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Departmental Budget Variance Commentary

The financial statements provide a comparison of the original budget as presented in the 2019-20 Portfolio Budget Statements (PBS) to the 2019-20 final outcome as presented in accordance with Australian Accounting Standards for Geoscience Australia. The Budget is not audited.
Variances are considered to be ‘major’ based on the following criteria:

  1. the variance between budget and actual is greater than +/-10% of the budget for the line item; or
  2. the variance between budget and actual is greater than +/-2% of the sub-total (i.e. total expenses, total income, total assets or total liabilities); or
  3. the variance between budget and actual is below this threshold but is considered important for the reader’s understanding, or it is sensitive or relates to a large offsetting movement.

In some instances, a budget has not been provided for in the PBS, for example non-cash items such as asset revaluations, foreign exchange and sale of asset adjustments.

Unless the variance is considered ‘major’ no explanation has been provided.

Statement of Comprehensive Income

Total expenses are lower than budget by 12%, mainly due to lower supplier expenses, offset by higher depreciation and amortisation expenses and finance costs due to the implementation of AASB 16 Leases.

Supplier expenses are lower than budget by $59.9 million, mainly due to delays in the Satellite-Based Augmentation System program ($20.4 million), operating lease payments now accounted for as depreciation and finance costs on right-of-use (ROU) assets under AASB 16 Leases ($31.8 million), and lower than expected expenses associated with external revenue (refer to revenue from contracts with customers below).

Depreciation and amortisation are higher than budget by $26.1 million due to implementation of AASB 16 Leases recognising depreciation on ROU assets.

Finance costs are higher than budget by $4.2 million due to implementation of AASB 16 Leases recognising interest on ROU assets as explained in supplier expenses.

Total own-source revenue is lower than budget by 19%, reflecting lower revenue from contracts with customers, offset by higher other revenue.

Revenue from contracts with customers is lower than budget by 22%. The budget was based on revenue earned by the organisation in prior years. The lower revenue is due to a general decline in externally funded activities from prior years, including collaborative arrangements, state government funded surveys and revenue from other Australian Government entities.

Other gains is higher than budget due to recognition of Global Navigation Satellite System ground stations received from the Western Australian government free of charge.

The Surplus on continuing operations relative to the budgeted deficit is mainly due to delays in the Satellite-Based Augmentation System program.

Statement of Financial Position

Total assets are higher than budget by $368.5 million due to higher financial assets and non-financial assets as outlined below.

Financial assets are higher than budget by $58.6 million, mainly as a result of higher Trade and other receivables due to delays in the Satellite-Based Augmentation System program ($20.4 million operating and $20.1 million capital expenditure) and the National Positioning Infrastructure program ($1.3 million operating and $5.5 million capital expenditure).

Non-financial assets are higher than budget by $310.0 million, mainly as a result of the implementation of AASB 16 Leases and the recognition of the associated right-of-use assets ($351.9 million) and higher prepayments than prior years partly due to whole of government arrangements for cloud services ($3.8 million). This is offset by delays in capital expenditure for the Satellite-Based Augmentation System program ($20.1 million).

Total liabilities are higher than budget by $288.2 million, mainly due to the recognition of lease liabilities as a result of the implementation of AASB 16 Leases, and higher provisions, offset by lower payables.

Total payables are lower than budget by $44.1 million, mainly due to the de-recognition of the lease rent straight-lining payable ($32.1 million) and operating lease incentives ($12.7 million) under AASB 16 Leases.

Total provisions are higher than budget by $3.2 million, mainly due to higher Employee provisions reflecting the lower 10 year bond rate impact on the long service leave provision and a provision for restructuring, as well as higher Other provisions due to changes to the make good provision which were not anticipated in the budget.

Statement of Changes in Equity

Total equity is higher than budget by $80.4 million, mainly due to: Reserves being higher as a result of the 2019-20 revaluation of non-financial assets, a Retained surplus as a result of the implementation of AASB 16 Leases and associated de-recognition of the lease rent straight-lining payable and operating lease incentives, and the operating surplus relative to the budgeted deficit (as explained in Statement of Comprehensive Income section).

Cash Flow Statement

Total cash used by investing activities is lower than budget by 66%, mainly due to delays in capital expenditure on the Satellite-Based Augmentation System program ($12.0 million) and the National Positioning Infrastructure program ($4.9 million).

Appropriations - contributed equity is lower than budget reflecting delays in the Satellite-Based Augmentation System program and the National Positioning Infrastructure program.

Other major cash flow variances are consistent with the variances as explained in the Statement of Comprehensive Income section.