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Chief Finance Officer's Report


For 2019–20 the MDBA reported a total operating surplus of $10.3 million. This was a result of:

  • Lower spending than anticipated on the Murray–Darling Basin Agreement functions. A significant portion of this will be carried over into the 2020–21 financial year to complete the projects in progress.
  • Revenue received during the year for new projects, where the funds were not able to be spent in 2019–20.

Expenditure for Murray–Darling Basin Agreement functions was lower than budgeted due to a delay in the receipt of machinery from overseas and delays in the program of work relying on the use of this machinery. Reduced water storage levels also resulted in less water entitlement usage for environmental purposes and therefore lower fees being paid. This was offset to an extent by increased expenditure on some of the infrastructure assets at Yarrawonga Weir and Hume to Yarrawonga river reach, and some investigations at the Hume Dam. The delivery of these programs is scalable depending on seasonal conditions, river and storage levels, and the associated lengthy and complex approval processes.


During 2019–20, the MDBA revenue comprised:

  • Revenue from the Australian Government totalling $75.2 million (2018–19: $94.2 million). This was lower in 2019–20 primarily due to the reduction in funding received for the South Australian Riverland Floodplains Integrated Infrastructure Program to $25.0 million (2018–19: $43.5 million).
  • Contributions from jurisdictions of $86.4 million (compared to $93.5 million in 2018–19). This was lower in 2019–20 due to some jurisdictions using the offset available against prior year unspent contributions.
  • Other revenue (including interest received) of $31.0 million (compared to $12.8 million in 2018–19) primarily comprised funding for a range of new projects commissioned by the Australian Government, royalty from hydropower generation and interest.

Figure 4.1 MDBA revenue trends (2013–14 to 2019–20) Graph depicting MDBA revenue trends (2013–14 to 2019–20)


The MDBA total expenditure for 2019–20 was $182.3 million (compared to $177.2 million in 2018–19). The increase from the prior year is due primarily to an increase in expenditure on the Murray–Darling Basin Agreement functions, the regionalisation program and an increase in depreciation relating to the right-of-use assets recorded for the first time under the new Leases accounting standard.

Figure 4.2 shows revenue received, expenditure incurred and the available funds. On transition from the Murray–Darling Basin Commission to the MDBA during 2008, the available funds were $441.5 million. A significant component of these funds has been applied for River Murray Operations (RMO) key construction projects, including the Environmental Works and Measures Program; and the MDBA share in the acquisition of water entitlements for The Living Murray program, which resulted in declining cash reserves. These reserves have now started to increase again due to the recent surpluses in the joint program activities from lower than anticipated expenditure on capital infrastructure projects. The balance held in the special account primarily relates to accumulated underspends of the joint program.

Figure 4.2 MDBA revenue, expenditure and special account (2013–14 to 2019–20) Graph depicting MDBA revenue, expenditure and special account (2013–14 to 2019–20)

The MDBA operating bank account is a special account under section 209 of the Water Act 2007 (Cth, the Water Act). The account is not a special account for the purposes of the Public Governance, Performance and Accountability Act 2013 (Cth, the PGPA Act). The Water Act specifies that all amounts received by the MDBA in connection with the performance of its functions under the Water Act must be credited to this special account. The bank account opening balance at 1 July 2019 was $126.2 million. This increased to $147.0 million at the end of the year after receipts of $212.7 million and payments of $191.9 million.


Assets and asset management

The MDBA financial statements include total assets at the end of 2019–20 of $176.3 million. When the Murray–Darling Basin Commission transitioned to the Murray–Darling Basin Authority in December 2008, a significant amount of the assets was transferred into the RMO and Living Murray Initiative (LMI) joint ventures.

Managed assets: Joint ventures

The two joint ventures were established through separate agreements: Asset Agreement for River Murray Operations Assets; and Further Agreement on Addressing Water Overallocation and Achieving Environmental Objectives in the Murray–Darling Basin—Control and Management of Living Murray Assets.

Under the agreements the MDBA has responsibility for managing the following classes of assets:

  • infrastructure assets, which are recorded in the RMO joint venture; and
  • water entitlements, which are recorded in the LMI joint venture.

At 30 June 2020, the RMO joint venture held net assets of $2.7 billion, including the Hume and Dartmouth dams and the locks and weirs on the River Murray. The RMO infrastructure asset base remained relatively constant during 2019–20. The revaluation resulted in assets being increased in value by $64.7 million in 2019–20.

Assets acquired under the asset agreement comprise:

  • plant and equipment purchases of $2.6 million;
  • assets constructed and held in work in progress of $11.5 million.

The LMI joint venture held net assets of $672.9 million, comprising gross investment in water recovery measures of $695.9 million and accumulated impairment losses of $23.0 million. The change in the LMI asset values during 2019–20 was the impairment reversal on water entitlements of $5.8 million.


During the year the major focus has been on:

  • assessment of the MDBA contributions from jurisdictions against the new revenue accounting standards (AASB 15 and AASB 1058) to determine the appropriate revenue recognition
  • assessment of the MDBA operating leases as at 1 July 2019 against the new leases accounting standard (AASB 16) to determine the amount to be capitalised as right-of-use assets
  • transfer of the MDBA Financial Management Information System (FMIS) to the cloud
  • reconfiguration of the FMIS to support the new operating model under the decentralised environment.

Special purpose reporting

One of the key functions of the MDBA is to act as an asset manager (on behalf of the assets controlling governments) for key infrastructure assets throughout the Basin. Infrastructure assets primarily comprise RMO assets, such as the Hume and Dartmouth dams and the locks and weirs on the River Murray, and water entitlements as part of the LMI joint venture. These water entitlement assets were either purchased from willing sellers or acquired as a result of infrastructure improvement-based savings projects to achieve the objectives of the LMI. RMO and LMI assets do not form part of the MDBA general purpose financial statements. They are reported separately in the RMO joint venture and LMI joint venture special purpose financial statements. These special purpose financial statements do not form part of this annual report but are independently audited on an annual basis. As part of the preparation of RMO financial statements, the infrastructure assets are revalued by an independent external valuer on a three-year cycle. An independent external valuation was undertaken at 30 June 2018. In the intervening financial years, including 2019–20, the MDBA conducts an internal revaluation by adjusting the value of its infrastructure assets using the Building Price Index.

As part of the preparation of the LMI financial statements, an impairment assessment is undertaken based on an independent valuation report. Water entitlements trading prices are recorded in the state registers. The state registries’ water trading data is refined to reliably undertake an impairment assessment that is recorded in the LMI joint venture special purpose financial statements in accordance with Australian Accounting Standards.

Internal controls

The MDBA has appropriate financial controls in place and these operated effectively and reliably during the past year. Similarly, no major issues have been identified by the MDBA internal audit process. There is a sound internal control framework in place, including effective identification and management of business risks, and a reliable financial and management reporting system.