged, $73.7 million (2017: $120.2 million).
2018 |
2017 |
||
$'000 |
$'000 |
||
B6.3: Other receivables |
|||
Dividends |
5,213 |
6,306 |
|
Competitive neutrality |
1,786 |
2,548 |
|
Other - fees and fines |
2,850 |
2,876 |
|
Total other receivables (gross) |
9,849 |
11,730 |
|
Less: impairment allowance - fees and fines |
(2,665) |
(2,610) |
|
Total impairment allowance |
(2,665) |
(2,610) |
|
Total other receivables (net) |
7,184 |
9,120 |
All significant receivables are expected to be collected within 12 months.
B7: Administered - Fair Value Measurement
Administered non-financial assets are measured at fair value in accordance with AASB 13 Fair Value Measurement and consistent with the departmental policy described at note B2 and B3.
The fair value of administered investments is taken to be the Australian Government’s proportional interest in the net assets of the entity. The Australian Government owns 100 per cent of the issued share capital of Australian Hearing, a Corporate Commonwealth Entity. The principal activity of Australian Hearing is to help people manage their hearing impairment in order to improve their quality of life.
Fair value measurements at 30 June |
For level 3 fair value measurements |
||||
2018 |
2017 |
Level2 |
Valuation techniques1 |
Inputs used |
|
$'000 |
$'000 |
||||
Financial assets |
|||||
Investment - Australian Hearing |
72,214 |
64,706 |
3 |
Net assets |
Net assets of the entity. |
1No change in valuation technique occurred during the period.
2Note B3 refers.
B8: Administered - Payables
2018 |
2017 |
||
$'000 |
$'000 |
||
B8.1: Child support and other payables |
|||
Child support maintenance |
31,502 |
28,837 |
|
Other |
162 |
91 |
|
Total child support and other payables |
31,664 |
28,928 |
|
Child support maintenance payables reflect amounts collected and due to be transferred to the custodial parent. All payables are expected to be settled within 12 months and are measured at their nominal amount.
Recovery of compensation |
82,809 |
82,805 |
|
Total compensation payables |
82,809 |
82,805 |
Recovery of compensation payable reflects amounts collected from insurers and third parties for compensation recovery claims not yet finalised.
B9: Administered - Provisions
The child support maintenance provision reflects child support obligations to the custodial parent that have been assessed but not yet received. The liability is calculated on the basis of the present value of the estimated future cash flows to be made to custodial parents at the reporting date. Estimated future cash flows are calculated with reference to the past experience of the recoverability of gross child support receivables from non-custodial parents. The estimate does not include future cash outflows that may result from child support re-assessments, relating prior to the reporting date, that are requested by non-custodial or custodial parents after the reporting date.
Movements in child support maintenance provisions |
|||
As at 1 July |
803,758 |
770,507 |
|
Additional provisions made1 |
1,576,208 |
1,543,529 |
|
Amounts used |
(1,463,333) |
(1,416,775) |
|
Amounts reversed |
(83,995) |
(93,503) |
|
Total as at 30 June |
832,638 |
803,758 |
1Additional provisions made to reflect child support obligations to the custodial parent that have been assessed but not yet received.
C: Funding
C1: Appropriations
2018 |
2017 |
||
$'000 |
$'000 |
||
Departmental ordinary annual services |
|||
Annual appropriation |
|||
Operating1 |
4,495,742 |
4,258,713 |
|
Departmental capital budget |
188,996 |
164,675 |
|
PGPA Act section 74 receipts |
341,857 |
300,942 |
|
PGPA Act section 75 transfers |
- |
(700) |
|
Total appropriation |
5,026,595 |
4,723,630 |
|
Appropriation applied (current and prior years) |
4,401,433 |
4,580,408 |
|
Variance |
625,162 |
143,222 |
|
Departmental other services |
|||
Annual appropriation |
|||
Equity injection2 |
177,850 |
138,421 |
|
Total appropriation |
177,850 |
138,421 |
|
Appropriation applied (current and prior years) |
185,433 |
71,238 |
|
Variance3 |
(7,583) |
67,183 |
|
Administered ordinary annual services |
|||
Annual appropriation |
|||
Operating |
1,566 |
1,565 |
|
PGPA Act section 74 receipts |
1,068 |
1,000 |
|
Total appropriation |
2,634 |
2,565 |
|
Appropriation applied (current and prior years)4 |
1,136 |
1,050 |
|
Variance |
1,498 |
1,515 |
1In 2017-18 revenue from the government reported in the statement of comprehensive income is $4,297.1 million,
$198.6 million less than the operating annual appropriation of $ 4,495.7 million. The $198.6 million difference reflects:
- $236.5 million reduction through the Appropriation Act (No.1) 2018-19 to reflect adjustments to 2017-18 revenue from government. This reduction is made up of a $57.5 million downward funding model adjustment and a net reduction in funding of $179.0 million.
- $12.3 million reduction through the Appropriation Act (No.1) 2017-18 to reflect adjustments to 2016-17 revenue from government, which was adjusted through the 2017-18 Appropriation Acts. This reduction is made up of a $0.9 million downward funding model adjustment and a net reduction in funding of $11.4 million.
- $25.6 million reduction through the Appropriation Act (No.3) 2017-18 to reflect adjustments to 2016-17 revenue from government for a downward funding model adjustment, which was adjusted through the 2017-18 Appropriation Acts.
2In 2017-18 the equity injections reported in the statement of changes in equity is $178.0 million, $0.2 million more than the equity injections of $177.8 million. The $0.2 million difference relates to a reduction through the Appropriation Act (No.2) 2017-18 to reflect adjustments to 2016-17 equity injections which could not be reflected in that year's Appropriation Acts.
3Funded from 2016-17 appropriation.
4Applied administered appropriation is represented by $1.1 million drawn from the Appropriation Act (No.1) 2017-18.
Figures in text have been rounded. Discrepancies between totals and sims of components are due to rounding.
2018 |
2017 |
||
Authority |
$'000 |
$'000 |
|
Departmental |
|||
Appropriation Act (No.1) 2013-141 |
- |
5,969 |
|
Appropriation Act (No.1) 2015-162 |
9,563 |
9,563 |
|
Appropriation Act (No.1) 2016-173 |
57,116 |
943,210 |
|
Appropriation Act (No.3) 2016-17 |
- |
155,822 |
|
Appropriation Act (No.4) 2016-174 |
29,000 |
67,183 |
|
Appropriation Act (No. 1) 2017-185 |
1,645,768 |
- |
|
Appropriation Act (No. 1) 2017-18 DCB |
5,000 |
- |
|
Appropriation Act (No. 2) 2017-18 |
30,600 |
- |
|
Appropriation Act (No. 3) 2017-18 |
9,228 |
- |
|
Appropriation Act (No. 4) 2017-18 |
- |
- |
|
Total appropriation6 |
1,786,275 |
1,181,747 |
|
Administered |
|||
Appropriation Act (No.1) 2016-177 |
1,515 |
1,515 |
|
Appropriation Act (No.1) 2017-18 |
1,498 |
- |
|
Total appropriation |
3,013 |
1,515 |
1Represents $6.0 million quarantined for the 2013-14 downwards funding agreement adjustment. Appropriation Act (No.1) 2013‑14 which was repealed through Appropriation Act (No.4) 2017-18.
2Appropriation Act (No.1) 2015-16 unspent annual appropriation includes $9.6 million of funds quarantined for administrative purposes.
3Appropriation Act (No.1) 2016-17 includes $56.5 million of operating appropriations withheld under section 51 of the PGPA Act, with a determination date of 30 June 2017 and quarantined amount of $0.6 million due to reversal of a 2017-18 measure.
4Appropriation Act (No.4) 2016-17 includes $29.0 million of capital appropriations withheld under section 51 of the PGPA Act, with a determination date of 30 June 2017.
5Appropriation Act (No. 1) 2017-18 includes cash at bank of $14.8 million.
6The total unspent departmental annual appropriation as at 30 June 2018 is $1,786.3 million (2017:$1,181.7 million) as compared to the total cash and appropriation receivable balance of $1,464.2 million (2017: $1,052.2 million). The $322.1 million difference reflects:
- $56.5 million of operating appropriation withheld through section 51 of the PGPA Act (footnote 3 refers);
- $29.0 million of capital appropriation withheld under section 51 of the PGPA Act (footnote 4 refers); and
- $236.5 million reduction to appropriation receivable in 2017-18 for the funding model adjustment amounting to $57.5 million and net reduction in funding of $179.0 million.
7This amount reflects unspent appropriation from 2016-17 relating to the child support programme.
Figures in text have been rounded. Discrepancies between totals and sums of components are due to rounding.
Authority |
||||
Public Governance, Performance and Accountability Act 20131 |
2,220 |
2,617 |
||
Total special appropriations applied |
2,220 |
2,617 |
1Refund appropriation of $0.8 million to enable payments of security bonds following issuance of Departure Prohibition Orders and $1.4 million to enable payments to be made for repayment of amounts earlier received under the Centrelink master programme.
2018 |
2018 |
2017 |
2017 |
|
$'000 |
$'000 |
$'000 |
$'000 |
|
Total receipts |
Total payments |
Total receipts |
Total payments |
|
Attorney-General's Department1 |
2,965 |
2,965 |
26,278 |
26,278 |
Department of Agriculture and Water Resources2 |
34,460 |
34,460 |
61,350 |
61,350 |
Department of Defence3 |
- |
- |
1,452 |
1,452 |
Department of Education and Training4 |
1,375,019 |
1,375,019 |
1,460,692 |
1,460,692 |
Department of Jobs and Small Business5 |
3,353 |
3,353 |
13,592 |
13,592 |
Department of Health6 |
57,308,349 |
56,315,133 |
56,259,983 |
55,138,535 |
Department of Home Affairs7 |
132,358 |
132,358 |
213,275 |
213,275 |
Department of Infrastructure, Regional Development and Cities8 |
195,281 |
195,281 |
191,264 |
191,264 |
Department of Social Services9 |
110,584,183 |
110,584,183 |
112,310,331 |
112,310,331 |
Department of Veterans’ Affairs10 |
2,311,816 |
3,305,175 |
2,337,839 |
3,455,341 |
Total |
171,947,784 |
171,947,927 |
172,876,056 |
172,872,110 |
Payments are made from appropriations administered by other agencies. The related revenue, expense, assets, liabilities and cash flows are disclosed in the financial statements of the relevant government agency which is responsible for the outcomes to which the items relate.
1Attorney-General's Department - Following the machinery of government changes on 20 December 2017, payments for disaster recovery relief and victims of terrorism made on behalf of the entity were transferred to the Department of Home Affairs.
2Department of Agriculture and Water Resources - The department made third party payments on behalf of the entity for farm household allowance.
3Department of Defence - The department made third party payments on behalf of the entity for assistance to individuals and businesses affected by the closure of Hunter River and Port Stephens fisheries. The payment ceased in February 2017.
4Department of Education and Training - The department made third party payments on behalf of the entity for child care rebate and child care benefit.
5Department of Jobs and Small Business - The department made third party payments on behalf of the entity for the job commitment bonus and commenced PaTH Internship Incentive payments.
6Department of Health - The department made third party payments on behalf of the entity for aged care, medical and pharmaceutical benefits.
7Department of Home Affairs - Following the machinery of government changes on 20 December 2017, payments for disaster recovery relief and victims of terrorism were transferred from the Attorney-General's Department to the Department of Home Affairs. The department continues to make third party payments on behalf of the entity for asylum seeker support.
8Department of Infrastructure, Regional Development and Cities - The department made third party payments on behalf of the entity for the Bass Strait passenger vehicle equalisation scheme and Tasmanian freight equalisation scheme.
9Department of Social Services - The department made third party payments on behalf of the entity for personal benefits related to a wide section of the community. These include age pension, disability support pension, carer payment, family tax benefit, austudy, abstudy, youth allowance and newstart.
10Department of Veterans’ Affairs - The department made third party payments on behalf of the entity for aged care, medical and pharmaceutical benefits.
C2: Special Accounts
The Child Support Special Account is used for the receipt of child support payments and the making of regular and timely payments to the custodial parents. The nature of the special account requires that child support monies received into the account are paid from the account to the relevant recipients. As such net child support receivables reported on the schedule of administered items are offset by equivalent child support provisions.
The Recovery of Compensation for Health Care and Other Services Special Account is used for the recovery of Medicare benefits, residential care and home care subsidies where the recipient receives compensation from a third party as a result of the injury or illness for which they had received benefits. The department is responsible for case management and the recovery of benefits back to the Australian Government. Compensation recovery revenue, receivables and transfers to the official public account are reported by the relevant policy agency.
Child Support Special Account1 |
Recovery of Compensation for Health Care and Other Services Special Account2 |
|||
2018 |
2017 |
2018 |
2017 |
|
$'000 |
$'000 |
$'000 |
$'000 |
|
As at 1 July |
71,622 |
61,078 |
82,805 |
73,860 |
Increases |
||||
Child Support (Registration & Collection) Act |
37,089 |
38,839 |
- |
- |
Ordinary annual services |
1,103 |
1,050 |
- |
- |
Repayments of ordinary annual services |
1,068 |
1,000 |
- |
- |
Child support receipts |
1,433,008 |
1,395,972 |
- |
- |
Health compensation receipts |
- |
- |
295,779 |
297,786 |
Total increases |
1,472,268 |
1,436,861 |
295,779 |
297,786 |
Available for payments |
1,543,890 |
1,497,939 |
378,584 |
371,646 |
Decreases |
||||
Payments to custodial parents |
(1,471,940) |
(1,425,317) |
- |
- |
Repayments debited from the special account |
(1,068) |
(1,000) |
- |
- |
Payments made to the Department of Health |
- |
- |
(62,157) |
(37,567) |
Refunds to customers |
- |
- |
(225,337) |
(251,274) |
Total decreases |
(1,473,008) |
(1,426,317) |
(287,494) |
(288,841) |
Total as at 30 June |
70,882 |
71,622 |
91,090 |
82,805 |
Represented by: |
||||
Cash held in the Official Public Account |
70,882 |
71,622 |
91,090 |
82,805 |
Total appropriation available |
70,882 |
71,622 |
91,090 |
82,805 |
Less timing differences |
(18,678) |
(21,373) |
(8,281) |
- |
Total cash in special accounts |
52,204 |
50,249 |
82,809 |
82,805 |
1Appropriation: Public Governance, Performance and Accountability Act 2013, section 80.
Establishing Instrument: Child Support (Registration and Collection) Act 1988, section 73.
Purpose: For the receipt of child support payments and the making of regular and timely payments to custodial parents.
2Appropriation: Public Governance, Performance and Accountability Act 2013, section 78(1).
Establishing Instrument: Determination 2015/06 under Public Governance, Performance and Accountability Act 2013.
Purpose: To credit monies for the purpose of recovery of compensation following a judgement or settlement under the Recovery of Compensation for Health Care and Other Services Special Account 2015 and;
(a) to pay a person an amount consistent with the Health and Other Services (Compensation) Act 1995;
(b) to pay an amount to a Commonwealth entity that manages a benefit, subsidy or scheme related to the Health and Other Services (Compensation) Act 1995;
(c) activities that are incidental to a purpose mentioned in paragraphs (a) or (b);
(d) to reduce the balance of the special account (and, therefore, the available appropriation for the special account) without making a real or notional payment;
(e) to repay amounts where an Act or other law requires or permits the repayment of an amount received.
3Special Appropriations $9.1 million in amounts credited to the special account as budget adjustments which are excluded from note C1.3 Special Appropriations applied, Child Support (Registration and Collection) Act 1988.
In 2018 and 2017 the Services for Other Entities and Trust Moneys - Department of Human Services Special Account had a nil balance and there were no transactions debited or credited during either year.
C3: Regulatory Charging
2018 |
2017 |
||
$'000 |
$'000 |
||
Amounts applied |
|||
Departmental |
|||
Annual appropriation1 |
5,079 |
4,891 |
|
Total amounts applied |
5,079 |
4,891 |
|
Expenses |
|||
Departmental2 |
3,930 |
4,482 |
|
Total expenses |
3,930 |
4,482 |
trtgdfgdfgdfgdfg
1The annual appropriation is taken to be representative of the amount applied and is equivalent to revenue received.
2Departmental expenses consist of direct and indirect costs. Indirect costs are apportioned internally to activities and may include administrative, corporate and technical support costs.
The department is responsible for the administration of early release of superannuation benefits on specific compassionate grounds. The department receives direct appropriation for the delivery of the service. The department provides details of the cost of delivery of the service to Treasury each year. Treasury liaises with the Australian Prudential Regulation Authority each year to confirm the agreed amount of levies collected on behalf of the department under the Financial Institutions Supervisory Levy Collection Act 1998.
The other entities involved in this cost recovery activity are the Australian Taxation Office and the Australian Securities and Investments Commission.
The Cost Recovery Implementation Statement for the above activity is available at: https://www.apra.gov.au/sites/default/files/apra_cris_2018-19.pdf
On 1 July 2018, this activitiy transferred to the Australian Taxation Office.
D: Other Items
D1: Contingent Assets and Liabilities
Contingent assets and liabilities may arise from uncertainty as to the existence of a liability or asset, or where the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain. Contingent liabilities are disclosed when settlement is greater than remote.
2018 |
2017 |
||
Claims for damages or costs |
$'000 |
$'000 |
|
Contingent assets |
|||
As at 1 July |
2,469 |
2,275 |
|
New contingent assets recognised |
50 |
2,119 |
|
Re-measurement |
(9) |
(1,925) |
|
Assets realised |
(33) |
- |
|
Total contingent assets as at 30 June1 |
2,477 |
2,469 |
|
Contingent liabilities |
|||
As at 1 July |
1,692 |
2,473 |
|
New contingent liabilities recognised |
792 |
1,620 |
|
Re-measurement |
(12) |
153 |
|
Liabilities realised |
(637) |
(632) |
|
Obligations expired |
(1,006) |
(1,922) |
|
Total contingent liabilities as at 30 June2 |
829 |
1,692 |
|
Net contingent liabilities as at 30 June |
(1,648) |
(777) |
1Contingent assets includes legal claims.
2Contingent liabilities include compensation and legal claims.
Unquantifiable contingencies
The department had a number of legal claims for which it has denied liability and is defending as well as claims which the department is pursuing. It is not possible to estimate the amount of any eventual payments or compensation in relation to these claims.
There were no quantifiable or unquantifiable administered contingent assets or liabilities in 2018 and 2017.
D2: Budgetary Reporting
Statement of comprehensive income
In 2017-18 the department reported an operating deficit of $74.5 million against a budgeted deficit of $269.5 million1. This $195.0 million variance represents 4.1 per cent of the budgeted $4.8 billion net cost of services reported in the 2017-18 Portfolio Budget Statements published in May 2017.
The department’s total expenses of $4.7 billion varies by 6.0 per cent to the original budget. The main causes of the variation is a reduction in expenditure relating to reduced costs of delivering some budget measures, delays in the passage of legislation associated with some budget measures, and a general lower than budgeted expenditure on suppliers. These were offset by an increase in employee benefits reflecting the effect of a change in the bond rate used to estimate the present value of future leave payments and salary increase paid to staff.
The department’s total revenue of $4.6 billion varies by 2.2 per cent to the original budget. Total revenue was lower than budget reflecting a reduction in revenue from government, the result of budget adjustments and decisions of government since the 2017‑18 Budget.
1The Government does not provide operating funding for make-good, depreciation or amortisation expenses. Rather, capital funding is received when assets need to be replaced and is recognised directly in equity.
Statement of financial position
As at 30 June 2018 the department’s total equity was $1,160.0 million compared to the original budget of $833.2 million. The original budget was prepared before the 2017 actual figures were known and used an estimated rather than actual final outcome. A more positive operating result than estimated was achieved for 2017, and combined with the positive result in 2018 has improved the department’s equity.
Total assets are higher than budget by 30.9 per cent primarily as a result of the positive variance in budgeted deficit which is largely reflected in the appropriation receivable balance. The positive variance also relates to lease incentive assets.
Total liabilities are higher than budget by 25.6 per cent. The major movements were due to higher than budgeted year-end supplier payables and lease incentive liabilities.
During 2017-18, the department received $367.0 million in contributed equity, $15.9 million more than originally budgeted. This increase mainly reflects additional capital funding provided during 2017-18 to support measures approved in the 2017-18 Mid-Year Economic and Fiscal Outlook update process.
Cash flow statement
The variances between budget and actuals in the cash flow statement are primarily the flow on effect from the events described above. Overall, the department operated within $5.2 million of the budgeted closing cash position.
D3: Administered - Budgetary Reporting
In 2017-18 the department administered $1.6 billion of expenses on behalf of the government, 1.0 per cent within budget and total income of $1.6 billion, 0.1 per cent within budget.
Approximately 99 per cent of the administered expense and administered income relates to child support.
The assets primarily relate to the debts owing from non-custodial parents. Similarly, the liabilities are in respect of the related payables owed to custodial parents.
D4: Key Management Personnel Remuneration
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities, directly or indirectly of the department. The department has determined the key management personnel to be the Secretary and Deputy Secretaries1. Key management personnel remuneration is reported in the table below.
2018 |
2017 |
||
$'000 |
$'000 |
||
Key management personnel remuneration expense |
|||
Short-term employee benefits |
|||
Salary |
3,413 |
3,878 |
|
Non-salary benefits |
312 |
345 |
|
Total short-term employee benefits |
3,725 |
4,223 |
|
Post-employment benefits |
|||
Superannuation |
796 |
683 |
|
Total post-employment benefits |
796 |
683 |
|
Other long-term employee benefits |
|||
Annual leave |
411 |
449 |
|
Long-service leave |
107 |
83 |
|
Total other long-term employee benefits |
518 |
532 |
|
Termination benefits |
398 |
- |
|
Total key management personnel remuneration expenses2 |
5,437 |
5,438 |
The total number of key management personnel that are included in the above table are 20 (2017: 17). This represents the total number of individuals who have been remunerated during the year, this includes acting arrangements where it is determined the individual meets the definition of a key management personnel.
1From 2 January 2018 the Chief Financial Officer and General Manager Service Strategy were no longer classified as key management personnel due to a changed reporting arrangements within the department.
2The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister’s remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the department.
D5: Related Party Disclosures
Related party relationships
The entity is an Australian Government controlled entity. Related parties to this entity are key management personnel, including the Portfolio Minister and Executive, and other Australian Government entities.
Transactions with related parties
Given the breadth of government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transaction include the payment or refund of taxes, receipt of a Medicare rebate or higher education loans. These transactions have not been separately disclosed in this note.
Significant transactions with related parties can include:
- the payments of grants or loans;
- the purchase of goods and services;
- asset purchases, sales transfers or leases;
- debts forgiven; and
- guarantees.
Giving consideration to relationships with related entities, and transactions entered into during the reporting period by the entity, it has been determined there are no significant related party transactions to be separately disclosed.
D6: Events After the Reporting Period
Departmental
There were no subsequent events that had the potential to significantly affect the ongoing structure and financial activities of the department.
Administered
There were no subsequent events that had the potential to significantly affect the financial activities delivered on behalf of the government.
Visit
https://www.transparency.gov.au/annual-reports/department-human-services/2018/part-6-financial-statements/62-statement-financial