Overview

The National Drought and North Queensland Flood Response and Recovery Agency (NDNQFRRA) is a non-corporate Commonwealth entity subject to the Public Governance, Performance and Accountability Act 2013 (PGPA Act). The NDNQFRRA provides strategic leadership, policy advice and coordination for the Government’s response and recovery efforts directed at drought and the flood affected areas of North, Far North and Western Queensland.

These financial statements are for the reporting period 1 July 2019 to 30 June 2020. They are required by section 42 of the PGPA Act, and are general purpose financial statements prepared on a going concern basis.

The financial statements have been prepared in accordance with:

• the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015; and
• 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 historical cost basis, except where noted.

The financial statements are presented in Australian dollars and values are rounded as indicated.

Major Agency changes in 2019-20

On the 5 December 2019, the Prime Minister announced the remit of the North Queensland Livestock Industry Recovery Agency (NQLIRA), would be expanded to include the coordination of the Australian Government’s national drought response. The Agency was renamed the National Drought and North Queensland Flood Response and Recovery Agency (NDNQFRRA).

Additional drought funding was provided through 2019-20 Additional Estimates. The expanded remit included the transfer of the Drought Map from the Department of Agriculture, Water and the Environment.

Significant Accounting Judgements and Estimates

The Agency has made no assumptions or estimates identified as having a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period.

Events after Reporting date

There are no significant events after the reporting date that affect these accounts.

Reporting of Administered Activities

In the 2019-20 Budget, the Agency reported administered estimates. These estimates related to a concessional loan program to financial institutions under the program known as ‘Urgent assistance for eligible primary producers’ affected by floods in Northern Queensland. This program was established by the Treasury Laws Amendment (North Queensland Flood Recovery) Act 2019.

Lending conditions to affected primary producers were better than anticipated and no loans were made.

The Agency therefore has not reported any administered actuals for 2019-20.

New Australian Accounting Standards

AASB 16 Leases

AASB 16 became effective on 1 July 2019.

This new standard has replaced AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a Lease, Interpretation 115 Operating Leases—Incentives and Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

AASB 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, together with options to exclude leases where the lease term is 12 months or less, or where the underlying asset is of low value. Except in certain circumstances, AASB 16 requires most leases to be recognised as a liability representing future lease payments and a ‘right of use’ asset in the Statement of Financial Position.

AASB 16 provides for certain optional practical expedients, including those related to the initial adoption of the standard. The Agency applied the practical expedient not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term remaining as of the date of initial application.

Upon transition, the Agency had only some minor lease arrangements with terms of less than 12 months. These transactions were expensed in 2019-20 as a practical expedient.

New Australian Accounting Standards applicable in future reporting periods

No new accounting standard or amendment to an existing standard effective in future reporting periods is anticipated to have a significant effect on the accounts of the Agency.

Taxation

The Agency is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST). Revenues, expenses and non-financial assets are recognised net of GST except where the amount of GST incurred is not recoverable from the Australian Taxation Office; and for receivables and payables.