NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2018
Basis of preparation of the financial statements
The financial statements are general purpose financial statements and are required by section 42 of the PGPA Act.
The financial statements have been prepared in accordance with:
- Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR) for reporting periods ending on or after 1 July 2017.
- Australian Accounting Standards and Interpretations – Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period. The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except where certain assets and liabilities are recorded at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars, and are rounded to the nearest thousand dollars unless otherwise specified.
Except where stated below, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.
Taxation
The Department of the Prime Minister and Cabinet (PM&C) is exempt from all forms of taxation except Fringe Benefits Tax (FBT), the Goods and Services Tax (GST) and Mining Withholding Tax (WHT).
New Australian accounting standards
No accounting standard has been adopted earlier than the application date as stated in the standard.
Other new standards, revised standards, interpretations and amending standards that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material financial impact, and are not expected to have a future material financial impact on PM&C.
Compliance with statutory conditions for payments from the consolidated revenue fund
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 programs. In accordance with its general practice, the 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.
During 2017-18 PM&C reviewed its exposure to the risk of not complying with statutory conditions on payments from appropriations, namely section 83 of the Constitution.
The review identified the following technical breach:
- The Aboriginals Benefit Account (ABA) special account – testing of transactions revealed that three payments made from the ABA under section 64(3) of the Aboriginal Land Rights (Northern Territory) Act 1976 (the ALRA), contravened section 83 of the Constitution totalling $0.594 million. The payments were a technical contravention, despite the payments having been made in accordance with the requirements of section 64(3) of the ALRA. Of the overpayments, $0.129 million has been recovered through reduction of subsequent payments and the remaining $0.465 million will be offset against future payments. Overpayments from previous years of $0.680 million were partially recovered during the year and the remaining $0.041 million will be offset against future payments.
Payments are required to be made out of the ABA based on royalties received by the Northern Territory and Australian Governments. The contraventions occur when the royalties upon which the payments were based had been estimated at a value greater than the eventual actual. Legislation has been prepared, and is awaiting presentation to Parliament, to reduce the risks of non-compliance associated with these payments to an acceptably low level.
PM&C will continue to monitor its level of compliance with section 83 of the Constitution across all legislation for which it is administratively responsible. Where possible, amendments to legislation will continue to be progressed.
Events after the reporting period
Departmental
There are no known events occurring after the reporting period that could impact on the financial statements.
Administered
On 12 February 2018, the Minister for Indigenous Affairs announced that the Government will introduce new Bills into Parliament to ensure the long-term sustainability of the new Indigenous Land and Sea Corporation which acquires and manages assets for Indigenous Australians, and allow the entity to invest in sea country and water assets. The Bill will establish a new special account, ‘Aboriginal and Torres Strait Islander Land and Sea Future Fund Special Account’ and transfer all assets of the Aboriginal and Torres Strait Islander Land Account to this account. As at date of signing the financial statements, this Bill had not been passed.
1. Departmental Financial Performance
2018 |
2017 |
||
$'000 |
$'000 |
||
Note 1.1A: Employee benefits |
|||
Wages and salaries |
191,968 |
182,817 |
|
Superannuation |
|||
Defined contribution plans |
18,016 |
16,711 |
|
Defined benefit plans |
18,515 |
19,436 |
|
Leave and other entitlements |
30,252 |
27,245 |
|
Separation and redundancies |
5,576 |
1,566 |
|
Other |
3,635 |
3,621 |
|
Total employee benefits |
267,962 |
251,396 |
Goods and services supplied or rendered |
|||
Consultants, legal, contractors and secondees |
53,304 |
57,538 |
|
Equipment, repairs and maintenance |
10,929 |
7,062 |
|
General expenses1 |
14,268 |
13,619 |
|
Venue hire |
2,774 |
762 |
|
Office accommodation, facility management and security |
5,879 |
5,365 |
|
Information, communication and technology |
40,615 |
40,310 |
|
Travel |
14,250 |
11,216 |
|
Total goods and services supplied or rendered |
142,019 |
135,872 |
|
Goods supplied |
13,422 |
11,386 |
|
Services rendered |
128,597 |
124,486 |
|
Total goods and services supplied or rendered |
142,019 |
135,872 |
|
Other suppliers |
|||
Operating lease rentals |
34,074 |
28,658 |
|
Workers compensation expenses |
2,834 |
2,773 |
|
Payments to related entities |
- |
10,000 |
|
Total other supplier expenses |
36,908 |
41,431 |
|
Total suppliers |
178,927 |
177,303 |
|
Leasing commitments |
|||
Commitments for minimum lease payments in relation to non-cancellable |
|||
Within 1 year |
25,755 |
28,031 |
|
Between 1 to 5 years |
92,166 |
90,134 |
|
More than 5 years |
221,175 |
11,202 |
|
Total operating lease commitments |
339,096 |
129,367 |
Note: Commitments are GST inclusive where relevant.
Operating lease commitments - leases for office accommodation
Office accommodation lease payments are subject to periodic increases in accordance with the rent review provisions in the lease agreements.
Operating leases comprise 80 leases for office accommodation (2017: 77).
1 Includes $0.029 million audit fees to the ANAO for the financial statements audit of the Aboriginal and Torres Strait Islander Land Account (ATSILA) (2017: $0.029 million), which is not a resource received free of charge.
for the period ended 30 June 2018
Accounting Policy
Leases
Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets.
The discount rate used is the interest rate implicit in the lease. Leased assets are amortised over the period of the lease.
Lease payments are allocated between the principal component and the interest expense.
PM&C currently has five (2017: seven) agreements for the leasing of premises which have provisions requiring the premises to be restored to their original condition at the conclusion of the lease. PM&C has recognised a make good provision to reflect the present value of this obligation.
2018 |
2017 |
||
$'000 |
$'000 |
||
Note 1.1C: Write-down and impairment of assets |
|||
Asset write-downs and impairments from: |
|||
Impairment and write-down of property, plant and equipment and intangibles |
6,705 |
5,160 |
|
Impairment of receivables |
16 |
153 |
|
Total write-down and impairment of assets |
6,721 |
5,313 |
Property, plant and equipment |
|||
Proceeds from sale |
1,019 |
4,123 |
|
Carrying value of asset sold |
(1,105) |
(4,700) |
|
Selling expense |
(31) |
(178) |
|
Total losses from asset sales |
117 |
755 |
Accounting Policy
Gains or losses from disposal of assets are recognised when control of the asset has passed to the buyer.
1.2 Own-Source Revenue and Gains
2018 |
2017 |
||
$'000 |
$'000 |
||
Own-source revenue |
|||
Note 1.2A: Sale of goods and rendering of services |
|||
Sale of goods |
- |
15 |
|
Rendering of services |
16,726 |
14,109 |
|
Total sale of goods and rendering of services |
16,726 |
14,124 |
Accounting Policy
Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:
- The amount of revenue, stage of completion and transaction costs incurred can be reliably measured.
- The probable economic benefits associated with the transaction will flow to PM&C.
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.
Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.
Note 1.2B: Resources received free of charge |
|||
Seconded staff |
9,092 |
7,065 |
|
Other |
474 |
474 |
|
Total resources received free of charge |
9,566 |
7,539 |
Accounting Policy
Resources received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.
Gain on early termination of lease |
4,944 |
- |
|
Reversal of previous asset write-down |
76 |
1,379 |
|
Reversal of make good provision |
613 |
593 |
|
Asset first recognised |
- |
603 |
|
Total other gains |
5,633 |
2,575 |
2. Income and Expenses Administered on Behalf of Government
2. Income and Expenses Administered on Behalf of Government
2018 |
2017 |
||
$'000 |
$'000 |
||
Note 2.1A: Employee benefits |
|||
Wages and salaries |
851 |
818 |
|
Superannuation |
|||
Defined contribution plans |
40 |
37 |
|
Defined benefit plans |
93 |
146 |
|
Leave and other entitlements |
152 |
51 |
|
Separation and redundancies |
62 |
43 |
|
Total employee benefits |
1,198 |
1,095 |
Goods and services supplied or rendered |
|||
Outsourced providers, contractors and consultants |
47,934 |
47,677 |
|
Equipment, repairs and maintenance |
830 |
607 |
|
General expenses |
7,707 |
8,198 |
|
Travel |
3,004 |
2,703 |
|
Information, communication and technology |
1,159 |
257 |
|
Total goods and services supplied or rendered |
60,634 |
59,442 |
|
Goods supplied |
626 |
529 |
|
Services rendered |
60,008 |
58,913 |
|
Total goods and services supplied or rendered |
60,634 |
59,442 |
|
Other suppliers |
|||
Operating lease rentals |
3 |
3 |
|
Workers compensation expenses |
11 |
12 |
|
Total other supplier expenses |
14 |
15 |
|
Total suppliers |
60,648 |
59,457 |
|
Leasing commitments |
|||
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows: |
|||
Within 1 year |
380 |
570 |
|
Between 1 to 5 years |
576 |
719 |
|
More than 5 years |
1,415 |
1,538 |
|
Total operating lease commitments |
2,371 |
2,827 |
|
Note: Commitments are GST inclusive where relevant.
Operating leases comprise 14 leases, five for office accommodation for the former Governors-General, one relating to the Indigenous Education (Northern Territory Facilities) program and eight relating to the Children and Schooling program. Lease payments are subject to periodic increase in accordance with the rent review provisions of the lease.
Accounting Policy
Leases
PM&C administers four (2017: four) agreements for the leasing of premises which have provisions requiring the premises to be restored to their original condition at the conclusion of the lease. A make good provision has been raised to reflect the present value of this obligation.
2018 |
2017 |
||
$'000 |
$'000 |
||
Note 2.1C: Grants |
|||
Public sector |
|||
Australian Government entities |
100,676 |
90,278 |
|
Local Governments |
87,893 |
70,103 |
|
State and Territory Governments |
70,156 |
60,378 |
|
Private sector |
|||
Non-profit organisations |
883,412 |
940,224 |
|
Commercial entities |
198,787 |
186,390 |
|
Total grants |
1,340,924 |
1,347,373 |
|
Program 2.1 - Jobs, Land and Economy |
646,114 |
639,175 |
|
Program 2.2 - Children and Schooling |
330,840 |
356,011 |
|
Program 2.3 - Safety and Wellbeing |
258,133 |
236,612 |
|
Program 2.4 - Culture and Capability |
47,756 |
63,955 |
|
Program 2.5 - Remote Australia Strategy |
43,332 |
44,564 |
|
Program 1.1 - Prime Minister and Cabinet |
14,749 |
7,056 |
|
Total grants |
1,340,924 |
1,347,373 |
Accounting Policy
PM&C administers a number of grants and subsidy schemes on behalf of the Government. Grant liabilities are recognised to the extent that (i) the services required to be performed by the grantee have been performed; or (ii) the grant eligibility criteria have been satisfied, but payments due have not been made. Where grant moneys are paid in advance of performance or eligibility, a prepayment is recognised.
Settlement is usually made according to the terms and conditions of each grant. This is usually within 30 days of performance or eligibility.
Impairment of receivables |
2,814 |
8,632 |
|
Write-down of non-financial assets |
13 |
- |
|
Total write-down and impairment of assets |
2,827 |
8,632 |
Payments associated with Land Councils administration |
49,843 |
46,798 |
|
Land Councils distributions |
97,482 |
50,875 |
|
Total payments associated with Land Councils |
147,325 |
97,673 |
Note 2.1F: Payments to Corporate Commonwealth entities and companies |
|||
Aboriginal Hostels Limited |
36,563 |
37,075 |
|
Australian Institute of Aboriginal and Torres Strait Islander Studies |
3,249 |
- |
|
Indigenous Business Australia |
10,133 |
10,602 |
|
Indigenous Land Corporation |
8,928 |
9,156 |
|
Torres Strait Regional Authority |
36,056 |
35,919 |
|
Total payments to Corporate Commonwealth entities and companies |
94,929 |
92,752 |
Accounting Policy
Payments to Corporate Commonwealth entities and companies from amounts appropriated for that purpose are classified as administered expenses, equity injections or loans of PM&C. The appropriation to PM&C is disclosed in section 5 Funding.
2018 |
2017 |
||
$'000 |
$'000 |
||
Note 2.1C: Grants |
|||
Public sector |
|||
Australian Government entities |
100,676 |
90,278 |
|
Local Governments |
87,893 |
70,103 |
|
State and Territory Governments |
70,156 |
60,378 |
|
Private sector |
|||
Non-profit organisations |
883,412 |
940,224 |
|
Commercial entities |
198,787 |
186,390 |
|
Total grants |
1,340,924 |
1,347,373 |
|
Program 2.1 - Jobs, Land and Economy |
646,114 |
639,175 |
|
Program 2.2 - Children and Schooling |
330,840 |
356,011 |
|
Program 2.3 - Safety and Wellbeing |
258,133 |
236,612 |
|
Program 2.4 - Culture and Capability |
47,756 |
63,955 |
|
Program 2.5 - Remote Australia Strategy |
43,332 |
44,564 |
|
Program 1.1 - Prime Minister and Cabinet |
14,749 |
7,056 |
|
Total grants |
1,340,924 |
1,347,373 |
Accounting Policy
PM&C administers a number of grants and subsidy schemes on behalf of the Government. Grant liabilities are recognised to the extent that (i) the services required to be performed by the grantee have been performed; or (ii) the grant eligibility criteria have been satisfied, but payments due have not been made. Where grant moneys are paid in advance of performance or eligibility, a prepayment is recognised.
Settlement is usually made according to the terms and conditions of each grant. This is usually within 30 days of performance or eligibility.
Impairment of receivables |
2,814 |
8,632 |
|
Write-down of non-financial assets |
13 |
- |
|
Total write-down and impairment of assets |
2,827 |
8,632 |
Payments associated with Land Councils administration |
49,843 |
46,798 |
|
Land Councils distributions |
97,482 |
50,875 |
|
Total payments associated with Land Councils |
147,325 |
97,673 |
Note 2.1F: Payments to Corporate Commonwealth entities and companies |
|||
Aboriginal Hostels Limited |
36,563 |
37,075 |
|
Australian Institute of Aboriginal and Torres Strait Islander Studies |
3,249 |
- |
|
Indigenous Business Australia |
10,133 |
10,602 |
|
Indigenous Land Corporation |
8,928 |
9,156 |
|
Torres Strait Regional Authority |
36,056 |
35,919 |
|
Total payments to Corporate Commonwealth entities and companies |
94,929 |
92,752 |
Accounting Policy
Payments to Corporate Commonwealth entities and companies from amounts appropriated for that purpose are classified as administered expenses, equity injections or loans of PM&C. The appropriation to PM&C is disclosed in section 5 Funding.
Interest on investments |
72,412 |
74,488 |
|
Interest on loans |
1,513 |
1,644 |
|
Unwinding of discount on concessional loans |
2,963 |
2,976 |
|
Total interest |
76,888 |
79,108 |
Return of grant funding |
11,372 |
25,176 |
|
Lease rental income |
1,848 |
2,280 |
|
Other |
44 |
108 |
|
Total other revenue |
13,264 |
27,564 |
Accounting Policy
All administered revenues relate to ordinary activities performed by PM&C on behalf of the Australian Government. As such, administered appropriations are not revenues of the individual entity. PM&C oversees distribution or expenditure of the funds as directed.
Interest revenue is recognised using the effective interest method.
3. Departmental Financial Position
This section analyses the Department of the Prime Minister and Cabinet’s assets used to generate financial performance and the operating liabilities incurred as a result. Employee related information is disclosed in the People section.
2018 |
2017 |
||
$'000 |
$'000 |
||
Note 3.1: Trade and other receivables |
|||
Goods and services receivables |
|||
Goods and services |
11,729 |
3,615 |
|
Total goods and services receivables |
11,729 |
3,615 |
|
Appropriations receivables |
|||
Existing programs |
81,571 |
81,768 |
|
Total appropriations receivable |
81,571 |
81,768 |
|
Other receivables |
|||
Statutory receivables |
3,449 |
3,588 |
|
Other |
- |
13,199 |
|
Total other receivables |
3,449 |
16,787 |
|
Total trade and other receivables (gross) |
96,749 |
102,170 |
|
Less impairment allowance |
|||
Goods and services |
(106) |
(167) |
|
Total impairment allowance |
(106) |
(167) |
|
Total trade and other receivables (net) |
96,643 |
102,003 |
|
2018 |
2017 |
||
$'000 |
$'000 |
||
As at 1 July |
(167) |
(112) |
|
Amounts written off |
- |
24 |
|
Amounts recovered and reversed |
76 |
74 |
|
Increases |
(15) |
(153) |
|
Total as at 30 June |
(106) |
(167) |
|
Land1 |
Buildings1 |
Leasehold improvements |
Plant and equipment |
Computer software internally developed |
Computer software purchased |
Total |
|
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
|
As at 1 July 2017 |
|||||||
Gross book value |
- |
- |
- |
- |
24,986 |
3,764 |
28,750 |
Fair value |
14,107 |
41,540 |
31,221 |
13,626 |
- |
- |
100,494 |
Work in progress |
- |
9,053 |
760 |
1,242 |
2,929 |
60 |
14,044 |
Accumulated depreciation/amortisation and impairment |
- |
(2,103) |
(5,988) |
(4,387) |
(4,550) |
(2,373) |
(19,401) |
Total as at 1 July 2017 |
14,107 |
48,490 |
25,993 |
10,481 |
23,365 |
1,451 |
123,887 |
Additions |
|||||||
Purchase |
- |
462 |
25,285 |
7,935 |
11,625 |
533 |
45,840 |
Revaluations and impairments recognised in other comprehensive income |
- |
(823) |
- |
- |
- |
- |
(823) |
Reclassifications |
(1,160) |
(4,130) |
2,882 |
(364) |
- |
92 |
(2,680) |
Depreciation and amortisation |
- |
(1,546) |
(6,791) |
(3,377) |
(5,763) |
(931) |
(18,408) |
Write-down and impairments recognised in net cost of services (expense) |
(2,331) |
(2,697) |
(1,245) |
(432) |
- |
- |
(6,705) |
Total as at 30 June 2018 |
10,616 |
39,756 |
46,124 |
14,243 |
29,227 |
1,145 |
141,111 |
Total as at 30 June 2018 represented by |
|||||||
Gross book value |
- |
- |
- |
- |
32,283 |
4,292 |
36,575 |
Fair value |
10,616 |
43,111 |
54,577 |
18,848 |
- |
- |
127,152 |
Work in progress |
- |
103 |
4,002 |
2,483 |
7,247 |
99 |
13,934 |
Accumulated depreciation, amortisation and impairment |
- |
(3,458) |
(12,455) |
(7,088) |
(10,303) |
(3,246) |
(36,550) |
Total as at 30 June 2018 |
10,616 |
39,756 |
46,124 |
14,243 |
29,227 |
1,145 |
141,111 |
1 PM&C has a property portfolio divestment strategy that will result in properties throughout Australia being sold within the next 12 months.
Contractual commitments for the acquisition of property, plant, equipment and intangible assets
Contractual commitments for the acquisition of IT equipment and other capital works of $6,529 million are payable within one year. (2017: $11.624 million).
Accounting Policy
Asset recognition threshold
Purchases of property, plant and equipment and intangibles are recognised initially at cost in the Statement of Financial Position, except for purchases costing less than $5,000, which are expensed in the year of acquisition (other than IT assets where they form part of a group of similar items which are significant in total).
The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions in property leases taken up by PM&C where there exists an obligation to restore the asset to its original condition. These costs are included in the value of PM&C's property, plant and equipment with a corresponding provision for the ‘make good’ recognised.
Property, plant and equipment are subsequently measured at fair value.
Revaluations
Fair values for each class of asset are determined as shown below:
Asset class |
Fair value measurement |
Land |
Market selling price |
Buildings excluding leasehold improvements |
Market selling price and depreciated replacement cost |
Leasehold improvements |
Depreciated replacement cost |
Plant and equipment |
Market selling price and depreciated replacement cost |
PM&C procured valuation services from independent valuation experts and relied on the valuations made by these experts. The experts provided written assurance that the models developed to value assets are in compliance with accounting standards. PM&C tests the procedures of the valuation model as an internal management review at least once every 12 months. PM&C has a rolling revaluation plan in place which ensures all assets are formally revalued at least once every three years. If a particular asset class experiences significant and volatile changes in fair value (i.e. where indicators suggest that the value of the class has changed materially since the previous reporting period), that class is subject to specific valuation in the reporting period, where practicable, regardless of the timing of the last specific valuation.
Assets that do not transact with enough frequency or transparency to develop objective opinions of value from observable market evidence have been measured using the cost (Depreciated Replacement Cost or DRC) approach. Professional judgement has been applied in calculating the consumed economic benefit/asset obsolescence relevant to the asset under construction.
All property, plant and equipment assets are valued on a recurring basis except for assets held for sale.
Upon revaluation, any accumulated depreciation is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.
Assets held for sale
Assets held for sale are measured at the lesser of their carrying amount and fair value less cost to sell and are valued at a non-recurring basis. PM&C is currently marketing five residential properties (staff housing) that are no longer essential for operational requirements. 2018: $1.825 million (2017: $0.250 million).
Intangibles
PM&C’s intangibles comprise internally developed and purchased software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.
Impairment
All assets were assessed for impairment during 2018.
Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.
Accounting Policy (continued)
Depreciation/Amortisation
Depreciable assets are written-off to their estimated residual values over their estimated useful lives to PM&C using, in all cases, the straight-line method of depreciation.
Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.
Depreciation rates applying to each class of asset are based on the following total useful lives for the current and prior reporting periods:
Buildings excluding leasehold improvements 3 to 50 years (2017: 3 to 50 years)
Leasehold improvements Lease term (2017: Lease term)
Plant and equipment 1 to 25 years (2017: 1 to 24 years)
Intangibles 1 to 5 years (2017: 1 to 5 years)
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.
2018 |
2017 |
||
$'000 |
$'000 |
||
Note 3.3: Other payables |
|||
Salaries, wages and superannuation |
1,704 |
1,763 |
|
Separation and redundancies payable |
3,314 |
601 |
|
Unearned income |
2,435 |
2,725 |
|
Lease liability |
10,666 |
10,980 |
|
Lease incentive |
15,154 |
1,631 |
|
Other |
3,026 |
3,059 |
|
Total other payables |
36,299 |
20,759 |
|
Make good provision |
Total |
|
$’000 |
$’000 |
|
As at 1 July 2017 |
1,258 |
1,258 |
Additional provisions made |
121 |
121 |
Finance cost |
10 |
10 |
Amounts used |
(131) |
(131) |
Gain on reversal of provision |
(613) |
(613) |
Total as at 30 June 2018 |
645 |
645 |
Significant accounting judgements and estimates
Provision for the restoration of leased premises (make good) is based on future obligations relating to the underlying assets and is supported by independent qualified valuers’ opinions.
4. Assets and Liabilities Administered on Behalf of Government
This section analyses assets used to generate financial performance and the operating liabilities incurred as a result which the Department of the Prime Minister and Cabinet does not control, but administers on behalf of the Government. Unless otherwise noted, the accounting policies adopted are consistent with those applied for departmental reporting.
4.1 Administered – Financial Assets
2018 |
2017 |
||
$'000 |
$'000 |
||
Note 4.1A: Cash and cash equivalents |
|||
Cash on hand or on deposit |
79 |
304 |
|
Aboriginals Benefit Account - Special Account |
11,212 |
24,334 |
|
Aboriginal and Torres Strait Islander Land Account - Special Account |
1 |
1 |
|
Cash held in the Official Public Account - Special Account |
12,284 |
11,433 |
|
Total cash and cash equivalents |
23,576 |
36,072 |
Goods and services receivables |
|||
Goods and services receivable |
17 |
7 |
|
Total goods and services receivables |
17 |
7 |
|
Advances and loans |
|||
Loans to Australian Government entities |
48,549 |
50,967 |
|
Total advances and loans |
48,549 |
50,967 |
|
Other receivables |
|||
Statutory receivables |
14,707 |
23,393 |
|
Interest receivable |
34,243 |
32,829 |
|
Grants receivable |
21,516 |
18,358 |
|
Other |
322 |
743 |
|
Total other receivables |
70,788 |
75,323 |
|
Total trade and other receivables (gross) |
119,354 |
126,297 |
|
Less impairment allowance |
|||
Other receivables |
(16,847) |
(15,413) |
|
Total impairment allowance |
(16,847) |
(15,413) |
|
Total trade and other receivables (net) |
102,507 |
110,884 |
|
Accounting Policy
Loans
Concessional loans are initially recognised at their fair value. If the rate of interest charged is lower than the government bond rate (for government/public sector loans) or the counterparty’s borrowing rate (for non-government loans), the difference between the amortised cost and the fair value of the loan is treated as an expense.
Loans to Australian Government entities are made for the period up to 7 years based on current interest rates. Interest is variable and is paid quarterly.
Movements in relation to 2018 |
|||
2018 |
2017 |
||
$'000 |
$'000 |
||
As at 1 July |
(15,413) |
(8,606) |
|
Amounts written off |
- |
591 |
|
Amounts recovered and reversed |
1,651 |
2,043 |
|
Increases |
(3,085) |
(9,441) |
|
Total as at 30 June |
(16,847) |
(15,413) |
|
2018 |
2017 |
||
$'000 |
$'000 |
||
Note 4.1C: Investments in Corporate Commonwealth entities and companies |
|||
Equity interest in |
|||
Aboriginal Hostels Limited |
149,556 |
146,332 |
|
Anindilyakwa Land Council |
15,945 |
14,607 |
|
Australian Institute of Aboriginal and Torres Strait Islander Studies |
37,919 |
- |
|
Central Land Council |
41,665 |
39,598 |
|
Indigenous Land Corporation |
452,005 |
371,367 |
|
Indigenous Business Australia |
1,415,737 |
1,334,810 |
|
National Australia Day Council Limited |
790 |
1,137 |
|
Northern Land Council |
11,346 |
21,966 |
|
Outback Stores Pty Ltd |
41,617 |
41,686 |
|
Tiwi Land Council |
2,796 |
1,283 |
|
Torres Strait Regional Authority |
83,600 |
79,821 |
|
Wreck Bay Aboriginal Community Council |
56,790 |
61,377 |
|
Total investments in Corporate Commonwealth entities and companies |
2,309,766 |
2,113,984 |
|
All investments in Corporate Commonwealth entities and companies are expected to be recovered in more than 12 months. |
Investment in Corporate Commonwealth Entities The Australian Government holds a 100% equity interest in the following administered investments: Aboriginal Hostels Limited Provides temporary accommodation to Aboriginal and Torres Strait Islander people through a national network of hostels. Australian Institute of Aboriginal and Torres Strait Islander Studies The Australian Institute of Aboriginal and Torres Strait Islander Studies (AIATSIS) is a research, collections and publishing organisation that promotes knowledge and understanding of Aboriginal and Torres Strait Islander cultures, traditions, languages and stories, past and present. AIATSIS transferred from the Education portfolio into the PM&C portfolio during the year. Refer Note 8.1 Restructuring. Investment in Commonwealth Entities (continued) Land Councils The Land Councils include: -Anindilyakwa Land Council -Central Land Council -Northern Land Council -Tiwi Land Council; and -Wreck Bay Aboriginal Community Council The Land Councils represent the Aboriginal people living in the area of the Land Council in the management of Aboriginal land in the area, and in relation to legislation concerning that land. The Land Councils also consult and protect the interests of traditional owners and take measures to assist in the protection of sacred sites in the area of the Land Council. Wreck Bay Aboriginal Community Council holds title to land and provides services to the Aboriginal community of Jervis Bay. Indigenous Land Corporation The Indigenous Land Corporation provides economic, environmental, social and cultural benefits for Aboriginal persons and Torres Strait Islanders by assisting in the acquisition and management of an Indigenous land base. Indigenous Business Australia Indigenous Business Australia creates opportunities for Aboriginal and Torres Strait Islander people and communities to build assets and gain wealth. National Australia Day Council Limited Promotes national pride, active citizenship and the observance and celebration of Australia Day; administration of the Australian of the Year awards, which includes awards for the Young Australian of the Year, the Senior Australian of the Year and Australia’s Local Hero; distribution of grants to State and Territory Australia Day Councils; and provision of recommendations and advice to the Australian Government on all matters relating to year-round national pride activities. Outback Stores Pty Ltd. Outback Stores Pty Ltd improves access to affordable, healthy food for Indigenous communities, particularly in remote areas, through providing food supply and store management and support services. Torres Strait Regional Authority The Torres Strait Regional Authority formulates, implements and monitors the effectiveness of programs for Aboriginal and Torres Strait Islander people living in the Torres Strait and Northern Peninsula Area. |
Accounting Policy
Administered investments
Administered investments in subsidiaries are not consolidated because their consolidation is relevant only at the whole-of-government level.
Administered investments other than those held for sale are classified as available for sale and are measured at their fair value as at 30 June 2018. Fair value has been taken to be the Australian Government's proportional interest in the net assets as advised by the entities as at the end of the reporting period recorded in the latest management accounts or unaudited financial statements provided.
Accounting Policy
Administered investments
Administered investments in subsidiaries are not consolidated because their consolidation is relevant only at the whole-of-government level.
Administered investments other than those held for sale are classified as available for sale and are measured at their fair value as at 30 June 2018. Fair value has been taken to be the Australian Government's proportional interest in the net assets as advised by the entities as at the end of the reporting period recorded in the latest management accounts or unaudited financial statements provided.
4.2 Administered – Non-Financial Assets
Note 4.2: Reconciliation of the opening and closing balances of property, plant and equipment |
|||||
Land |
Buildings |
Leasehold improvements |
Plant and equipment |
Total |
|
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
|
As at 1 July 2017 |
|||||
Fair value |
- |
- |
97 |
1,990 |
2,087 |
Accumulated depreciation and impairment |
- |
- |
(23) |
(999) |
(1,022) |
Total as at 1 July 2017 |
- |
- |
74 |
991 |
1,065 |
Additions |
|||||
Acquisition of entities or operations (including restructuring) |
44,000 |
5,811 |
- |
- |
49,811 |
Revaluations recognised in other comprehensive income |
- |
- |
- |
(203) |
(203) |
Depreciation expense |
- |
(126) |
(49) |
(143) |
(318) |
Write-down and impairments recognised in net cost of services (expense) |
- |
- |
- |
(13) |
(13) |
Total as at 30 June 2018 |
44,000 |
5,685 |
25 |
632 |
50,342 |
Total as at 30 June 2018 represented by |
|||||
Fair value |
44,000 |
5,811 |
97 |
1,095 |
51,003 |
Accumulated depreciation and impairment |
- |
(126) |
(72) |
(463) |
(661) |
Total as at 30 June 2018 |
44,000 |
5,685 |
25 |
632 |
50,342 |
Accounting Policy
Revaluation
All leasehold improvements, plant and equipment assets were formally valued during the year by independent qualified valuers and were assessed for impairment.
Depreciation
Depreciation rates applying to each class of depreciable asset are based on the following useful lives for the current and prior reporting periods:
Buildings excluding leasehold improvements 22 to 30 years (2017: n/a)
Leasehold improvements Lease term (2017: Lease term)
Plant and equipment 5 to 114 years (2017: 1 to 115 years)
4.3A - Administered – Payables
2018 2017 $'000 $'000 Note 4.3A: Grants Public sector Australian Government entities (related parties) 17,064 1,979 Local Governments 22 60 State and Territory Governments 21,327 7,105 Private sector Commercial entities 860 857 Non-profit organisations 8,924 31,790 Total grants 48,197 41,791
Office of Township Leasing payables |
1,094 |
160 |
|
Other |
341 |
743 |
|
Total other payables |
1,435 |
903 |
|
All other payables are expected to be settled in no more than 12 months. |
5. Funding
1.
This section identifies the Department of the Prime Minister and Cabinet funding structure.
Note 5.1A: Departmental annual and unspent appropriations ('recoverable GST exclusive') |
||
2018 |
2017 |
|
$'000 |
$'000 |
|
Ordinary annual services |
||
Annual Appropriation |
||
Operating |
451,886 |
404,494 |
Capital budget |
14,506 |
11,732 |
Section 74 receipts |
26,047 |
22,924 |
Section 75 transfers |
(11,072) |
- |
Total available appropriation |
481,367 |
439,150 |
Appropriation applied (current and prior years) |
(470,695) |
(439,277) |
Variance |
10,672 |
(127) |
Opening unspent appropriation balance |
143,464 |
143,591 |
Repeal of Annual Appropriation Acts 2013-14, 2014-15 |
(50,762) |
- |
Closing unspent appropriation balance |
103,374 |
143,464 |
Balance comprises appropriations as follows1, 2: |
||
Appropriation Act (No. 1) 2013-14 |
- |
5,000 |
Appropriation Act (No.1) 2014-15 |
- |
43,446 |
Appropriation Act (No.1) 2014-15 - Capital Budget (DCB) |
- |
2,316 |
Appropriation Act (No.1) 2015-16 |
1,190 |
1,190 |
Appropriation Act (No.1) 2016-17 |
13,128 |
86,770 |
Appropriation Act (No.1) 2016-17 cash held by the department |
- |
2,976 |
Appropriation Act (No.3) 2016-17 |
- |
305 |
Appropriation Act (No.3) 2016-17 - Capital Budget (DCB) - Non Operating |
- |
1,461 |
Appropriation Act (No.1) 2017-18 |
78,867 |
- |
Appropriation Act (No.1) 2017-18 cash held by the department |
1,910 |
- |
Appropriation Act (No.1) 2017-18 - Capital Budget (DCB) - Non Operating |
8,279 |
- |
Total unspent appropriation - ordinary annual services |
103,374 |
143,464 |
Other services |
||
Annual Appropriation |
||
Equity injections |
11,694 |
8,611 |
Total available appropriation |
11,694 |
8,611 |
Appropriation applied (current and prior years) |
(9,665) |
(12,334) |
Variance |
2,029 |
(3,723) |
Opening unspent appropriation balance |
4,609 |
8,332 |
Repeal of Annual Appropriation Act 1 (No.2) 2014-15 |
(57) |
- |
Closing unspent appropriation balance |
6,581 |
4,609 |
Balance comprises appropriations as follows : |
||
Appropriation Act (No 2) 2014-15 - Non Operating - Equity Injection |
- |
57 |
Appropriation Act (No.2) 2016-17 - Non Operating - Equity Injection |
- |
4,552 |
Appropriation Act (No.2) 2017-18 - Non Operating - Equity Injection |
6,581 |
- |
Total unspent appropriation - other services |
6,581 |
4,609 |
Total unspent appropriation |
109,955 |
148,073 |
1 The current year unspent appropriation balance is shown inclusive of Section 51 permanent quarantines against Appropriation Act (No.1) 2017-18 of $10.168 million, Appropriation Act (No.1) 2017-18 – Capital Budget(DCB) – Non Operating of $3.795 million, Appropriation Act (No.1) 2015-16 of $1.190 million and Appropriation Act (No.1) 2016-17 of $11.320 million.
2 The current year unspent appropriation balance is shown inclusive of re-allocations of amounts from Appropriation Act (No.1) 2017-18 to Appropriation Act (No.1) 2017-18 – Capital Budget (DCB) of $1.600 million that was approved by the Finance Minister during 2017-18.
Accounting Policy
Revenue from Government - Departmental
Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as revenue from Government when PM&C gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts.
Note 5.1B: Administered annual and unspent appropriations ('recoverable GST exclusive') |
||
2018 |
2017 |
|
$'000 |
$'000 |
|
Ordinary annual services |
||
Annual Appropriation |
||
Operating |
1,320,644 |
1,408,961 |
Capital budget |
253 |
250 |
Payments to corporate Commonwealth entities/companies |
94,929 |
92,752 |
Section 74 receipts |
5,213 |
2,131 |
Section 75 transfers |
(19,037) |
- |
Total available appropriation |
1,402,002 |
1,504,094 |
Appropriation applied (current and prior years) |
(1,395,502) |
(1,437,686) |
Variance |
6,500 |
66,408 |
Opening unspent appropriation balance |
122,651 |
56,243 |
Repeal of Annual Appropriation Acts 2012-13, 2013-14 and 2014-15 |
(26,897) |
- |
Closing unspent appropriation balance |
102,254 |
122,651 |
Balance comprises appropriations as follows1: |
||
Appropriation Act (No.1) - Capital Budget (DCB) - - Non Operating 2012-13 |
- |
240 |
Appropriation Act (No.1) 2013-14 |
- |
10 |
Appropriation Act (No.5) 2013-14 |
- |
10 |
Appropriation Act (No.1) 2014-15 |
- |
26,497 |
Appropriation Act (No.1) - Capital Budget (DCB) - - Non Operating 2014-15 |
- |
140 |
Appropriation Act (No.3) 2015-16 |
8,902 |
8,902 |
Appropriation Act (No.1) - Capital Budget (DCB) - - Non Operating 2015-16 |
252 |
252 |
Appropriation Act (No.1) 2016-17 |
39,058 |
86,442 |
Appropriation Act (No.1) - Capital Budget (DCB) - - Non Operating 2016-17 |
146 |
146 |
Supply Act (No.1) - Capital Budget (DCB) - - Non Operating 2016-17 |
12 |
12 |
Appropriation Act (No.1) 2017-18 |
53,631 |
- |
Appropriation Act (No.1) - Capital Budget (DCB) - - Non Operating 2017-18 |
253 |
- |
Total unspent appropriation - ordinary annual services |
102,254 |
122,651 |
Other services |
||
Annual Appropriation |
||
States, ACT, NT and Local government |
7,762 |
7,648 |
Payments to corporate Commonwealth entities/companies |
23,850 |
36,550 |
Total available appropriation |
31,612 |
44,198 |
Appropriation applied (current and prior years) |
(31,612) |
(45,257) |
Variance |
- |
(1,059) |
Opening unspent appropriation balance |
23,838 |
24,897 |
Repeal of Annual Appropriation Acts 2013-14 and 2014-15 |
(23,838) |
- |
Closing unspent appropriation balance |
- |
23,838 |
Balance comprises appropriations as follows: |
||
Appropriation Act 6 - SPP 2013-14 |
- |
23,837 |
Appropriation Act 2 - SPP 2014-15 |
- |
1 |
Total unspent appropriation - other services |
- |
23,838 |
Total unspent appropriation |
102,254 |
146,489 |
Note 5.1C: Special appropriations ('recoverable GST exclusive') |
||
Authority |
Appropriation applied |
|
2018 |
2017 |
|
$'000 |
$'000 |
|
Aboriginal Land Rights (Northern Territory) Act 1976 |
338,702 |
178,948 |
Public Governance, Performance and Accountability Act 2013 s.77 |
50 |
6 |
Higher Education Support Act 2003 |
67,979 |
58,584 |
Total |
406,731 |
237,538 |
There were no transactions during 2017 and 2018 for special appropriations Indigenous Education (Targeted Assistance) Act 2000, s.13 and Native Title Act 1993, s.54(2).
1 The prior year administered unspent annual appropriation is shown inclusive of Section 51 permanent quarantines against Appropriation Act (No.3) 2015-16 of $8.902 million, Appropriation Act (No.1) Capital Budget (DCB) 2015-16 of $0.252 million, Appropriation Act (No.1) 2016-17 of $39.058 million, Appropriation Act (No.1) Capital Budget (DCB) 2016-17 of $0.146 million and Supply Appropriation Act (No.1) Capital Budget (DCB) 2016-17 of $0.012 million.
5.2 Special Accounts
Services for Other Entities and Trust Moneys1 |
Aboriginals and Torres Strait Islander Corporations Unclaimed Money Account2 |
Aboriginal Tutorial Assistance Superannuation Special Account3 |
Indigenous Remote Services Delivery Special Account4 |
Australian New Zealand Land Information Special Account5 |
||||||
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Balance brought forward from previous period |
- |
58 |
787 |
887 |
- |
960 |
10,646 |
8,083 |
- |
77 |
Increases |
||||||||||
Administered |
||||||||||
Other receipts |
1,418 |
140 |
196 |
34 |
- |
- |
11,190 |
2,782 |
- |
- |
Total increases |
1,418 |
140 |
196 |
34 |
- |
- |
11,190 |
2,782 |
- |
- |
Available for payments |
1,418 |
198 |
983 |
921 |
- |
960 |
21,836 |
10,865 |
- |
77 |
Administered |
||||||||||
Transfers to OPA |
- |
(58) |
- |
- |
- |
(960) |
- |
- |
- |
(49) |
Payments made to suppliers |
- |
(140) |
(2) |
(134) |
- |
- |
(11,951) |
(219) |
- |
(28) |
Total administered decreases |
- |
(198) |
(2) |
(134) |
- |
(960) |
(11,951) |
(219) |
- |
(77) |
Total decreases |
- |
(198) |
(2) |
(134) |
- |
(960) |
(11,951) |
(219) |
- |
(77) |
Total balance carried to the next period |
1,418 |
- |
981 |
787 |
- |
- |
9,885 |
10,646 |
- |
- |
Balance represented by: |
||||||||||
Cash held in the OPA |
1,418 |
- |
981 |
787 |
- |
- |
9,885 |
10,646 |
- |
- |
Total balance carried to the next period |
1,418 |
- |
981 |
787 |
- |
- |
9,885 |
10,646 |
- |
- |
Aboriginals Benefit Account6 |
Aboriginals and Torres Strait Islander Land Account7 |
|||||||||
2018 |
2017 |
2018 |
2017 |
|||||||
$'000 |
$'000 |
$'000 |
$'000 |
|||||||
Balance brought forward from previous period |
24,334 |
19,560 |
1 |
3 |
||||||
Increases |
||||||||||
Administered |
||||||||||
Appropriation credited to special account |
337,701 |
177,965 |
- |
- |
||||||
Investments realised |
691,500 |
729,500 |
2,004,610 |
2,018,239 |
||||||
Other receipts |
20,123 |
17,683 |
53,095 |
58,812 |
||||||
Total increase |
1,049,324 |
925,148 |
2,057,705 |
2,077,051 |
||||||
Available for payments |
1,073,658 |
944,708 |
2,057,706 |
2,077,054 |
||||||
Decreases |
||||||||||
Administered |
||||||||||
PGPA Act section 58 investments |
(877,746) |
(785,500) |
(2,004,995) |
(2,025,333) |
||||||
Payments made |
(184,700) |
(134,874) |
(52,710) |
(51,720) |
||||||
Total administered decreases |
(1,062,446) |
(920,374) |
(2,057,705) |
(2,077,053) |
||||||
Total decreases |
(1,062,446) |
(920,374) |
(2,057,705) |
(2,077,053) |
||||||
Total balance carried to the next period |
11,212 |
24,334 |
1 |
1 |
||||||
Balance represented by: |
||||||||||
Cash held in entity bank accounts |
11,212 |
24,334 |
1 |
1 |
||||||
Total balance carried to the next period |
11,212 |
24,334 |
1 |
1 |
1Appropriation: Public Governance, Performance and Accountability Act 2013; section 78 Establishing Instrument: PGPA Act Determination (DPM&C SOETM Special Account 2018). PGPA Act Determination (DPM&C SOETM Special Account 2018) replaces Determination 2008/13, which was repealed on 30 June 2018. |
Purpose: This account was created to disburse amounts held on trust or otherwise for the benefit of a person other than the Commonwealth. This account is non-interest bearing. |
2Appropriation: Public Governance, Performance and Accountability Act 2013; section 80 |
Establishing Instrument: Corporations (Aboriginal and Torres Strait Islander) Act 2006; section 551-20 Purpose: To administer unclaimed moneys received by the Registrar of Aboriginal and Torres Strait Islander Corporations. This account is non-interest bearing. |
3Appropriation: Public Governance, Performance and Accountability Act 2013; section 78 Establishing Instrument: Determination 2003/05 Purpose: To provide a source of finance for the liability for the Superannuation Productivity Benefit entitlements owing to tutors contracted under the Aboriginal Tutorial Assistance Scheme (ATAS). This account is non-interest bearing. The Determination sunset on 1 April 2017. |
4Appropriation: Public Governance, Performance and Accountability Act 2013; section 78 Establishing Instrument: Determination 2010/06 |
Purpose: To support the implementation of the Remote Service Delivery National Partnership Agreement. It will provide the Australian Government with the capacity to address high priority projects in a timely way and support projects identified through the local implementation planning process. This account is non-interest bearing. |
5Appropriation: Public Governance, Performance and Accountability Act 2013; section 78 Establishing Instrument: Determination 2001/11 (amended by Determination 2006/10) |
Purpose: To develop best practice policies and guidelines in spatial data management in Australia and New Zealand and to assist the growth of a spatial information industry in Australia and New Zealand. This account is non-interest bearing. The Determination sunset on 1 April 2017. |
6Appropriation: Public Governance, Performance and Accountability Act 2013; section 80
Establishing Instrument: Aboriginal Land Rights (Northern Territory) Act 1976; sections 62, 63, 64 and 65
Purpose: For the receipt and disbursement of the equivalent of mining royalty moneys derived from mining operations on Aboriginal land in the Northern Territory.
This account is interest bearing.
7Appropriation: Public Governance, Performance and Accountability Act 2013; section 80
Establishing Instrument: Section 192W of the Aboriginal and Torres Strait Islander Act 2005
Purpose: To provide a secure stream of income to the Indigenous Land Corporation in perpetuity to provide economic, environmental, social and cultural benefits for Aboriginal people and Torres Strait Islanders by assisting in the acquisition and management of an Indigenous land base.
This account is interest bearing.
Aboriginal Advancement Account
The Aboriginal Advancement Account was established under section 80 of the PGPA Act.
The purpose of the account is for furthering the social and economic advancement of Aboriginal people living in Victoria. There were no transactions credited or debited to the special account during 2017 and 2018.
6. People
This section describes a range of employment and post-employment benefits provided to our people.
2018 |
2017 |
||
$'000 |
$'000 |
||
Note 6.1A: Employee provisions |
|||
Annual leave |
26,445 |
26,163 |
|
Long service leave |
52,184 |
51,497 |
|
Total employee provisions |
78,629 |
77,660 |
|
Accounting policy and significant accounting judgements
Employee benefits
Liabilities for ‘short-term employee benefits’ and termination benefits due within 12 months of the end of the reporting period are measured at their nominal amounts.
Leave
The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of PM&C is estimated to be less than the annual entitlement for sick leave.
The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including PM&C’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.
The liability for long service leave has been determined by reference to the work of an actuary during 2018. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.
Separation and redundancy
A liability is made for separation and redundancy benefit payments. PM&C recognises a liability for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.
Superannuation
PM&C's staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or another fund of their choice.
The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.
The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.
PM&C makes employer contributions to the employees' superannuation scheme. For Commonwealth defined benefits schemes, these rates are determined by an actuary to be sufficient to meet the current cost to the Government. PM&C accounts for the contributions as if they were contributions to defined contribution plans.
The liability for superannuation recognised as at 30 June represents outstanding contributions for the final fortnight of the year.
2018 |
2017 |
||
$'000 |
$'000 |
||
Note 6.1B: Administered employee provisions |
|||
Annual leave |
113 |
107 |
|
Long service leave |
180 |
144 |
|
Total employee provisions |
293 |
251 |
|
Accounting Policy
The expense and liabilities for services rendered by staff employed in the Prime Minister’s Official Establishments and in support of former Governors-General are recognised as administered items. Accounting policies are consistent with those applied to departmental items.
Note 6.1C: Non-cash benefits - former Governors-General benefits |
|||
Non-cash benefits - former Governors-General |
13,251 |
13,918 |
|
Total non-cash benefits - former Governors-General benefits |
13,251 |
13,918 |
|
Changes in the value of the defined benefit obligations are as follows: |
|||
Net liability at 1 July |
13,918 |
16,037 |
|
Finance costs |
348 |
305 |
|
Actuarial losses/(gains) |
354 |
(1,112) |
|
Benefits paid |
(1,369) |
(1,312) |
|
Net liability at 30 June |
13,251 |
13,918 |
|
Principal actuarial assumptions at the reporting date (expressed as weighted averages): |
|||
Discount rate at 30 June |
2.50% |
2.50% |
|
Future salary increases |
3.50% |
3.50% |
|
Inflation rate |
2.50% |
2.50% |
|
Rate of expenditure slow down with age |
3.00% |
3.00% |
Accounting Policy
Former Governors-General benefits
PM&C has responsibility for the administration of non-cash benefits provided to former Governors-General. These entitlements are regarded as post-employment benefits and represent the provision of office facilities, administrative support and transport.
The liability for these benefits is calculated annually as the present value of future benefit obligations. Actuarial gains or losses are recognised in equity in the year in which they occur. Interest on the liability is recognised in the surplus/(deficit).
Significant accounting judgements and estimates
The provision for non-cash former Governors-General entitlements relate to post-employment benefits such as office facilities, administrative support and transport. The future liability for these benefits is based on the actuarial assessment determined by the Australian Government Actuary.
6.2 Key Management Personnel Remuneration
2018 |
2017 |
||
$'000 |
$'000 |
||
Short-term employee benefits |
3,979 |
3,807 |
|
Post-employment benefits |
582 |
569 |
|
Other long-term employee benefits |
406 |
388 |
|
Total key management personnel remuneration expenses |
4,967 |
4,764 |
The total number of key management personnel included in the above table is 17 (2017: 13). Included in that number is six staff who worked for the full-year and 11 staff who worked a part-year (2017: seven and six).
Key management personnel on acting arrangements are included where the length of the arrangement is longer than two months.
1 Excludes remuneration and other benefits of the PM&C Portfolio Ministers as these are set by the Remuneration Tribunal and are not paid by PM&C.
PM&C is an Australian Government controlled entity. Related parties to PM&C are Key Management Personnel including the Portfolio Ministers, and other Australian Government entities.
Significant transactions with related parties can include:
- the payments of grants or loans;
- purchases of goods and services;
- asset purchases, sales transfers or leases;
- debts forgiven; and
- guarantees.
Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens for example payment or refund of taxes, receipt of a Medicare rebate or higher education loans. These transactions have not been disclosed in this note.
Giving consideration to relationships with related entities, and transactions entered into during the reporting period (including comparative year) by PM&C, it has been determined that there are no related party transactions to be separately disclosed.
7. Managing Uncertainties
This section analyses how the Department of the Prime Minister and Cabinet manages financial risks within its operating environment.
7.1 Contingent Assets and Liabilities
Note 7.1A: Contingent assets and liabilities
Unquantifiable contingent liabilities - claims for damages and costs
Claims have been made against the Australian Government by former residents of the Retta Dixon Home in the Northern Territory. These claims are currently being assessed.
Accounting Policy
Contingent liabilities and contingent assets are not recognised in the Statement of Financial Position but are reported in the relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset, or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when the probability of settlement is greater than remote.
Note 7.1B: Administered contingent assets and liabilities
PM&C is not aware of any material administered quantifiable or unquantifiable contingent assets or liabilities as at 30 June 2018.
2018 |
2017 |
||
$'000 |
$'000 |
||
Note 7.2A: Categories of financial instruments |
|||
Financial assets |
|||
Loans and receivables |
|||
Cash and cash equivalents |
1,910 |
2,976 |
|
Goods and services receivables (net) |
11,623 |
3,448 |
|
Accrued revenue |
4,056 |
3,787 |
|
Total loans and receivables |
17,589 |
10,211 |
|
Total financial assets |
17,589 |
10,211 |
|
Financial liabilities |
|||
Financial liabilities measured at amortised cost |
|||
Trade creditors and accruals |
22,709 |
22,673 |
|
Grants |
232 |
303 |
|
Total financial liabilities measured at amortised cost |
22,941 |
22,976 |
|
Total financial liabilities |
22,941 |
22,976 |
Loans and receivables |
|||
Impairment |
(16) |
(153) |
|
Reversal of impairment |
76 |
- |
|
Net gains/ (losses) on loans and receivables |
60 |
(153) |
|
Net gain/ (loss) on financial assets |
60 |
(153) |
Accounting Policy
Financial Assets
PM&C classifies its financial assets in the following categories:
(a) Held-to-maturity investments
(b) Available for sale financial assets
(c) Loans and receivables.
All financial assets are expected to be recovered within 12 months except where indicated.
Interest is recognised by applying the effective interest rate.
Impairment of financial assets
Financial assets are assessed for impairment at the end of each reporting period.
Financial liabilities
Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).
Financial liabilities are recognised and derecognised upon ‘trade date’.
Settlement of supplier payables is usually made within 30 days.
Significant accounting judgements and estimates
The relevant government bond rate has been used to discount non-current liabilities.
This section analyses how the Department of the Prime Minister and Cabinet manages financial risks within its operating environment.
1.1. Contingent Assets and Liabilities
Note 7.1A: Contingent assets and liabilities
Unquantifiable contingent liabilities - claims for damages and costs
Claims have been made against the Australian Government by former residents of the Retta Dixon Home in the Northern Territory. These claims are currently being assessed.
Accounting Policy
Contingent liabilities and contingent assets are not recognised in the Statement of Financial Position but are reported in the relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset, or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when the probability of settlement is greater than remote.
Note 7.1B: Administered contingent assets and liabilities
PM&C is not aware of any material administered quantifiable or unquantifiable contingent assets or liabilities as at 30 June 2018.
2018 |
2017 |
||
$'000 |
$'000 |
||
Note 7.2A: Categories of financial instruments |
|||
Financial assets |
|||
Loans and receivables |
|||
Cash and cash equivalents |
1,910 |
2,976 |
|
Goods and services receivables (net) |
11,623 |
3,448 |
|
Accrued revenue |
4,056 |
3,787 |
|
Total loans and receivables |
17,589 |
10,211 |
|
Total financial assets |
17,589 |
10,211 |
|
Financial liabilities |
|||
Financial liabilities measured at amortised cost |
|||
Trade creditors and accruals |
22,709 |
22,673 |
|
Grants |
232 |
303 |
|
Total financial liabilities measured at amortised cost |
22,941 |
22,976 |
|
Total financial liabilities |
22,941 |
22,976 |
Loans and receivables |
|||
Impairment |
(16) |
(153) |
|
Reversal of impairment |
76 |
- |
|
Net gains/ (losses) on loans and receivables |
60 |
(153) |
|
Net gain/ (loss) on financial assets |
60 |
(153) |
Accounting Policy
Financial Assets
PM&C classifies its financial assets in the following categories:
(a) Held-to-maturity investments
(b) Available for sale financial assets
(c) Loans and receivables.
All financial assets are expected to be recovered within 12 months except where indicated.
Interest is recognised by applying the effective interest rate.
Impairment of financial assets
Financial assets are assessed for impairment at the end of each reporting period.
Financial liabilities
Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).
Financial liabilities are recognised and derecognised upon ‘trade date’.
Settlement of supplier payables is usually made within 30 days.
Significant accounting judgements and estimates
The relevant government bond rate has been used to discount non-current liabilities.
7.3 Administered – Financial Instruments
2018 |
2017 |
||
$'000 |
$'000 |
||
Note 7.3A: Categories of financial instruments |
|||
Financial assets |
|||
Held-to-maturity investments |
|||
Bank term deposits |
2,798,741 |
2,612,110 |
|
Total held-to-maturity investments |
2,798,741 |
2,612,110 |
|
Loans and receivables |
|||
Cash and cash equivalents |
23,576 |
36,072 |
|
Loans to Australian Government entities |
48,549 |
50,967 |
|
Goods and services receivable |
17 |
7 |
|
Interest receivable |
34,243 |
32,829 |
|
Grants receivable (net) |
4,669 |
2,945 |
|
Total loans and receivables |
111,054 |
122,820 |
|
Available for sale financial assets |
|||
Aboriginal Hostels Limited |
149,556 |
146,332 |
|
Anindilyakwa Land Council |
15,945 |
14,607 |
|
Australian Institute of Aboriginal and Torres Strait Islander Studies |
37,919 |
- |
|
Central Land Council |
41,665 |
39,598 |
|
Indigenous Land Corporation |
452,005 |
371,367 |
|
Indigenous Business Australia |
1,415,737 |
1,334,810 |
|
National Australia Day Council Limited |
790 |
1,137 |
|
Northern Land Council |
11,346 |
21,966 |
|
Outback Stores Pty Ltd |
41,617 |
41,686 |
|
Tiwi Land Council |
2,796 |
1,283 |
|
Torres Strait Regional Authority |
83,600 |
79,821 |
|
Wreck Bay Aboriginal Community Council |
56,790 |
61,377 |
|
Total available for sale financial assets |
2,309,766 |
2,113,984 |
|
Total financial assets |
5,219,561 |
4,848,914 |
|
Financial liabilities |
|||
Financial liabilities measured at amortised cost |
|||
Trade creditors and accruals |
3,967 |
6,505 |
|
Grants |
48,197 |
41,791 |
|
Other payables |
1,094 |
845 |
|
Total financial liabilities measured at amortised cost |
53,258 |
49,141 |
|
Total financial liabilities |
53,258 |
49,141 |
2018 |
2017 |
||
$000 |
$000 |
||
Note 7.3B: Net gains or losses on financial instruments |
|||
Financial assets |
|||
Held-to-maturity investments |
|||
Interest revenue |
72,200 |
74,244 |
|
Net gains on held-to-maturity investments |
72,200 |
74,244 |
|
Loans and receivables |
|||
Interest revenue |
4,688 |
4,864 |
|
Reversal of impairment |
948 |
1,498 |
|
Impairment |
(2,814) |
(8,632) |
|
Net gains/ (losses) on loans and receivables |
2,822 |
(2,270) |
|
Net gain on financial assets |
75,022 |
71,974 |
|
Accounting Policy
Financial assets
Investments
Investment activities are conducted in accordance with the requirements of section 58 of the PGPA Act. Investments are typically low risk and take the form of term deposits. The duration of the term deposits are usually for a term of three to 12 months.
The investment objective of PM&C is to comply with legislative obligations under the PGPA Act, the ALRA and the Aboriginal and Torres Strait Islander Act 2005. Investment practices are also governed by the investment policy of PM&C, which requires the management of the portfolio to respond to positive investment opportunities in the market so as to achieve the best possible returns for the account within the legislative framework.
The investment portfolio and bank accounts are managed to ensure sufficient funds are available for payments as required.
The asset allocation of the portfolio as at 30 June 2018 is 100% (2017: 100%) term deposits with Australian banks.
Loans and receivables
Where loans and receivables are not subject to concessional treatment, they are carried at amortised cost using the effective interest method. Gains and losses due to impairment, derecognition and amortisation are recognised through the Administered Schedule of Comprehensive Income.
8. Other Information
Restructuring 2017
PM&C had no restructuring activity during 2017.
Restructuring 2018
AIATSIS1 |
Official Establishments2 |
||
Education |
Finance |
Finance |
|
$'000 |
$'000 |
$'000 |
|
FUNCTION ASSUMED |
|||
Assets recognised |
|||
Investment in Corporate Commonwealth entities |
39,974 |
- |
- |
Appropriation receivable |
- |
28 |
- |
Property, plant and equipment |
- |
- |
49,811 |
Total assets recognised |
39,974 |
28 |
49,811 |
Liabilities recognised |
|||
Employee provisions |
- |
28 |
- |
Total liabilities recognised |
- |
28 |
- |
Net assets assumed |
39,974 |
- |
49,811 |
Expenses |
|||
Recognised by the receiving entity |
- |
- |
126 |
Recognised by the losing entity |
- |
50 |
219 |
Total expenses |
- |
50 |
345 |
1 The Australian Institute of Aboriginal and Torres Strait Islander Studies (AIATSIS) was transferred into the PM&C Portfolio following the Administrative Arrangements Order of 19 April 2018. As a result, an investment in AIATSIS was transferred from the Department of Education and Training (Education).
2 Official Establishments, ownership and property management of the Prime Minister’s official residences was assumed from the Department of Finance (Finance) during the year following the Administrative Arrangements Order of 30 November 2017.
National policy on cities1 |
Cyber policy and counter terrorism coordination2 |
Intelligence policy3 |
Reducing the burden of Government regulation4 |
Spatial data5 |
|
DIRDC |
DoHA |
ONI |
DJSB |
DIIS |
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
FUNCTION RELINQUISHED |
|||||
Assets relinquished |
|||||
Appropriation receivable |
1,192 |
1,261 |
430 |
148 |
161 |
Total assets relinquished |
1,192 |
1,261 |
430 |
148 |
161 |
Liabilities relinquished |
|||||
Employee provisions |
1,192 |
1,345 |
459 |
162 |
161 |
Total liabilities relinquished |
1,192 |
1,345 |
459 |
162 |
161 |
Net assets relinquished |
- |
(84) |
(29) |
(14) |
- |
1 Responsibility for National policy on cities and population was relinquished to the Department of Infrastructure, Regional Development and Cities (DIRDC) following the Administrative Arrangements Order of 20 December 2017.
2 Responsibility for Cyber policy and Counter terrorism co-ordination was relinquished to the Department of Home Affairs (DoHA) following the Administrative Arrangements Order of 20 December 2017.
3 Responsibility for Intelligence Policy was relinquished to the Office of National Intelligence (ONI) following a decision of the Prime Minister, effective 21 August 2017.
4 Reducing the burden of Government regulation was relinquished to the Department of Jobs and Small Business (DJSB) following the Administrative Arrangements Order of 20 December 2017.
5 Responsibility for the spatial data function was transferred to the Department of Industry, Innovation and Science (DIIS) following a decision of the Prime Minister, effective January 2018.
Other functions relinquished
Responsibility for the APS Data Skills and Capability Framework and data platforms was relinquished to the Digital Transformation Agency following a decision of the Prime Minister, effective 31 October 2017. No assets or liabilities were transferred.
Responsibility for the Independent National Security Legislation Monitor was relinquished to the Attorney General's Department following the Administrative Arrangements Order of 10 May 2018. Funding transfers for this function had not been finalised as at 30 June 2018.
Responsibility for the Cyber Security Advisor was relinquished to the Australian Signals Directorate following the Administrative Arrangements Order of 10 May 2018. Funding transfers for this function had not been finalised as at 30 June 2018.
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