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Budget commentary

For the period ended 30 June 2020

Departmental Budget Variance Commentary:

The below table provides commentary for significant variances between PM&C’s original budget estimates, as published in the 2019-20 Portfolio Budget Statements, and the actual expenditure and net asset position for the year.

Explanation of major variances

Affected line items (and statement)

The National Indigenous Australians Agency (NIAA) was established in the PM&C portfolio as at 1July 2019. The Indigenous Affairs functions, previously under Outcome 2, have transferred from PM&C to NIAA. Due to the timing of the original 2019-20 budget, Outcome 2 was included. This has impacted line items this year.

Various line items - Statement of Comprehensive Income (variance in net cost of services to original budget of $244m)

Net Assets ($57m) - Statement of Financial Position

Property, Plant and Equipment ($75m) - Statement of Financial Position

Net cash from / (used by) operating activities $14m - Cash Flow Statement

Impact of the AASB 16 Leases accounting standard: PM&C has applied the modified retrospective approach which has resulted in the recognition of the ROU assets as at 1 July 2019. There is also an increase in the Interest & Depreciation expense and a corresponding decrease in the Operating Lease expenses. The original budget did not reflect the adoption of this standard.

Property, Plant and Equipment ($117m) - Statement of Financial Position

Finance costs ($1.5m), Depreciation ($9.6m) and Supplier ($11m) expense - Statement of Comprehensive Income

Cash used for Financing and Operating Activities ($7.6m) – Cash Flow Statement

Own Source Revenue: Revenue generated from rendering of services has increased reflecting shared corporate service arrangements provided to other government entities, primarily NIAA.

Revenue from contracts with customers ($47m) - Statement of Comprehensive Income

Accrued revenue – Statement of Financial Position

Sale of goods and rendering of services ($47m) – Cash Flow Statement