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Report of financial performance

The department reported a consolidated operating loss (excluding depreciation) of $13.65 million in 2018–19. This is against the budget of $0.65 million surplus reported in the 2018–19 Portfolio Budget Statements. The Defence Service Homes Insurance Scheme (DSHIS) reported an operating loss of $6.37 million (excluding depreciation) and DVA reported an operating loss of $7.28 million (excluding depreciation).

DVA’s operating loss is primarily driven by an unprecedented growth in compensation claims. DSHIS incurred a technical operating loss largely due to natural catastrophe flooding events. The department has notified the Minister for Finance of the operating loss, and is developing effective budget measures to address current and future claim demand.

DSHIS operates as a separate entity; however, under the Commonwealth financial framework it is reported as part of DVA. For more details on DSHIS, see Program 1.4 and DSHIS’s separate financial statements.

DVA’s cash position decreased by $1.21 million in 2018–19.

DVA’s net assets increased by $5.86 million in 2018–19 (from $82.70 million in 2017–18 to $88.56 million in 2018–19) mainly due to a combination of increases in premiums receivable and land and buildings, partially offset by an increase in provision for outstanding claims.

Table 9 highlights the financial relationship between DVA and DSHIS. The table shows the entities separately, then amalgamates their finances to give the total which is used for reporting in the financial statements.

Table 9: Financial performance and financial position for DVA and DSHIS 2016–17 to 2018–19

2016–17

2017–18

2018–19

DVA

($m)

DSHIS

($m)

DVA total

($m)

DVA

($m)

DSHIS

($m)

DVA total

($m)

DVA

($m)

DSHIS

($m)

DVA total

($m)

Surplus/deficit after income tax

–23.59

0.49

23.10

–26.66

5.61

21.05

–30.60

–6.44

37.04

Non-appropriated expenses

23.99

0.08

24.07

23.79

0.08

23.87

23.32

0.07

23.39

Surplus/deficit attributable to the entity

0.41

0.56

0.97

–2.87

5.68

2.81

–7.28

–6.37

13.65

Cash balance

3.77

2.64

6.41

4.77

3.20

7.97

2.28

4.48

6.76

Net assets

43.04

33.90

76.94

43.19

39.51

82.70

55.49

33.07

88.56

DSHIS = Defence Service Home Insurance Scheme