Overview of financial performance
The department began 2012–13 with a budgeted net cost of service of $302.9 million. During the year, this budget increased to $303.9 million (an increase of $1. 0 million) primarily because of the following items in the Portfolio additional estimates statements 2012–13:
- $2.5 million one-off reallocation of funding for ABARES
- $1.9 million reduction because of savings measures including the Fire Service Levy and targeted savings related to public service efficiencies.
Departmental operating result
The department’s 2012–13 financial result was as expected, despite the challenges posed by economic conditions and savings measures. The 2012–13 financial statements reported a $48.2 million operating deficit, compared to a budgeted deficit of $43.8 million.
The main factors contributing to the 2012–13 operating result primarily include:
- lower than expected revenues in cost-recovery, in line with declining trade volumes at the border ($19 million)
- write-down and impairments ($5 million)
- payments made in the year where revenue received was in previous years ($10 million)
- unfunded depreciation ($8 million)
- drawing on reserves for some critical infrastructure repairs ($5 million).
Cost-recovery programs such as import clearance and seaports continue to present challenges for the department’s financial management. Efforts continue to be applied to ensure the cost base is in line with revenues. However, revenues continue to fluctuate, with trade volumes across the border and fees that have not changed since 2009. Figure 1 shows the sources of our cost-recovered revenue in 2012–13.
The department continues to meet the savings targets and efficiency measures imposed by the Australian Government. In doing this, the department has reprioritised investments, reduced non-critical spending such as travel and consultants, and is reviewing its major supplier spends.
Figure 2 Total of both administered and departmental expenses over the past 10 years
Figure 3 shows the assets, liabilities and net asset position over 10 years and indicates our focus on financial management while delivering key activities to our stakeholders. As shown, the department’s net asset position has reduced by $32.1 million from 2011–12.
DAFF manages 16 arrangements that are supported by industry reserves. Industry reserves operate to provide stability to the long-term financial position of the arrangement, avoiding the need for frequent changes in fees and charges. They also operate to management unforeseen over- and under-recoveries that may result from changes in the demand for serves and the level of industry activity. The financial result of each arrangement is transferred to the reserve at year’s end.
Administered program performance
The department began 2012–13 with estimated revenue of $413.7 million and estimated expenses of $793.7 million.
Our 2012–13 administered activities covered programs such as:
- Clean Energy Future—Creating Opportunities on the Land (see Program 1.1)
- Caring for our Country—Landcare (see Program 1.2)
- The Rural Financial Counselling Service (see Program 1.12)
- Live Animal Exports—Business Assistance (see Program 1.12)
- Transitional Farm Family Payment. (see Program 1.1).
During the year no new government initiatives were introduced that adjusted the department’s budget.
Administered Financial Results
Revenue received for 2012–13 was $450.9 million; an increase from the previous year’s revenue of $395.8 million.
Expenditure for 2012–13 was $791.1 million; a decrease from the previous year’s expenditure of $883.3 million (see Figure 2). This reflects completion of a number of programs in 2012.