Overview of financial performance

​​​Departmental operating budget

The department began 2014–15 with an expected budgeted deficit of $13.3 million, including unfunded depreciation.

The department’s revenue from government at the start of the year was $292.7 million. In the Portfolio Additional Estimates Statements 2014–15 (PAES) this figure increased by $8.1 million to $300.8 million. This related mostly to additional funding provided from the 2013–14 Mid-Year Economic and Fiscal Outlook measure ‘Funding for pre-existing measures affecting the public sector’.

Increases in estimates for own source revenue ($7.8 million) and expenses ($5.4 million) were also updated as part of the PAES process. This improved the department’s expected operating result and was predominantly due to better financial performance in cost-recovered activities.

Looking forward, the department will continue its focus on strong financial management and reducing costs while continuing to deliver key activities to its stakeholders.

Departmental operating results

The department’s 2014–15 financial result was better than expected despite the challenges posed by economic conditions and savings measures. The year ended with a $19.6 million operating surplus, compared to a budgeted deficit of $13.3 million (Portfolio Budget Statements 2014–15), before allowing for net cash appropriation arrangements.

Our five-year Finance Strategy has the long-term objective of ensuring the department remains a financially sustainable department of state and service delivery organisation. In particular, the strategy aims to ensure our cost-recovered services, which represent more than half of departmental expenditure, are efficient, transparent and sustainably funded.

The department has implemented positive steps to achieve a sustainable financial position, which have included continuing to implement the Service Delivery Modernisation programme to improve workforce productivity and make business practices more modern, effective and efficient.

Action has also been taken to better manage the department’s revenue. Unlike many other Commonwealth agencies, the department has a cost-recovery revenue stream that is based on volatile activity that cannot be forecast with certainty.

The department has also worked on reforms to the pricing architecture of the department’s cost-recovery arrangements. This will ensure it is aligned with the way services are now delivered in the department, reflecting our risk-based systems and processes.

Revenue

In 2014–15, departmental revenue increased by $25.0 million from 2013–14 to $406.4 million. The increase was primarily because of higher than expected activity levels in cost-recovery arrangements.

Figure 1 outlines the own source income received by the department over the past five years and estimated own-source income from 2015–16 as per the Portfolio Budget Statements 2015–16.

Figure 1 Own source income

Graph showing own source income - Total cost-recovery revenue collected in 2014–15 was $378.8 million. 

Total cost-recovery revenue collected in 2014–15 was $376.2 million. Figure 2 shows cost-recovery revenue by programme in 2014–15.

Figure 2 Sources of cost-recovery revenue 2014–15

Figure 2 shows cost-recovery  revenue by programme in 2014–15.5 

Departmental expenses

The department’s expenses totalled $687.6 million in 2014–15, against a budget of $685.5 million (Portfolio Budget Statements 2014–15).

Figure 3 shows the trend of departmental expenses over the past five years, and budgeted expenditure Figures from 2015–16.

Figure 3 Departmental expenses

Graph showing departmental expenses 

We continue to meet the savings targets and efficiency measures imposed by the government. In doing this, the department has reprioritised investments and continued to reduce non-critical spending.

Figure 4 outlines the major expenditure categories in supplier expenditure during 2014–15.

Figure 4 Supplier expenditure breakdown 2014–15

Figure 4 outlines the major expenditure categories in supplier expenditure during 2014–15 

Supplier spend predominantly relates to property lease payments and information technology.

Industry Reserves

The department manages 14 cost-recovery arrangements that are supported by industry reserves.

Figure 5 outlines the industry reserve balances as at 30 June 2015.

Figure 5 Industry reserves and accumulated deficits at 30 June 2015

Graph showing industry reserves and accumulated deficits at 30 June 2015 

Administered programme performance

Our 2014–15 administered activities covered programmes including:

  • A Competitive Agriculture Sector—boosting farm profits through rural research and development
  • Drought Concessional Loans Scheme
  • Drought Recovery Concessional Loans Scheme
  • Farm Finance Concessional Loans Scheme
  • National Landcare Programme
  • Rural Financial Counselling Service
  • Clean Energy Future—Creating Opportunities on the Land

The department managed administered assets of $905.6 million on behalf of the government. This largely comprised Farm Finance and drought loans of $539.5 million and investments in six portfolio entities of $275.9 million.

Administered revenue received for 2014–15 was $524.6 million, an increase of $55.4 million on the 2013–14 revenue Figure of $469.2 million. This additional revenue was because of the incremental increase in levies collected from industries (including $29.3 million for the Australian Pesticides and Veterinary Medicines Authority), as well as interest revenue under the Farm Finance and drought concessional loans schemes.

Revenue for 2015–16 is forecast to be in line with that of 2014–15.

Expenditure for 2014–15 was $977.3 million, an increase of $84.6 million on the 2013–14 expenditure Figure of $892.7 million. This increase was primarily due to appropriation for the following new programmes:

  • A Competitive Agriculture Sector—boosting farm​ profits through rural research and development
  • Farm Household Support Act 2014, s. 105—payments for Farm Household Allowance

Expenditure is expected to increase in 2015–16 in line with measures from the Agricultural Competitiveness White Paper.

In 2014–15, the department collected $488.8 million in statutory agriculture levies. Commonwealth matching funds for the year totalled $245.9 million. These amounts were used to support research and development, marketing and promotion, residue testing, and plan and animal health programmes.

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Last reviewed: 4 November 2019
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