Commonwealth of Australia
CON SOLIDA TED FIN A N CIA L STA TEM EN TS
FOR TH E YEA R EN DED 30 JUN E 2015
CIRCULATED BY
SENATOR THE HONOURABLE MATHIAS CORMANN
MINISTER FOR FINANCE
OF THE COMMONWEALTH OF AUSTRALIA
DECEMBER 2015
© Commonwealth of Australia 2015
ISSN 2205-9008 (print)
2205-9016 (online)
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CONTENTS
PREFACE ......................................................................................................... 1
COMMENTARY ON THE FINANCIAL STATEMENTS ................................................. 3
Introduction .................................................................................................................... 5
Discussion and analysis ................................................................................................ 7
CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE AUSTRALIAN
GOVERNMENT (WHOLE OF GOVERNMENT) AND GENERAL GOVERNMENT
SECTOR FINANCIAL REPORTS......................................................................... 33
Independent audit report .............................................................................................
Statement of compliance .............................................................................................
Australian Government operating statement ..............................................................
Australian Government balance sheet ........................................................................
Australian Government cash flow statement ..............................................................
Australian Government statement of changes in equity .............................................
35
38
39
41
42
43
SECTOR STATEMENTS .................................................................................... 45
Australian Government operating statement by sector –
including General Government Sector Financial Report ...........................
Australian Government balance sheet by sector –
including General Government Sector Financial Report ...........................
Australian Government cash flow statement by sector –
including General Government Sector Financial Report ...........................
Australian Government statement of changes in equity –
General Government Sector .....................................................................
47
49
52
54
NOTES TO THE FINANCIAL STATEMENTS .......................................................... 55
iii
PREFACE
I am pleased to present the Consolidated Financial Statements (CFS) for the Australian
Government for the financial year ended 30 June 2015. The CFS presents the whole of
government and general government sector (GGS) financial reports. It consolidates the
audited accounts of 184 entities across the public sector.
The CFS has been prepared in accordance with the regulations of the Public Governance,
Performance and Accountability Act 2013 (the PGPA Act) and applicable Australian
Accounting Standards (AAS), including the requirements of AASB 1049 Whole of
Government and General Government Sector Financial Reporting (AASB 1049). The CFS
shows the results of the Australian Government’s financial performance and cash
flows for the year ended 30 June 2015 and the Australian Government’s financial
position as at 30 June 2015.
The Preface and the Commentary should be read in light of the information and
explanations provided in the CFS.
Fiscal balance
The Australian Government fiscal balance for the year ended 30 June 2015 was a deficit
of $46.5 billion. For the year ended 30 June 2014, the Australian Government reported
a fiscal balance deficit of $43.3 billion.
Australian Government taxation revenue increased by $6.7 billion (1.9 per cent) in
2014-15, reflecting an increase in taxes from individuals, customs duty and sales, offset
by a decrease in carbon price revenue, company tax and excise duty. Non-taxation
revenue increased by $2.7 billion (8.8 per cent).
Australian Government expenses increased by $15.9 billion (3.8 per cent) in 2014-15.
This was mainly driven by an $8.7 billion increase in current and capital transfers, a
$5.3 billion increase in operating expenses, a $1.2 billion increase in interest expenses
and a $0.8 billion increase in superannuation interest expenses.
The increase in current and capital transfers was due largely to an increase of
$5.5 billion in current and capital grants and $4.0 billion in personal benefits, partially
offset by a $0.9 billion decrease in subsidy expenses.
Within operating expenses, supply of goods and services increased by $4.6 billion,
depreciation and amortisation increased by $0.7 billion, and superannuation expenses
increased by $0.4 billion, partially offset by smaller movements in other line items.
In addition, the Australian Government’s net acquisition of non-financial assets
decreased by $3.4 billion.
1
Preface
Balance sheet
The Australian Government’s net worth was negative $309.0 billion at 30 June 2015. As
at 30 June 2014, the Australian Government’s net worth was negative $264.7 billion.
The Australian Government’s financial assets increased by $34.6 billion (9.8 per cent)
in 2014-15. Total non-financial assets increased by $8.7 billion (6.3 per cent).
The Australian Government’s liabilities increased by $87.5 billion (11.6 per cent) to
$841.3 billion. The increase is primarily as a result of an increase in interest bearing
liabilities of $57.9 billion (14.6 per cent) which includes a $57.4 billion increase in the
value of Australian Government Securities. Provisions and payables increased by
$29.6 billion (8.3 per cent) mainly due to an increase in the superannuation liability of
$26.6 billion.
Cash flow
The Australian Government recorded a cash deficit of $37.6 billion in 2014-15 from
operating activities and investing activities in non-financial assets. The closing cash
position was $4.8 billion.
Contingent liabilities, contingent assets and risks
Contingent liabilities and contingent assets for the Australian Government are not
disclosed in the balance sheet but are set out in detail in Note 12A. Analysis of interest
rate, foreign currency, default and other risks that could potentially impact on the
Australian Government’s financial position is included in Note 12B.
Final Budget Outcome
Under the Charter of Budget Honesty Act 1998 (the Charter), the Australian Government
is also required to publicly release and table a Final Budget Outcome (FBO) report no
later than three months after the end of the financial year. The FBO for the
2014-15 financial year was released by the Treasurer and I on 21 September 2015. The
FBO is unaudited but is derived from materially audit-cleared financial statements.
Under the Charter, the FBO must be based on external reporting standards; including
AAS and the concepts and classifications set out in Government Finance
Statistics (GFS), with any departures from those standards to be documented.
I would like to thank the many Australian Government employees whose efforts have
contributed to the completion of the 2014-15 CFS.
Senator the Hon Mathias Cormann
Minister for Finance
2
COMMENTARY ON THE FINANCIAL STATEMENTS
Commentary on the financial statements
INTRODUCTION
The 2014-15 Consolidated Financial Statements (CFS) for the Australian Government
are required by section 48 of the Public Governance, Performance and Accountability
Act 2013 (PGPA Act) 1. The CFS present the whole of government and general
government sector (GGS) financial reports and are prepared in accordance with
AASB 1049 Whole of Government and General Government Sector Financial Reporting
(AASB 1049).
The financial report includes consolidated results for all Australian Government
controlled entities as well as disaggregated information on the sectors of government
(GGS, public non-financial corporations (PNFC) and public financial corporations
(PFC) sectors). 2 The institutional structure of the public sector is explained in Note 1.
Note 16 provides the list of Australian Government controlled reporting entities,
including their sectoral classification.
AT A GLANCE
Table 1: Financial results for the year ended 30 June (2010-11 to 2014-15)
2010-11
$b
2011-12
$b
2012-13
$b
2013-14
$b
2014-15
$b
Revenue
322.3
350.4
370.4
378.9
388.2
Expenses
368.0
389.8
393.9
413.1
429.0
Net capital investment
6.7
6.9
4.5
9.0
5.6
Fiscal balance
(52.4)
(46.3)
(28.0)
(43.3)
(46.5)
Total assets
377.0
390.6
430.9
489.0
532.3
Total liabilities
480.2
647.4
641.4
753.8
841.3
Net worth
(103.1)
(256.9)
(210.5)
(264.7)
(309.0)
Operating activities
(33.7)
(29.6)
(10.3)
(27.5)
(24.9)
Investing activities in non-financial assets
(11.5)
(12.5)
(9.2)
(12.5)
(12.7)
Cash surplus/(deficit)
(45.2)
(42.1)
(19.5)
(40.0)
(37.6)
1
2
The Financial Management and Accountability Act 1997 was replaced by the PGPA Act on
1 July 2014.
Unless explicitly stated, the financial results reported in this commentary comprise
consolidated amounts for the Australian Government as a whole, inclusive of the GGS,
PNFC and PFC sectors. The balances and movements detailed in the commentary have been
rounded to the nearest tenth of a billion. Discrepancies between totals and sums of
components are due to rounding.
5
Commentary on the financial statements
The Australian Government financial results for 2014-15 were as follows:
•
The fiscal balance result for the year to 30 June 2015 was a deficit of
$46.5 billion. For the year ended 30 June 2014, the Australian Government
reported a fiscal balance deficit of $43.3 billion. 3
•
Total revenues for 2014-15 were $388.2 billion, an increase of $9.3 billion
(2.5 per cent) compared to 2013-14.
•
Total expenses for 2014-15 were $429.0 billion, an increase of $15.9 billion
(3.8 per cent) compared to 2013-14.
•
Net acquisition of non-financial assets for 2014-15 were $5.6 billion, a decrease
of $3.4 billion (37.8 per cent) compared to 2013-14.
•
The Australian Government’s closing net worth position was negative
$309.0 billion at 30 June 2015, a decrease of $44.3 billion since 30 June 2014.
•
Total assets increased by $43.3 billion (8.9 per cent) since 30 June 2014 to
$532.3 billion at 30 June 2015.
•
Total liabilities increased by $87.5 billion (11.6 per cent) since 30 June 2014 to
$841.3 billion at 30 June 2015.
•
The cash deficit was $37.6 billion, a decrease of $2.4 billion (6.0 per cent)
compared to 2013-14.
3
The 2013-14 CFS fiscal balance deficit of $42.2 billion was $1.1 billion less than the 2013-14
restated deficit balance of $43.3 billion, due to prior year adjustments to tax related items and
the treatment of Medibank Private Limited as a discontinued operation. Refer to Notes 1 and
2 to the 2014-15 CFS for further information.
6
Commentary on the financial statements
DISCUSSION AND ANALYSIS
Operating statement
Table 2: Operating statement
2014-15
$b
388.2
429.0
(40.8)
5.6
(46.5)
Revenue
Expenses
Net operating balance
Less Net acquisitions of non-financial assets
Australian Government fiscal balance
2013-14
$b
378.9
413.1
(34.2)
9.0
(43.3)
Change
$b
9.3
15.9
(6.6)
(3.4)
(3.2)
Change
%
2.5
3.8
19.3
(37.8)
7.4
The fiscal balance for the year to 30 June 2015 was a deficit of $46.5 billion. For the year
ended 30 June 2014, the Australian Government reported a fiscal balance deficit of
$43.3 billion.
The decrease in the fiscal balance between 2013-14 and 2014-15 reflects an increase in
total expenses of $15.9 billion, partially offset by an increase in total revenues of
$9.3 billion and a decrease in the net acquisition of non-financial assets of $3.4 billion.
The increase in expenses was largely due to an increase in the supply of goods and
services, an increase in grants and the growth in direct personal benefits.
The increase in revenues was primarily due to an increase in taxation revenue flowing
from the modest growth in employment and wage income.
The decrease in the acquisition of non-financial assets primarily reflects the sale of
digital dividend spectrum licensing which commenced in 2014-15.
7
Commentary on the financial statements
Chart 1 provides a comparison of the Australian Government’s consolidated fiscal
balance since 2007-08.
Chart 1: Consolidated fiscal balance
30
4
$billion
$billion
30
10
10
-10
-10
-30
-30
-50
-50
-70
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
-70
Chart 2 provides a trend of the Australian Government’s consolidated revenues and
expenses since 2007-08.
450
Chart 2: Revenue and expenses
$billion
450
400
400
350
350
300
300
Expenses
250
4
$billion
2007-08
2008-09
2009-10
2010-11
Revenue
2011-12
2012-13
2013-14
2014-15
250
The reporting of consolidated fiscal balance commenced in 2008-09 when the CFS were
prepared in accordance with the whole of government requirements of AASB 1049 for the
first time. The 2007-08 results were restated consistent with this standard in the 2008-09 CFS.
8
Commentary on the financial statements
Australian Government revenue
The Australian Government’s revenue increased by $9.3 billion (2.5 per cent) in
2014-15 to $388.2 billion.
Table 3: Revenue
2014-15
$b
354.9
33.3
388.2
Taxation revenue
Non-taxation revenue
Total revenue
2013-14
$b
348.2
30.6
378.9
Change
$b
6.7
2.7
9.3
Change
%
1.9
8.7
2.5
Chart 3 shows the composition of revenue since 2007-08.
400
$billion
Chart 3: Composition of revenue
$billion
400
350
350
300
300
250
250
200
200
150
150
100
100
50
50
0
2007-08
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
Tax ation r evenue
Non- tax ation r evenue
9
2014-15
0
Commentary on the financial statements
Taxation revenue
The Australian Government total taxation revenue for the year ended on 30 June 2015
was $354.9 billion. The composition of taxation revenue is shown in Chart 4 below.
Chart 4: Composition of taxation revenue
Customs duty
3%
Sales taxes
16%
Company tax
19%
Excise duty
7%
Other*
4%
Individuals and other
withholding taxation
51%
*Other includes superannuation funds ($5.9 billion), fringe benefits tax ($4.4 billion), other — indirect taxation
($3.8 billion) and resource rent tax ($1.4 billion).
Table 4: Australian Government — taxation revenue
2014-15
$b
2013-14
$b
Change
$b
Change
%
Income taxation
Individuals and other withholding taxation
Company tax
Fringe benefits tax
Superannuation funds
Resource rent taxes
Total income taxation
Sales taxes
Excise duty
Customs duty
Carbon pricing mechanism
Other - indirect taxation
181.2
65.9
4.4
5.9
1.4
258.8
57.8
23.7
10.9
0.0
3.8
167.2
68.5
4.3
6.1
1.8
247.9
56.8
25.6
9.3
4.7
3.8
14.0
(2.6)
0.1
(0.2)
(0.4)
10.9
1.0
(1.9)
1.6
(4.7)
0.0
8.4
(3.8)
2.3
(3.3)
(22.2)
4.4
1.8
(7.4)
17.2
(100.0)
0.0
Total taxation revenue
354.9
348.2
6.7
1.9
10
Commentary on the financial statements
Taxation revenue increased by $6.7 billion (1.9 per cent) to $354.9 billion. The key
movements in taxation revenue from 2013-14 to 2014-15 were:
•
an increase of $14.0 billion (8.4 per cent) from individuals and other withholding
taxation. The growth in individuals and other withholding taxation is broadly
consistent with conditions in the labour market;
•
a decrease of $4.7 billion (100.0 per cent) in the carbon pricing mechanism as a
result of the carbon tax being repealed;
•
a decrease of $2.6 billion (3.8 per cent) from company tax. This was due to weaker
corporate profitability, as well as lower commodity prices affecting the mining
sector;
•
a decrease in excise duty of $1.9 billion (7.4 per cent) and a corresponding increase
in customs duty of $1.6 billion (17.2 per cent) as a result of a greater share of
tobacco products being cleared through Customs; and
•
an increase of $1.0 billion (1.8 per cent) in sales taxes, with the main contributor
being a $0.9 billion increase in goods and services tax (GST), consistent with
growth in consumption subject to GST.
Non-taxation revenue
The Australian Government’s total non-taxation revenue for the year ended on
30 June 2015 was $33.3 billion. The composition of non-taxation revenue is shown in
Chart 5 below.
Chart 5: Composition of non-taxation revenue
11
Commentary on the financial statements
Table 5: Non-taxation revenue
2014-15
$b
17.9
4.5
3.9
7.0
33.3
Sales of goods and services
Interest income
Dividend income
Other
Total non-taxation revenue
2013-14
$b
16.9
4.4
2.5
6.9
30.6
Change
$b
1.0
0.1
1.4
0.1
2.7
Change
%
5.9
2.3
56.0
1.4
8.7
Total non-taxation revenue increased by $2.7 billion (8.7 per cent) to $33.3 billion. The
key movements in non-taxation revenue from 2013-14 to 2014-15 were as follows:
•
an increase of $1.0 billion in sales of goods and services revenue mainly associated
with:
– an increase of $0.6 billion in services revenue from public corporations,
including the Australian Submarine Corporation Pty Ltd ($0.2 billion), the
Reserve Bank of Australia (RBA) ($0.2 billion) and National Broadband
Network Co Ltd (NBN) ($0.1 billion);
– a decrease of $0.3 billion due to the winding down of the Guarantee Scheme
for Large Deposits and Wholesale Funding fees by the Department of the
Treasury (the Treasury); and
– an increase of $0.2 billion in visa application fee revenue due to increased visa
activity levels.
•
an increase of $1.4 billion in dividend income, primarily from the Future Fund
investment portfolio.
•
an increase of $0.1 billion in interest income, including an increase of $0.3 billion
in interest from Australian dollar investments held by the RBA; partially offset by
a $0.1 billion decrease in interest from the Future Fund investment portfolio and a
$0.1 billion decrease in interest from residential mortgage-backed securities
investments held by the Australian Office of Financial Management (AOFM).
•
an increase of $0.1 billion in other revenue including:
– a decrease in offshore petroleum royalties and uranium royalties of $0.4 billion
due to changes in production volume, price and exchange rates;
– an increase of $0.3 billion in resources received free of charge primarily due to
increased demand for the National Disability Insurance Scheme services; and
– an increase of $0.2 billion in other non-tax revenue across a range of entities.
12
Commentary on the financial statements
Australian Government expenses
Chart 6 below shows the composition and the trend for expenses since 2007-08.
Chart 6: Expenses
450
$billion
$billion
450
400
400
350
350
300
300
250
250
200
200
150
150
100
100
50
50
0
2007-08
2008-09
2009-10
2010-11
Current and capital transfers
2011-12
2012-13
Gross operating
2013-14
2014-15
0
Interest
The Australian Government’s total expenses for the year ended on 30 June 2015 were
$429.0 billion. The composition of expenses is shown in Chart 7 below.
Chart 7: Breakdown of expenses
13
Commentary on the financial statements
Table 6: Expenses
Gross operating
Interest
Current and capital transfers
Grants
Personal benefits
Subsidies
Total current and capital transfers
Total expenses
2014-15
$b
127.9
2013-14
$b
122.6
Change
$b
5.3
25.8
23.9
2.0
Change
%
4.3
8.2
133.8
129.2
12.3
275.4
128.3
125.2
13.2
266.7
5.5
4.0
(0.9)
8.7
4.3
3.2
(6.5)
3.2
429.0
413.1
15.9
3.8
The Australian Government’s total expenses increased by $15.9 billion (3.8 per cent) in
comparison to 2013-14.
Current and capital transfers increased by $8.7 billion (3.2 per cent) to $275.4 billion.
The key changes in current and capital transfers from 2013-14 to 2014-15 were as
follows:
•
an increase of $5.5 billion in current and capital grants. The primary contributors
to the increase included:
– an increase of $5.8 billion in grants to state and territory governments, which
includes increases in: government and non-government schools national
support ($3.6 billion); general revenue assistance ($3.0 billion); financial
assistance grants for local governments ($2.3 billion); and assistance to the
states for healthcare services ($1.6 billion). These amounts were partially offset
by decreases in: state government school assistance payments ($2.1 billion); rail
transport ($0.9 billion); road transport ($0.8 billion); public hospital services
($0.8 billion); government schools ($0.3 billion) and aged care assistance
($0.3 billion);
– an increase of $1.2 billion in grants to non-profit institutions, which includes
increases in: home support ($0.9 billion); Indigenous jobs, land and economy
($0.5 billion); and the National Disability Insurance Scheme ($0.5 billion).
These amounts were partially offset by decreases to: services and support for
people with a disability ($0.3 billion); education, wellbeing and community
safety ($0.2 billion) and targeted community care ($0.2 billion);
– a decrease of $0.8 billion in grants to the private sector, which includes
decreases in: home support ($0.5 billion); industry development and
investment ($0.3 billion); and other energy related initiatives and management
($0.3 billion). These amounts were partially offset by an increase in
encouraging investment ($0.2 billion); and
– a decrease of $0.6 billion in mutually agreed write-downs, primarily penalty
and interest charge remissions by the Australian Taxation Office.
14
Commentary on the financial statements
•
an increase of $4.0 billion in personal benefits expense. This includes increases in:
the age pension ($2.2 billion); child care benefits ($1.2 billion); and student
payments ($0.8 billion).
•
a decrease of $0.9 billion in subsidy expenses primarily as a result of the repeal of
the carbon tax ($1.2 billion), partially offset by increases for the fuel tax credit
scheme ($0.3 billion) and stronger uptake of the research and development tax
incentive ($0.2 billion).
Gross operating expenses increased by $5.3 billion (4.3 per cent) to $127.9 billion. The
key changes in gross operating expenses from 2013-14 to 2014-15 were as follows:
•
the supply of goods and services expense increased by $4.6 billion, including
increases in: Defence related expenditure ($1.0 billion); Medicare services
($0.9 billion); child care rebate ($0.8 billion); residential and flexible care
($0.8 billion); disability and carers ($0.7 billion); dental services ($0.3 billion), and
public corporations, including Australia Post ($0.2 billion) and NBN ($0.2 billion).
These increases were partially offset by a $0.5 billion decrease, which was driven
by the closure of several detention centres.
•
depreciation and amortisation expenses increased by $0.7 billion consistent with
the increase in non-financial assets.
•
the current service cost of the Australian Government’s unfunded superannuation
provisions increased by $0.4 billion. The current service cost recognises the
increase in the superannuation liability that results from employee service in the
reporting period. As the calculation of the amount is based on a present value, it
is sensitive to changes in the discount rate used for the calculation. 5 The longer the
length of service, the greater the impact of discount rate changes.
Interest (excluding superannuation interest) expenses increased by $1.2 billion
(7.5 per cent) during 2014-15 to $16.8 billion as a result of an increased volume of
Australian Government Securities on issue for the year. Superannuation interest
expenses increased by $0.8 billion (9.6 per cent) during 2014-15 to $9.0 billion.
5
Under AASB 119 Employee Benefits, the expenses recognised in the operating statement,
including the current service cost and the nominal interest on superannuation, are
determined with reference to the yield on government bonds (discount rate) at the start of
the reporting period (4.1 per cent in 2014-15; 4.3 per cent in 2013-14), with the change in
interest rates reflected as an actuarial revaluation in ‘other economic flows’.
15
Commentary on the financial statements
Chart 8 below provides a presentation of total expenses based on how the Australian
Government allocated resources across the range of policy areas. The chart highlights
the relative cost of each function for 2014-15 compared with the previous year.
Chart 8: Total expenses by function
Mining, manufacturing and construction
Agriculture, forestry and fishing
Recreation and culture
Public order and safety
Housing and community amenities
Fuel and energy
Other economic affairs
Transport and communication
Defence
General public services
Education
Health
Other purposes
Social security and welfare
0
20
2014-15
40
60
80
100
2013-14
120
140
$billion
Australian Government other economic flows
Table 7: Other economic flows
2014-15
$b
(5.6)
0.4
3.8
(17.7)
1.6
13.4
0.4
(3.7)
Net write-downs of assets
Revaluation of equity investments
Net foreign exchange gains/(losses)
Actuarial revaluation of superannuation
Revaluations of non-financial assets
Net gains/(losses) from sale of assets
Other
Total other economic flows
2013-14
$b
(6.6)
0.3
(0.2)
(13.0)
1.2
6.3
(8.3)
(20.3)
Change
$b
1.0
0.1
4.1
(4.7)
0.4
7.1
8.7
16.6
Change
%
(14.6)
35.8
(1,641.7)
36.2
29.6
113.2
(104.7)
(81.6)
The Australian Government reported a net loss of $3.7 billion in other economic flows
in 2014-15, a $16.6 billion change from 2013-14.
16
Commentary on the financial statements
The $4.7 billion change in the actuarial revaluation of superannuation primarily relates
to discount rate changes. Under the accounting standards, the superannuation liability
is calculated using a discount rate based on current long-term government bond rates.
Movement in the discount rate can cause significant movements in the valuation of the
liability. In 2014-15, the discount rate decreased from 4.1 per cent to 3.7 per cent
(increasing the liability and reducing net worth). In 2013-14, the discount rate
decreased from 4.3 per cent to 4.1 per cent. The actuarial assumptions applied in the
calculation of the Australian Government’s liability are detailed in Note 12C.
The major contributor to the $8.7 billion change in ‘other’ relates to a one-off variation
in indexation arrangements for military superannuation in 2013-14 ($7.8 billion).
The $7.1 billion increase in net gains from sale of assets primarily relates to the sale of
Medibank Private ($4.3 billion) and the digital dividend from spectrum licensing
($2.0 billion) in 2014-15.
The $4.1 billion increase in net foreign exchange gains/(losses) relates largely to
$6.0 billion in gains for foreign currency held by the RBA, partially offset by
$2.1 billion in foreign exchange losses relating to the Future Fund investment portfolio.
Australian Government net acquisition of non-financial assets
Table 8: Net acquisition of non-financial assets
2014-15
$b
15.6
2.5
8.1
0.6
0.0
5.6
Purchases of non-financial assets
less Sale of non-financial assets
less Depreciation
plus Change in inventories and other movements
plus Other movements in non-financial assets
Total net acquisition of non-financial assets
2013-14
$b
15.1
0.4
7.4
0.7
1.0
9.0
Change
$b
0.5
2.1
0.7
(0.1)
(1.0)
(3.4)
Change
%
3.3
525.0
9.5
(14.3)
(100.0)
(37.8)
The Australian Government’s net acquisition of non-financial assets showed a decrease
of $3.4 billion from last year to $5.6 billion in 2014-15. The increase in sale of
non-financial assets is reflective of proceeds from the sale of digital dividend spectrum
licensing which commenced in 2014-15 ($2.0 billion).
17
Commentary on the financial statements
Balance sheet
The Australian Government’s net worth decreased by $44.3 billion in 2014-15 to
produce a closing negative net worth of $309.0 billion.
Table 9: Balance sheet
2014-15
$b
386.3
146.0
532.3
455.5
385.8
841.3
(309.0)
Financial assets
Non-financial assets
Total assets
Interest bearing liabilities
Provisions and payables
Total liabilities
Net worth
2013-14
$b
351.8
137.3
489.0
397.6
356.2
753.8
(264.7)
Change
$b
34.6
8.7
43.3
57.9
29.6
87.5
(44.3)
Change
%
9.8
6.3
8.9
14.6
8.3
11.6
16.7
The decrease in net worth resulted from the $57.9 billion increase in interest bearing
liabilities and increase of $29.6 billion in provisions and payables (primarily relating to
superannuation), partially offset by an increase in financial assets of $34.6 billion and
non-financial assets of $8.7 billion.
Chart 9 shows the movement and composition of the Australian Government’s
financial position since 2007-08.
Chart 9: Australian Government balance sheet
600
$billion
$billion
600
500
500
400
400
300
300
200
200
100
100
0
-100
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
0
-100
-200
-200
-300
-300
-400
-400
-500
-500
-600
-600
-700
-700
-800
-800
-900
-900
Financial assets
Non-financial assets
Interest bearing liabilities
Net worth
18
Provisions and payables
Commentary on the financial statements
Australian Government assets
The Australian Government’s total assets as at 30 June 2015 was $532.3 billion. The
composition of assets is shown in Chart 10 below.
Chart 10: Composition of assets
Included in the above categories are the following items:
Cash and Deposits
Cash at bank and cash on
hand;
Short-term deposits
(generally less than
three months); and
Fund deposits at call.
Other receivables
Statutory receivables and
recoverables; and
Trade debtors.
Advances Paid are loans
made for policy purposes
rather than for liquidity
management, including:
Student loans (including
Higher Education Loan
Programme (HELP));
Loans to state and territory
governments; and
Subscriptions to international
aid organisations.
Investments, Loans and
Placements
Equity investments constitute
a financial claim on other
entities and include:
Investments in public
corporations (valued using the
discounted cash flow method
or net assets);
Future Fund equity holdings;
and
Investments in international
financial institutions.
Non-financial assets
19
Term deposits;
Investment debt securities
(including Future Fund and
Government Funds);
International Monetary Fund
(IMF) quota; and
Residential
mortgage-backed securities.
Land, buildings, plant,
infrastructure and
equipment, investment
property, heritage and
cultural assets, biological
assets and assets held for
sale are non-financial
produced assets;
Specialist military equipment;
Intangibles include software
and other produced
intangibles;
Inventories; and
Prepayments.
Commentary on the financial statements
Table 10: Australian Government’s assets
2014-15
$b
2013-14
$b
Change
$b
Change
%
4.8
41.8
41.2
254.5
44.1
386.3
146.0
532.3
4.5
34.8
42.2
229.8
40.5
351.8
137.3
489.0
0.3
6.9
(1.0)
24.7
3.6
34.6
8.7
43.3
6.8
19.9
(2.3)
10.7
8.9
9.8
6.3
8.9
Financial assets
Cash and deposits
Advances paid
Other receivables and accrued revenue
Investments, loans and placements
Equity investments
Total financial assets
Non-financial assets
Total assets
The Australian Government’s total assets increased by $43.3 billion (8.9 per cent) since
30 June 2014.
This included a $34.6 billion (9.8 per cent) increase in financial assets to $386.3 billion at
30 June 2015, and a $8.7 billion (6.3 per cent) increase in non-financial assets to
$146.0 billion at 30 June 2015. This continues the trend of recent years where a greater
proportion of the Australian Government’s assets held are financial assets.
The key movements in financial assets between 30 June 2014 and 30 June 2015 included
the following:
•
an increase of $24.7 billion in investments, loans and placements. This included a
$14.8 billion increase in Australian dollar securities and foreign exchange
holdings held by the RBA and an increase of $11.2 billion in non-equity
investments held by the Future Fund. These increases were partially offset by a
$1.8 billion decrease in residential mortgage-backed securities held by the AOFM;
•
an increase of $6.9 billion in advances paid, mainly due to a $5.3 billion increase in
the HELP scheme reflecting increased loan numbers; and
•
an increase of $3.6 billion in equity investments, primarily resulting from an
increased holding of listed equities and listed managed investment schemes by
the Future Fund.
The key movements in non-financial assets between 30 June 2014 and 30 June 2015
included the following:
•
an increase of $3.5 billion for infrastructure, plant and equipment including an
increase of $3.1 billion in network assets for the rollout of the NBN;
•
an increase of $1.5 billion for other non-financial assets, primarily driven by an
increase in Defence prepayments for foreign military sales;
•
an increase of $1.4 billion for specialist military equipment;
20
Commentary on the financial statements
•
an increase of $0.9 billion for buildings primarily due to revaluations by Defence
and of overseas property purchases by the Department of Foreign Affairs and
Trade;
•
an increase in land of $0.6 billion mainly due to revaluations; and
•
an increase in heritage and cultural assets of $0.5 billion, mainly due to
revaluation of cultural institution collections.
Australian Government liabilities
The Australia Government’s total liabilities were $841.3 billion as at 30 June 2015. The
composition of liabilities is shown in Chart 11 below.
Chart 11: Composition of liabilities
21
Commentary on the financial statements
Included in the above categories are the following items:
Interest bearing liabilities
Provisions
Payables
Public debt (Treasury bonds,
Treasury Notes and Treasury
Indexed Bonds);
Australian Government’s
unfunded superannuation
liability;
Trade creditors, capital
creditors and unsettled
investment purchases;
Bills of exchange and
promissory notes issued to
international multilateral
organisations;
Annual leave, long service
leave liabilities, accrued
salaries and wages,
separations and redundancies,
workers compensation
provisions;
Amounts payable to grant
or subsidy recipients at
period-end;
IMF Special Drawing Rights
allocation reflecting Australia’s
cumulative liability to the IMF;
and
Finance leases and other
loans.
Social security, health and
education benefit provisions;
Grant provisions for university
superannuation, Natural
Disaster Relief and Recovery
Arrangements and subsidy
provisions administered
through the tax system;
Personal benefit
payables at period-end;
Unearned income and
prepayments received;
and
Unclaimed monies and
outstanding claims.
Provisions for asbestos,
decontamination, etc; and
Unearned income, unclaimed
monies, outstanding claims
and taxation refunds.
Table 11: Australian Government’s liabilities
2014-15
$b
455.5
385.8
841.3
Interest bearing liabilities
Provisions and payables
Total liabilities
2013-14
$b
397.6
356.2
753.8
Change
$b
57.9
29.6
87.5
Change
%
14.6
8.3
11.6
The Australian Government’s liabilities have increased by $87.5 billion (11.6 per cent)
since 30 June 2014.
This included a $57.9 billion (14.6 per cent) increase in interest bearing liabilities to
$455.5 billion at 30 June 2015 and a $29.6 billion (8.3 per cent) increase in provisions
and payables to $385.8 billion at 30 June 2015.
The decrease in the bond rate was the main contributor to the overall increase in
provisions. A number of Australian Government provisions are long-term in nature
and, as such, are subject to variations if the discount rate used in calculating the
present value of these liabilities changes. The bond rate change was the key
determinant of the $26.6 billion increase in the Australian Government’s unfunded
superannuation liabilities.
22
Commentary on the financial statements
The increase of $57.9 billion in interest bearing liabilities includes:
•
an increase of $57.4 billion in the issuance volume and market value of Australian
Government Securities held by the AOFM;
•
a decrease of $1.6 billion in other interest bearing liabilities due to a decrease of
amounts outstanding under repurchase agreements by the RBA of $3.5 billion;
partially offset by an increase in swap principal payables by the RBA and Future
Fund of $1.2 billion, and an increase of $0.6 billion in the IMF allocation of Special
Drawing Rights to Treasury; and
•
an increase of $1.2 billion in loans, primarily bills of exchange and promissory
notes issued to the IMF by the Treasury.
The increase in provisions and payables of $29.6 billion included:
•
an increase of $26.6 billion in the superannuation liability resulting from actuarial
revaluations, in particular a 0.4 percentage point decrease in the Government
bond rate used to discount expected future superannuation payments;
•
an increase of $4.7 billion in Australian currency (notes) on issue;
•
an increase of $1.4 billion in other employee liabilities, mainly resulting from
actuarial adjustments to the provision for military workers compensation of
$1.2 billion; partially offset by
•
a decrease in other provisions of $2.3 billion, mainly driven by $1.8 billion for the
Natural Disaster Relief and Recovery Arrangements provision reflecting the close
out of projects in Queensland.
23
Commentary on the financial statements
Statement of cash flows
Table 12: Cash flow
2014-15
$b
2013-14
$b
Change
$b
Change
%
Cash receipts
Operating activities
Investing activities in non-financial assets
Financing activities
Total cash receipts
385.8
2.4
60.3
448.5
369.5
0.7
89.4
459.6
16.3
1.7
(29.1)
(11.1)
4.4
242.9
(32.6)
(2.4)
Cash payments
Operating activities
Investing activities in non-financial assets
Investing activities in financial assets
Financing activities
Total cash payments
410.7
15.1
16.1
6.4
448.3
397.3
13.2
40.0
9.0
459.5
13.4
1.9
(23.9)
(2.6)
(11.2)
3.4
14.4
(59.8)
(28.9)
(2.4)
Net cash from discontinued activities
0.1
0.3
(0.2)
(63.3)
Net movement in cash
Cash at beginning of the year
Cash at end of year
0.3
4.5
4.8
0.4
4.1
4.5
(0.1)
0.4
0.3
(25.0)
9.8
6.7
(24.9)
(12.7)
(37.6)
(27.5)
(12.5)
(40.0)
2.6
(0.2)
2.4
(9.5)
1.6
(6.0)
Key fiscal aggregate
Operating activities
Investing activities in non-financial assets
Cash surplus/(deficit)
The Australian Government’s cash balance was $4.8 billion at 30 June 2015. In 2014-15
the Australian Government recorded a cash deficit of $37.6 billion, a decrease of
$2.4 billion compared to a cash deficit of $40.0 billion for 2013-14. 6
6
The cash deficit reported above differs to the deficit reported in the 2014-15 Final Budget
Outcome (FBO) as the above result is for the ‘whole of government’, including public
corporations whereas the FBO focuses on the outcome for the GGS. In addition, the
2014-15 FBO excludes Future Fund earnings and includes the net acquisition of assets
acquired under finance leases and similar arrangements.
24
Commentary on the financial statements
Australian Government cash receipts and payments
The following charts provide a detailed break-down of Australian Government
receipts and payments for 2014-15, showing the relative composition of each dollar
received and each dollar paid.
Chart 12: Composition of each dollar of cash received in 2014-15
Taxes:
$351.6 billion (2013-14: $338.2 billion)
(78 cents of every dollar received in 2014-15, 74 cents in
2013-14)
Borrowing and
investment:
$62.7 billion (2013-14: $90.2 billion)
(14 cents of every dollar received in 2014-15, 19 cents in
2013-14)
Sales of goods and
services:
$18.5 billion (2013-14: $17.7 billion)
(4 cents of every dollar received in 2014-15, 4 cents in 2013-14)
Interest and dividends:
$8.2 billion (2013-14: $6.4 billion)
(2 cents of every dollar received in 2014-15, 1 cent in 2013-14)
Other:
$7.5 billion (2013-14: $7.1 billion)
(2 cents of every dollar received in 2014-15, 2 cents in 2013-14)
Taxation receipts remain the predominant source of Australian Government receipts
with 78 cents of every dollar that the Australian Government receives resulting from
tax collections in 2014-15.
25
Commentary on the financial statements
Chart 13: Composition of each dollar of cash paid in 2014-15
Grants and subsidies:
$144.4 billion (2013-14: $140.1 billion)
(32 cents of every dollar paid in 2014-15, 32 cents in 2013-14)
Personal benefits:
$130.9 billion (2013-14: $126.4 billion)
(29 cents of every dollar paid in 2014-15, 28 cents in 2013-14)
Payments for goods and
services:
$85.0 billion (2013-14: $79.8 billion)
(19 cents of every dollar paid in 2014-15, 17 cents in 2013-14)
Payments for employees
and other:
$36.0 billion (2013-14: $36.8 billion)
(9 cents of every dollar paid in 2014-15, 8 cents in 2013-14)
Financing and investing
activities:
$22.5 billion (2013-14: $48.9 billion)
(5 cents of every dollar paid in 2014-15, 11 cents in 2013-14)
Purchases of
non-financial assets:
$15.1 billion (2013-14: $13.2 billion)
(3 cents of every dollar paid in 2014-15, 3 cents in 2013-14)
Interest paid:
$14.4 billion (2013-14: $14.3 billion)
(3 cents of every dollar paid in 2014-15, 3 cents in 2013-14)
Grants and subsidies, personal benefits and payments for the supply of goods and
services are the main items of expenditure for the government, comprising 80 per cent
of all payments.
26
Commentary on the financial statements
Chart 14 provides a trend of the Australian Government’s cash receipts and cash
payments for operating activities and purchases/sales of non-financial assets since
2007-08.
Chart 14: Receipts and payments — operating and non-financial assets
450
$billion
$billion
450
400
400
350
350
300
300
250
2007-08
2008-09
2009-10
2010-11
Payments
2011-12
2012-13
2013-14
2014-15
250
Receipts
Future commitments
Table 13: Australian Government — future commitments
Capital commitments
2014-15
$b
2013-14
$b
Change
$b
Change
%
38.8
28.4
10.4
36.5
Other commitments
Operating leases
Grant commitments
Other commitments
Total other commitments
18.9
109.2
52.7
180.8
19.4
101.5
43.2
164.1
(0.5)
7.7
9.5
16.7
(2.5)
7.6
22.1
10.2
Total commitments
219.6
192.5
27.1
14.1
less Commitments receivable
Net commitments
2.1
217.5
4.8
187.7
(2.7)
29.8
(56.2)
15.9
The Australian Government is committed to future capital expenditure of $38.8 billion
as at 30 June 2015, an increase of $10.4 billion since 2013-14. The change is primarily in
relation to increases in various collective investment vehicles held by the Future Fund,
specialist military equipment, and infrastructure, plant and equipment.
Total other commitments increased by $16.7 billion, as a result of an increase in ‘other’
commitments of $9.5 billion, primarily due to employment programme commitments,
and grant commitments of $7.7 billion, mostly related to education funding
commitments.
27
Commentary on the financial statements
Contingent liabilities
Contingent liabilities are associated with events that are considered possible but not
sufficiently probable (or quantifiable) that they should be included in the balance
sheet. The Australian Government includes those contingent liabilities that were
quantifiable in accordance with accounting standards.
Table 14: Australian Government — contingent liabilities
Quantifiable contingent liabilities
Guarantees
Indemnities
Uncalled shares/capital subscriptions
Claims for damages/costs
Other contingencies
Total quantifiable contingent liabilities
2014-15
$b
2013-14
$b
Change
$b
Change
%
18.0
0.3
15.6
0.2
259.9
294.0
16.6
0.3
13.5
0.2
5.4
36.1
1.4
(0.0)
2.1
(0.0)
254.5
257.9
8.3
(5.1)
15.5
(16.6)
4,676.3
715.1
The Australian Government disclosed a total of $294.0 billion in quantifiable
contingent liabilities as at 30 June 2015.
‘Other’ contingencies increased by $254.5 billion, primarily as a result of the RBA
providing a Committed Liquidity Facility (CLF) to eligible authorised deposit-taking
institutions (ADIs) as part of Australia’s implementation of the Basel III liquidity
requirements. The CLF provides ADIs with a contractual commitment to funding
under repurchase agreements with the RBA, subject to certain conditions.
The total of uncalled shares and capital subscriptions included $15.5 billion
(2014: $13.4 billion) associated with the European Bank for Reconstruction and
Development, the International Bank for Reconstruction and Development, the
Multilateral Investment Guarantee Agency and the Asian Development Bank.
28
APPENDIX A
Historical information
The following table presents the key financial results for the Australian Government from the 2007-08 financial year. 7
OPERATING STATEMENT
Revenue from transactions
Taxation revenue
Non-taxation revenue
Total revenue
29
Expenses from transactions
Gross operating expenses
Current and capital transfers
Superannuation interest expense
Interest expenses
Total expenses
Net operating balance
Net acquisition of
non-financial assets
Fiscal balance
7
2007-08
$b
2008-09
$b
2009-10
$b
2010-11
$b
2011-12
$b
2012-13
$b
2013-14
$b
2014-15
$b
286.0
29.1
315.1
278.3
31.5
309.8
268.0
30.9
298.9
288.8
33.5
322.3
316.5
33.9
350.4
334.4
36.0
370.4
348.2
30.6
378.9
354.9
33.3
388.2
88.3
189.3
6.0
5.9
289.5
95.9
225.7
6.7
6.4
334.8
103.6
232.5
6.7
7.9
350.7
110.9
238.4
7.0
11.7
368.0
119.4
249.3
7.4
13.8
389.8
124.6
248.6
6.7
14.0
393.9
122.6
266.7
8.2
15.6
413.1
127.9
275.4
9.0
16.8
429.0
25.6
(25.0)
(51.8)
(45.7)
(39.4)
(23.4)
(34.3)
(40.8)
3.3
5.0
7.6
6.7
6.9
4.5
9.0
5.6
22.3
(30.0)
(59.4)
(52.4)
(46.3)
(28.0)
(43.3)
(46.5)
Key financial results have been presented from 2007-08 following the introduction of the AASB 1049. The 2007-08 outcome was restated consistent
with this standard in the 2008-09 CFS.
Liabilities
Interest bearing liabilities
Provisions and payables
Total liabilities
Net worth
30
CASHFLOW STATEMENT
Operating activities
Investing activities in
non-financial assets
Investing activities in
financial assets
Financing activities
Net movement in cash
2008-09
$b
2009-10
$b
2010-11
$b
2011-12
$b
2012-13
$b
2013-14
$b
2014-15
$b
244.1
95.2
339.2
266.9
100.3
367.2
268.3
109.0
377.2
261.7
115.3
377.0
268.2
122.4
390.6
303.1
127.8
430.9
351.8
137.3
489.0
386.3
146.0
532.3
86.2
185.4
271.5
124.2
227.5
351.7
183.8
247.4
431.2
222.0
258.2
480.2
287.7
359.8
647.4
315.4
325.9
641.4
397.6
356.2
753.8
455.5
385.8
841.3
67.7
15.5
(53.9)
(103.1)
(256.9)
(210.5)
(264.7)
(309.0)
32.6
(12.7)
(44.3)
(33.7)
(29.6)
(10.3)
(27.5)
(24.9)
(8.0)
(10.2)
(12.5)
(11.5)
(12.5)
(9.2)
(12.5)
(12.7)
(43.8)
(26.7)
6.4
(0.9)
(6.9)
(13.7)
(40.0)
(16.1)
18.9
(0.3)
49.4
(0.2)
51.9
1.6
46.0
(0.1)
47.5
(1.4)
33.2
0.0
80.5
0.4
53.9
0.3
Notes to the financial statements
BALANCE SHEET
Assets
Financial assets
Non-financial assets
Total assets
2007-08
$b
Commentary on the Financial Statements
APPENDIX B
LINKS TO OTHER PUBLICATIONS PUBLISHED BY THE AUSTRALIAN
GOVERNMENT ABOUT ITS PROJECTED AND ACTUAL FINANCIAL
POSITION FOR THE 2014-15 FINANCIAL YEAR
The Australian Government publishes a range of information about its projected and
actual financial position. Links to some of these documents are set out below. The
information in the following documents has been prepared for different purposes and
therefore does not form part of the CFS. Further, the documents listed below are not
subject to audit.
2014-15 Final Budget Outcome
The 2014-15 Final Budget Outcome (FBO) was prepared in a manner consistent with
the Charter of Budget Honesty Act 1998 (the Charter). The Charter requires that,
inter alia, the Government provide the FBO no later than three months after the end of
the financial year. Consistent with these requirements, the FBO encompasses
Australian Government GGS fiscal outcomes for the 2014-15 financial year and is
based on external reporting standards.
The FBO is available on the Australian Government
http://www.budget.gov.au/2014-15/content/fbo/html/index.htm.
website
at:
Australian Government (GGS) Monthly Financial Statements
The Australian Government (GGS) Monthly Financial Statements are prepared on a
basis consistent with the Budget as required under section 47 of the PGPA Act. The
statements are prepared in accordance with AASB 1049.
The Australian Government Monthly Financial Statements are available on the
Department of Finance website and the Minister for Finance website at:
http://www.finance.gov.au/publications/commonwealth-monthly-financial-stateme
nts/; and
http://www.financeminister.gov.au/media/2015/index.html.
Budget Strategy and Outlook and Mid-Year Economic and Fiscal Outlook
The Budget Strategy and Outlook — Budget Paper — 2014-15, the Mid-Year Economic and
Fiscal Outlook 2014-15 and the Budget Strategy and Outlook — Budget Paper — 2015-16
have been prepared in accordance with the Charter.
The aforementioned Budget Papers are available on the Australian Government
website at http://www.budget.gov.au/.
31
Commentary on the Financial Statements
Tax Expenditures Statement 2014
The Tax Expenditures Statement (TES) provides details of concessions, benefits,
incentives and charges provided through the tax system (tax expenditures) to taxpayers
by the Australian Government. The TES is available on the Treasury website at:
http://www.treasury.gov.au/PublicationsAndMedia/Publications/2015/TES-2014.
32
CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING
THE AUSTRALIAN GOVERNMENT (WHOLE OF
GOVERNMENT) AND GENERAL GOVERNMENT SECTOR
FINANCIAL REPORTS
INDEPENDENT AUDIT REPORT
35
Consolidated financial statements
36
37
Consolidated financial statements
38
Consolidated financial statements
Australian Government operating statement
for the year ended 30 June 2015
2015
$m
2014
$m
3A
3B
3C
3C
3D
354,910
17,901
4,499
3,927
6,966
388,203
348,232
16,904
4,406
2,457
6,855
378,854
4A
4A
4B
4C
4A
22,282
7,324
8,099
83,310
6,838
127,853
8,999
16,816
22,519
6,893
7,375
78,756
7,010
122,553
8,214
15,646
4E
124,567
12,344
129,190
266,101
115,910
13,197
125,184
254,291
4E
4E
1,857
7,398
9,255
429,024
2,477
9,932
12,409
413,113
(40,821)
(34,259)
(5,627)
332
13,433
3,808
(935)
717
(121)
27
(29,187)
(6,592)
310
6,302
(247)
(480)
(8,198)
(124)
65
(43,223)
2
149
(29,038)
101
(43,122)
9
1,601
(17,720)
224
1,235
(13,014)
41
9
383
(44,550)
282
(54,578)
Note
Revenue from transactions
Taxation revenue
Sales of goods and services
Interest income
Dividend income
Other
Total revenue
Expenses from transactions
Gross operating expenses
Wages and salaries
Superannuation
Depreciation and amortisation
Supply of goods and services
Other operating expenses
Total gross operating expenses
Superannuation interest expense
Interest expense
Current transfers
Current grants
Subsidy expenses
Personal benefits
Total current transfers
Capital transfers
Mutually agreed write-downs
Other capital grants
Total capital transfers
Total expenses
4A
4D
4F
Net operating balance
Other economic flows - included in Operating Result
Net write-downs of assets (including bad and doubtful debts)
Assets recognised for the first time
Net gain/(loss) from the sale of assets
Net foreign exchange gains/(losses)
Net swap interest gains/(losses)
Other gains/(losses)
Amortisation of non-produced assets
Net result from associates and joint ventures
Operating result from continuing operations
Discontinued operation
Operating result
Other economic flows - Other non-owner movements in equity
Items that will not be reclassified to operating result
Revaluation of non-financial assets
Actuarial revaluations of superannuation
Other economic revaluations
Items that may be reclassified subsequently to operating result
Revaluation of equity investments
Comprehensive result - Total change in net worth
39
5A
5B
5C
5D
5E
Consolidated financial statements
Australian Government operating statement (continued)
for the year ended 30 June 2015
Note
Net operating balance
less Net acquisition of non-financial assets
Purchases of non-financial assets
less Sales of non-financial assets
less Depreciation
plus Change in inventories
plus Other movements in non-financial assets
Total net acquisition of non-financial assets
Fiscal balance (Net lending/borrowing)
The above statement should be read in conjunction with the accompanying notes.
40
2015
$m
2014
$m
(40,821)
(34,259)
15,623
2,497
8,099
588
22
5,637
(46,458)
15,144
444
7,375
721
989
9,035
(43,294)
Consolidated financial statements
Australian Government balance sheet
as at 30 June 2015
2015
$m
2014
$m
10B
7A
7A
7B
7C
4,822
41,769
41,208
254,461
44,089
386,349
4,514
34,834
42,167
229,776
40,477
351,768
7D
7D
7D
7D
7D
7D
7E
7D
7F
10,953
27,878
42,652
30,515
8,678
387
8,531
11,332
5,062
145,988
532,337
10,396
27,003
41,243
26,990
8,536
375
8,371
10,825
3,523
137,262
489,030
8A
8B
8C
8D
8E
25,124
404,044
9,707
5,336
11,291
455,502
24,588
346,616
8,464
4,990
12,934
397,592
8F
8F
8G
8G
8G
8G
8G
8G
8G
248,540
20,091
5,558
5,983
4,529
3,239
65,481
4,666
27,713
385,800
841,302
221,948
18,720
6,146
5,607
4,482
3,355
60,778
5,089
30,049
356,174
753,766
(367,797)
58,832
(308,965)
(320,385)
55,649
(264,736)
Current liabilities
Non-current liabilities
Total liabilities by maturity
113,930
727,372
841,302
108,637
645,129
753,766
Current assets
Non-current assets
Total assets by maturity
329,347
202,990
532,337
296,244
192,786
489,030
Note
Assets
Financial assets
Cash and deposits
Advances paid
Other receivables and accrued revenue
Investments, loans and placements
Equity investments
Total financial assets
Non-financial assets
Land
Buildings
Specialist military equipment
Other plant, equipment and infrastructure
Intangibles
Investment property
Inventories
Heritage and cultural assets
Other non-financial assets
Total non-financial assets
Total assets
7G
Liabilities
Interest bearing liabilities
Deposits held
Government securities
Loans
Other borrowings
Other interest bearing liabilities
Total interest bearing liabilities
Provisions and payables
Superannuation liability
Other employee liabilities
Suppliers payable
Personal benefits payable
Subsidies payable
Grants payable
Australian currency on issue
Other payables
Other provisions
Total provisions and payables
Total liabilities
Net worth(a)
Accumulated results
Reserves
Net worth
(a) Minority interests have not been separately disclosed as they are immaterial to the financial statements.
The above statement should be read in conjunction with the accompanying notes.
41
Consolidated financial statements
Australian Government cash flow statement
for the year ended 30 June 2015
2015
$m
2014
$m
351,577
18,513
4,459
3,756
7,534
385,839
338,219
17,747
4,222
2,201
7,058
369,447
(29,504)
(85,016)
(144,444)
(14,377)
(130,891)
(6,467)
(410,699)
(7)
(24,867)
(29,599)
(79,782)
(140,092)
(14,308)
(126,367)
(7,153)
(397,301)
374
(27,480)
INVESTING ACTIVITIES
Investments in non-financial assets
Sales of non-financial assets
Purchases of non-financial assets
Net cash flows from investments in non-financial assets
2,380
(15,114)
(12,734)
714
(13,225)
(12,511)
Investments in financial assets for policy purposes
Investments in financial assets for liquidity purposes
(5,190)
(10,908)
(6,429)
(33,553)
91
(28,741)
(58)
(52,551)
FINANCING ACTIVITIES
Financing cash received
Cash received
Borrowings
Other financing
Total cash received
57,597
2,693
60,290
87,529
1,919
89,448
Financing cash used
Borrowings
Other financing
Total cash used
(6,374)
(6,374)
(8,965)
(8,965)
Net cash flows from financing activities
53,916
80,483
308
452
4,514
4,062
4,822
4,514
(24,867)
(12,734)
(37,601)
(27,480)
(12,511)
(39,991)
(481)
(38,082)
(2,662)
(42,653)
Note
OPERATING ACTIVITIES
Operating cash received
Taxes received
Receipts from sales of goods and services
Interest receipts
Dividend receipts
Other receipts
Total cash received
Operating cash used
Payments for employees
Payments for goods and services
Grants and subsidies paid
Interest paid
Personal benefits
Other payments
Total cash used
Net cash from discontinued operating activities
Net cash flows from operating activities
2
10A
Net cash from discontinued investing activities
Net cash from investing activities
2
Net (decrease)/increase in cash held
Cash at beginning of year
Cash at end of year
Key fiscal aggregate
Net cash flows from operating activities
Net cash flows from investments in non-financial assets
Cash surplus/(deficit)
Finance leases and similar arrangements
GFS cash surplus/(deficit)
10B
The above statement should be read in conjunction with the accompanying notes.
42
Australian Government statement of changes in equity (net worth)
to the year ended 30 June 2015
Australian Government
Reserves
Foreign
currency
translation Investments
Statutory
reserve(b)
reserve(c)
funds(d)
$m
$m
$m
Accumulated
results
$m
Asset
revaluation
reserve(a)
$m
Adjusted opening balance as at 1 July 2013
(259,041)
33,844
(156)
14,000
Comprehensive result - Total change in
net worth
Transfers to/(from)/between reserves
Net worth as at 30 June 2014 (f)
(53,987)
(7,357)
(320,385)
1,461
37
35,342
(166)
(322)
Non-material changes in accounting policy and errors
Adjusted opening balance as at 1 July 2014
176
(320,209)
55
35,397
(322)
Item
43
Other
reserve(e)
$m
Total
reserves
$m
Total
$m
(3,248)
4,443
48,883
(210,158)
(1,994)
(982)
11,024
3
8,799
5,554
105
(497)
4,051
(591)
7,357
55,649
(54,578)
(264,736)
99
11,123
5,554
(9)
4,042
145
55,794
321
(264,415)
The above statement should be read in conjunction with the accompanying notes.
(44,550)
(308,965)
Consolidated financial statements
Comprehensive result - Total change in
net worth
(46,721)
1,934
219
9
9
2,171
Transfers to/(from)/between reserves
(867)
(47)
(2)
(4,308)
1,570
3,654
867
Net worth as at 30 June 2015 (f)
(367,797)
37,284
(105)
6,824
7,124
7,705
58,832
(a) The asset revaluation reserve includes net revaluation increments and decrements arising from the revaluation of property, plant and equipment.
(b) The foreign currency translation reserve records foreign currency differences arising from the translation of self-sustaining foreign operations.
(c) The investments reserve records the Australian Government’s interest in portfolio authorities and companies.
(d) Statutory funds comprise amounts set aside out of operating surpluses under a specific Act or Statute.
(e) Other reserves include amounts set aside out of operating surpluses for purposes other than those detailed above, including general reserves.
(f) Minority interests have not been separately disclosed as they are immaterial to the financial statements.
SECTOR STATEMENTS
Australian Government operating statement by sector — including General Government Sector Financial Report
for the year ended 30 June 2015
Note
General
Government
2015
2014
$m
$m
Public non-financial
corporations
2015
2014
$m
$m
Public financial
corporations(a)
2015
2014
$m
$m
Eliminations and
netting(b)
2015
2014
$m
$m
47
.
354,910
17,901
4,499
3,927
6,966
388,203
348,232
16,904
4,406
2,457
6,855
378,854
22,282
7,324
8,099
83,310
6,838
127,853
8,999
16,816
22,519
6,893
7,375
78,756
7,010
122,553
8,214
15,646
124,567
12,344
129,190
266,101
115,910
13,197
125,184
254,291
1,857
7,398
9,255
429,024
(40,821)
2,477
9,932
12,409
413,113
(34,259)
Sector statements
Revenue from transactions
Taxation revenue
3A
355,009 348,372
(99)
(140)
Sales of goods and services
3B
8,975
8,575
9,840
9,389
3,257
6,713
(4,171)
(7,773)
Interest income
3C
3,145
3,339
44
66
2,271
1,981
(961)
(980)
Dividend income
3C
6,178
4,105
71
64
(2,322)
(1,712)
Other
3D
7,006
6,843
103
81
176
8,999
(319)
(9,068)
Total revenue
380,313 371,234
9,987
9,536
5,775
17,757
(7,872) (19,673)
Expenses from transactions
Gross operating expenses
Wages and salaries
4A
18,357
18,823
3,764
3,548
286
498
(125)
(350)
Superannuation
4A
6,927
6,372
354
474
66
91
(23)
(44)
Depreciation and amortisation
4B
6,804
6,340
1,255
998
57
83
(17)
(46)
Supply of goods and services
4C
79,289
75,134
5,196
4,835
2,775
5,988
(3,950)
(7,201)
Other operating expenses
4A
5,742
6,017
852
681
273
399
(29)
(87)
Total gross operating expenses
117,119 112,686
11,421
10,536
3,457
7,059
(4,144)
(7,728)
Superannuation interest expense
4A
8,999
8,214
Interest expenses
4D
16,024
15,050
420
363
1,313
1,154
(941)
(921)
Current transfers
Current grants
4E
124,635 115,960
(68)
(50)
Subsidy expenses
12,506
13,368
(162)
(171)
Personal benefits
129,190 125,184
Tax expenses
(66)
35
48
88
18
(123)
Total current transfers
266,331 254,512
(66)
35
48
88
(212)
(344)
Capital transfers
Mutually agreed write-downs
4E
1,857
2,627
(150)
Other capital grants
4E
7,398
18,732
(8,800)
Total capital transfers
9,255
21,359
(8,950)
4F
Total expenses
417,728 411,821
11,775
10,934
4,818
8,301
(5,297) (17,943)
Net operating balance
(37,415) (40,587)
(1,788)
(1,398)
957
9,456
(2,575)
(1,730)
(a) Includes Medibank Private Limited (discontinued operation) for the period prior to disposal – refer Note 2.
(b) The eliminations and netting column includes the elimination of inter-sector transactions and the netting off of gains and losses across sectors
Australian
Government
2015
2014
$m
$m
for the year ended 30 June 2015
Note
48
Other economic flows - included
in operating result
Net write-downs of assets
Assets recognised for the first time
Net gain/(loss) from the sale of assets
Net foreign exchange gains/(losses)
Net swap interest gains/(losses)
Other gains/(losses)
Amortisation of non-produced assets
Net result from associates and joint ventures
Operating result
Discontinued operation
Net operating result
5A
5B
5C
5D
5E
2
General
Government
2015
$m
2014
$m
(5,412)
326
10,690
(2,335)
(977)
4,706
(58)
27
(30,448)
(30,448)
Public non-financial
corporations
2015
$m
2014
$m
(6,537)
310
6,093
(402)
(524)
(8,322)
(64)
64
(49,969)
(217)
5
50
2
8
11
(63)
(1,992)
(49,969)
(1,992)
Public financial
corporations(a)
2015
$m
2014
$m
(66)
197
8
11
14
(60)
(1,294)
(7)
(73)
6,142
35
42
(3)
7,093
(1,294)
7,093
Eliminations and
netting(b)
2015
$m
2014
$m
(104)
2
34
149
33
124
(10)
9,684
9
1
2,766
(1)
(1)
(4,042)
3
(3,840)
9,684
149
(3,691)
Australian
Government
2015
$m
2014
$m
115
(2)
(22)
(2)
(14)
10
1
(1,644)
(5,627)
332
13,433
3,808
(935)
717
(121)
27
(29,187)
(6,592)
310
6,302
(247)
(480)
(8,198)
(124)
65
(43,223)
101
(1,543)
149
(29,038)
101
(43,122)
1,601
(17,720)
224
1,235
(13,014)
41
383
(44,550)
(40,821)
282
(54,578)
(34,259)
15,623
2,497
8,099
588
22
5,637
(46,458)
15,144
444
7,375
721
989
9,035
(43,294)
Other economic flows - through equity
Will not be reclassified to operating result
Revaluation of non-financial assets
9
1,647
1,158
(73)
63
29
14
(2)
Actuarial revaluations of superannuation
(17,780) (13,233)
145
220
(85)
(1)
Other economic revaluations
(3,873)
(58)
(234)
(94)
(1,264)
157
5,595
36
May be reclassified to operating result
Revaluation of equity investments
9
3,201
7,679
380
262
(3,198)
(7,659)
Comprehensive result
(47,253) (54,423)
(2,154)
(1,105)
6,153
10,116
(1,296)
(9,166)
Net operating balance
(37,415) (40,587)
(1,788)
(1,398)
957
9,456
(2,575)
(1,730)
less Net acquisition of non-financial assets
11,337
9,613
4,233
4,726
53
805
Purchases of non-financial assets
2,423
241
75
197
5
(1)
1
less Sales of non-financial assets
6,804
6,340
1,255
998
57
83
(17)
(46)
less Depreciation
582
704
8
14
(2)
2
1
plus Change in inventories
14
114
18
875
(11)
(2)
1
2
plus Other movements in non-financial assets
Total net acquisition of non-financial assets
2,706
3,850
2,929
4,420
(17)
717
19
48
Fiscal balance (Net lending/borrowing)
(40,121) (44,437)
(4,717)
(5,818)
974
8,739
(2,594)
(1,778)
(a) Includes Medibank Private Limited (discontinued operation) for the period prior to disposal – refer Note 2.
(b) The eliminations and netting column includes the elimination of inter-sector transactions and the netting off of gains and losses across sectors.
Sector statements
Australian Government operating statement by sector — including General Government Sector Financial Report (continued)
Australian Government balance sheet by sector — including General Government Sector Financial Report
as at 30 June 2015
Note
Assets
Financial assets
Cash and deposits
Advances paid
Other receivables and accrued revenue
Investments, loans and placements
Equity investments
Total financial assets
10B
7A
7A
7B
7C
General
Government
2014
2015
$m
$m
Public non-financial
corporations
2015
2014
$m
$m
Public financial
corporations
2015
2014
$m
$m
Eliminations(a)
2015
$m
2014
$m
Australian
Government
2015
2014
$m
$m
49
3,156
40,658
42,335
136,376
83,496
306,021
3,844
34,040
41,865
117,611
75,576
272,936
2,042
5
1,272
624
3
3,946
1,380
8
1,172
415
9
2,984
480
1,030
2,177
1,851
250
571
158,175 143,954
401
638
161,483 148,044
(856)
(1,740)
(1,071)
(1,065)
(2,648)
(1,441)
(40,714) (32,204)
(39,811) (35,746)
(85,100) (72,196)
4,822
41,769
41,209
254,461
44,089
386,350
4,514
34,834
42,167
229,776
40,477
351,768
Non-financial assets
Land
7D
9,941
Buildings
7D
25,639
Specialist military equipment
7D
42,652
Other plant, equipment and infrastructure
7D
13,624
Intangibles
7D
6,544
Investment property
7D
187
Inventories
7E
8,415
Heritage and cultural assets
7D
11,332
Tax assets
Other non-financial assets
7F
4,896
Total non-financial assets
123,230
7G
Total assets
429,251
(a) Comprises the elimination of inter-sector balances.
9,331
24,847
41,243
13,097
6,183
183
8,253
10,825
3,310
117,272
390,208
870
1,952
16,714
2,100
200
107
915
217
23,075
27,021
916
1,871
13,617
2,091
192
106
913
237
19,943
22,927
143
149
287
284
177
275
36
263
9
11
4
12
37
91
693
1,085
162,176 149,129
(1)
(2)
(919)
(88)
(1,010)
(86,110)
10,953
27,878
42,652
30,515
8,678
387
8,531
11,332
5,062
145,988
532,338
10,396
27,003
41,243
26,990
8,536
375
8,371
10,825
3,523
137,262
489,030
1
1
(1)
1
(925)
(115)
(1,038)
(73,234)
Sector statements
Note
General
Government
2015
2014
$m
$m
50
Liabilities
Interest bearing liabilities
Deposits held
8A
218
Government securities
8B
409,937
Loans
8C
5,693
Other borrowing
8D
1,509
Other interest bearing liabilities
8E
6,715
Total interest bearing liabilities
424,072
Provisions and payables
Superannuation liability
8F
248,209
Other employee liabilities
8F
17,052
Suppliers payable
8G
4,601
Personal benefits payable
8G
5,983
Subsidies payable
8G
4,529
Grants payable
8G
3,239
Australian currency on issue
8G
Tax liabilities
Other payables
8G
2,688
Other provisions
8G
27,332
Total provisions and payables
313,633
Total liabilities
737,705
(a) Comprises the elimination of inter-sector balances.
Public non-financial
corporations
2015
2014
$m
$m
211
351,282
4,708
1,529
5,674
363,404
2,660
3,826
15
6,501
2,510
3,461
14
5,985
221,747
15,930
4,881
5,607
4,482
3,355
3,133
29,182
288,317
651,721
24
1,636
1,002
674
1,956
382
5,674
12,175
4
1,349
1,036
560
1,307
393
4,649
10,634
Public financial
corporations
2015
2014
$m
$m
60,486
2,406
4,562
67,454
53,574
2,285
7,247
63,106
306
197
1,403
1,441
60
408
65,481
60,778
1
28
2,668
2,043
1
477
69,920
65,372
137,374 128,478
Eliminations(a)
2015
$m
2014
$m
Australian
Government
2015
2014
$m
$m
(35,580) (29,197)
(5,893)
(4,666)
(1,052)
(1,039)
1
(1)
(1)
(42,525) (34,903)
25,124
404,044
9,707
5,336
11,291
455,502
24,588
346,616
8,464
4,990
12,934
397,592
1
(105)
(675)
(2,646)
(2)
(3,427)
(45,952)
248,540
20,091
5,558
5,983
4,529
3,239
65,481
4,666
27,713
385,800
841,302
221,948
18,720
6,146
5,607
4,482
3,355
60,778
5,089
30,049
356,174
753,766
(179)
(588)
(1,394)
(3)
(2,164)
(37,067)
Sector statements
Australian Government balance sheet by sector — including General Government Sector Financial Report (continued)
as at 30 June 2015
Australian Government balance sheet by sector — including General Government Sector Financial Report (continued)
as at 30 June 2015
Note
Net worth
Accumulated results
Reserves
Contributed equity
Net worth
General
Government
2015
2014
$m
$m
(360,194) (316,559)
51,740
55,046
(308,454) (261,513)
Public non-financial
corporations
2015
2014
$m
$m
(3,543)
1,847
16,542
14,846
(1,530)
1,852
11,971
12,293
Public financial
corporations
2015
2014
$m
$m
(142)
24,698
246
24,802
Eliminations(a)
2015
$m
2014
$m
Australian
Government
2015
2014
$m
$m
1,370
19,150
131
20,651
(3,918)
(19,453)
(16,788)
(40,159)
(3,666)
(20,399)
(12,102)
(36,167)
(367,797) (320,385)
58,832
55,649
(308,965) (264,736)
51
Current liabilities
Non-current liabilities
Total liabilities by maturity
85,999
651,706
737,705
76,567
575,154
651,721
4,252
7,923
12,175
3,687
6,947
10,634
68,643
64,590
68,731
63,888
137,374 128,478
(44,964)
(988)
(45,952)
(36,207)
(860)
(37,067)
113,930
727,372
841,302
108,637
645,129
753,766
Current assets
Non-current assets
Total assets by maturity
(a) Comprises the elimination of inter-sector balances.
220,658
208,593
429,251
193,097
197,111
390,208
3,839
23,182
27,021
3,059
19,868
22,927
149,401 135,862
12,775
13,267
162,176 149,129
(44,551)
(41,560)
(86,111)
(35,774)
(37,460)
(73,234)
329,347
202,990
532,337
296,244
192,786
489,030
Sector statements
OPERATING ACTIVITIES
Cash received
Taxes received
Receipts from sales of
goods and services
Interest receipts
Dividend receipts
GST receipts
Other receipts
Total cash received
General
Government
2015
2014
$m
$m
Public non-financial
corporations
2015
2014
$m
$m
Public financial
corporations(a)
2015
2014
$m
$m
Eliminations and
netting(b)
2014
2015
$m
$m
Australian
Government
2015
2014
$m
$m
52
351,675
338,215
-
-
-
-
(98)
4
351,577
338,219
8,839
3,056
4,745
7,598
375,913
8,579
3,128
3,131
6,811
359,864
10,732
44
370
34
11,180
10,421
72
3
277
12
10,785
3,104
2,327
58
18
210
5,717
6,675
1,894
43
18
9,005
17,635
(4,162)
(968)
(1,047)
(388)
(308)
(6,971)
(7,928)
(872)
(976)
(295)
(8,770)
(18,837)
18,513
4,459
3,756
7,534
385,839
17,747
4,222
2,201
7,058
369,447
(25,775)
(80,252)
(144,512)
(13,924)
(130,891)
(5,289)
(400,643)
(25,889)
(75,845)
(148,990)
(13,972)
(126,367)
(5,769)
(396,832)
(43)
(4,130)
(6,086)
(57)
(385)
(537)
(11,238)
(84)
(3,759)
(5,599)
(65)
(396)
(604)
(10,507)
(31)
(97)
(2,771)
(162)
(1,366)
(311)
(4,738)
(61)
(430)
(5,575)
(123)
(1,137)
(266)
(7,592)
74
498
4,093
230
970
385
(330)
5,920
145
479
7,237
9,021
866
396
(514)
17,630
(29,504)
(85,016)
(144,444)
(14,377)
(130,891)
(6,467)
(410,699)
(29,599)
(79,782)
(140,092)
(14,308)
(126,367)
(7,153)
(397,301)
Net cash from discontinued operating activities
Net cash from operating activities
(24,730)
(36,968)
(58)
278
979
10,043
(7)
(1,058)
374
(833)
(7)
(24,867)
374
(27,480)
INVESTING ACTIVITIES
Investments in non-financial assets
Sales of non-financial assets
Purchases of non-financial assets
Net cash flows from investments
in non-financial assets
2,305
(11,280)
457
(9,012)
75
(3,801)
257
(3,523)
(53)
5
(803)
20
(5)
113
2,380
(15,114)
714
(13,225)
(8,975)
(8,555)
(3,726)
(3,266)
(53)
(798)
20
108
(12,734)
(12,511)
Cash used
Taxes paid
Payments for employees
Payments for goods and services
Grants and subsidies paid
Interest paid
Personal benefits
GST paid
Other payments
Total cash used
(a) Includes Medibank Private Limited (discontinued operation) for the period prior to disposal – refer Note 2.
(b) The eliminations and netting column includes the elimination of inter-sector transactions and the netting off of certain cash flows across sectors.
Sector statements
Australian Government cash flow statement by sector — including General Government Sector Financial Report
for the year ended 30 June 2015
Australian Government cash flow statement by sector — including General Government Sector Financial Report (continued)
for the year ended 30 June 2015
General
Government
2015
$m
2014
$m
Public non-financial
corporations
2015
2014
$m
$m
Public financial
corporations(a)
2015
2014
$m
$m
Eliminations and
netting(b)
2015
2014
$m
$m
Australian
Government
2015
2014
$m
$m
53
(5,163)
(6,371)
-
-
(63)
-
36
(58)
(5,190)
(6,429)
(11,953)
(7,718)
(46)
656
(12,315)
(40,033)
13,406
13,542
(10,908)
(33,553)
Net cash from discontinued investing activities
Net cash from investing activities
(26,091)
(22,644)
(3,772)
(2,610)
(12,431)
(40,831)
91
13,553
(58)
13,534
91
(28,741)
(58)
(52,551)
FINANCING ACTIVITIES
Cash flows from financing activities
Cash received
Borrowings
Other financing
Total cash received
52,381
52,381
63,218
63,218
105
4,817
4,922
3,233
3,233
6,381
5,456
11,837
27,366
3,961
31,327
(1,270)
(7,580)
(8,850)
(3,055)
(5,275)
(8,330)
57,597
2,693
60,290
87,529
1,919
89,448
Cash used
Other financing
Total cash used
(2,248)
(2,248)
(1,875)
(1,875)
(430)
(430)
(412)
(412)
(935)
(935)
(604)
(604)
(2,761)
(2,761)
(6,074)
(6,074)
(6,374)
(6,374)
(8,965)
(8,965)
Net cash from discontinued financing activities
Net cash from financing activities
50,133
61,343
4,492
2,821
10,902
30,723
(11,611)
(14,404)
53,916
80,483
Net increase / (decrease) in cash
(688)
1,731
662
489
(550)
(65)
884
(1,703)
308
452
Cash at beginning of year
3,844
2,113
1,380
891
1,030
1,095
(1,740)
(37)
4,514
4,062
Cash at end of year
Key fiscal aggregate
Net cash flows from operating activities
Net cash flows from investments
in non-financial assets
Cash surplus/(deficit)
3,156
3,844
2,042
1,380
480
1,030
(856)
(1,740)
4,822
4,514
(24,730)
(36,968)
(58)
278
979
10,043
(1,058)
(833)
(24,867)
(27,480)
(8,975)
(33,705)
(8,555)
(45,523)
(3,726)
(3,784)
(3,266)
(2,988)
(53)
926
(798)
9,245
20
(1,038)
108
(725)
(12,734)
(37,601)
(12,511)
(39,991)
(72)
(33,777)
(586)
(46,109)
(409)
(4,193)
(2,076)
(5,064)
926
9,245
(1,038)
(725)
(481)
(38,082)
(2,662)
(42,653)
Finance leases and similar arrangements
GFS cash surplus/(deficit)
(a) Includes Medibank Private Limited (discontinued operation) for the period prior to disposal – refer Note 2.
(b) The eliminations and netting column includes the elimination of inter-sector transactions and the netting off of certain cash flows across sectors.
Sector statements
INVESTING ACTIVITIES
Investments in financial assets for
policy purposes
Investments in financial assets for
liquidity purposes
General Government
Reserves
Foreign
currency
translation Investments
reserve
reserve
$m
$m
Accumulated
results
$m
Asset
revaluation
reserve
$m
Adjusted opening balance as at 1 July 2013
(249,138)
29,271
(220)
Comprehensive result - Total change in net worth
Transfers to/(from)/between reserves
Net worth as at 30 June 2014
(68,336)
915
(316,559)
1,118
53
30,442
Non-material changes in accounting policy and errors
Adjusted opening balance as at 1 July 2014
168
(316,391)
Comprehensive result - Total change in net worth
(48,111)
Transfers to/(from)/between reserves
4,308
Net worth as at 30 June 2015
(360,194)
The above statement should be read in conjunction with the accompanying notes.
Item
54
Other
reserves
$m
Total
reserves
$m
Total
$m
12,880
117
42,048
(207,090)
(109)
(329)
12,948
(984)
24,844
(44)
16
89
13,913
(915)
55,046
(54,423)
(261,513)
55
30,497
(329)
98
24,942
(9)
80
144
55,190
312
(261,201)
1,597
(3)
32,091
166
(163)
(916)
(4,308)
19,718
11
3
94
858
(4,308)
51,740
(47,253)
(308,454)
Sector statements
General Government Sector statement of changes in equity
to the year ended 30 June 2015
NOTES TO THE FINANCIAL STATEMENTS
INDEX TO NOTES
NOTE 1: BASIS OF FINANCIAL STATEMENTS PREPARATION .................................59
NOTE 2: DISCONTINUED OPERATIONS ...............................................................66
NOTE 3: REVENUE FROM TRANSACTIONS ..........................................................69
Note 3A: Taxation revenue ........................................................................................... 70
Note 3B: Sales of goods and services .......................................................................... 73
Note 3C: Interest and dividend income ......................................................................... 74
Note 3D: Other sources of non-taxation revenue ......................................................... 74
NOTE 4: EXPENSES FROM TRANSACTIONS .........................................................75
Note 4A: Employee and superannuation expenses ...................................................... 76
Note 4B: Depreciation and amortisation expenses ....................................................... 77
Note 4C: Supply of goods and services ........................................................................ 78
Note 4D: Interest expense ............................................................................................ 79
Note 4E: Grants expense .............................................................................................. 79
Note 4F: Expenses by function ..................................................................................... 80
NOTE 5: OTHER ECONOMIC FLOWS ...................................................................82
Note 5A: Net write-down of assets (including bad and doubtful debts) ........................ 84
Note 5B: Net gain/(loss) from the sale of assets ........................................................... 85
Note 5C: Net foreign exchange gains/(losses) ............................................................. 86
Note 5D: Net swap interest gains/(losses) .................................................................... 86
Note 5E: Other gains/(losses) ....................................................................................... 86
NOTE 6: FAIR VALUE MEASUREMENT.................................................................87
NOTE 7: ASSETS ..............................................................................................96
Note 7A: Advances paid and receivables ..................................................................... 97
Note 7B: Investments, loans and placements ............................................................... 99
Note 7C: Equity investments ....................................................................................... 100
Note 7D: Land and buildings, plant, equipment and infrastructure, heritage
and cultural assets and intangibles ........................................................... 101
Note 7E: Inventories .................................................................................................... 108
Note 7F: Other non-financial assets............................................................................ 108
Note 7G: Assets by function(a) ................................................................................... 108
NOTE 8: LIABILITIES .......................................................................................109
Note 8A: Deposit liabilities .......................................................................................... 110
Note 8B: Government securities ................................................................................. 110
Note 8C: Loans ........................................................................................................... 110
Note 8D: Other borrowings ......................................................................................... 111
Note 8E: Other interest bearing liabilities .................................................................... 111
Note 8F: Employee benefits ........................................................................................ 112
Note 8G: Other provisions and payables .................................................................... 114
57
Notes to the financial statements
NOTE 9: NET REVALUATION INCREASES/(DECREASES) .....................................116
NOTE 10: RECONCILIATION OF CASH ...............................................................117
NOTE 11: COMMITMENTS ...............................................................................118
NOTE 12: RISKS ............................................................................................120
Note 12A: Contingencies ............................................................................................ 121
Note 12B: Financial instruments ................................................................................. 134
Note 12C: Defined benefit superannuation plans ....................................................... 152
NOTE 13: EVENTS OCCURRING AFTER BALANCE DATE .....................................164
NOTE 14: RECONCILIATIONS AND EXPLANATIONS ............................................164
Note 14A: Reconciliations to ABS GFS measures ..................................................... 165
Note 14B: Reconciliation to original budget ................................................................ 169
Note 14C: Glossary of key fiscal aggregates .............................................................. 179
NOTE 15: AUDIT EXPENSES ............................................................................181
NOTE 16: LIST OF AUSTRALIAN GOVERNMENT REPORTING ENTITIES................. 182
58
Notes to the financial statements
Note 1: Basis of financial statements preparation
1.1
Purpose
The purpose of this note is to outline the basis on which the financial statements for the
Australian Government (whole of government) and the general government sector
(GGS) have been prepared.
Significant accounting policies that are relevant to understanding the financial
statements are provided throughout the notes to the financial statements.
Except as otherwise noted, the accounting policies detailed in this note and throughout
the notes to the financial statements are applicable at both the whole of government
level and for the GGS.
1.2
Statement of compliance
The Australian Government Consolidated Financial Statements (CFS) are required by
section 48 of the Public Governance, Performance and Accountability Act 2013.
The CFS are general purpose financial statements that have been prepared for the
whole of government and the GGS in accordance with Australian Accounting
Standards (AAS), including AASB 1049 Whole of Government and General Government
Sector Financial Reporting (AASB 1049).
The GGS financial statements are included in the CFS and can be found in the Sector
statements and the Notes to the financial statements.
1.3
Basis of accounting
The purpose of the CFS is to provide users with information about the stewardship by
the Australian Government and accountability for the resources entrusted to it;
information about the financial position, performance and cash flows of the Australian
Government; and information that facilitates assessment of the macro-economic
impact of the Australian Government.
The principles and rules in the Australian Bureau of Statistics Australian System of
Government Finance Statistics: Concepts, Sources and Methods 2005 — ABS Catalogue
No. 5514.0 (ABS GFS manual) have been applied in the production of these financial
statements, except in instances in which the application would conflict with AAS.
The 2014-15 financial statements for the whole of government and the GGS have been
prepared on the basis of the ABS GFS manual effective as at 1 July 2014.
Where the key fiscal aggregates presented on the face of the financial statements are
materially different to that measured in accordance with the applied ABS GFS manual,
a reconciliation between the two measures has been provided (refer Note 14A).
59
Notes to the financial statements
The CFS has been prepared on an accrual basis and is presented in Australian dollars.
With the exception of advances paid to the International Development Association
(IDA) and the Asian Development Fund (ADF) the key fiscal aggregates reported in
the CFS GGS financial statements materially align to the GGS financial statements
included in the 2014-15 Final Budget Outcome (FBO). As detailed in Part 2, Note 2 of
the 2014-15 FBO, AASB 1049 requires the advances paid to the IDA and ADF to be
recognised at fair value. Under the ABS GFS manual, these advances are recorded at
nominal value. The ABS GFS treatment is adopted in the FBO while the AAS treatment
is adopted in the CFS.
1.4
New Australian Accounting Standards
Adoption of New Australian Accounting Standard Requirements
During 2014-15, the Australian Government adopted all applicable AAS that became
effective during 2014-15. Other than noted below, the application of new accounting
standards did not materially impact the operations of the Australian Government.
The Australian Government has early adopted AASB 2015-7 Amendments to Australian
Accounting Standards — Fair Value Disclosures of Not-for-Profit Public Sector Entities
(AASB 2015-7). AASB 2015-7 amends AASB 13 Fair Value Measurement to provide
disclosure relief to not-for-profit public sector entities from certain disclosures about
the fair value measurements of property, plant and equipment held for their current
service potential rather than to generate net cash inflows. This includes relief from
disclosures of quantitative information about the significant unobservable inputs used
in fair value measurements and of the sensitivity of certain fair value measurements to
changes in unobservable inputs.
Future Australian Accounting Standards Requirements
The Australian Accounting Standards Board (AASB) has issued a number of new
standards, amendments to standards and interpretations that are effective for future
reporting periods:
• AASB 15 Revenue from Contracts with Customers (AASB 15) replaces components of
AASB 111 Construction Contracts, AASB 118 Revenue and AASB 1004 Contributions.
AASB 15 could significantly change the pattern of revenue and profit recognition
and internal budgeting processes. The new standard is effective from
1 January 2018.
• AASB 9 Financial Instruments represents the finalisation of the three phase project to
replace AASB 139 Financial Instruments: Recognition and Measurement. It incorporates
new principles for the requirements for recognition and measurement of financial
assets and liabilities and their derecognition and general hedge accounting. This is
likely to impact on the categorisation, recognition and measurement of financial
instruments particularly those currently held at fair value through profit or loss.
The new standard is effective from 1 January 2018.
60
Notes to the financial statements
• AASB 124 Related Party Disclosures removes the current exemption for not-for-profit
public sector entities such as government departments, and adds implementation
guidance with examples specifically tailored to the Australian environment.
Related party transactions will be required to be disclosed to the extent necessary
for users to understand the potential effect of the relationship on the financial
statements. The new standard is effective from 1 July 2016.
Other than the above, current pronouncements related to future reporting periods are
not expected to materially impact on future reporting periods or will not apply to the
operations of the Australian Government.
1.5
Prior year adjustments and changes in accounting policy
For the 2013-14 comparatives, adjustments were made to tax related items as a result of
amending the classification of provisions from bad and doubtful tax debts and credit
amendments to dual tax debts. In the operating statement, this resulted in a reduction
in taxation revenue from individuals of $684 million and an offsetting reduction in bad
and doubtful debts of $684 million, reducing the net operating balance but with no
impact on the operating result. In the balance sheet, there was a reduction to gross
taxation receivables of $1,007 million with a corresponding reduction in the provisions
for doubtful debts and credit amendments, resulting in no change to net receivables.
The comparatives have been adjusted to eliminate Future Fund imputation credits
receivable from, and payable to, the Australian Taxation Office. These were previously
recognised on a gross basis. The comparative imputation credit receivable at
30 June 2014 was $764 million (1 July 2013: $489 million) while the payable was
$343 million (1 July 2013: $220 million). The net movement of $153 million has been
eliminated against income tax revenue in 2013-14.
The 2013-14 comparatives were also restated to reclassify work in progress from ‘other
non-financial assets’ to the respective classes of buildings, infrastructure, plant and
equipment and intangibles. Other reclassifications have been disclosed in the relevant
notes.
1.6
The reporting entity and basis of consolidation
For the purposes of these financial statements, the Australian Government means the
executive (consisting principally of Ministers and their departments), the legislature
(that is, the Parliament) and the judiciary (that is, the courts). Where the ‘Australian
Government’ is referred to throughout these statements it is intended to also mean the
‘Commonwealth of Australia’. The Australian Government reporting entity (referred
to as the reporting entity) includes Australian Government Departments of State,
Parliamentary Departments, other non-corporate Commonwealth entities, corporate
Commonwealth entities and Commonwealth companies in which the Australian
Government holds a controlling interest.
61
Notes to the financial statements
The Australian Government controls an entity when it is exposed to, or has rights to
variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. The existence of control
in the context of these financial statements does not in any way indicate that there is
necessarily control over the manner in which statutory/professional functions are
performed by an entity.
In the process of reporting the Australian Government as a single economic entity, all
material transactions and balances between government-controlled entities are
eliminated. Any dissimilar accounting policies applied at the entity level are amended
to ensure consistent policies are adopted in these financial statements where the effect
is material.
Where control of an entity is obtained during a financial year, results are included in
the consolidated operating statement and consolidated cash flow statement from the
date on which control commenced. Where control of an entity ceases during a financial
year, results are included for that part of the year for which control existed.
1.7
Sectors
The sector classification of Australian Government entities follows that defined by the
Australian Bureau of Statistics for the purposes of Government Finance Statistics
(GFS); this, in turn, is based on international standards issued by the International
Monetary Fund (IMF).
Figure 1: Institutional structure of the public sector
Total public sector
Public financial corporations
sector (PFC)
Total non-financial public
sector
(Perform central banking functions,
accept deposits and have the
authority to incur liabilities and
acquire assets in the market)
General government sector
(GGS)
Public non-financial
corporations sector (PNFC)
(GGS provides non-market public
services and are funded mainly
through taxes and levies)
(Provide goods and services to
consumers on a commercial basis,
are funded largely by the sale of
these goods and services, and are
generally legally distinguishable from
the governments that own them)
62
Notes to the financial statements
1.8
Significant accounting judgements and estimates
In preparing financial statements, Australian Government entities are required to
make judgements and estimates that impact:
•
income and expenses for the year;
•
the reported amounts of assets and liabilities; and
•
the disclosure of off-balance sheet arrangements, including contingent assets and
contingent liabilities.
Judgements and estimates are subject to periodic review, including through the receipt
of actuarial advice. Judgements and estimates are based on historical experience,
various other assumptions believed to be reasonable under the circumstances and,
where appropriate, practices adopted by other entities.
Specialist military equipment
Prior to 2014-15, AASB 1049 permitted defence weapons platforms (DWPs) to be
measured in the CFS at the historic cost basis of measurement. From 2014-15, this
standard requires specialist military equipment (SME), which includes DWPs, to be
measured at fair value, if fair value can be reliably measured.
The requirement to recognise almost all property, plant and equipment assets at fair
value is unique to government. This requirement has arisen from the multi-year
project to reduce complexity through the harmonisation of the two reporting
frameworks applicable to government — AAS and GFS. The accounting standard
AASB 1049 is the result of this harmonisation project and has been in place since
2008-09. As part of the harmonisation process, the option available to reporting entities
under the accounting standards to recognise property, plant and equipment either at
cost, or at fair value, was removed for consolidated government reporting. The
removal of this option was to provide consistency with the broad GFS requirement
that all assets be recorded at market or fair value.
AASB 1049 does provide one exception to this requirement, and that is where fair
value cannot be reliably measured. Given the difficulties in measuring DWPs 1,
AASB 1049 also provided extended transitional relief until 2014-15 from the
requirement to measure these assets at fair value. This relief, which only applied to
1
The basis of conclusion to the amending standard AASB 2012-8 Amendments to AASB 1049 —
Extension of Transitional Relief for the Adoption of Amendments to the ABS GFS Manual relating to
Defence Weapons Platforms, stated the “Board considered a submission arguing that more time
was needed to measure assets classified as defence weapons platforms at fair value, for the
purposes of financial reporting under AASB 1049, due to the magnitude and complexity of
the valuation exercise for such assets. Constituents familiar with the nature and quantity of
the assets involved advised the Board that an extension of transitional relief for two years
would be required to comply. The Board agreed that the extension is warranted, and
considered that such an extension should be sufficient and therefore would not expect to
provide further relief for such assets in the future”.
63
Notes to the financial statements
DWPs, was in recognition of the complexity involved in determining the fair values of
DWPs.
In applying the fair value requirement of AASB 1049, AASB 13 Fair Value Measurement
requires the use of an exit price and a valuation approach that maximises observable
inputs and is compatible with the market, income or cost valuation approaches.
The process undertaken over several years to assess the reliability of fair value
measurement for DWPs has involved the Department of Finance (Finance) working
collaboratively with the Department of Defence (Defence). Identifying fair values for
SME is a complex and time consuming task due to the unique nature and number of
the assets involved and the complexity of determining fair value.
The Australian Government, through Finance and Defence, has not completed its work
to establish reliable measurements of the fair value of DWPs in time for the
2014-15 CFS. Consequently SME continues to be measured at the historic cost basis of
measurement in note 7D, at an amount of $42,652 million.
The Australian Government is committed to preparing the CFS in accordance with
applicable accounting standards, including recognising SME at fair value where this
can be done reliably. Finance intends to finalise the assessment to measure the SME
class of assets at fair value in time for inclusion for the 2015-16 CFS.
Other significant estimates and judgements
In the process of applying the accounting policies described in the relevant note,
judgements and estimates made by Australian Government entities that have the most
significant impact on the amounts recorded in these financial statements include:
Significant accounting estimate / judgement
Note
Taxation revenue items reported under the economic transaction method
3A
Impairment — key assumptions and methodologies used to estimate the
recoverability of accounts receivable, statutory debts and inventory
5A
Fair value — assumptions used in valuation techniques for the fair value of financial
assets and liabilities, including derivatives
6, 12B
Fair value and impairment test — key assumptions underlying recoverable amount
and valuations of land, property, plant and equipment and infrastructure
5A, 6
Measurement of depreciation and amortisation — estimate of expected useful lives
4B, 7D
Measurement of defined benefit and long service leave obligations — principal
actuarial assumptions
8F, 12C
Recognition and measurement of provisions and contingencies — key assumptions
about the likelihood and magnitude of an outflow or inflow of resources
8G, 12A
64
Notes to the financial statements
1.9
Insurance
Australian Government entities operating in the GGS are members of the Australian
Government’s self managed fund for insurable risks, Comcover. This excludes workers
compensation where the risk continues to be managed by Comcare. Australian
Government entities operating outside the GGS adopt their own insurance strategies,
which includes both self-insurance and commercial insurance coverage.
1.10 Rounding
All amounts have been rounded to the nearest million dollars, unless otherwise noted.
1.11 Audit of Australian Government controlled entities
These financial statements are consolidated from the 2014-15 financial statements of
Australian Government entities that were all audit signed.
1.12 Compliance with the Constitution
Section 83 of the Constitution provides that no amount may be paid out of the
Consolidated Revenue Fund except under an appropriation made by law. Australian
Government entities continue to monitor their level of compliance with section 83 of
the Constitution across all legislation for which they have legislative responsibility.
It is important to note that it is not possible in all instances to fully remove the
potential for section 83 breaches under existing legislation. In many cases the
Australian Government relies on information provided by payment recipients to
calculate and pay appropriate entitlements, and this information is not always timely
or accurate. The following table shows the number and value of actual and potential
breaches identified in 2014-15, and amounts recovered to date, for those entities that
have reported actual or potential non-compliance with section 83 of the Constitution:
65
Notes to the financial statements
Commonwealth controlled entity
Recovered/
Actual breaches
Potential breaches
Waived
Value
Value
No.
$'000
No.
$'000
$'000
7
90
20
46
46
47
56
-
Australian Accounting Standards Board
Australian Bureau of Statistics
Attorney-General's Department
Australian Customs and Border
Protection Service
270
4,011
Australian Financial Security Authority
1
5
Australian Taxation Office
8
20
Department of Agriculture
Department of Defence
Department of Finance
40
16
Department of Health
398
58,227
Department of Human Services
35
44
Department of Infrastracture and
and Regional Development
Department of Social Services
36
5,000
Department of the Prime Minister
and Cabinet
5,913
942
Department of the Treasury
3
14,111
Department of Veterans' Affairs
6,731
82,512
Total
(a) The number of potential breaches has not been quantified.
24
363
38
-
1
466
1,124
-
3,736
5
20
399
15
58,227
29
1
2,346,496
13
2,506,355
1,562,848
n/a (a)
2,346,969
46,137
2,554,152
136
n/a (a)
1,625,461
The Australian Government continues to have regard to developments in case law,
including the High Court’s most recent decision on Commonwealth expenditure in
Williams v Commonwealth [2014] HCA 23, as they contribute to the larger body of law
relevant to the development of Commonwealth programmes. In accordance with its
general practice, the Government will continue to monitor and assess risk and decide
on any appropriate actions to respond to risks of expenditure not being consistent with
constitutional or other legal requirements.
Note 2: Discontinued operations
During 2014-15 the Australian Government sold Medibank Private Limited
(Medibank) through an initial public offering.
The Medibank Share Offer prospectus was released on 20 October 2014. Medibank was
listed on the Australian Stock Exchange on 25 November 2014.
Medibank’s pre-disposal results, adjusted for the elimination of transactions with
Australian Government entities, have been reported as a discontinued operation in the
2014-15 CFS, including the reclassification of comparatives.
For the Australian Government, the impact of the disposal was:
• The recognition of a gain on disposal of $4,343 million, comprising proceeds
received from the sale of $5,685 million, less the carrying amount of Medibank’s net
assets of $1,263 million (in Note 5B) at the date of sale and selling costs of
$79 million;
66
Notes to the financial statements
• The recognition of a payable of $4 million for Medibank sales outstanding refunds
at 30 June 2015; and
• A net cash inflow of $5,088 million, representing proceeds of $5,685 million from
the sale of Medibank, amounts yet to be refunded of $4 million, less $79 million in
selling costs paid and $522 million cash held by Medibank on disposal.
The GGS reported a gain on sale of $5,521 million. This comprised:
• a net gain on sale of $1,644 million being the difference between the proceeds of
$5,685 million and the fair value of the Government’s investment in Medibank of
$4,041 million (in Note 5B) and selling costs of $79 million; and
• accumulated general government revaluation gains of $3,956 million which were
previously taken direct to reserves and which the AAS requires to be recognised as
a gain on disposal (in Note 5E).
The difference in treatment between the Australian Government and the GGS reflects
Medibank’s previous classification as a public financial corporation (PFC). This meant
that Medibank was fully consolidated into the Australian Government on a
line-by-line basis but categorised as a financial equity investment at fair value for the
GGS.
The adjusted financial performance of Medibank, on consolidation in the Australian
Government’s financial statements for 2014-15 is detailed below. There is no income
tax expense associated with the sale of Medibank as this is eliminated upon
consolidation.
Discontinued operations
Financial performance
2015(a)
2014
$m
$m
Revenue from transactions
2,769
6,458
Expenses from transactions
2,619
6,288
Net operating balance
Other economic flows - included in Operating Result
Net operating result
67
150
170
(1)
(69)
149
101
Notes to the financial statements
The contribution to Australian Government cash flows of Medibank after adjusting for
the elimination of transactions with Australian Government entities was as follows:
Discontinued operations
Cash flows
2015(a)
2014
$m
$m
Net cash flows from operating activities
(7)
374
Net cash flows from investing activities
91
(58)
Net cash flows from financing activities
Net result
(a) The 2015 amounts are for the period 1 July 2014 to 24 November 2014.
68
-
-
84
316
Notes to the financial statements
Note 3: Revenue from transactions
Revenue from transactions arise from interactions between the Australian Government
and other entities, including households, private corporations and the not-for-profit
sector and other governments. It excludes gains resulting from changes in price levels
and other changes in the volume of assets. These are disclosed separately in Note 5 as
‘Other Economic Flows’. The total Australian Government revenue and relative
composition of revenue sources were as follows:
Amount
$m
450,000
2014-15 Composition
Income
taxation
67%
400,000
350,000
300,000
250,000
Indirect
taxation
25%
200,000
150,000
100,000
50,000
Other
revenue
2%
0
2013-14
2014-15
Dividend
revenue
1%
Interest
revenue
1%
Sales of
goods &
services
4%
• Income taxation (refer Note 3A) is the largest source of Australian Government
revenue and refers to the taxation of income, profits and capital gains;
• Indirect taxation (refer Note 3A) includes taxes on the sale and use of goods and
services and other taxes. Included within this grouping is the goods and services
tax (GST), customs and excise duties and other taxes levied on particular products
or industries;
• Sales of Goods and Services (refer Note 3B) is distinguished from taxation in that
the revenue is received in return for the direct provision of goods and services
(including the provision of regulatory services) to the payer;
• Dividend revenue (refer Note 3C) comprise equity distributions received by the
Government Investment Funds and corporations and, at the GGS level, includes
distributions from public corporations (which are eliminated upon consolidation);
• Interest revenue (refer Note 3C) refers to income accrued on financial assets such as
deposits, securities other than shares, loans and accounts receivable; and
• Other non-taxation revenue (refer Note 3D) includes transaction revenue not
categorised elsewhere, with significant items including the collection of royalties
and the collection of child support payments to pass on to custodial parents.
69
Notes to the financial statements
Note 3A: Taxation revenue
General Government
2015
2014
$m
$m
Income taxation
Individuals and other withholding taxes
Gross income tax withholding
Gross other individuals
less Refunds
Total individuals and other withholding taxation
Fringe benefits tax
Company tax
Superannuation funds
Resource rent taxes
Total income taxation revenue
Australian Government
2015
2014
$m
$m
167,645
40,565
(27,033)
181,177
4,393
65,961
5,890
1,382
258,803
157,077
37,561
(27,407)
167,231
4,285
68,612
6,147
1,785
248,060
167,645
40,565
(27,033)
181,177
4,393
65,862
5,890
1,382
258,704
157,076
37,561
(27,407)
167,230
4,285
68,473
6,147
1,785
247,920
Indirect taxation
Sales taxes
Goods and services tax
Wine equalisation tax
Luxury car tax
Total sales taxes
56,462
828
540
57,830
55,517
826
476
56,819
56,462
828
540
57,830
55,517
826
476
56,819
Excise duty revenue(a)
Customs duty revenue(a)
23,687
10,884
25,647
9,282
23,687
10,884
25,647
9,282
-
4,744
-
4,744
510
3,295
3,805
503
491
3,329
3,820
498
510
3,295
3,805
503
491
3,329
3,820
498
(503)
-
(498)
-
(503)
-
(498)
-
Carbon pricing mechanism
Other indirect taxation
Agricultural levies
Other taxes
Total other indirect taxation revenue
Mirror taxes
less Transfers to States in relation to
mirror tax revenue
Mirror tax revenue
Total indirect taxation revenue
96,206
100,312
96,206
100,312
Total taxation revenue(b)
355,009
348,372
354,910
348,232
(a) The 2014-15 Final Budget Outcome provides a disaggregation of excise and customs duty revenue by
duty type.
(b) Concessions and other forms of tax expenditures constitute revenue foregone and are not reported
above or as an expense (unless available to beneficiaries regardless of whether they are required to pay
tax in which case an expense is recorded). The Australian Government Treasury issues an annual
Tax Expenditures Statement (unaudited), which provides a list of tax expenditures provided by the
Australian Government to individuals and businesses.
Taxation revenue
Taxation revenues are recognised when all of the following three conditions have been
satisfied:
• there is a basis establishing the Australian Government’s right to receive the
revenue;
• it is probable that future economic benefits will be received; and
• the amount of revenue to be received can be reliably measured.
70
Notes to the financial statements
Estimation of some revenues can be difficult due to impacts of economic conditions
and the timing of final taxable income, hence the Australian Government uses
two bases of recognition:
• Economic Transaction Method (ETM) - Revenue is recognised when the
Government, through the application of legislation to taxation and other relevant
activities, gains control over the future economic benefits that arise from taxes and
other statutory charges. Where a taxation revenue is able to be measured reliably
(even in cases where the transactions are yet to occur but are likely to be reported)
the ETM method is used to recognise revenue; or
• Taxation Liability Method (TLM) - Revenue is recognised at the earlier of when an
assessment of a tax liability is made, or payment is received. Furthermore, revenue
is recognised when there is sufficient information to raise an assessment but an
event has occurred which delays the issue of the assessment. This method is
permitted when there is an ‘inability to reliably measure taxes when the underlying
transactions or events occur’. Revenue recognised under this policy is generally
measured at a later time than would be the case if it were measured under ETM.
The revenue recognition policy adopted by the Australian Government for each major
type of taxation revenue is as follows:
Type of
taxation
revenue
Revenue
recognition
basis
Basis of revenue recognition
Income tax —
individuals
TLM
Comprise income tax withholding (ITW), other individuals,
Medicare levy and income tax refunds. ITW represents
amounts withheld from payments of remuneration for the
year. Other individuals includes income tax instalments and
final tax returns received during the year. Other individuals
revenue and income tax refunds do not incorporate an
estimate of the tax to be paid or refunded on the final
assessment for the year.
Income tax —
companies
TLM
Comprise amounts of tax payable by companies that relate
to instalments and final payments received/raised for current
and former periods. It does not include estimates of revenue
related to the reporting year that will be recognised in annual
income tax returns lodged after the reporting date.
Income tax —
superannuation
funds
TLM
Superannuation contributions tax is levied on
superannuation funds based on contributions made by
employers. Superannuation fund tax revenue comprise
amounts of tax payable by superannuation funds that relate
to instalments and payments for current and former
reporting years. It does not include estimates of revenue
related to the reporting year that will be recognised in annual
income tax returns lodged after the reporting date.
Petroleum
resource rent
tax (Resources
rent tax)
ETM
Recognised based on the actual and estimated taxable
profits in respect to offshore petroleum projects excluding
some of the North-West Shelf production and associated
exploration areas, which are subject to excise (included in
excise on petroleum and other fuel products) and royalties.
71
Notes to the financial statements
Type of
taxation
revenue
Revenue
recognition
basis
Basis of revenue recognition
Goods and
services tax
(GST)
ETM
Recognised based on the actual liabilities raised during the
year and includes an estimate of those outstanding that
relate to transactions occurring in the reporting period.
Excise duty
ETM
Recognised based on the actual and estimated duty
payable. Excise duty becomes payable when certain goods
are distributed for home consumption during the reporting
period.
Customs duty
ETM
Recognised when imported goods are distributed for home
consumption.
Luxury car tax
ETM
Recognised at the time the sale (or private import) of a
luxury vehicle occurs within the reporting period and
includes an estimate of amounts outstanding that relate to
transactions occurring in the reporting period.
Wine
equalisation
tax
ETM
Recognised when an assessable dealing occurs within the
reporting period giving rise to a tax liability and includes an
estimate of amounts outstanding that relate to transactions
occurring in the reporting period.
Fringe benefits
tax (FBT)
ETM
Recognised on fringe benefits provided by employers to
employees during the reporting period and includes an
estimate of outstanding instalments and balancing payments
for the annual FBT return.
If all taxation revenue had been measured according to the ETM, including those
revenue types currently considered unreliable, the estimated impact on the 2014-15
financial results would be as follows:
Operating statement and balance sheet for 2014-15 — Adoption of ETM
2015
Income
Taxation revenue
Income tax
Individuals and other withholding taxes
Fringe benefits tax
Superannuation
Companies
Resources rent tax
Total income tax
Total taxation revenue
Assets
Liabilities
Net worth
72
$m
2015
Full ETM
$m
2015
Difference
$m
181,177
4,393
5,890
65,862
1,382
258,704
181,759
4,393
5,528
62,631
1,382
255,693
582
(362)
(3,231)
(3,011)
354,910
351,899
(3,011)
532,337
841,302
601,629
903,344
69,292
62,042
(308,965)
(301,715)
7,250
Notes to the financial statements
Penalties and general interest charges (GIC) arising under taxation legislation are
recognised as revenue at the time the penalty and GIC are imposed on the taxpayer
and included within the relevant revenue categories. Generally, subsequent remissions
and write-offs of such penalties and interest are treated as an expense or other
economic flow of the period. Penalties and interest that are imposed by law and
immediately remitted by the Commissioner of Taxation are not recognised as revenue
or expense.
Taxpayers are entitled to dispute amounts assessed by the Government. Where the
Government considers that the probable outcome will be a reduction in the amount of
tax owed by a taxpayer, an allowance for credit amendment (if the disputed debt is
unpaid) or a provision for refund (if the disputed debt has been paid) will be created
and there will be a corresponding reduction in revenue.
Note 3B: Sales of goods and services
Sales of goods
Rendering of services
Operating lease rental
Other fees from regulatory services
Total sales of goods and services revenue
Cost of goods sold
General Government
2015
2014
$m
$m
1,547
1,453
3,684
3,645
44
68
3,700
3,409
8,975
8,575
731
552
Australian Government
2015
2014
$m
$m
1,951
1,895
12,147
11,489
103
111
3,700
3,409
17,901
16,904
1,070
894
Sales of goods and services
Revenue from the sale of goods is recognised when:
• the risks and rewards of ownership have been transferred to the buyer;
• the seller retains neither managerial involvement nor effective control over the
goods;
• the revenue and transaction costs incurred can be reliably measured; and
• it is probable that the economic benefits associated with the transaction will flow to
the entity.
Revenue from the rendering of services is recognised by reference to the stage of
completion of contracts at the reporting date. The revenue is recognised when:
• the amount of revenue, stage of completion and transaction costs incurred can be
reliably measured; and
• the probable economic benefits of the transaction will flow to the entity.
73
Notes to the financial statements
Fees from regulatory services are designed to cover all or part of the cost of providing
a regulatory function. If the revenue collected is clearly out of all proportion to the
costs of providing the regulatory service, then the fee is classified as taxation revenue.
Fees from regulatory services are recognised when collected or when due and payable
under the relevant legislation.
Note 3C: Interest and dividend income
Interest from other governments
State and Territory debt
Housing agreements
General purpose advances
Total interest from other governments
General Government
2015
2014
$m
$m
Australian Government
2015
2014
$m
$m
21
116
137
9
121
130
21
116
160
297
9
121
187
317
Interest from other sources
Advances
Deposits
Bills receivable
Bank deposits
Indexation of HELP receivable and
other student loans
Securities
Other
Total interest from other sources
47
104
178
44
39
5
257
47
111
27
240
45
54
30
337
567
1,208
904
3,008
408
1,472
984
3,209
567
2,817
393
4,202
408
2,711
504
4,089
Total interest
3,145
3,339
4,499
4,406
Dividends
Dividends from other public sector entities
Other dividends
Total dividends
2,324
3,854
6,178
1,695
2,410
4,105
3,927
3,927
2,457
2,457
Total interest and dividend income
9,323
7,444
8,426
6,863
Interest and dividend income
Interest revenue is recognised using the effective interest method. Dividend revenue is
recognised when the right to receive a dividend has been established.
Note 3D: Other sources of non-taxation revenue
General Government
2015
2014
$m
$m
90
75
1,402
1,823
111
112
1,499
1,507
3,904
3,326
Industry contributions
Royalties
Seigniorage
Child support payments
Other
Total other sources of non-taxation
revenue
7,006
74
6,843
Australian Government
2015
2014
$m
$m
90
75
1,402
1,823
111
112
1,499
1,507
3,864
3,338
6,966
6,855
Notes to the financial statements
Note 4: Expenses from transactions
Expenses from transactions arise from interactions between the Australian
Government and other entities, including households, private corporations, the
not-for-profit sector and other governments. They exclude losses resulting from
changes in price levels and other changes in the volume of assets. These are disclosed
separately in Note 5 as ‘Other Economic Flows’. The total Australian Government
expenses and relative composition of expenses are as follows:
Amount
2014-15 Composition
$m
500,000
Interest
expenses
6%
450,000
400,000
350,000
Current
and capital
transfers
64%
300,000
250,000
200,000
150,000
Gross
operating
expenses
30%
100,000
50,000
0
2013-14
2014-15
• Gross operating expenses cover the costs incurred by the Government in the
provision of services, including benefit payments to third parties to provide
services to households (such as Medicare). Included in gross operating expenses
are:
– Employee and superannuation expenses (refer Note 4A),
– Depreciation and amortisation (refer Note 4B), and
– Supply of goods and services (refer Note 4C);
• Interest expenses comprise the nominal growth in the Government’s unfunded
superannuation liabilities (refer Note 4A), interest incurred on financial liabilities
and the initial discount recognised on the provision of concessional loans
(refer Note 4D); and
• Current and capital transfers are unrequited transfers in the form of:
– Personal benefits paid directly to individuals or households,
– Subsidies to public and private entities to allow them to provide goods or
services at a reduced cost, or
75
Notes to the financial statements
– Financial assistance in the form of current or capital grants to third parties to
achieve particular government outcomes (refer Note 4E).
Note 4A: Employee and superannuation expenses
General Government
2014
2015
$m
$m
Australian Government
2014
2015
$m
$m
18,357
18,823
22,282
22,519
2,530
372
754
2,086
5,742
2,614
580
740
2,083
6,017
3,246
619
804
2,169
6,838
3,367
698
781
2,164
7,010
6,927
8,999
15,926
6,372
8,214
14,586
7,324
8,999
16,323
6,893
8,214
15,107
40,025
Total employee and superannuation expense
Employee benefit accounting policies are disclosed in Note 8F.
39,426
45,443
44,636
Wages and salaries expenses
Other operating expenses
Leave and other entitlements
Separations and redundancies
Workers compensation premiums and claims
Other
Total other operating expenses
Superannuation expenses
Superannuation
Superannuation interest
Total superannuation expenses
Ministerial remuneration
The Australian Government has elected to disclose ministerial remuneration of
Cabinet Ministers. This disclosure is not currently required under the accounting
standards. Ministerial remuneration is limited to Cabinet Ministers because they are
considered the key management personnel of the Australian Government. Cabinet
Ministers are responsible for planning, directing and controlling the activities of the
Australian Government, directly or indirectly. The disclosure includes all Cabinet
Ministers who have served during the financial year. For Cabinet Ministers who serve
only part of the financial year, their ministerial remuneration is pro-rated. Employee
expenses include salary and allowances received or receivable by 20 Cabinet Ministers
totalling $8.7 million during 2014-15 (39 Cabinet Ministers during 2013-14: $8.8 million.
The 2013-14 number included 20 ministers who served under the former Government
which ceased on 18 September 2013).
Ministerial remuneration comprises total salary (including the additional ministerial
component), superannuation contributions, and motor vehicle costs including related
fringe benefits tax. Additional ministerial benefits that are not considered to be for
personal benefit, such as electorate allowance, staff, transport, printing and
communication, as well as costs incurred by portfolio departments on behalf of
Ministers, are excluded from the disclosure. Costs associated with The Lodge and
Kirribilli House are not included, as these are national assets and incur costs regardless
of who uses them. The Life Gold Pass entitlement and accumulation of the entitlement
available for former prime ministers are also excluded. The overall value of these
entitlements is included in employee provisions.
76
Notes to the financial statements
The Remuneration Tribunal provides information on the remuneration of Senators and
Members of Parliament, including ministers. This information is available on the
Remuneration Tribunal website.
Note 4B: Depreciation and amortisation expenses
General Government
2015
2014
$m
$m
Depreciation
Specialist military equipment
Buildings
Other infrastructure, plant and equipment
Heritage and cultural assets
Total depreciation
Total amortisation
Add back Amortisation of non-produced assets
Total depreciation and amortisation expense
2,872
1,462
1,450
73
5,857
1,005
(58)
6,804
2,539
1,422
1,394
51
5,406
998
(64)
6,340
Australian Government
2015
2014
$m
$m
2,872
1,574
2,198
73
6,717
1,503
(121)
8,099
2,539
1,530
1,974
51
6,094
1,405
(124)
7,375
Depreciation
Land, being an asset with an unlimited useful life, is not depreciated. The majority of
buildings, plant, equipment and infrastructure are depreciated on a straight-line basis
over their useful life or over the lesser of the lease term and useful life for selected
leasehold improvements.
Depreciation and amortisation rates applying to each class of depreciable assets are
based on the following useful lives:
Buildings(a)
Specialist military equipment
Other plant, equipment and infrastructure
Heritage and cultural assets
2014-15
2013-14
1-200 years
1-54 years
1-112 years
1-5,000 years
1-200 years
1-54 years
1-112 years
1-5,000 years
(a) This depreciation range includes certain leasehold improvements, which have depreciation rates of up to
50 per cent.
77
Notes to the financial statements
Amortisation
Software is amortised on a straight-line basis over its anticipated useful life. Other
intangible assets are amortised from the date they are available for use, unless
classified as an indefinite life intangible (for example, water entitlements).
Amortisation rates applying to each class of intangible asset are based on the following
useful lives:
Computer software
Other intangibles(a)
2014-15
2013-14
1-24 years
1-100 years (b)
1-24 years
1-100 years (b)
(a) Excludes goodwill and indefinite life intangibles.
(b) The useful life of the Hansard digitised data is currently 100 years.
Note 4C: Supply of goods and services
Supply of goods and services
Operating lease rental expenses
Health care payments
Benefits to households in goods and services
Other
Total payment for supply of goods
and services
General Government
2015
2014
$m
$m
25,812
24,575
2,555
2,549
5,080
5,220
44,028
40,943
1,814
1,847
79,289
75,134
Australian Government
2015
2014
$m
$m
29,389
27,750
2,847
2,844
5,080
5,220
44,028
40,943
1,966
1,999
83,310
78,756
Operating Leases
Operating lease payments are expensed on a straight-line basis, which is representative
of the pattern of benefits derived from the leased assets.
Benefits to households in goods and services (indirect personal benefits)
Comprise benefits provided to households as social transfers and delivered by a third
party (for example, medical and pharmaceutical benefits). These benefits are reported
separately to personal benefits which comprise current transfers provided directly to
individuals or households, rather than via a third party. Direct and indirect personal
benefit payments are determined in accordance with provisions under social security
law and other legislation.
78
Notes to the financial statements
Note 4D: Interest expense
General Government
2015
2014
$m
$m
Interest on debt
Government securities
Loans
Taxation overpayments
Exchange settlement funds
Deposits
Other
Total interest on debt
Discount on concessional instruments
Unwinding of discount and other
Finance charges for finance leases
Other financing costs
Total interest expense
14,473
10
223
4
34
14,744
860
314
106
1,280
16,024
13,390
10
230
32
13,662
1,060
227
101
1,388
15,050
Australian Government
2015
2014
$m
$m
14,236
134
223
506
31
107
15,237
860
316
403
1,579
16,816
13,148
143
230
342
29
138
14,030
1,060
234
322
1,616
15,646
Interest expense
Interest on outstanding borrowings and other finance costs directly related to
borrowings are expensed as incurred. Interest expense includes interest on debt,
discounts on loans and concessional instruments, unwinding of discount of provisions
and amortisation of finance charges for finance leases.
Note 4E: Grants expense
General Government
2015
2014
$m
$m
Current grants expense
State and Territory governments
Local governments
Private sector
Overseas
Non-profit organisations
Multi-jurisdictional sector
Other
Total current grants expense
Capital grants expense
Mutually agreed write-downs
Other capital grants
State and Territory governments
Local governments
Private sector
Multi-jurisdictional sector
Other
Total other capital grants expense
Total capital grants expense
Total grants expense
79
Australian Government
2015
2014
$m
$m
96,418
5,669
4,622
5,174
9,985
2,767
124,635
88,454
15
6,444
4,173
3,966
9,634
3,274
115,960
96,418
5,669
4,622
5,174
9,985
2,699
124,567
88,454
15
6,444
4,173
3,966
9,634
3,224
115,910
1,857
2,627
1,857
2,477
6,594
410
101
293
7,398
9,255
133,890
8,765
714
34
97
9,122
18,732
21,359
137,319
6,594
410
101
293
7,398
9,255
133,822
8,765
714
34
97
322
9,932
12,409
128,319
Notes to the financial statements
Current and capital transfers (grants)
Where no economic benefits are receivable in return for transfers, amounts are
recognised as current transfers. For other transfers, the distinction between current and
capital transfers is based on the nature of the activities or assets for which the transfers
are made. If the activities or assets relate to the acquisition of assets, other than
inventories that will be used in production for one year or more, the transfers are
treated as capital transfers. Otherwise they are treated as current transfers.
Where a transaction or event gives rise to legal, social, political or economic
consequences such that the Australian Government has little discretion to avoid the
sacrifice of future economic benefits, a liability and expense is recognised. In other
circumstances, grants are recognised to the extent that the services required to be
performed by the grantee have been performed or the grant eligibility criteria have
been satisfied. Education grants to and through the states, territories and other
education providers, such as universities, are recognised on a due and payable basis.
Capital transfers also include mutually agreed write-downs. These transactions occur
when both parties agree to the write-off of an amount owed to the Australian
Government, rather than the Australian Government unilaterally deciding to
write-down or write-off a debt. Mutually agreed write-downs include, for example, the
remission of a penalty raised for overdue taxes receivable. Mutually agreed
write-downs are recorded as an expense in the calculation of fiscal balance.
The 2014-15 Final Budget Outcome provides a disaggregation of current and capital
grants to state and territory governments, and local governments.
Note 4F: Expenses by function
General Government
Australian Government
2015
2014
2015
2014(a)
$m
$m
$m
$m
General public services
24,533
34,091
25,402
25,888
Defence
23,693
22,146
23,771
22,114
Public order and safety
4,443
4,369
4,527
4,380
Education
31,100
29,669
31,100
29,669
Health
65,696
63,791
65,675
63,793
Social security and welfare
147,785
140,561
147,700
140,472
Housing and community amenities
4,835
6,044
4,836
6,044
Recreation and culture
3,533
3,749
3,529
3,748
Fuel and energy
6,799
6,749
6,799
6,749
Agriculture, forestry and fishing
2,412
2,384
2,409
2,384
Mining, manufacturing and construction
3,550
3,451
3,648
3,547
Transport and communication
6,432
8,408
16,735
17,855
Other economic affairs
10,045
10,838
10,016
10,862
Other purposes
82,872
75,571
82,877
75,608
Total expenses
417,728
411,821
429,024
413,113
(a) The 2013-14 Australian Government comparatives have been updated to allocate the elimination of
inter-sector transactions by function. Previously, these eliminations were allocated to ‘Other purposes’.
80
Notes to the financial statements
The functional classification of expenses shows the total accrual outlays according to
the socioeconomic objectives that the Australian Government aims to achieve.
The following table provides a description of each function.
Function
Description
General public
services
Includes legislative and executive affairs, financial and fiscal affairs,
foreign affairs, foreign economic aid, general research, general economic
and social planning, statistical services, and government superannuation
benefits.
Defence
Includes military and civil defence affairs, foreign military aid and defence
research.
Public order and
safety
Includes administration of the federal legal system and the provision for
legal services, including legal aids, to the community. Public order and
safety expenses also include law enforcement and intelligence activities,
and the protection of Australian Government property.
Education
Includes primary and secondary education, university and other higher
education, technical and further education, preschool and special
education, and transportation of students.
Health
Includes general hospitals, repatriation hospitals, mental health
institutions, nursing homes, special hospitals, hospital benefits, medical
benefits, medical clinics and practitioners, dental clinics and practitioners,
maternal and infant health, ambulance services, school and other public
health services, pharmaceuticals, medical aids and appliances, and
health research.
Social security
and welfare
Includes sickness benefits, benefits to ex servicemen and their
dependants, invalid and other permanent disablement benefits, old age
benefits, widows, deserted wives, divorcees and orphans benefits,
unemployment benefits, family and child benefits, sole parent benefits,
family and child welfare, and aged and handicapped welfare.
Housing and
community
amenities
Includes housing and community development, water supply, household
garbage and other sanitation, sewerage, urban stormwater drainage,
protection of the environment, and street lighting.
Recreation and
culture
Includes public halls and civic centres, swimming pools and beaches,
national parks and wildlife, libraries, creative and performing arts,
museums, art galleries, broadcasting, and film production.
Fuel and energy
Includes coal, petroleum, gas, nuclear affairs, and electricity.
Agriculture,
forestry and
fishing
Includes agricultural land management, agricultural water resources
management, agricultural support schemes, agricultural research and
extension services, forestry and fishing.
Mining,
manufacturing and
construction
Includes activities relating to prospecting, mining and mineral resources
development, manufacturing activities and research into manufacturing
methods, materials and industrial management, and activities associated
with the building and construction industry.
Transport and
communication
Includes road construction, road maintenance, parking, water transport,
rail transport, air transport, pipelines, multi mode urban transit systems,
and communications.
Other economic
affairs
Includes storage, saleyards, markets, tourism and area promotion, and
labour and employment affairs.
Other purposes
Includes public debt transactions, general purpose inter government
transactions, and natural disaster relief.
81
Notes to the financial statements
Note 5: Other economic flows
Included within ‘other economic flows’ are the changes in the volume or value of
assets and liabilities that do not result from transactions. This includes impairment
write-downs (unless mutually agreed with the counter-party), fair value movements,
changes in assumptions underpinning actuarial assessments, and foreign exchange
gains or losses. For government reporting, these flows are distinguished from
transactions as they do not involve an interaction between entities and are often not
related to economic activities (e.g. production, income generation, consumption,
wealth accumulation).
Noting that other economic flows comprise both gains and losses, the predominant
sources of other economic flows are as follows:
$million
15,000
2013-14
10,000
2014-15
5,000
0
-5,000
-10,000
-15,000
Other equity
revaluations
Superannuation
revaluation
Non-financial
revaluations
Other
gains/(losses)
Net swap
interest
Net foreign
exchange
Net gain/(loss) on
sale of assets
Net
write-downs
-20,000
Of the above, the following flows are included in the measurement of the accounting
operating result. The remaining movements are adjusted directly to equity.
• Net write-down of assets (refer Note 5A) comprised the revaluation and
impairment of financial and non-financial assets;
• Net gain/(loss) from the sale of assets (refer Note 5B) which is the difference
between the proceeds and the carrying amount of assets sold after selling costs;
• Net foreign exchange gains/(losses) (refer Note 5C) comprised unrealised
gains/losses from the translation of assets and liabilities held overseas;
82
Notes to the financial statements
• Net swap interest gains/(losses) (refer Note 5D) comprised interest accrued or
incurred on swaps and other derivatives (a form of financing transaction); and
• Other gains/(losses) (refer Note 5E) which are other gains/losses not classified
elsewhere but which are included in the calculation of the operating result for
accounting purposes.
83
Notes to the financial statements
Note 5A: Net write-down of assets (including bad and doubtful debts)
General Government
2015
2014
$m
$m
Australian Government
2015
2014
$m
$m
FINANCIAL ASSETS
Receivables - bad and doubtful debts
Goods and services
Taxes due
Other
Total receivables - bad and doubtful debts
101
3,077
681
3,859
99
4,790
719
5,608
114
3,077
681
3,872
102
4,790
719
5,611
Net write-down/(reversal) and impairment arising
from the revaluation of investments and other
financial assets
Total financial write-down and impairment
69
3,928
(159)
5,449
64
3,936
(170)
5,441
419
2
67
907
148
31
(90)
379
58
466
177
6
2
427
(2)
53
907
222
31
53
388
63
467
211
6
16
1,484
1,088
1,691
1,151
5,412
6,537
5,627
6,592
NON-FINANCIAL ASSETS
Inventories
Land
Buildings
Specialist military equipment
Other infrastructure, plant and equipment
Heritage and cultural assets
Intangibles
Net write-down, impairment and fair
value losses arising from the revaluation
of non-financial assets
Total net write-down and impairment
of assets and fair value losses
Impairment of taxes due
Impairment losses for large tax receivables (greater than $10 million) are estimated on
an individual assessment basis, with a default percentage impairment rate (based on
historical collectability rates) applied to debts where the taxpayer is insolvent or has
entered into a payment arrangement. The remaining tax receivables (less than
$10 million) impairment loss is derived using an automated model which allows large
debt populations to be examined and provides for statistical credibility, in conjunction
with interpretive judgement.
Impairment of non-financial assets
Non-financial assets were assessed for impairment at 30 June 2015. Where indications
of impairment exist, the asset’s recoverable amount is estimated and an impairment
adjustment made if the asset’s recoverable amount is less than its carrying amount.
The recoverable amount of an asset is the higher of its fair value less cost to sell and its
value in use. Where the future economic benefit of an asset is not primarily dependent
on the asset’s ability to generate future cash flows, and the asset would be replaced if
the Australian Government was deprived of the asset, its value in use is taken to be its
depreciated replacement cost.
84
Notes to the financial statements
Note 5B: Net gain/(loss) from the sale of assets
General Government
Australian Government
2015
$m
2014
$m
2015
$m
2014
$m
6,964
6,964
6,111
6,111
6,881
6,881
6,122
6,122
5,686
(4,034)
-
5,686
(1,256)
-
Net gains/(losses) - Entities(a)
1,652
-
4,430
-
NON-FINANCIAL ASSETS
Proceeds from sale of land and buildings
less selling costs of sale of land and buildings
less written down value of land and buildings sold
Net gains/(losses) - land and buildings
211
(4)
(258)
(51)
135
(8)
(141)
(14)
286
(5)
(282)
(1)
358
(44)
(171)
143
15
(1)
(15)
(1)
15
(16)
(1)
15
(1)
(15)
(1)
17
(16)
1
47
77
50
100
(11)
(11)
(11)
(11)
(53)
(17)
(84)
(18)
(59)
(20)
(104)
(15)
2,144
(16)
2,128
(1)
(1)
5
(7)
(2)
(2)
(2)
2,144
(16)
2,128
(1)
(1)
5
(7)
(2)
(2)
(2)
15
(15)
-
9
(9)
-
15
(15)
-
9
(9)
-
FINANCIAL ASSETS
Net gains/(losses) from sale of investments
Net gains/(losses) from sale of receivables
Net gains/(losses) - financial assets
COMMONWEALTH ENTITIES
Proceeds from sale of entities
less written down value of entities
Proceeds from sale of investment properties
less selling costs of investment properties
less written down value of investment properties
Net gains/(losses) - investment properties
Proceeds from sale of infrastructure, plant
and equipment
less selling costs of infrastructure, plant
and equipment
less written down value of infrastructure, plant and
equipment sold
Net gains/(losses) - I,P&E
Proceeds from sale of intangibles
less selling costs of intangibles
less written down value of intangibles
Net gains/(losses) - intangibles
less written down value of heritage and cultural assets
Net gains/(losses) - heritage and cultural assets
Proceeds from sale of biological assets
less selling costs of biological assets
less written down value of biological assets
Net gains/(losses) - biological assets
Total net gains/(losses) - non-financial assets
2,058
(37)
2,105
125
Net gains/(losses) from sale of assets
Add back selling costs included in expenses
Net gains/(losses) from sale of assets in other
economic flows
10,674
16
6,074
19
13,416
17
6,247
55
10,690
6,093
13,433
6,302
(a) Including gain on sale of Medibank Private Limited, excluding selling costs. In 2014-15, these costs
comprised $1.5 million in employee costs and $77.3 million in supplier costs which are reported within
the respective categories — refer Note 2.
85
Notes to the financial statements
Note 5C: Net foreign exchange gains/(losses)
General Government
Australian Government
2015
$m
2014
$m
2015
$m
2014
$m
Net foreign exchange gains/(losses)
Non-speculative
(2,335)
(402)
3,808
(247)
Net foreign exchange gains/(losses)
(2,335)
(402)
3,808
(247)
Foreign currency translation
Transactions are translated to Australian dollars at the rate of exchange applicable at
the date of the transaction. Balances and investments are translated at the exchange
rates applicable at balance date.
Note 5D: Net swap interest gains/(losses)
General Government
2015
2014
$m
$m
Australian Government
2015
2014
$m
$m
Net swap interest
Net swap interest revenue
Net swap interest expense
1,025
(2,002)
612
(1,136)
1,114
(2,049)
698
(1,178)
Net swap interest received
(977)
(524)
(935)
(480)
Swap interest
Consistent with the ABS GFS Manual, interest on swaps and other derivatives is
classified as a financing transaction and recorded in ‘other economic flows’.
Note 5E: Other gains/(losses)
Fair value gains - financial instruments
Fair value gains - biological assets
Fair value gains - investment properties
Net actuarial gains/(losses)
Superannuation past service cost and
gain/(loss) from settlements
Other
Total other gains/(losses)
General Government
2015
2014
$m
$m
5,694
1,005
22
11
2
8
(1,141)
(1,584)
129
4,706
(7,797)
35
(8,322)
Australian Government
2015
2014
$m
$m
1,698
1,115
22
11
9
22
(1,141)
(1,584)
129
717
(7,797)
35
(8,198)
Other gains/(losses)
Other gains/(losses) primarily comprise:
• Fair value movements in financial assets and liabilities categorised as ‘held at fair
value through profit and loss’ (refer Note 12B);
• The actuarial revaluation of provisions, other than superannuation; and
• Gains resulting from the derecognition of financial assets previously categorised as
‘available for sale’ (refer Note 12B) with the gain equal to the accumulated fair
value movements previously taken direct to reserves.
86
Note 6: Fair value measurement
(a)
Fair value measurement
The following tables provide an analysis of assets and liabilities that are measured at fair value.
Australian Government
Level 1 (a)
$m
2015
Level 2 (b)
Level 3 (c)
Total (d)
Level 1 (a)
$m
$m
$m
$m
2014
Level 2 (b)
Level 3 (c)
$m
$m
Total (d)
$m
Financial assets:
-
1,931
33,606
35,537
-
1,949
27,583
29,532
58,903
42,324
54,251
155,478
59,627
41,481
44,235
145,343
41,871
100,774
7
44,262
1,954
89,811
43,832
234,847
38,346
97,973
120
43,550
1,677
73,495
215,018
Land
-
9,917
1,021
10,938
-
9,303
985
10,288
Buildings
-
3,269
21,496
24,765
-
2,876
20,653
23,529
Plant, equipment and infrastructure
-
1,091
16,096
17,187
-
969
15,746
16,715
Heritage and cultural assets
-
7,717
3,614
11,331
-
8,161
2,659
10,820
Other
5
5
555
22,549
42,227
560
64,781
11
11
543
21,852
40,043
61,906
100,779
66,811
132,038
299,628
97,984
65,402
113,538
276,924
Receivables
Investments, loans and placements
Equity investments
Total financial assets
40,143
Non-financial assets:
87
Total fair value measurements of assets in the
statement of financial position
554
Notes to the financial statements
Total non-financial assets
Fair value measurement (continued)
Australian Government
Level 1 (a)
2015
Level 2 (b)
Level 3 (c)
2014
Level 3 (c)
Level 2 (b)
Total (d)
$m
$m
Total (d)
Level 1 (a)
$m
$m
$m
$m
$m
$m
Government securities
363,907
40,114
-
404,021
314,024
32,578
-
346,602
Other
363,907
3,720
43,834
1,609
1,609
5,329
34
314,058
2,668
35,246
1,919
1,919
351,223
Financial liabilities:
Total financial liabilities
Total fair value measurements of liabilities in the
statement of financial position
88
(a)
(b)
(c)
(d)
409,350
4,621
363,907
1,609
409,350
43,834
314,058
35,246
1,919
351,223
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability.
Level 3: Unobservable inputs for the asset or liability.
This excludes buildings and plant, equipment and infrastructure at cost, including assets under construction and assets which are measured using depreciated
historical cost as a surrogate for fair value. These are disclosed in Note 7D. The comparatives have been adjusted to remove assets at cost.
Notes to the financial statements
(a)
General Government
Level 1 (a)
2015
Level 2 (b)
Level 3 (c)
Total (d)
Level 1 (a)
2014
Level 2 (b)
Level 3 (c)
Total (d)
$m
$m
$m
$m
$m
$m
$m
$m
-
1,205
32,434
33,639
-
1,243
26,727
27,970
Financial assets:
Receivables
Investments, loans and placements
745
68,809
54,010
123,564
3,883
63,016
43,757
110,656
41,872
42,617
7
70,021
41,363
127,807
83,242
240,445
38,159
42,042
18
64,277
37,075
107,559
213,878
Land
-
9,110
830
9,940
-
8,450
792
9,242
Buildings
-
2,584
20,446
23,030
-
2,788
19,713
22,501
Plant, equipment and infrastructure
-
1,089
11,051
12,140
-
963
10,845
11,808
3,614
11,331
-
8,161
2,659
10,820
360
305
20,667
34,009
314
54,685
Equity investments
Total financial assets
75,252
Non-financial assets:
Heritage and cultural assets
89
Other
-
7,717
355
20,855
35,941
56,801
9
9
42,622
90,876
163,748
297,246
42,051
84,944
141,568
268,563
Government securities
363,908
40,113
-
404,021
318,691
32,578
-
351,269
Other
363,908
6,897
47,010
1,483
1,483
8,380
412,401
33
318,724
530
33,108
1,667
1,667
353,499
363,908
47,010
1,483
412,401
318,724
33,108
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability.
Level 3: Unobservable inputs for the asset or liability.
This excludes buildings and plant, equipment and infrastructure at cost, which predominantly comprise assets under construction.
1,667
353,499
Total non-financial assets
Total fair value measurements of assets in the
statement of financial position
Financial liabilities:
Total financial liabilities
Total fair value measurements of liabilities in the
statement of financial position
(a)
(b)
(c)
(d)
2,230
Notes to the financial statements
5
5
Notes to the financial statements
(b)
Valuation technique and inputs for Level 2 and Level 3 fair value
measurements
The following table summarises the valuation techniques used by entities in
determining the values of Level 2 and Level 3 categorised assets and liabilities.
Valuation Technique
Cost approach
Description
The amount required currently to replace the service capacity of an asset.
Depreciated replacement
cost (DRC)
The amount a market participant would be prepared to pay to acquire or
construct a substitute asset of comparable utility, adjusted for obsolescence.
Obsolescence is determined based on professional judgement regarding
physical, economic and external obsolescence factors relevant to the asset
under consideration.
Income approach /
Discounted cash flows
Converts future amounts (cash flow or income and expenses) to a single current
(i.e. discounted) amount. The fair value measurement is determined on the basis
of the value indicated by current market expectations about those future
amounts.
Market approach
Market approach seeks to estimate the current value of an asset with reference
to recent market evidence including transactions of comparable assets within
local second-hand markets.
Net assets of entities
The value of the company’s assets less the value of its liabilities.
The following table summarises the inputs used by entities:
Input Used
Cost of new assets
Description
The amount a market participant would pay to acquire or construct a new
substitute asset of comparable utility.
Per square metre cost
The square metre cost of new or replacement assets.
Consumed economic
benefit
Physical deterioration, functional or technical obsolescence and conditions of the
economic environment specific to the asset.
Capitalisation rate
Rate of return on a real estate investment property based on the income that the
property is expected to generate.
Market transactions
Market transactions of comparable assets, adjusted by a small amount to reflect
differences in price sensitive characteristics (eg. size, condition etc).
Adjusted market
transactions
Market transactions of comparable assets, involving significant professional
judgement to adjust for other factors (eg. economic conditions) and their impact
on price sensitive characteristics.
Principal due
The amount of the prinicpal remaining to be repaid.
Discount rate
Rate at which cash flows are discounted back to the value at measurement date.
Future cash flows
The future predicted cash flows of the asset.
Foreign exchange rates
Rates used to convert foreign currencies into Australian dollars.
Weighted average cost of
capital (WACC)
The average rate of return a company is expected to pay to all its security
holders to finance its assets.
Net assets of entities
The value of the company’s assets less the value of its liabilities.
90
Notes to the financial statements
The valuation techniques and inputs have been applied to the various classes of assets
and liabilities as follows:
Receivables
Receivables categorised as Level 2 and Level 3 have been valued using a discounted
cash flow approach. The primary inputs include principal due and the discount rate.
Level 3 receivables are differentiated from Level 2 in that the majority (by value) are
calculated each year by actuarial assessment. The two main measures impacting on the
calculation are the face value of the debt not expected to be repaid and the fair value of
the remaining receivable, calculated as the present value of projected future cash
flows. The remaining balance of the Level 3 receivables have been valued consistent
with previous years, using professional valuation advice.
These balances are sensitive to changes in the underlying assumptions, including the
discount rate. For example, the Government’s largest receivable, Higher Education
Loan Programme loans, are sensitive to changes in the future Consumer Price Index
(CPI) growth, the discount rate (yield curve) and debt not expected to be repaid.
Investments, loans and placements
Investments, loans and placements categorised as Level 2 have been valued using a
market approach based on observable market transactions. Those categorised as
Level 3 use the following techniques:
Category
Valuation technique(s)
Inputs used
IMF quota
3
Cost approach
Foreign exchange rates
Collective investment vehicles
3
Discounted cash flow
Discount rate
Other interest bearing securities
3
Discounted cash flow
Discount rate
Other
3
Net assets of entities
Net assets of entities
Investments, loans and placements categorised as Level 3 that are valued using the net
assets technique have been based on either the latest available audited accounts of
those entities or internal management accounts because this is the most relevant
available information at the end of the period. This information is an observable input.
Due to the diverse nature of the collective investment vehicles, it is not possible to
provide a range of inputs and associated sensitivity analysis for those investments of
the Future Fund Management Agency.
For the IMF quota investment, the value of shares are held in foreign currency and
converted to an Australian dollar equivalent for inclusion in the financial statements.
This information is an observable input.
91
Notes to the financial statements
Equity investments
Equity investments categorised as Level 2 have been valued using a market approach
based on observable market transactions. Those categorised as Level 3 use the
following techniques:
Category
3
Shares
Investment in public corporations
3
3
Equity accounted investments
Inputs used
Valuation technique(s)
Values of shares held
Foreign exchange rates
Net assets of entities
Net assets of entities
Net assets of entities
Net assets of entities
Discounted cash flow
WACC
Net assets of entities
Net assets of entities
GGS investments in public corporations that have been valued using a discounted net
cash flow technique are assumed to be a cash generating unit. Cash flow projections
for a forecast period and terminal year are based on management corporate plans and
have been discounted using a WACC. A decrease or increase of 0.4 per cent in the
discount rate used in the WACC calculations would result in an approximate
+/- $0.2 billion movement respectively in the value of the assets.
For international shares held by the Treasury, the value is held in foreign currency and
converted to an Australian dollar equivalent for inclusion in the financial statements.
This information is an observable input.
Financial liabilities
Financial liabilities categorised as Level 2 have been valued using a market approach
based on observable market transactions. Those categorised as Level 3 use the
following techniques:
Category
Other
Loans
Valuation technique(s)
Inputs used
3
Market approach
Adjusted market transaction
Other debt
3
Market approach
Adjusted market transaction
Payables
3
Discounted cash flow
Discount rate
Bond rate
Financial liabilities categorised as Level 3 have had their fair value determined using
market interest rates and valuation techniques that incorporate discounted cash flows
or adjusted market transactions. They have been classified Level 3 because they have
either complex interest rate formulas that include foreign exchange rates, a variety of
discount rates, use the Nikkei index or they have knockout or callable features. The
inputs are considered observable.
92
Notes to the financial statements
Non-financial assets
Non-financial assets categorised as Level 2 and 3 have been valued using the following
techniques:
Category
Land
Buildings
Valuation technique(s)
Inputs used
2
Market approach
Market transactions
3
Income Approach
Market approach
Future cash flows
Adjusted market transaction
Income Approach
Future cash flows
2
Market approach
Market transactions
2
2
Income approach
Cost approach
Market transactions
Replacement cost of new assets
3
Depreciated replacement cost
Market transactions
Replacement cost of new assets
3
Market approach
Adjusted market transaction
3
Income approach
Capitalisation rate
2
Market approach
Per square metre cost
Replacement cost of new assets
2
Cost approach
Replacement cost of new assets
Consumed economic benefit
3
Depreciated replacement cost
Replacement cost of new assets
Consumed economic benefit
Consumed economic benefit
Other
Infrastructure
Plant and
Market transactions
Equipment
Heritage and
cultural assets
2
Market approach
Market transactions
2
3
Cost approach
Depreciated replacement cost
Replacement cost of new assets
Replacement cost of new assets
3
Market approach
Adjusted market transaction
2
Market approach
Market transactions
Consumed economic benefit
Other
Capitalisation rate
Future earnings
Government entities engage professional valuers to undertake comprehensive
valuations of these classes of non-financial assets as specified in their respective
accounting policy notes. Valuations are conducted with sufficient frequency to ensure
that the carrying amounts of assets do not differ materially from the assets’ fair values
as at the reporting date. Professional valuers were engaged as required.
Level 3 non-financial assets valued using the market approach utilise market
transactions of similar assets adjusted using professional judgement for each
individual asset’s characteristics to determine fair value. Non-financial assets that do
not transact with enough frequency and transparency to develop objective opinions of
value from observable market evidence have been valued utilising the depreciated
replacement cost approach, unless this cannot be reliably calculated.
93
Reconciliation for recurring Level 3 fair value measurements
The following tables provide reconciliations for the movement in balances for assets and liabilities classified as Level 3.
Australian Government
Financial Assets
Opening balance at 1 July 2013
Purchases / Payments
Sales / Repayments
94
Gains and losses recognised in profit or
loss
Gains and losses recognised in equity
Transfers in / (out) of level 3(a)
Closing balance at 30 June 2014
Purchases / Payments
Sales / Repayments
Gains and losses recognised in profit or
loss
Gains and losses recognised in equity
Transfers in / (out) of level 3(a)
Financial
Liabilities
Non-Financial Assets
Receivables
Investments,
loans and
placements
Equity
investments
Land
Buildings
Other IPE
Heritage and
cultural
assets
$m
$m
$m
$m
$m
$m
$m
$m
24,767
38,932
1,745
1,000
19,264
15,720
2,471
419
Other
6,511
10,062
210
1
2,482
708
28
749
(2,005)
(9,543)
(222)
(1)
(24)
(49)
-
(482)
(149)
(922)
78
21
(2)
(1,406)
(1,319)
(21)
(164)
4,857
9
(12)
200
219
179
(8)
(604)
(151)
(86)
(1)
137
467
2
1,390
27,583
44,235
1,677
985
20,653
15,746
2,659
1,919
8,233
14,128
220
2
1,500
2,018
30
108
(2,096)
(13,497)
(192)
(9)
(49)
(51)
-
(532)
(114)
616
128
4
(1,440)
(1,643)
(46)
122
-
8,336
32
39
435
241
(135)
-
-
433
89
-
397
(215)
1,106
(8)
Closing balance at 30 June 2015
33,606
54,251
1,954
1,021
21,496
16,096
3,614
1,609
(a) Transfers between levels are determined on an individual entity basis and usually occur when there has been a change to the valuation technique or inputs used to
determine the fair value measurement.
Notes to the financial statements
(c)
General Government
Financial Assets
Receivables
Opening balance at 1 July 2013
Purchases / Payments
Sales / Repayments
Gains and losses recognised in profit or
loss
Gains and losses recognised in equity
Transfers in / (out) of level 3(a)
Closing balance at 30 June 2014
95
Purchases / Payments
Sales / Repayments
Gains and losses recognised in profit or
loss
Closing balance at 30 June 2015
Equity
investments
Land
Buildings
Other IPE
Heritage and
cultural
assets
Other
$m
$m
$m
$m
$m
$m
$m
$m
23,984
38,519
26,257
806
18,385
10,958
2,471
-
6,288
9,892
3,403
1
2,410
652
28
749
(1,856)
(9,452)
(235)
(1)
(16)
(49)
-
(336)
(136)
(921)
57
21
(1)
(1,359)
(1,048)
(21)
(164)
4,892
7,715
(12)
172
239
179
-
(604)
(151)
(86)
(1)
121
93
2
1,390
26,727
43,757
37,075
792
19,713
10,845
2,659
1,667
7,945
13,995
5,211
1
1,402
1,490
30
107
(1,960)
(13,465)
(1,739)
-
(21)
(48)
-
(389)
(278)
607
(4,007)
(1)
(1,406)
(1,328)
(46)
106
-
8,363
4,838
38
361
301
(135)
-
-
753
(15)
-
397
(209)
1,106
(8)
32,434
54,010
41,363
830
20,446
11,051
3,614
1,483
(a) Transfers between levels are determined on an individual entity basis and usually occur when there has been a change to the valuation technique or inputs used to
determine the fair value measurement.
Notes to the financial statements
Gains and losses recognised in equity
Transfers in / (out) of level 3(a)
Investments,
loans and
placements
Financial
Liabilities
Non-Financial Assets
Notes to the financial statements
Note 7: Assets
Assets are probable future economic benefits obtained or controlled by an Australian
Government entity as a result of past transactions and activities undertaken, and other
events. These include financial assets such as deposits, loans and investments, and
non-financial assets such as land, buildings and inventories. The total Australian
Government assets and relative composition of assets are as follows:
Amount
2014-15 Composition
Investments,
48%
loans &
placements
$m
600,000
Equity
investments
500,000
8%
400,000
300,000
Receivables
& accrued
revenue
200,000
8%
100,000
0
2013-14
2014-15
Advances
paid
8%
1%
Cash &
deposits
27%
Non-financial
assets
• Cash and deposits include cash on hand or at bank and short-term deposits.
• Advances paid (refer Note 7A) include loans receivable and are predominantly
provided for policy purposes such as student loans;
• Other receivables and accrued revenue (refer Note 7A) include statutory amounts
due for the collection of tax or the recovery of benefits, and contractual amounts
due for the provision of goods and services or other arrangements;
• Investments, loans and placements (refer Note 7B) comprise securities and other
non-equity investments held for liquidity or policy purposes;
• Equity investments (refer Note 7C) cover shares held by the Government
Investment Funds and corporations and, at the GGS level, include the investment in
public corporations (which are eliminated upon consolidation); and
• Non-financial assets comprise the Government’s holdings of land and buildings,
plant, equipment and infrastructure, heritage and cultural assets, investment
properties and intangibles (refer Note 7D). Non-financial assets also includes
inventories for sale, use or distribution (refer Note 7E) and other non-financial
assets (refer Note 7F).
96
Notes to the financial statements
Note 7A: Advances paid and receivables
General Government
2015
2014
$m
$m
Australian Government
2015
2014
$m
$m
Advances paid
Loans to State and Territory governments
Higher Education Loan Programme
Student Financial Supplement Scheme
Other
less Provision for doubtful debts
3,146
30,445
531
6,771
(235)
2,502
25,147
604
6,015
(228)
3,146
30,445
531
7,883
(236)
2,502
25,147
604
6,810
(229)
Total advances paid
40,658
34,040
41,769
34,834
895
4,206
35,441
25
6,910
817
3,635
36,965
55
6,126
1,686
4,206
35,434
324
4,556
1,827
3,635
36,960
300
5,057
(739)
(1,958)
(754)
(1,978)
(766)
(675)
(766)
(675)
(13,107)
(3,704)
29,161
(14,001)
(2,215)
28,749
(13,107)
(3,704)
27,875
(14,001)
(2,215)
28,910
12,785
389
13,174
42,335
82,993
12,775
341
13,116
41,865
75,905
12,785
548
13,333
41,208
82,977
12,775
482
13,257
42,167
77,001
35,977
47,016
35,958
39,947
34,821
48,156
36,199
40,802
82,993
75,905
82,977
77,001
Other receivables
Goods and services receivable
Recoveries of benefit payments
Taxes receivable
Other financial assets
Other
less Provision for doubtful debts - Goods
and services and other
less Provision for doubtful debts - Personal
benefits receivable
less Provision for doubtful debts - Taxes
receivable
less Provision for credit amendments
Total other receivables
Accrued revenue
Accrued taxation revenue
Other accrued revenue
Total accrued revenue
Other receivables and accrued revenue
Total advances paid and receivables
Advances paid and receivables
maturity schedule
Not later than one year
Later than one year
Total advances paid and receivables
by maturity
Advances (loans)
Advances are recognised initially at fair value plus transaction costs and subsequently
measured at amortised cost using the effective interest rate method, less any
impairment loss, unless these loans have been designated as ‘held at fair value through
profit or loss’. Interest is recognised on loans evenly in proportion to the amount
outstanding over the period to repayment. Loans designated as ‘held at fair value
through profit or loss’ include the Higher Education Loan Programme and certain
concessional loans.
97
Notes to the financial statements
Other receivables and accrued revenue
Trade debtors, bills of exchange, promissory notes and other receivables are initially
recorded at the fair value of the amounts to be received and are subsequently
measured at amortised cost using the effective interest rate method, less any
impairment loss. Other accrued revenue is recognised when a service has been
provided but has not been invoiced. Accrued revenue is recognised at the nominal
amounts due. Taxation related accounting policies are disclosed in Note 3A.
Collectability of debts is reviewed at balance date. An allowance is made when
collection of the debt is judged to be less, rather than more, likely. The following tables
provide a reconciliation of the movement in the provision for doubtful debts,
excluding those associated with statutory receivables.
Reconciliation of the allowance for doubtful debts(a)
Advances
Goods and
and loans
Services
$m
Opening balance 1 July 2013
less Amounts written off
Australian Government
less Amounts recovered and reversed
Other
Total
$m
$m
$m
(30)
(106)
(1,682)
(1,818)
(5)
(52)
(2)
(59)
-
(11)
(24)
(35)
(5)
(80)
(118)
(203)
(199)
(44)
(37)
(280)
(229)
(167)
(1,811)
(16)
(47)
(4)
(2,207)
(67)
less Amounts recovered and reversed
(1)
(38)
(4)
(43)
plus Amount recognised in net surplus
7
(95)
(1)
(89)
plus Amount recognised in net surplus
plus Other movement
Closing balance 30 June 2014
less Amounts written off
(31)
(2)
1,229
1,196
(236)
(179)
(575)
(990)
Advances
Goods and
Other
Total
and loans
Services
$m
$m
$m
$m
Opening balance 1 July 2013
(24)
(90)
(1,682)
(1,796)
less Amounts written off
(5)
(50)
(2)
(57)
-
(9)
(24)
(33)
plus Other movement(b)
Closing balance 30 June 2015
General Government
less Amounts recovered and reversed
plus Amount recognised in net surplus
plus Other movement
Closing balance 30 June 2014
(4)
(73)
(118)
(195)
(205)
(44)
(36)
(285)
(228)
(148)
(1,810)
(16)
(47)
(4)
(2,186)
(67)
less Amounts recovered and reversed
(1)
(31)
(4)
(36)
plus Amount recognised in net surplus
7
(93)
(1)
(87)
(31)
(1)
1,228
1,196
less Amounts written off
plus Other movement(b)
Closing balance 30 June 2015
(235)
(164)
(575)
(974)
(a) Excludes statutory receivables such as taxes receivable and personal benefits recoverable. Includes
$1,200 million reversal of previous impairment write-down for the Higher Education Superannuation
programme following agreement with the NSW Government that NSW will resume making payments to
eligible NSW universities to meet its share of superannuation expenses.
98
Notes to the financial statements
Note 7B: Investments, loans and placements
General Government
Australian Government
2015
2014
2015
2014
$m
$m
$m
$m
Gold
3,915
3,584
5,890
6,512
Deposits
38,268
30,866
Government securities
2
233
138,649
125,620
Residential mortgage backed securities(a)
6,060
6,060
4,288
4,288
Debentures
859
11,824
9,995
5,913
5,306
International Monetary Fund quota
Defined benefit superannuation plan assets
266
81
Collective investment vehicles
32,293
45,121
45,121
32,293
Other interest bearing securities
29,661
31,550
29,661
31,550
Other
13,222
14,847
13,123
11,303
229,776
254,461
Total investments, loans and placements
136,376
117,611
(a) Investments in residential mortgage-backed securities are to support competition in the residential
mortgage market and to meet government policy objectives. Residential mortgage-backed securities
held for investment purposes are classified elsewhere.
Investments, loans and placements
Gold holdings (including gold on loan to other institutions) are valued at market value
at balance date. The Australian Government measures gold at the bid price.
Depending on the type of instrument, deposits are recognised at either nominal or
market value. Interest is credited to revenue as it accrues. Deposits have varying terms
and rates of interest.
Investments in domestic and foreign government securities, except those contracted
for sale under repurchase agreements, are classified by the Reserve Bank of Australia
(RBA) as ‘at fair value through profit or loss’. Securities purchased and contracted for
sale under repurchase agreements are classified as ‘loans and receivables’ and valued
at amortised cost. The difference between the purchase and sale price is accrued over
the term of the agreement and recognised as interest revenue.
The IMF quota represents Australia’s membership subscription to the IMF. The
investment is denominated in special drawing rights (SDR) and is valued at the
Australian dollar equivalent. SDR is an international type of monetary reserve made
up of a basket of national currencies created by the IMF.
The Future Fund employs collective investment vehicles (CIVs) as part of its
investment strategy. Investments in CIVs are recorded at fair value on the date which
consideration is provided to the contractual counterparty under the terms of the
relevant subscription agreement.
Other interest bearing securities are primarily held by the Australian Government
investment funds (refer Note 12B) and include negotiable certificates of deposit,
mortgage and asset backed securities, bank bills and corporate debt securities.
99
Notes to the financial statements
Note 7C: Equity investments
General Government
2015
2014
$m
$m
42,976
39,296
39,810
35,745
710
535
83,496
75,576
Investments - Shares
Investment in public corporations
Equity accounted investments
Total equity investments
Australian Government
2015
2014
$m
$m
43,377
39,933
712
544
44,089
40,477
Equity investments
At the whole of government level, equity investments primarily consist of the Future
Fund’s holdings of listed equities and listed managed investment schemes. These
investments are designated as ‘financial assets through profit or loss’ on acquisition.
At the GGS level, equity investments also include the Australian Government’s
ownership interest in public corporations in the public non-financial corporation
(PNFC) and PFC sectors. The investments are eliminated at whole of government level.
Where the public corporation is a government business enterprise whose principal
function is to engage in commercial activities in the private sector, the investment is
measured at fair value, applying a discounted cash flow technique. Investments in
other public corporations are measured as the Australian Government’s proportional
interest in the net assets of the public corporation as at the end of the reporting period.
100
Note 7D: Land and buildings, plant, equipment and infrastructure, heritage and cultural assets and intangibles
Australian Government
Other plant,
Specialist
military equipment and
infrastructure
equipment
$m
$m
Heritage
and
cultural Investment
assets
property
$m
$m
Total
$m
-
10,748
(5,671)
5,077
4,674
(1,215)
3,459
108,554
(44,912)
63,642
10,876
(56)
10,820
375
375
-
-
68,588
(6,862)
61,726
26,990
10,825
375
5,077
3,459
125,368
81,186
(38,534)
42,652
15,359
(2,031)
13,328
1
1
-
11,081
(6,002)
5,079
4,601
(1,002)
3,599
115,467
(47,680)
67,787
27,833
(3,068)
24,765
-
20,797
(3,610)
17,187
11,445
(114)
11,331
387
387
-
-
71,400
(6,792)
64,608
27,878
42,652
30,515
11,332
387
5,079
3,599
132,395
-
-
4,784
59,824
64,608
Gross book value
Accumulated depreciation/amortisation
At Cost
109
109
3,540
(66)
3,474
77,387
(36,144)
41,243
12,091
(1,816)
10,275
5
5
Gross book value
Accumulated depreciation/amortisation
At Fair Value
10,287
10,287
26,999
(3,470)
23,529
-
20,051
(3,336)
16,715
Net book value at 30 June 2014
10,396
27,003
41,243
Gross book value
Accumulated depreciation/amortisation
At Cost
15
15
3,224
(111)
3,113
Gross book value
Accumulated depreciation/amortisation
At Fair Value
10,938
10,938
Net book value at 30 June 2015
10,953
Australian Government assets at fair value — Revaluation period
Assets held at fair value as at 30 June 2015 were based on valuations conducted in the following periods:
2013-14 or earlier
2014-15
Assets at fair value at 30 June 2015
283
10,655
10,938
1,386
23,379
24,765
-
3,114
14,073
17,187
1
11,330
11,331
387
387
Notes to the financial statements
Other
intangibles
$m
Buildings
$m
Item
101
Computer
software
$m
Land
$m
Notes to the financial statements
Australian Government assets at fair value — Valuation details
Details pertaining to valuations can be found in the audited financial statements of
individual Australian Government controlled entities. During 2014-15, material
revaluations occurred within the following Australian Government controlled entities:
• Australian Customs and Border Protection Service;
• Australian Postal Corporation;
• Australian Rail Track Corporation Limited;
• Australian Submarine Corporation Pty Limited;
• Commonwealth Scientific and Industrial Research Organisation;
• Defence Housing Australia;
• Department of Defence;
• Department of Finance;
• Department of Foreign Affairs and Trade;
• Department of Immigration and Border Protection;
• Department of Infrastructure and Regional Development;
• Department of Veteran Affairs;
• Indigenous Land Corporation;
• National Archives of Australia;
• National Gallery of Australia;
• National Library of Australia; and
• Sydney Harbour Federation Trust.
Australian Government leased assets
Australian Government entities lease assets under a number of finance leases. As at
30 June 2015, the carrying value of leased assets included $1,400 million in land and
buildings (2014: $1,499 million) and $252 million in plant and equipment
(2014: $237 million). These entities were within the GGS. Refer Note 8D for accounting
policy disclosure on finance leases.
102
Australian Government
Reconciliation of movement in land and buildings, plant, equipment and infrastructure, heritage and cultural assets and intangibles
Australian Government
Item
Net book value at 1 July 2013
Additions:
Purchases and entity acquisitions
Acquisition by finance lease
Internally developed
103
Revaluations: write-ups
Depreciation/amortisation expense
Recoverable amount write-downs
Reversal of write-downs
Other movements
Disposals
Revaluations: write-ups
Depreciation/amortisation expense
Recoverable amount write-downs
Reversal of write-downs
Other movements
Disposals
As at 30 June 2015
Heritage
and
cultural Investment
property
assets
$m
$m
10,547
368
Computer
software
$m
4,657
Other
intangibles
$m
3,165
Total
$m
115,294
Land
$m
9,440
Buildings
$m
25,742
28
2
-
2,620
513
-
4,309
-
3,656
2,147
-
77
-
2
-
708
630
243
1
11,643
2,662
631
480
(2)
483
229
(1,583)
(123)
(386)
(2,539)
(469)
16
(337)
186
(2,122)
(63)
2
2,169
239
(51)
(6)
21
16
5
(1,087)
(57)
234
(116)
(65)
84
149
1,150
(7,498)
(785)
102
2,338
(35)
(9)
(25)
(72)
(2)
(16)
(8)
(2)
(169)
10,396
27,003
41,243
26,990
10,825
375
5,077
3,459
125,368
21
4
-
2,419
20
-
5,065
-
5,412
457
-
71
-
17
-
671
783
289
-
13,965
481
783
649
(1)
(2)
4
-
324
(1,623)
(83)
8
(134)
(2,872)
(907)
128
62
(2,368)
(152)
3
161
489
(73)
(3)
24
10
1
(1,169)
(150)
5
(121)
(114)
(117)
213
(131)
1,534
(8,220)
(1,414)
233
(72)
(118)
(56)
(5)
(50)
(1)
(16)
(17)
-
(263)
10,953
27,878
42,652
30,515
11,332
387
5,079
3,599
132,395
Notes to the financial statements
As at 30 June 2014
Additions:
Purchases and entity acquisitions
Acquisition by finance lease
Internally developed
Other plant,
Specialist
military equipment and
equipment
infrastructure
$m
$m
21,087
40,288
Australian Government assets under construction include $2,885 million (2014: $3,238 million) in buildings, $11,993 million (2014:
$11,904 million) in specialist military equipment and $5,007 million (2014: $3,993 million) in other plant, equipment and infrastructure.
General Government
Reconciliation of movement in land and buildings, plant, equipment and infrastructure, heritage and cultural assets and intangibles
General Government
Specialist
Other plant,
military equipment and
equipment
infrastructure
$m
$m
Heritage
and
cultural Investment
assets
property
$m
$m
Other
intangibles
$m
Total
$m
-
7,937
(4,218)
3,719
3,340
(876)
2,464
92,393
(41,238)
51,155
10,876
(56)
10,820
183
183
-
-
60,952
(6,398)
54,554
13,097
10,825
183
3,719
2,464
105,709
81,186
(38,534)
42,652
1,484
1,484
1
1
-
8,644
(4,955)
3,689
3,533
(678)
2,855
97,458
(44,167)
53,291
25,755
(2,725)
23,030
-
15,294
(3,154)
12,140
11,445
(114)
11,331
187
187
-
-
62,621
(5,993)
56,628
25,639
42,652
13,624
11,332
187
3,689
2,855
109,919
Buildings
$m
89
89
2,346
2,346
77,387
(36,144)
41,243
1,289
1,289
5
5
Gross book value
Accumulated depreciation/amortisation
At Fair Value:
9,242
9,242
25,629
(3,128)
22,501
-
15,022
(3,214)
11,808
Net book value at 30 June 2014
9,331
24,847
41,243
1
1
2,609
2,609
Gross book value
Accumulated depreciation/amortisation
At Fair Value:
9,940
9,940
Net book value at 30 June 2015
9,941
Item
Gross book value
Accumulated depreciation
At Cost:
104
Computer
software
$m
Land
$m
Gross book value
Accumulated depreciation
At Cost:
Notes to the financial statements
Australian Government assets under construction
General Government assets at fair value — Revaluation period
Assets held at fair value as at 30 June 2015 were based on valuations conducted in the following periods:
2013-14 or earlier
2014-15
Assets at fair value at 30 June 2015
283
9,657
9,940
1,386
21,644
23,030
-
2,948
9,192
12,140
1
11,330
11,331
187
187
-
-
-
-
4,618
52,010
56,628
105
Notes to the financial statements
Item
Net book value at 1 July 2013
Additions:
Purchases and entity acquisitions
Acquisition by finance lease
Internally developed
Revaluations: write-ups
Depreciation/amortisation expense
Recoverable amount write-downs
Reversal of write-downs
Other movements
Disposals
106
As at 30 June 2014
Additions (a):
Purchases and entity acquisitions
Acquisition by finance lease
Internally developed
Revaluations: write-ups
Depreciation/amortisation expense
Recoverable amount write-downs
Reversal of write-downs
Other movements
Specialist
Other plant,
military equipment and
equipment
infrastructure
$m
$m
40,288
12,610
Heritage
and
cultural Investment
assets
property
$m
$m
10,547
195
Computer
software
$m
3,579
Other
intangibles
$m
2,057
Total
$m
101,693
2
-
260
630
213
1
8,674
586
631
239
(51)
(6)
21
2
-
(848)
(56)
159
(56)
(37)
84
204
1,056
(6,402)
(724)
100
268
Land
$m
8,917
Buildings
$m
23,500
21
2
-
2,247
513
-
4,309
-
1,545
71
-
77
-
479
(57)
122
(1,474)
(116)
94
(2,540)
(469)
16
(336)
214
(1,433)
(40)
183
(31)
(39)
(25)
(53)
(2)
(16)
(5)
(2)
(173)
9,331
24,847
41,243
13,097
10,825
183
3,719
2,464
105,709
18
4
-
2,333
20
-
5,065
-
1,605
49
-
71
-
16
-
292
652
276
-
9,676
73
652
694
(1)
(2)
10
262
(1,509)
(79)
(6)
(187)
(2,872)
(907)
128
123
(1,480)
(89)
(1)
368
490
(73)
(3)
23
2
2
(876)
(68)
5
(19)
(51)
(56)
213
9
1,571
(6,862)
(1,204)
211
334
Disposals
(113)
(42)
(5)
(48)
(1)
(16)
(16)
-
(241)
As at 30 June 2015
9,941
25,639
42,652
13,624
11,332
187
3,689
2,855
109,919
General Government assets under construction
GGS assets under construction include $2,609 million (2014: $2,346 million) in buildings, $11,993 million (2014: $11,904 million) in
specialist military equipment and $1,497 million (2014: $1,289 million) in other plant, equipment and infrastructure.
Notes to the financial statements
General Government
Notes to the financial statements
Land, buildings, plant, equipment and infrastructure
Property, plant and equipment are stated at historical cost or valuation, except as
otherwise indicated. Property, plant and equipment are stated at fair value, except
assets under construction and specialist military equipment (refer Note 1.8), which is
valued at cost. Certain small entities and public corporations may adopt a cost basis in
their own financial statements. Where the difference is material to the CFS, an
adjustment is made on consolidation.
Where available, the fair value of property, plant and equipment is determined by
reference to market-based evidence, for example, the market value of similar
properties. If there is no market-based evidence of fair value because of the specialised
nature of the item of property, plant or equipment and the item is rarely sold, fair
value is estimated using an income (net present value/discounted cash flows) or a
depreciated replacement cost approach. The valuation techniques used for each class
of depreciable assets are disclosed in Note 6.
The cost of restoration or removal is provided for in the measurement of property,
plant and equipment when a legal or constructive obligation exists. These costs include
obligations relating to the dismantling, removal, remediation, restoration and other
expenditure associated with the Australian Government’s fixed assets or site fit-outs.
Restoration provisions are initially recorded when a reliable estimate of the costs to be
incurred can be determined and are discounted to present value. Estimates are based
upon a review of lease contracts, legal requirements, historical information, and
expected future costs. Any changes to these estimates are adjusted on a progressive
basis as required.
Intangibles
The Australian Government’s intangibles comprise internally developed software for
internal use, water entitlements and intangible assets acquired by public corporations
(PNFCs and PFCs). When public corporations acquire investments in controlled,
jointly controlled or associated entities, and pay an amount greater than the fair value
of the net identifiable assets of the entity, this excess is recognised as goodwill.
Intangibles are carried at cost. Water entitlements are classified as indefinite life
intangibles and are therefore subject to annual impairment testing. Goodwill and other
indefinite life intangibles are not amortised but tested for impairment on an
annual basis.
107
Notes to the financial statements
Note 7E: Inventories
General Government
2015
2014
$m
$m
Inventories held for sale
Finished goods(a)
Raw materials and stores
Work in progress
Total inventories held for sale
Australian Government
2015
2014
$m
$m
1,081
57
242
1,380
669
63
535
1,267
1,146
70
247
1,463
734
77
539
1,350
7,035
6,986
7,068
7,021
Total inventories
8,415
8,253
8,531
(a) Finished goods include $193 million valued at net realisable value (2014: $231 million).
8,371
Consumable stores and inventories
held for distribution
Inventories
Inventories held for sale are valued at the lower of cost and net realisable value.
Inventories held for distribution are measured at cost, adjusted for any loss of service
potential. Quantities on hand and items of inventory are periodically evaluated with
excess and obsolete inventory recorded as a reduction to inventory and an expense.
Note 7F: Other non-financial assets
Total biological assets
Total assets held for sale
Prepayments
Other
Total other non-financial assets
General Government
2015
2014
$m
$m
44
36
129
95
4,516
2,985
207
194
4,896
3,310
Australian Government
2015
2014
$m
$m
44
36
129
143
4,620
3,058
269
286
5,062
3,523
Note 7G: Assets by function(a)
General Government
Australian Government
2015
2014 (c)
2015
2014 (c)
$m
$m
$m
$m
184,383
166,115
184,086
165,773
General public services
79,883
75,996
80,269
76,314
Defence
2,915
2,579
2,944
2,595
Public order and safety
33,240
28,872
33,240
28,872
Education
1,261
5,495
1,244
3,596
Health
8,317
7,547
7,979
7,189
Social security and welfare
8,435
8,153
8,389
8,139
Housing and community amenities
12,428
13,416
12,428
13,416
Recreation and culture
1,538
877
1,538
877
Fuel and energy
910
451
908
451
Agriculture, forestry and fishing
525
296
2,384
1,856
Mining, manufacturing and construction
15,613
12,601
23,787
19,877
Transport and communication
31,736
155,792
Other economic affairs
24,576
140,530
48,067
17,349
Other purposes(b)
43,234
19,545
429,251
532,337
Total assets
390,208
489,030
(a) Refer to Note 4F for a description of each function.
(b) Cash and deposits that are not allocated to other functions are included in the ‘Other purposes’ function.
(c) The 2013-14 comparatives have been updated for consistency with the 2014-15 functional classification.
108
Notes to the financial statements
Note 8: Liabilities
Liabilities are obligations to another entity to provide economic value as a result of
past transactions and activities undertaken by Australian Government entities. They
include interest bearing liabilities, provisions and payables. The total Australian
Government liabilities and relative composition of liabilities are as follows:
Amount
900,000
2014-15 Composition
$m
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
2013-14
2014-15
•
Deposits held (refer Note 8A) predominantly the liability for cash and deposits
held with the RBA and other PFCs;
•
Government securities (refer Note 8B) issued by the Australian Government in
the form of Treasury Bonds, Treasury Indexed Bonds and Treasury Notes;
•
Loans (refer Note 8C) comprising promissory notes issued to the IMF and other
multi-lateral organisations to meet Australia’s international financial obligations,
bonds issued by public corporations, and other loans;
•
Other borrowings (refer Note 8D) covers obligations under finance lease
arrangements;
•
Other interest bearing liabilities (refer Note 8E) includes Australia’s liability to
the IMF as denominated in special drawing rights (SDR), repurchase agreements
entered into by the RBA, and other debt not elsewhere classified;
•
Employee benefits (refer Note 8F) captures amounts owing to current and former
employees, the largest of which is the Australian Government obligation for the
unfunded proportion of the public sector and military superannuation schemes;
and
•
Other provisions and payables (refer Note 8G) including year-end obligations for
goods and services, current and capital transfers and unearned income. Also
includes a liability for currency notes issued by the RBA.
109
Notes to the financial statements
Note 8A: Deposit liabilities
General Government
2014
2015
$m
$m
-
Exchange settlement funds
Drawing accounts held with the Reserve Bank
of Australia
State governments
Monies held in trust
Foreign governments
Other
Total deposit liabilities
Australian Government
2014
2015
$m
$m
23,360
22,379
212
6
206
5
370
59
212
758
365
824
206
872
307
218
211
25,124
24,588
Deposits held
Deposits include deposits at call and term deposits and are classified as financial
liabilities. Deposit balances are shown at their amortised cost, which is equivalent to
their face value. Interest is accrued over the term of deposits and is paid periodically or
at maturity.
Note 8B: Government securities
General Government
2015
2014
$m
$m
Australian Government
2015
2014
$m
$m
Treasury bonds
Treasury notes
Treasury indexed bonds
Other
359,868
5,978
38,176
5,915
309,202
4,974
32,419
4,687
359,868
5,978
38,176
22
309,202
4,974
32,419
21
Total government securities
409,937
351,282
404,044
346,616
Government securities
Government securities liabilities are measured at fair value. Where a security is issued
at a premium or discount, the premium or discount is recognised at that time and
included in the book value of the liability.
Note 8C: Loans
General Government
2015
2014
$m
$m
Australian Government
2015
2014
$m
$m
Bills of exchange and promissory notes
Bonds (non-Treasury)
Loans
Total loans
4,825
868
5,693
3,904
804
4,708
5,658
2,908
1,141
9,707
4,477
3,067
920
8,464
Loans maturity schedule
Not later than one year
Later than one year
Total loans by maturity
212
5,481
5,693
104
4,604
4,708
801
8,906
9,707
594
7,870
8,464
110
Notes to the financial statements
Loans
Loans are initially recognised at fair value plus any transaction costs that are directly
attributable to the issue, and are subsequently measured at either amortised cost or at
fair value through profit and loss. Any differences between the final amounts paid to
discharge the loan and the initial loan proceeds (including transaction costs) are
recognised in the operating statement over the borrowing period using the effective
interest method.
Note 8D: Other borrowings
General Government
2015
2014
$m
$m
Australian Government
2015
2014
$m
$m
Finance lease liabilities as at the reporting date
are reconciled to the lease liability as follows:
Not later than one year
Later than one year and not later than five years
Later than five years
143
650
2,277
175
651
2,301
588
1,965
11,072
569
1,836
10,495
Minimum lease payments
less future finance charges
Total finance lease liabilities
Finance lease liabilities maturity schedule
Current
Non-current
3,070
1,561
1,509
3,127
1,598
1,529
13,625
8,289
5,336
12,900
7,910
4,990
45
1,464
80
1,449
192
5,144
199
4,791
Total finance lease liabilities by maturity
1,509
1,529
5,336
4,990
Other borrowings (finance leases)
Finance leases effectively transfer from the lessor to the lessee substantially all the risks
and rewards incidental to ownership of leased assets. Where an asset is acquired by
means of a finance lease, the asset is capitalised at either the fair value of the leased
asset or, if lower, the present value of minimum lease payments at the inception of the
lease contract. A corresponding liability is recognised at the same time in other
borrowings. Lease payments are allocated between the principal component and the
interest expense. The discount rate used is the interest rate implicit in the lease.
Note 8E: Other interest bearing liabilities
Swap principal payable
Amounts outstanding under repurchase agreements
Special reserve - IMF special drawing rights
Finance lease incentives
Other
Total other interest bearing liabilities
General Government
2015
2014
$m
$m
942
469
5,633
5,054
131
144
9
7
6,715
111
5,674
Australian Government
2015
2014
$m
$m
2,174
783
1,780
5,244
5,633
5,054
139
154
1,565
1,699
11,291
12,934
Notes to the financial statements
Other interest bearing liabilities
The IMF SDR allocation liability reflects the current value in Australian dollars of the
Australian Government’s liability to repay Australia’s cumulative allocations of SDRs.
Interest is payable to the IMF in relation to the amount by which Australia’s SDR
holdings are below Australia’s net cumulative allocations. Interest expense is
recognised as it accrues.
In the course of financial market operations, the RBA engages in repurchase
agreements involving foreign and Australian dollar marketable securities. Securities
sold but contracted for purchase under repurchase agreements are reported within the
relevant investment category and are valued at market prices. The counterparty
obligation to repurchase is reported as an interest bearing liability and is measured at
amortised cost. The difference between the sale and purchase price is recognised as
interest expense over the term of the agreement.
Note 8F: Employee benefits
General Government
2015
2014
$m
$m
248,209
221,747
Total superannuation liability
Other employee liabilities
Leave and other entitlements
Accrued salaries and wages
Workers compensation claims
Separations and redundancies
Military compensation
Other
Total other employee liabilities
Total employee and superannuation liabilities
7,263
785
3,225
154
5,333
292
17,052
265,261
7,331
772
3,175
284
4,092
276
15,930
237,677
Australian Government
2015
2014
$m
$m
248,540
221,948
9,770
875
3,374
388
5,333
351
20,091
268,631
9,800
854
3,314
383
4,092
277
18,720
240,668
Employee numbers
As at 30 June 2015, the number of full time equivalent employees was 295,808
(2014: 304,491). This comprises civilians and military personnel, including reserve
forces.
Superannuation
The
superannuation
liability
represents
the
present
value
of
the
Australian Government’s unfunded liability to employees for past services as
estimated by the actuaries of the respective superannuation plans. Additional
information on superannuation is included in Note 12C.
112
Notes to the financial statements
Other employee liabilities
Liabilities for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits)
and termination benefits due within 12 months of balance date are measured at their
nominal amounts. The nominal amount is calculated with regard to the rates expected
to be paid on settlement of the liability. The liability for leave and other entitlements
includes provision for annual leave and long service leave.
Liabilities for services rendered by employees are recognised at the reporting date to
the extent that they have not been settled. All other employee benefit liabilities are
measured at the present value of the estimated future cash outflows to be made in
respect of services provided by employees up to the reporting date.
The liability for long service leave is calculated using expected future increases in
wages and salary rates including related on-costs and is discounted using applicable
government bond rates. In determining the present value of the liability, attrition rates,
pay increases through promotion and inflation are taken into account. The liability for
long service leave has been determined by reference to the work of actuaries.
Workers’ compensation claims
The provision represents an estimate of the present value of future payments in respect
of claims for events occurring before 30 June 2015 with a 75 per cent probability of
sufficiency. The expected future payments are discounted to present value using a risk
free rate. The expected future payments include claims reported but not yet paid,
claims incurred but not yet reported, and anticipated claims handling costs.
Military compensation
The military compensation provision represents an estimate of the present value of
future payments in respect of claims under the Military Rehabilitation and Compensation
Act 2004 and the Safety, Rehabilitation and Compensation Act 1988 arising from service
rendered before 30 June 2015. The provision is calculated by discounting future
payments using a yield curve derived from the yields on Commonwealth bonds of
various durations as at 30 June 2015.
The military compensation provision is subject to inherent sources of uncertainty
arising from a range of factors, including that claims may not be received until many
years after the event and subsequent payments for income support, health and
rehabilitation services can extend over a long period of time. The Annual Report for
the Department of Veterans’ Affairs details the assumptions and areas of uncertainty
underpinning the actuarial estimation of the military provision.
113
Notes to the financial statements
Note 8G: Other provisions and payables
General Government
2015
2014
$m
$m
Australian Government
2015
2014
$m
$m
Payables
Suppliers payable
Trade creditors
Operating lease rental payable
Other creditors
Total suppliers payable
3,646
325
630
4,601
3,561
264
1,056
4,881
4,431
325
802
5,558
4,622
264
1,260
6,146
Total personal benefits payable
5,983
5,607
5,983
5,607
Total subsidies payable
4,529
4,482
4,529
4,482
Grants payable
State and Territory governments
Private sector
Overseas
Local governments
Other
630
573
1,483
3
550
679
384
1,660
2
630
630
573
1,483
3
550
679
384
1,660
2
630
Total grants payable
3,239
3,355
3,239
3,355
Other payables
Unearned income
Accrued expenses
Other
Total other payables
Total payables
916
897
875
2,688
21,040
1,091
961
1,081
3,133
21,458
1,248
2,518
900
4,666
23,975
2,029
1,947
1,113
5,089
24,679
-
-
65,481
60,778
8,457
10,846
8,457
10,846
12,876
2,888
12,446
2,920
12,876
2,888
12,853
2,918
2,159
952
27,332
27,332
48,372
2,017
953
29,182
29,182
50,640
2,259
1,233
27,713
93,194
117,169
2,122
1,310
30,049
90,827
115,506
Australian currency on issue
Other provisions
Grant provisions
Provision for outstanding benefits
and claims
Provision for tax refunds
Provision for restoration,
decommissioning and makegood
Other
Total other provisions
Total provisions
Total other provisions and payables
114
Notes to the financial statements
A: Reconciliation of movement in provisions
General Government
2015
2014
$m
$m
Movement table:
Balance of provisions at 1 July
Provisions made during the year
Provisions used during the year
Provisions remeasured, reversed or
unwound during the year
Balance of provisions at 30 June
Australian Government
2015
2014
$m
$m
29,182
8,458
(9,188)
32,222
19,704
(14,569)
90,827
13,166
(9,764)
90,025
28,064
(19,131)
(1,120)
27,332
(8,175)
29,182
(1,035)
93,194
(8,131)
90,827
Other provisions and payables
Payables
Trade and other payables, including accruals, are recorded when
Australian Government entities are required to make future payments as a result of a
purchase of assets or services. Payables are initially recognised at fair value and are
subsequently measured at amortised cost.
Provisions
Non-employee provisions are recognised at the best estimate of the expenditure
required to settle the present obligation at the reporting date. If the effect is material,
provisions are determined by discounting the expected future cash flows (adjusted for
expected future risks) required to settle the obligation at a rate that reflects current
market assessments of the time value of money and the risks specific to the liability.
The calculation of provisions is subject to the volatility of economic assumptions used,
in particular, the discount rate and the effects of inflation as well as the impact of
variations in payment patterns. In calculating the estimated cost of future payments for
each provision, actuarial advice is generally obtained. Given the uniqueness of a
number of the Australian Government provisions and the use of actuarial
assumptions, there can be an element of uncertainty in the estimate.
Australian currency on issue
Australian currency issued represents a liability of the RBA in favour of the holder.
Currency issued for circulation, including demonetised currency, is measured at face
value. When the RBA issues currency notes to the commercial banks it receives, in
exchange, funds equal to the full face value of the notes issued.
115
Notes to the financial statements
Note 9: Net revaluation increases/(decreases)
General Government
2015
2014
$m
$m
Financial assets
Equity investments
Non-financial assets
Land
Buildings
Other infrastructure, plant and equipment
Heritage and cultural assets
Provision for restoration, decommissioning and
makegood
Total non-financial assets
Total revaluation increases/(decreases)
116
Australian Government
2015
2014
$m
$m
3,201
7,679
383
282
679
272
169
518
496
139
260
239
638
329
107
518
498
230
244
239
9
1,647
24
1,158
9
1,601
24
1,235
4,848
8,837
1,984
1,517
Notes to the financial statements
Note 10: Reconciliation of cash
Cash and deposits
Cash includes: cash at bank and on hand, short term deposits at call and investments
in short-term money market instruments that are used in the cash management
function on a day-to-day basis, net of outstanding bank overdrafts. Cash and
cash equivalents includes notes and coins held and any deposits in bank accounts with
an original maturity of three months or less that are readily convertible to known
amounts of cash and subject to insignificant risk of changes in value. Deposits at call,
which are held for longer-term investment purposes, are classified as investments.
Cash is recognised at its nominal amount.
A: Reconciliation of net operating balance to net cash flows from operating
activities
General Government
2015
2014
$m
$m
(37,415)
(40,587)
Net operating balance
less Revenues not providing cash
Other
Total revenues not providing cash
plus Expenses not requiring cash
Increase in employee entitlements
Depreciation/amortisation expense
Mutually agreed writedowns
Other non-cash expenses
Total expenses not requiring cash
plus Cash provided by working capital items
(Increase)/Decrease in receivables
(Increase)/Decrease in inventories
(Increase)/Decrease in other financial assets
(Increase)/Decrease in other non-financial
assets
Increase/(Decrease) in benefits, subsidies
and grants payable
Increase/(Decrease) in supplier payables
Increase/(Decrease) in other
provisions and payables
Total cash provided/(used) by working
capital items
equals Net cash from/(used by) operating
activities
Australian Government
2015
2014
$m
$m
(40,821)
(34,259)
745
745
554
554
579
579
384
384
8,382
6,804
1,857
1,881
18,924
16,301
6,340
2,627
(6,867)
18,401
8,636
8,099
1,857
1,882
20,474
16,500
7,422
2,477
(6,863)
19,536
(6,067)
(489)
1,280
(8,858)
(474)
99
(3,668)
(498)
1,200
(7,469)
(491)
154
(1,479)
(319)
(1,472)
(363)
(189)
2,417
(2,410)
(506)
(189)
2,098
(2,410)
(447)
(967)
(1,760)
(1,412)
(1,347)
(5,494)
(14,228)
(3,941)
(12,373)
(24,730)
(36,968)
(24,867)
(27,480)
B: Reconciliation of cash at the end of the reporting period as shown in
the cash flow statement to the related items in the balance sheet.
Cash at the end of the reporting period as shown in the Australian Government and
GGS cash flow statement is equal to ‘cash and deposits’ as reported in the Australian
Government and GGS balance sheet.
117
as at 30 June 2015
General
government
2015
2014
$m
$m
118
Capital commitments
Land and buildings
Infrastructure, plant and equipment
Specialist military equipment
Investments
Other capital commitments
Total capital commitments
Other commitments
Operating leases
Grant commitments
Other commitments
Total other commitments
Total commitments
less Commitments receivable
Net commitments by type
Capital - One year or less
Capital - From one to five years
Capital - Over five years
Operating leases - One year or less
Operating leases - From one to five years
Operating leases - Over five years
Other - One year or less
Other - From one to five years
Other - Over five years
Net commitments by maturity
Public non-financial
corporations
2015
2014
$m
$m
Public financial
corporations
2015
2014
$m
$m
Australian
Government
2015
2014
$m
$m
1,948
853
9,848
33,362
1,309
47,320
1,480
1,218
10,252
33,747
986
47,683
34
7,652
1
7,687
96
1,676
1,772
82
12
94
37
2
39
1,979
8,570
9,848
17,047
1,322
38,766
1,568
2,923
10,252
12,665
988
28,396
17,285
109,189
50,621
177,095
224,415
1,834
222,581
17,489
101,500
39,082
158,071
205,754
4,527
201,227
1,711
2,423
4,134
11,821
16,898
(5,077)
1,658
4,384
6,042
7,814
21,682
(13,868)
1
68
69
163
14
149
342
1
343
382
10
372
18,908
109,189
52,698
180,795
219,561
2,091
217,470
19,398
101,500
43,165
164,063
192,459
4,774
187,685
30,338
16,581
393
47,312
2,323
6,904
5,980
15,207
52,511
97,351
10,200
160,062
222,581
22,340
23,164
1,036
46,540
2,268
6,630
6,561
15,459
48,207
81,252
9,769
139,228
201,227
1,689
2,410
3,587
7,686
286
714
705
1,705
(7,001)
(7,412)
(55)
(14,468)
(5,077)
1,539
233
1,772
241
700
707
1,648
(3,902)
(14,333)
947
(17,288)
(13,868)
60
33
93
(2)
(10)
(2)
(14)
1
69
70
149
38
2
40
45
155
137
337
(2)
(3)
(5)
372
24,246
10,548
3,980
38,774
2,607
7,609
6,683
16,899
53,328
98,371
10,098
161,797
217,470
18,716
7,517
1,036
27,269
2,554
7,485
7,405
17,444
49,464
83,884
9,624
142,972
187,685
Notes to the financial statements
Note 11: Commitments
Commitments are obligations or undertakings to make future payments to other entities that exist at the end of the reporting period
but which have not been recognised as liabilities in the balance sheet. The above does not include commitments for grants payable to
the states and territories under the Federal Financial Relations Act 2009 (for the current and comparative years). The budgeted
information for payment of grants to states and territories can be found in Budget Paper No. 3.
Operating leases comprise the following:
Nature of lease
General description of leasing arrangement
Leases for computer
equipment
Most entities lease computer equipment and software.
Leases for office
accommodation
Entities may lease office accommodation from parties outside the Australian Government.
Computer leases are generally for three to five years with an option to renew for one to two further periods of two to three years each. In
some cases there are no renewal or purchase options available to the agencies.
Leases are effectively non-cancellable. No contingent rentals exist.
Leases for office accommodation generally range from one to 15 years (although they can be longer). They may be extended for up to
three to five years from the originally specified expiry date. In some cases there are no renewal or purchase options available to the entities.
119
Leases are effectively non-cancellable.
In most cases lease payments are subject to increases in accordance with terms as negotiated under the lease (generally subject to annual
increase in accordance with upwards movements in the consumer price index, a set annual increase agreed to in the lease or an
annual/bi-annual review).
Most entities lease motor vehicles as part of the senior executive officers’ remuneration packages and also for general office use.
Leases for office
equipment
Most entities lease office equipment.
Leases for
transportation and
support facilities for
Antarctic operations
Lease payments are subject to increases in accordance with terms as negotiated under the lease.
Vehicle leases are generally for a minimum period of three months and typically extend from two to four years. They may be extended for up
to three months from the originally specified expiry date. In some cases there are no renewal or purchase options available to the agencies.
Leases are effectively non-cancellable. No contingent rentals exist. Lease payments are fixed for the term of the lease.
Office equipment leases are generally for three to five years. In some cases there are no renewal or purchase options available to the
agencies. Leases are effectively non-cancellable. No contingent rentals exist.
In some cases there are additional costs based on usage of the equipment.
The transportation leases generally have options for renewal. Future options not yet exercised are not included as commitments.
Leases are effectively non-cancellable and no contingent rentals exist.
Notes to the financial statements
Agreements for the
provision of motor
vehicles
Notes to the financial statements
Note 12: Risks
The assets and liabilities in the 2014-15 CFS incorporate assumptions and judgements
based on the best information available at the date of signing. The judgements and
estimates made by Australian Government entities that have the most significant
impact on the amounts recorded in the financial statements are disclosed in Note 1.
In addition to these, there are a range of factors that may influence the amounts
ultimately realised or settled in future years that relate to past events. The disclosure of
these factors increases the transparency of the risks to the Government’s financial
position. These risks have been grouped into the following disclosures:
• Contingencies (refer Note 12A) comprising possible obligations or assets arising
from past events and whose existence will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events. The Australian Government
has issued a number of guarantees, such as those relating to guarantee schemes for
the banking and financial sector, while other significant contingent liabilities relate
to uncalled capital subscriptions and credit facilities to international financial
institutions and legal cases concerning the Australian Government.
The Government has robust and conservative strategies in place to reduce its
potential exposure to these contingent liabilities.
• Financial Instrument disclosures (refer Note 12B) concerning the contractual
arrangements that the Australian Government has entered into for policy, liquidity
or financing purposes. To varying degrees, Australian Government entities are
exposed to the following risks arising from financial instruments:
– Market risk
– Credit risk; and
– Liquidity risk.
• Defined benefit superannuation plans (refer Note 12C) comprise the
Government’s largest liability after public debt. Under these schemes, the
Australian Government’s obligation is to provide the agreed benefits to current and
former employees, for which it bears actuarial risk (the risk that benefits will cost
more than expected). Given the significance of these obligations, Note 12C explains
the characteristics of the major defined benefit plans and risks associated with
them, and describes how the plans may affect the amount, timing and uncertainty
of the Australian Government’s future cash flows. The Future Fund is a long-term
investment fund that is designed to enhance the ability of the
Australian Government to discharge unfunded superannuation liabilities expected
after 2020, when an ageing population is likely to place significant pressures on the
Government’s finances.
Consistent with the amounts recognised in the financial statements, the disclosures are
based on the policies, events and arrangements up to the reporting date and do not
include policy decisions announced in the 2015-16 Budget Papers which have not yet
been enacted or implemented.
120
Note 12A: Contingencies
Reconciliation of movement in quantifiable contingent liabilities and contingent assets
Item
Opening balance as at 1 July 2013
Increases
Re-measurement
Liabilities/Assets crystallised
Contingent Liabilities
Uncalled shares
Claims for
Other
Total
Total
Net
Guarantees
Indemnities
or capital
damages or
quantifiable
quantifiable
Contingent
Contingent
(a)(e)
$m
(b)
$m
subscriptions(c)
$m
costs
$m
contingencies
$m
liabilities
$m
assets
$m
Liabilities
$m
16,714
447
13,251
228
7,263
37,903
332
37,571
35
1
-
94
1,232
1,362
141
1,221
(77)
(89)
223
7
(1,161)
(1,097)
(20)
(1,077)
-
-
-
(43)
(1)
(44)
(248)
204
(33)
(27)
-
(105)
(1,891)
(2,056)
(2,041)
As at 30 June 2014
16,639
332
13,474
181
5,442
36,068
(15)
190
Opening balance as at 1 July 2014
16,639
332
13,474
181
5,442
36,068
190
35,878
39
3
-
81
256,453
256,576
10
256,566
1,362
(2)
2,095
(53)
829
4,231
28
4,203
-
-
-
(38)
(1)
(39)
(51)
12
(26)
(18)
-
(20)
(2,798)
(2,862)
(49)
128
(2,813)
Expired
121
Increases (d)
Re-measurement
Liabilities/Assets crystallised
As at 30 June 2015
151
259,925
293,974
293,846
18,014
315
15,569
(a) A guarantee is where one party promises to be responsible for the debt or performance obligations of another party should that party default in some way.
(b) An indemnity is a legally binding promise whereby a party undertakes to accept the risk of loss or damage another party may suffer.
(c) Uncalled shares/capital subscriptions include uncalled shares of $15,504 million (2014: $13,415 million) in the European Bank for Reconstruction and Development,
the International Bank for Reconstruction and Development, the Multilateral Investment Guarantee Agency and the Asian Development Bank.
(d) From 1 January 2015, the RBA has provided a Committed Liquidity Facility (CLF) to eligible authorised deposit-taking institutions (ADIs) as part of Australia’s
implementation of the Basel III liquidity requirements. The CLF provides ADIs with a contractual commitment to funding under repurchase agreements with the RBA,
subject to certain conditions.
(e) The comparatives have been updated to align with current year classifications and for prior period adjustments. This includes Export Finance and Insurance
Corporation guarantees which were previously recognised as remote contingencies. The reclassification more appropriately reflects the nature of the contingency.
Notes to the financial statements
Expired
35,878
Notes to the financial statements
Contingent liabilities and assets are not recognised in the balance sheet but are
disclosed in the relevant notes. They are classified as contingent due to:
• uncertainty as to the existence of a liability or asset which will only be confirmed by
the occurrence or non-occurrence of one or more future events not wholly within
the control of the Australian Government,
• an existing liability in respect of which settlement is not probable or, for a
contingent asset, where the inflow of economic benefits is not virtually certain, or
• an existing liability or asset where the amount cannot be reliably measured.
Quantifiable contingencies by sector(a)(b)
as at 30 June 2015
General
Government
2015
2014
$m
$m
Quantifiable contingent liabilities
Guarantees
Indemnities
Uncalled shares/capital subscriptions
Claims for damages/costs
Other contingencies
Total quantifiable contingent liabilities
less Quantifiable contingent assets
Public non-financial
corporations
2015
2014
$m
$m
Public financial
corporations
2015
2014
$m
$m
16,506
415
15,504
113
4,901
37,439
14,827
332
13,415
174
5,441
34,189
389
39
428
389
7
1
397
1,180
66
255,024
256,270
1,423
59
1,482
117
145
12
15
-
30
Net quantifiable contingencies
37,322
34,044
416
382 256,270
1,452
(a) Refer to the Australian Government contingency disclosures for further details on quantifiable and
non-quantifiable contingencies.
(b) Transactions between sectors are included in this table but eliminated in the consolidated statements to
avoid double counting. Accordingly, the sum of the amounts for each line item may exceed or be less
than the equivalent amount in the consolidated statements.
Non-quantifiable contingencies
The following pages list unquantifiable contingencies. Those identified and reported in
the 2014-15 CFS for the first time have been identified as ‘new’. 1
Further detail on individual contingencies may be included in the annual report for the
respective Commonwealth entity.
1
A number of the new contingent liabilities have previously been reported in the Statement of
Risks included in the Australian Government budget documentation.
122
Notes to the financial statements
Guarantees, indemnities and undertakings
A range of guarantees, indemnities and undertakings have been provided by
Australian Government entities in relation to various agreements, deeds and other
matters and some of these guarantees, indemnities and undertakings are unlimited.
Guarantees, indemnities and undertakings include, but are not limited to:
•
Emergency pest and disease response arrangements (administered by the
Department of Agriculture). The Australian Government is typically liable for
50 per cent of total government funding to respond to a disease or pest outbreak.
The Australian Government may be expected to contribute bilaterally in situations
where an incursion is not covered by a cost sharing agreement or where the
relevant industry body is not party to an agreement. The Australian Government
may also provide financial assistance to an industry party by funding its initial
share of the response. These contributions may subsequently be recovered from the
industry over a period of up to ten years, usually by a levy;
•
Native title agreements — access to geospatial data (administered by the
Attorney-General’s Department) whereby indemnities have been provided against
third-party claims arising from errors in the data. Under the Native Title Act 1993,
the Australian Government will be liable for any compensation found to be payable
in respect of compensable acts for which the Commonwealth is responsible;
•
Australian Victims of Terrorism Overseas Payment (administered by the
Attorney-General’s Department). The Australian Government manages a scheme
for providing financial assistance to Australians who are victims of an overseas
terrorist act that has been declared by the Prime Minister. Under the scheme,
Australians harmed (primary victims) and Australians who are close family
members of a person who dies as a direct result of a declared terrorist act
(secondary victims) will be able to claim payments of up to $75,000. As acts of
terrorism are unpredictable, the cost of the scheme is unquantifiable.
•
Additionally the Terrorism Insurance Scheme is managed by the Australian
Reinsurance Pool Corporation (ARPC) for replacement terrorism insurance
covering damage to commercial property including associated business
interruption and public liability under the Terrorism Insurance Act 2003. The
Australian Government guarantees to pay any liabilities of the ARPC, but the
Treasurer must declare a reduced payout rate to insured parties if the Australian
Government’s liability would otherwise exceed $10 billion. A declared terrorist
incident was announced by the Treasurer on 15 January 2015 relating to the
incident at the Lindt Café in Martin Place on 15 and 16 December 2014. Claims have
been submitted by affected reinsurers, however, the quantum of claims have not
exceeded their individual retentions;
123
Notes to the financial statements
•
Australian Red Cross Society — blood and blood products (administered by the
Department of Health). The Australian Government, states and territories jointly
provide indemnity for the Australian Red Cross Blood Service regarding personal
injury and loss or damages suffered by a recipient of certain blood and blood
products where other available mitigation or cover is not available;
•
CSL Ltd (administered by the Department of Health). The Australian Government
has indemnified CSL Ltd for a specific range of events that occurred during the
Plasma Fractionation Agreement from 1 January 1994 to 31 December 2004, where
alternative cover was not arranged by CSL Ltd. Indemnities relate to certain
existing and potential claims made for personal injury, loss or damage suffered
through therapeutic and diagnostic use of certain products manufactured by
CSL Ltd;
•
Vaccines (administered by the Department of Health). Indemnities have been
provided to the manufacturers of smallpox and influenza vaccines held by the
Australian Government, covering possible adverse events that could result from the
use of the vaccines in an emergency situation;
•
The Australian Medical Association Ltd (AMA) (administered by the Department
of Health). The AMA, the Commonwealth, Australian Private Hospitals
Association Ltd, Australian Health Insurance Association and Beyond Blue Ltd
have agreed to indemnify each other in respect of any loss, liability, cost, claim or
expense due to misuse of confidential information or breach of the Privacy Act 1988
in relation to participation in and support of the Private Mental Health Alliance;
•
New South Wales Health Administration Council (NSW HAC) (administered by
the National Health Funding Body (NHFB)). An indemnity has been provided to
the New South Wales Government through the NSW HAC, in relation to a state
funding pool account with the RBA. The indemnity includes liabilities or claims
arising from acts or omissions of NHFB staff as users of pool account information,
liabilities or claims arising from unauthorised access to the banking services or
system from NHFB premises. NSW HAC has provided a reciprocal indemnity for
the actions of staff of the NHFB to the RBA;
•
Medical Indemnity (administered by the Department of Health). The Incurred But
Not Reported Scheme is designed to fund the incurred but not reported liabilities of
Medical Defence Organisations where they do not have adequate reserves to cover
their liabilities. Eligibility for claim payments under this scheme is dependent on
whether the Medical Indemnity Insurer is deemed to be a participating Medical
Defence Organisation under the Medical Indemnity Act 2002 and the Midwife
Professional Indemnity (Commonwealth Contribution) Scheme Act 2010;
•
Medical Indemnity Exceptional Claims Scheme (MIECS) (administered by the
Department of Health). The MIECS assumes liability for 100 per cent of any
damages payable against a doctor that exceeds a specified level of cover provided
by that doctor’s medical indemnity insurer (currently $20 million);
124
Notes to the financial statements
•
Asian Football Confederation Cup (new) (administered by the Department of
Health). The Australian Government has agreed to pay a percentage of any amount
payable by a state beyond an agreed threshold for hosting the Asian Football
Confederation Cup 2015, given by that state under or in connection with the
Competition Agreement;
•
Northern Maritime Patrol and Response — Triton (administered by the
Department of Immigration and Border Protection). The Government has entered
into a contractual arrangement with Gardline Australia Pty Ltd for the provision of
a vessel to strengthen enforcement activities in Australia’s northern waters.
The contract with Gardline Australia Pty Ltd contains unquantifiable indemnities
relating to the use, or other operations, of armaments and the presence of
armaments on the vessel. It also contains unquantifiable indemnities relating to
damage to any property or injury to any person caused by apprehended or escorted
persons or their vessel;
•
Immigration detention services — Serco (new) (administered by the Department
of Immigration and Border Protection). On 11 December 2014, the
Australian Government entered into a contract with Serco Australia Pty Ltd (Serco)
to deliver immigration detention services in Australia on behalf of the Australian
Government at immigration detention facilities. The contract terms limit Serco’s
liability to the Australian Government to a maximum of any insurance proceeds
recovered by Serco up to a value of $330 million. Serco’s liability is unlimited for
specific events defined under the contract;
•
Immigration detention services — state and territory governments (administered
by the Department of Immigration and Border Protection). The
Australian Government has negotiated arrangements with a number of state and
territory governments for the provision of health, education, corrections and
policing services to immigration detention facilities and people in immigration
detention. Some jurisdictions are seeking indemnification by the Australian
Government for the provision of those services;
•
Snowy Hydro Limited water releases (administered by the Department of
Industry
and
Science).
The
Australian,
New
South
Wales
and
Victorian governments have indemnified Snowy Hydro Limited for liabilities
arising from water releases in the Snowy River below Jindabyne Dam, where these
releases are in accordance with the water licence and related regulatory
arrangements agreed between the three governments. The indemnity applies to
liabilities for which a claim is notified within 20 years from 28 June 2002;
•
Maralinga clean-up (administered by the Department of Industry and Science).
Fourteen unlimited indemnities have been given in relation to the clean-up of the
former British atomic test site at Maralinga;
125
Notes to the financial statements
•
Gorgon liquefied natural gas and carbon dioxide storage project (new)
(administered by the Department of Industry and Science). On 13 February 2015,
the Australian and Western Australian governments signed an agreement to
provide an indemnity to the Gorgon Joint Venture Partners (GJV) to indemnify the
GJV against independent third-party claims (relating to stored carbon dioxide)
following closure of the carbon dioxide sequestration project. The
Western Australian Government will indemnify the GJV, and the Australian
Government will indemnify the Western Australian Government for 80 per cent of
any amount determined to be payable;
•
Liquid Fuel Emergency Act 1984 (administered by the Department of Industry and
Science). The Australian Government and state and territory governments have
entered into an inter-governmental agreement in relation to a national liquid fuel
emergency. Under the agreement, the Australian Government may incur the direct
costs of managing a liquid fuel emergency and includes the possibility of the
Australian Government reimbursing the state and territory governments for costs
arising from their responses, and potential compensation for industry arising from
Australian Government directions under the Act;
•
Maritime incident clean-up (administered by the Department of Infrastructure and
Regional Development). The Australian Maritime Safety Authority is responsible
for the provision of funds necessary to meet the clean-up costs arising from
ship-sourced marine pollution and, in all circumstances, is responsible for making
appropriate efforts to recover the costs of any such incidents. The
Australian Government meets costs that cannot be recovered from such incidents;
•
Accommodation Payment Guarantee Scheme (administered by the Department of
Social Services). The Australian Government guarantees the repayment of aged care
residents’ accommodation bonds, entry contribution balances and, from 1 July 2014,
refundable accommodation deposits and contributions if the approved provider
becomes insolvent or bankrupt and defaults on its refund obligations. From the
latest available information, the maximum contingent liability, in the highly
unlikely event that all providers defaulted, is $15.6 billion. For the 2014-15 financial
year, the scheme was activated twice with total payments of $8.6 million. Since the
scheme was introduced it has been activated a total of eight times requiring
payment of $42.7 million;
•
National Disability Insurance Scheme (NDIS) (new) (administered by the
Department of Social Services). The Australian Government has committed to
provide temporary, untied financial assistance to some jurisdictions that expect to
have their GST entitlements adversely affected during the transition to the NDIS.
Any impact on the Australian Government is not expected to occur before 2016-17;
•
IMF New Arrangements to Borrow (NAB) (administered by the Department of the
Treasury). Australia has made a line of credit available to the IMF under its NAB
since 1998. During 2014-15, Australia met three calls under the NAB totalling
A$40.8 million (special drawing rights 23 million);
126
Notes to the financial statements
•
Loan to New South Wales for James Hardie Asbestos Injuries Compensation
Fund
(administered
by
the
Department
of
the
Treasury).
The
Australian Government has agreed to lend up to $160 million to the
New South Wales Government to support the loan facility to top up the
James Hardie Asbestos Injuries Compensation Fund. The loan agreement is subject
to a number of conditions; and
•
Officers and Directors assisting the Commonwealth in relation to asset sales,
reviews and other arrangements (administered by various entities). From time to
time, the Australian Government has provided warranties, undertakings and
indemnities (indemnities) to directors, committee members, advisers, officers
and/or staff of organisations for activities undertaken in good faith in assisting the
Commonwealth in relation to asset sales, reviews and other arrangements.
This includes indemnities in relation to the: Directors of NBN Co Ltd (NBN Co);
Export Finance Insurance Corporation board members and senior management;
former Directors of the Australian Submarine Corporation Pty Ltd; directors and
delegates of the board of the Commonwealth Superannuation Corporation,
Future Fund Board of Guardians (Board members); officers and employees of
ADI Limited; Maritime Industry Finance Company Ltd board members;
Moorebank Intermodal Company Limited board members; Directors of
National Rail Corporation; certain specified members of the review into the
Australian Human Pituitary Hormone Programme; and certain specified members
of
the
review
into
the
Diagnostics
Products
Agreement.
The
Australian Government has also indemnified the boards and/or acquirers of certain
entities against certain claims and costs arising from the sales of the Government
entities. The probability of these indemnities being called upon is generally
considered remote but is included for completeness.
Claims and proceedings
At any time various Australian Government entities are subject to claims and legal
actions that are pending court or other processes. These include, but are not limited to:
•
Suspension of livestock exports to Indonesia (administered by the Department of
Agriculture). Proceedings have commenced against the Australian Government for
losses due to the temporary suspension of exports of live animals to Indonesia that
was put in place on 7 June 2011. Currently the amount of the claims remains
unquantified;
•
Equine influenza outbreak (administered by the Department of Agriculture).
Proceedings have commenced against the Australian Government in relation to the
outbreak of equine influenza in 2007. The final quantum of damages sought cannot
be calculated;
127
Notes to the financial statements
•
Termination of the funding agreement with OPEL Network Pty Ltd
(administered by the Department of Communications). As at 30 June 2015, the
Australian Government is a party to legal action brought against it in relation to an
agreement under the Broadband Connect Infrastructure Programme. The outcome
of that litigation cannot be predicted;
•
Australian Government general insurance fund — Comcover (administered by
the Department of Finance). Comcover’s liability for outstanding claims, which
includes the expected future cost of claims notified and claims incurred but not
reported, is subject to inherent uncertainty in the estimation process. The
Australian Government’s potential liability cannot be quantified at this time;
•
Tobacco Plain Packaging (administered by the Department of Health) The
Government will continue to fund the defence of legal challenges to the tobacco
plain packaging legislation in international forums;
•
Medicare Locals (administered by the Department of Health). Due to the
Government’s commitment to cease all Commonwealth funding to Medicare Locals
from 30 June 2015, the Commonwealth is terminating the Medicare Locals Deed for
Funding and Program Schedules under clause 22.1(i). The Commonwealth is
therefore liable for any reasonable costs incurred by Medicare Locals which are
directly attributable to the termination. Some funds are also expected to be
recovered from a number of sites as a result of the termination, which would
partially offset the liability. Neither costs nor potential recoveries can be estimated
at present; and
•
Business Services Wage Assessment Tool (BSWAT) (administered by the
Department of Social Services). The Australian Government may potentially
become liable for a significant range of costs following the full Federal Court ruling
(21 December 2012) that the use of the BSWAT to assess the wages of
two intellectually disabled employees constituted unlawful discrimination under
the Disability Discrimination Act 1992. The Australian Government’s potential
liability cannot be quantified at this time.
Property remediation — Defence and other sites
From time to time, the Australian Government may have ownership of properties that
have a potential or possible environmental and associated concern. Where this is the
case, further reviews may be undertaken to determine the extent, nature and estimated
costs of remediation, if required. Specifically:
• Defence has made financial provision for the estimated costs involved in restoring,
decontaminating and decommissioning property where a legal or constructive
obligation has arisen. For cases where there is a legal or constructive obligation, but
the potential cost could not be quantified, the obligations have been assessed as
unquantifiable contingencies; and
128
Notes to the financial statements
• Under the Googong Dam lease agreement with the Australian Capital Territory
Government, the Australian Government is required to undertake rectification of
easements or any defects in title, and remediation of any contamination it may have
caused to the site. It also gives an indemnity in relation to acts or omissions by the
Australian Government.
Non-quantifiable contingent assets
Contingent assets include but are not limited to:
•
HIH Claims Support Scheme (HCSS) (administered by the Department of the
Treasury). As an insured creditor in the liquidation of the HIH Group, the
Australian Government is entitled to payments arising from the HCSS’s position in
the Proof of Debt of respective HIH companies. The Australian Government has
received payments from the HIH Estate during 2014-15, however, the timing and
amount of future payments are unknown and will depend on the outcome of the
estimation process and the completion of the liquidation of the HIH Group;
•
International Monetary Fund (IMF) (administered by the Department of the
Treasury). Since 1986, the IMF has used its burden sharing mechanism to make up
for the loss of income from unpaid interest charges on the loans of debtor members
and to accumulate precautionary balances in a Special Contingent Account to
protect the IMF against losses arising from the failure of a member to repay its
overdue principal obligations. As there is considerable and inherent uncertainty
around the timing and amounts of burden sharing to be refunded to Australia this
contingent asset cannot be reliably measured and as such is recorded as an
unquantifiable contingent asset;
•
Wireless local area network. The Commonwealth Scientific and Industrial
Research Organisation (CSIRO) has ongoing patent infringement proceedings in the
United States of America in relation to CSIRO’s invention of a wireless local area
network. The final amount of the damages awarded is presently unknown; and
•
Coal Mining Industry (Long Service Leave) Legislation Amendment Act 2011. The
Coal Mining Industry (Long Service Leave Funding) Corporation (Corporation) is
currently undertaking a Transitional Service Review. The provision in the Act
provides that ‘Eligible Employees’ and ‘Former Employees’ can make application to
the Corporation for recognition of period or periods of employment service
between 1 January 2000 and December 2011 in the Black Coal Mining Industry that
may not be presently recognised and recorded by the Corporation. The Corporation
has not recognised levies attributable to those employers of ‘Eligible Employees’
and ‘Former Employees’ that previously did not contribute to the Corporation.
At balance date, the amounts that would be receivable are not reliably measurable.
Additionally, at any time various Australian Government entities are pursuing various
other claims and legal actions that are pending court or other processes.
129
Notes to the financial statements
Contingent liabilities excluded on the basis of remoteness
A significant remote contingent liability is a possible obligation that would be material
to the CFS, but where the probability of settlement is considered very low (less than
five per cent).
The disclosure of remote contingencies is not required under AAS but is listed below
for transparency. Further detail on individual remote contingencies may be included in
the annual report for the respective Commonwealth entity:
•
Research and Development (administered by the Department of Agriculture).
Under several Acts, the Commonwealth provides contributions to a number of
nominated entities responsible for undertaking research and development activities
in respect of portfolio industries. These contributions are typically made on a
matching basis. At 30 June 2015, the Commonwealth had a maximum potential
liability in respect of matching payments of approximately $444 million
(30 June 2014: $401 million). The likelihood of meeting the eligibility requirements
and the amount of future payments is uncertain. Hence, the total liability is
considered unquantifiable.
•
Foreign currency denominated loans (administered by the Australian Office of
Financial Management). Indemnifies agents of foreign currency denominated loans
issued by the Australian Government outside Australia against any loss, liability,
costs, claims, charges, expenses, actions, or demands due to any misrepresentation
by the Australian Government and any breach of warranties. The
Australian Government is not aware of any event that has occurred that may
trigger action under the indemnities.
•
Financial Claims Scheme — Deposits (administered by the Australian Prudential
Regulation Authority (APRA)). Provides depositors of authorised deposit-taking
institutions and general insurance policyholders with timely access to their funds in
the event of a financial institution failure. Authorised under the Banking Act 1959
and available from 1 February 2012, deposits up to $250,000 at eligible authorised
deposit-taking institutions are covered under the Financial Claims Scheme. This
$250,000 cap has no expiry date. When last estimated as at 31 December 2014,
deposits eligible for coverage under the Financial Claims Scheme were
approximately $766 billion (2014: $722.8 billion);
• Financial Claims Scheme — Insurance (administered by APRA). The Policyholder
Compensation Facility established under the Insurance Act 1973 provides a
mechanism for making payments to eligible beneficiaries with a valid claim against
a failed general insurer. Amounts available to meet payments and administer both
facilities, in the event of activation, are capped at $20.1 billion under the legislation.
Any payments made under the Financial Claims Scheme would be recovered
through the liquidation of the failed institution. If there were a shortfall, a levy
would be applied to industry to recover the difference between the amount
expended and the amount recovered in the liquidation;
130
Notes to the financial statements
•
Telstra Financial Guarantee (administered by the Department of
Communications). Provides a guarantee to Telstra in respect of NBN Co’s financial
obligations to Telstra under the Definitive Agreements (as amended on
14 December 2014). The liabilities under the agreements between Telstra and
NBN Co arise progressively during the roll out of the National Broadband Network
as Telstra’s infrastructure is accessed and Telstra’s customers are disconnected from
its copper and hybrid-fibre coaxial cable networks. The Australian Government is
only liable in the event NBN Co does not pay an amount under the Definitive
Agreements when due. As at 30 June 2015, NBN Co had generated liabilities which
it had not paid and that were covered by the guarantee estimated at $3.9 billion.
The guarantee will terminate when NBN Co achieves specified credit ratings for a
period of two continuous years and either: the company is capitalised by the
Commonwealth to the agreed amount; or the Communications Minister declares
that the National Broadband Network should be treated as built and fully
operational. The Australian Government also provides a guarantee to Optus of
NBN Co’s financial obligations to Optus under the Optus HFC Subscriber. As at
30 June 2015, the liabilities covered by the guarantee were not material to the CFS;
•
Equity Funding Agreement with NBN Co (administered by the Department of
Communications). The Australian Government (GGS) has an Equity Funding
Agreement with NBN Co (which is consolidated into the PNFC sector). Under the
agreement, the Australian Government is committed, in the event of a termination
of the national broadband network roll out, to provide sufficient funds to NBN Co
to meet its direct costs arising from that termination. As at 30 June 2015, NBN Co’s
termination liabilities were estimated at $8.5 billion (2014: $6.7 billion). This
cross-sector guarantee is internal to the Australian Government;
•
Space Activities Act 1998 (administered by the Department of Industry and
Science). The Australian Government is liable under the UN Convention on
International Liability for Damage Caused by Space Objects for damage caused to third
party States, including persons and property of that State, by space objects
launched from, or by, Australia or Australian nationals. The Space Activities
Act 1998 requires the launch operator to insure against liability up to a prescribed
amount, with the Australian Government bearing any liability above this amount.
The Australian Government also accepts liability for damage suffered by Australian
nationals, to a maximum value of $3 billion above the insured level;
•
Tripartite deeds relating to the sale of core regulated airports (administered by
the Department of Infrastructure and Regional Development). The tripartite deeds
between the Australian Government, the airport lessee companies and financiers
amend the airport (head) leases to provide for limited step-in-rights for financiers
in circumstances where the Australian Government terminates the head lease to
enable the financiers to correct the circumstances that triggered such a termination
event. The tripartite deeds may require the Australian Government to pay
financiers compensation as a result of its termination of the (head) lease;
131
Notes to the financial statements
•
New South Wales Rural Fire Fighting Service (NSW RFS) in relation to the Jervis
Bay Territory (new) (administered by the Department of Infrastructure and
Regional Development). An uncapped indemnity has been provided for any
damage caused as a result of the actions of the NSW RFS in the Jervis Bay Territory
while fighting a fire. The likelihood of an event occurring has been assessed as very
remote and the risks are currently mitigated through the training and professional
qualifications of the NSW RFS staff;
•
Indian Ocean Territories Service Delivery Arrangement (administered by the
Department of Infrastructure and Regional Development). Indemnities have been
provided to the Western Australian Government, their respective officers, agents,
contractors and employees against civil claims relating to their employment and
conduct as officers as part of the Service Delivery Arrangement in the Indian Ocean
Territories. The likelihood has been assessed as remote and the risks are currently
mitigated through the training and professional qualifications of the staff of these
agencies;
•
Defence-related remote contingencies. At 30 June 2015, Defence had
1,437 (2013-14: 1,597) instances of quantifiable remote contingent liabilities valued
at $3.8 billion (2013-14: $3.7 billion) and another nine unquantifiable remote
contingent liabilities. A significant remote contingency includes proceedings in
relation to Cockatoo Island Dockyard (CODOCK). Following a final court decision
in 2006, CODOCK was awarded a complete indemnity from the Australian
Government for its uninsured exposure to asbestos damages claims
(plus 7.5 per cent profit);
•
Export Finance Insurance Corporation (EFIC) Commercial Account (administered
by the Department of Foreign Affairs and Trade). Under the Export Finance and
Insurance Corporation Act 1991, the Australian Government (GGS) guarantees EFIC’s
(which is consolidated into the PFC sector) creditors. The guarantee covers the EFIC
Commercial Account and has a $200 million callable capital facility available for
this purpose. This guarantee has never been utilised. As at 30 June 2015, the
guarantee covered estimated liabilities of $3.5 billion (2014: $3.3 billion). This
cross-sector guarantee is internal to the Australian Government;
•
Commonwealth Bank of Australia and Commonwealth Bank of Australia
Officers’ Super Fund (administered by the Department of the Treasury). Under the
terms of the Commonwealth Bank Sale Act 1995, the Australian Government has
guaranteed various liabilities of the Commonwealth Bank of Australia (CBA), and
the Commonwealth Bank Officers’ Superannuation Corporation (CBOSC). The
guarantee of the covered CBA liabilities was estimated at $4.4 billion at
30 June 2015 (2014: $4.4 billion) and the covered CBOSC liabilities were estimated at
$0.5 billion at 30 June 2015 (2014: $0.7 billion);
132
Notes to the financial statements
•
Guarantee of large deposits in authorised deposit taking institutions
(administered by the Department of the Treasury). Available to eligible deposits
above $1 million issued between 12 October 2008 and 31 March 2010. Eligible term
deposits were guaranteed for up to five years and at-call deposits until
October 2015. As at 30 June 2015, total liabilities covered by the Scheme were
estimated at $1.45 billion. The guarantee also operated for wholesale funding issued
between the above dates. This funding has all since matured;
•
Guarantee of state and territory borrowing (administered by the Department of
the Treasury). Available to state and territory governments on a voluntary basis for
borrowings issued between 24 July 2009 and 31 December 2010.
Australian Government expenditure would arise under the guarantee only in the
unlikely event that a state or territory failed to meet its obligations with respect to a
commitment that was subject to the guarantee and the guarantee was called upon.
The Government would likely be able to recover any such expenditure through a
claim on the relevant state or territory at a future date. As at 30 June 2015, the face
value of borrowings covered by the guarantee was $11.7 billion (2014: $15.7 billion);
and
•
Reserve Bank of Australia (RBA) liabilities (administered by the Department of
the Treasury). Under the Reserve Bank of Australia Act 1959, the
Australian Government (GGS) guarantees the RBA’s (which is consolidated into the
PFC sector) liabilities. As at 30 June 2015, the guarantee was valued at $65.5 billion
(2014: $60.8 billion). This cross-sector guarantee is internal to the Australian
Government.
133
Notes to the financial statements
Note 12B: Financial instruments
(a)
Categories of financial instruments
The classification of financial assets depends on the purpose for which they were
acquired. The Australian Government classifies its financial assets into the following
categories:
Financial assets at
fair value through
profit or loss
Financial assets
held for trading, and
those designated at
fair value through
profit or loss.
Derivatives are
categorised as held
for trading unless
they are designated
as hedges
Loans and
receivables
Held-to-maturity
investments
Available-for-sale
Non-derivative
financial assets with
fixed or
determinable
payments that are
not quoted in an
active market
Non-derivative
financial assets with
fixed or
determinable
payments and fixed
maturities where
there is a positive
intention and ability
to hold to maturity
Principally
marketable equity
securities, are
non-derivatives that
are either
designated in this
category or not
classified in any of
the other categories
Similarly, the classification of financial liabilities depends on the purpose for which the
liabilities were entered into. The Australian Government classifies its financial
liabilities in the following categories:
•
financial liabilities at fair value through profit or loss; and
•
other liabilities.
Categories of financial instruments by value
General
Government
2015
$m
2014
$m
Australian
Government
2015
$m
2014
$m
Financial assets
Loans and receivables
Financial assets at fair value through
profit or loss
Held to maturity
Available for sale
Carrying amount of financial assets
26,870
19,511
112,118
97,041
188,771
3,544
51,674
270,859
167,573
3,502
46,305
236,891
221,501
3,963
13,346
350,928
203,208
3,584
11,810
315,643
Financial liabilities
Financial liabilities at fair value through
profit or loss
Other financial liabilities
412,401
25,579
353,499
26,429
409,350
128,476
351,223
126,890
Carrying amount of financial liabilities
437,980
379,928
537,826
478,113
134
Notes to the financial statements
Available-for-sale financial assets and financial assets at fair value through profit or
loss are subsequently carried at fair value. Loans and receivables and held-to-maturity
investments are subsequently carried at amortised cost using the effective interest
method less impairment. For ‘financial assets at fair value through profit or loss’, gains
and losses arising from changes in the fair value are included as other economic flows
in the operating statement in the period in which they arise.
Certain financial assets categorised as ‘loans and receivables’ and measured at
amortised cost are initially measured at fair value using a valuation method as a
quoted price was not observable. In addition, the investment in the IMF quota is
classified as ‘available for sale’ but is measured at cost as fair value cannot be reliably
measured due to its unique nature.
Impairment of financial assets
Financial assets are assessed for impairment at each balance date. If there is objective
evidence that an impairment loss has been incurred it is recognised as follows:
Financial asset
category
Measurement of impairment loss
Recognition of impairment
loss
Financial assets held
at amortised cost:
loans and receivables
or held to maturity
investments held at
amortised cost
Difference between the carrying
amount and the present value of
estimated future cash flows
discounted at the asset’s original
effective interest rate
• carrying amount is
reduced by way of an
allowance account
• loss is recognised in the
operating statement as an
‘other economic flow’.
Financial assets held
at cost: unquoted
equity instrument held
at cost (because fair
value cannot be
reliably measured) or
a linked derivative
asset
Difference between the carrying
amount of the asset and the
present value of the estimated
future cash flows discounted at the
current market rate for similar
assets
• loss is recognised in the
operating statement as an
‘other economic flow’.
Available for sale
financial assets
Difference between its cost, less
principal repayments and
amortisation, and its fair value, less
any impairment loss previously
recognised in the operating
statement
• transferred from equity
(net worth) to the
operating statement as an
‘other economic flow’.
Derecognition of financial assets and liabilities
Financial assets are derecognised when the contractual rights to the cash flows from
the financial asset expire or the asset is transferred to another entity. In the case of a
transfer to another entity, it is necessary that the risks and rewards of ownership are
also transferred. Financial liabilities are derecognised when the obligation under the
contract is discharged, cancelled or expired.
135
Notes to the financial statements
Fair value
The fair values of Australian Government and GGS financial assets and liabilities
approximate their carrying amounts as reported in the CFS, with the exception of the
subsequent measurement of concessional loans categorised as ‘loans and receivables’
under AASB 139 Financial Instruments: Recognition and Measurement. Subsequent to
recognition, these loans are carried at amortised cost which may differ to an updated
fair value.
Net income, expense and other economic flows from financial assets
General
Government
2015
$m
2014
$m
Australian
Government
2015
2014 (a)
$m
$m
Loans and receivables
Interest income
Net gain/(loss) on disposal
Net foreign exchange gain/(loss)
Write-down and impairment
Interest expenses
Net gain/(loss)
510
1
(5)
(249)
(18)
239
493
3
(381)
(29)
86
311
8
(3)
(262)
(18)
36
1,157
11
(384)
(29)
755
Available for sale
Interest income
Dividend income
Net gain/(loss) on disposal
Net foreign exchange gain/(loss)
Write-down and impairment
Fair value movements in equity
Net gain/(loss)
2
2,344
(1)
626
3,158
6,129
1
1,727
(366)
(150)
7,679
8,891
29
38
(1)
626
383
1,075
25
38
(366)
(150)
282
(171)
-
-
1,527
1,527
353
11
364
3,520
6,965
3,833
(2,317)
(7)
(517)
11,955
23,432
3,318
6,111
2,378
41
(7)
(296)
3,040
14,585
3,574
6,874
3,889
3,829
(7)
(517)
7,964
25,606
3,380
6,114
2,421
187
(7)
(296)
3,161
14,960
Held for trading
Interest income
Net gain/(loss) on disposal
Net gain/(loss)
Fair value through profit and loss
Interest income
Net gain/(loss) on disposal
Dividend income
Net foreign exchange gain/(loss)
Write-down and impairment
Interest expenses
Other gains
Net gain/(loss)
Held to maturity
Interest income
135
139
158
176
Net gain/(loss) on disposal
(3)
Net foreign exchange gain/(loss)
2
2
Net gain/(loss)
137
139
160
173
(a) The 2013-14 Australian Government comparatives have been updated to exclude Medibank Private
Limited as a discontinued operation.
136
Notes to the financial statements
Net income, expense and other economic flows from financial liabilities
General
Government
2015
$m
Held at fair value through profit and loss
Interest expenses
Other gains
Net gain/(loss) held at fair value
through profit and loss
2014
$m
Australian
Government
2015
2014 (a)
$m
$m
16,534
(8,197)
14,950
(3,687)
16,397
(8,197)
14,811
(3,687)
8,337
11,263
8,200
11,124
Other financial liabilities
Interest expenses
388
399
1,356
1,115
Net foreign exchange gain/(loss)
(641)
(80)
(647)
(79)
Net gain/(loss) other financial liabilities
(253)
319
709
1,036
(a) The 2013-14 Australian Government comparatives have been updated to exclude Medibank Private
Limited as a discontinued operation.
(b)
Financial management objectives and market risk
Market risk represents the risk that the fair value or future cash flows of a financial
instrument will fluctuate due to changes in market prices. Market risk comprises
currency risk, interest rate risk and other price risks. The management of market risk
by Australian Government entities is governed by the Public Governance, Performance
and Accountability Act 2013 (PGPA Act) and, for some entities such as the RBA, specific
legislation.
The three sectors of government: GGS, PNFC and PFC; hold financial instruments for
different purposes and with different market risk exposures. Consequently, the
following discussion of financial management objectives and market risk has been
disaggregated by sector. Where material, the discussion includes a sensitivity analysis
for each type of market risk exposure showing the effect on the net operating balance
and net worth resulting from ‘reasonably possible’ changes in market risk at
30 June 2015.
Generally, in applying the sensitivity analysis as at 30 June 2015, a default rate of
10.9 per cent (2014: 11.5 per cent) has been applied for the sensitivity analysis of
foreign exchange risk and 40 to 100 basis points for the sensitivity analysis of interest
rate risk. However, for certain financial instruments, different sensitivity rates have
been used based on the relevant entity’s assessment of changes in risk variables that
were considered reasonably possible at the reporting date with regard to the nature of
the underlying financial instrument.
General government sector
GGS entities hold financial instruments as part of their operations or for public policy
purposes.
137
Notes to the financial statements
Management of interest rate risk in the general government sector
Commonwealth entities subject to the PGPA Act are required to draw down
administered and departmental monies on an ‘as-needed’ basis. As a general principle,
Commonwealth general government entities cannot invest public monies except as
delegated under section 58 of the PGPA Act or authorised by legislation. Corporate
Commonwealth entities subject to the PGPA Act are also restricted in how they can
invest monies that are surplus to operational requirements. As a general principle,
surplus money may only be placed on deposit with a bank or invested directly in
securities issued or guaranteed by the Australian Government, a state or a territory,
unless an exemption is approved by the Finance Minister. Financial assets held by the
majority of GGS entities are non-interest bearing, including trade receivables, or have
fixed interest and do not fluctuate due to changes in the market interest rate.
The Treasurer has delegated investment powers to the Australian Office of Financial
Management (AOFM). The AOFM’s functions give it primary responsibility for
ensuring that the Australian Government has sufficient cash to meet its needs. As at
30 June 2015, AOFM had deposited $34.3 billion in term deposits with the RBA on
behalf of the Australian Government (2014: $27.1 billion). As these investments are
internal to the Australian Government reporting entity, they are not reported in the
CFS, except at the general government level.
Investment funds
The Australian Government Investment Funds currently comprise:
•
Future Fund;
•
DisabilityCare Australia Fund (DCAF);
•
Building Australia Fund (BAF);
•
Education Investment Fund (EIF); and
•
Health and Hospitals Fund (HHF).
The Future Fund was established by the Future Fund Act 2006 to finance the Australian
Government’s unfunded public sector superannuation liability. The Future Fund
Board of Guardians is responsible for the investment decisions of the Fund under an
Investment Mandate issued by the Australian Government. The Investment Mandate
requires the Board to maximise returns above a benchmark rate whilst taking
acceptable but not excessive risk. The benchmark rate has been set at the Consumer
Price Index (CPI) plus 4.5 per cent to 5.5 per cent per annum over the long term.
Section 58 of the PGPA Act does not apply to investments of the fund.
The DCAF is an investment fund which will reimburse Commonwealth and state and
territory governments for the costs relating to the National Disability Insurance
Scheme.
138
Notes to the financial statements
The Nation Building Funds (BAF, EIF and HHF) are designed to provide financing
resources for critical areas of infrastructure.
The DCAF and Nation Building Funds are also managed by the Future Fund
Management Agency and the Future Fund Board of Guardians and operate under the
same governance arrangements.
As at 30 June 2015, the Funds’ exposures to interest rates, in respect of securities held,
was:
Floating interest rates
Fixed interest rates
2015
2014
2015
$m
$m
$m
$m
Future Fund
8,810
11,037
17,517
17,387
Other Investment Funds
7,390
6,045
3,989
3,557
2014
The following table details the impact on the net operating balance and net worth of a
40 basis point (2014: 60 basis point) change in the Funds’ interest rate bond yield with
all other variables held constant.
Effect on
Effect on
Interest rate risk
Future Fund
Other Investment Funds
Change in
risk
variable
Operating
balance
Net Operating
balance
worth
Net worth
2015
2015
2014
2014
$m
$m
$m
$m
+40bp
(525)
(525)
n/a
n/a
-40bp
544
544
n/a
n/a
+60bp
n/a
n/a
(308)
(308)
-60bp
n/a
n/a
328
328
+40 bp
21
21
n/a
n/a
-40 bp
(19)
(19)
n/a
n/a
+60 bp
-60 bp
n/a
n/a
40
40
n/a
n/a
(38)
(38)
Exchange traded interest rate futures are used by the Future Fund’s investment
managers to manage the exposure to interest rates and to ensure it remains within
approved limits. At 30 June 2015, the notional value of open futures contracts and
swaps totalled $12,526 million (2014: $8,982 million).
The other administered funds had open positions in exchange traded interest rate
futures contracts as at 30 June 2015. The notional value of investments in ‘sell
international interest rate futures contracts’ was negative $1,054 million (2014: negative
$1,323 million).
139
Notes to the financial statements
Financial assets held for policy purposes
The GGS also holds certain financial assets and liabilities for public policy purposes.
These include:
•
Residential mortgage-backed securities (RMBS) (administered by the AOFM) to
support competition in the Australian residential mortgage market. Initiated in
September 2008 and extended in October 2008 and again in November 2009 to a
total program of up to $20 billion. In April 2013, the Government announced that
due to improvements in market conditions, the AOFM would not make any new
investments in RMBS. On behalf of the Australian Government, the AOFM
acquired a total of $15,462 million of AAA (or equivalent) rated RMBS up to
30 June 2015. The amount held as at 30 June was $4,261 million (in principal
terms). Interest earned on RMBS comprises a floating interest rate (set against the
one-month Bank Bill Swap (BBSW) reference rate) plus a fixed margin set at the
time each investment is acquired. The following table shows the sensitivity to a
change in the one-month BBSW rate.
Effect on
Effect on
Interest rate risk
Residential mortgage backed
securities
•
Change in
risk
variable
Operating
balance
Net Operating
balance
worth
Net worth
2015
2015
2014
2014
$m
$m
$m
$m
+100 bp
34
34
51
51
-100 bp
(34)
(34)
(51)
(51)
Concessional loans held for policy purposes — The Australian Government has
entered into a number of concessional loan arrangements for policy purposes.
These include student loans provided under the Higher Education Loan
Programme (2015: $30,445 million, 2014: $25,147 million) and loans to state and
territory governments under previous Commonwealth-State financing
arrangements (2015: $2,033 million, 2014: $2,106 million). Student loans have
been designated as ‘held at fair value through profit and loss’. Changes in market
interest rates will impact on the fair value of these loans but will have no impact
on the future cash flows or principal amounts at maturity. Loans to state and
territory governments are borrowings for a fixed period with regular
repayments, which comprise principal and interest components, and a fixed
interest rate. Other concessional loans have been designated as ‘loans and
receivables’ and have no exposure to interest rate risk.
Other material financial assets held for policy purposes (rather than liquidity
management) include: Australia’s subscription to the Asian Development Fund and
International Development Association; the IMF quota; investments in international
financial institutions; and, at the general government level, the investment in public
corporations.
140
Notes to the financial statements
Debt management
The majority of GGS entities are prohibited from borrowing. The AOFM is responsible
for the borrowing activities of the GGS and for overall debt management. For many
years, debt issuance by the Australian Government was undertaken solely with the
objective of maintaining the Treasury Bond and Treasury Bond futures markets, as
successive budget surpluses removed the need to borrow to fund the Budget. The
forecast Budget outlook changed in the Updated Economic and Fiscal Outlook published
on 3 February 2009 and the objective of issuance changed to funding the Budget. As a
means of diversifying its funding sources, in September 2009, the
Australian Government resumed issuance of Treasury Indexed Bonds.
The main types of market risk the Australian Government’s debt portfolio is exposed
to is domestic interest rate risk and domestic inflation risk. Moreover, by generally
issuing/buying and holding to maturity, the market risk most relevant to the debt
portfolio is the risk of fluctuations to future interest cash flows and principal amounts
arising from changes in interest rates and inflation. In market value terms, as at
30 June 2015, the AOFM had issued $409,936 million in Commonwealth Government
Securities (2014: $351,275 million). The following table provides a sensitivity analysis
of interest rate risk in relation to the debt portfolio.
Effect on
Effect on
Interest rate risk
Change in
risk
variable
Operating Net worth Operating
balance
balance
Net worth
2015
2015
2014
$m
$m
$m
$m
(386)
(386)
(230)
(230)
2014
Treasury bonds
+100 bp
-100 bp
437
437
269
269
Treasury notes
+100 bp
(49)
(49)
(40)
(40)
-100 bp
49
49
40
40
Management of currency risk in the general government sector
Entities in the GGS are responsible for the management of their foreign exchange risks.
However, it is Australian Government policy that these entities do not act to reduce
the foreign exchange risk that they would otherwise face in the course of their business
arrangements. This means that GGS entities are not permitted to undertake any form
of hedging. Rather than allowing GGS entities to enter into individual hedging
arrangements, the Australian Government has taken a decision to self-insure foreign
exchange exposures and not accept the additional costs associated with hedging. This
is based on the view that, as a large organisation, the Australian Government has a
broad spread of assets and liabilities and a range of revenues and expenses, both
geographically and across classes, which assists in the management of movements in
exchange rates.
The Future Fund undertakes certain transactions denominated in foreign currencies,
hence it is exposed to the effects of exchange rate fluctuations. Exchange rate
141
Notes to the financial statements
exposures are managed utilising forward foreign exchange contracts. The Fund’s
exposure in Australian equivalents to foreign currency risk at 30 June 2015 totalled
$80,737 million (2014: $67,945 million). After adjusting for forward exchange contracts,
the Fund’s net exposure at 30 June 2015 amounted to $49,220 million (2014:
$44,841 million). The Fund’s exposures are in multiple currencies, primarily US dollar,
Euro, Yen and the UK Pound.
The following table demonstrates the impact on the net operating balance and net
worth, of a 10.9 per cent movement (2014: 11.5 per cent movement) in the value of the
Australian dollar (AUD) relative to the basket of actual net exposures.
Effect on
Effect on
Currency risk
Investments
Change in
risk
variable
Operating Net worth Operating
balance
balance
Net worth
2015
2015
2014
2014
$m
$m
$m
$m
+10.9%
4,667
4,667
n/a
n/a
-10.9%
+11.5%
(4,587)
(4,587)
n/a
n/a
n/a
n/a
5,460
5,460
-11.5%
n/a
n/a
(5,411)
(5,411)
The Australian Government holds several financial instruments as part of its
membership of the IMF and its investment in international financial institutions and
multilateral aid organisations. These financial instruments include the:
•
IMF quota (financial assets), comprising the current value in AUD of Australia’s
subscription to the IMF (2015: $5,913 million, 2014: $5,306 million);
•
investment in international financial institutions, including the European Bank
for Reconstruction and Development, the International Bank for Reconstruction
and Development, the International Finance Corporation, the Asian
Development Bank and the Multilateral Investment Guarantee Agency (2015:
$1,013 million, 2014: $857 million);
•
subscription based membership rights (not control) held by the Australian
Government in accordance with the articles of association for the International
Development Association and the Asian Development Fund, which are
recognised at fair value (2015: $1,936 million, 2014: $1,545 million);
•
promissory notes (financial liability) issued to the IMF and international financial
institutions (2015: $4,825 million, 2014: $3,904 million). The promissory notes are
non-interest bearing and relate to the undrawn paid-in capital subscriptions; and
•
the SDR allocation liability which reflects the current value in AUD of the
Treasury’s liability to repay to the IMF Australia’s cumulative allocations of SDRs
(2015: $5,633 million, 2014: $5,054 million).
142
Notes to the financial statements
The Australian Government is exposed to foreign currency denominated in US dollars,
Euro and SDR on the above financial instruments. The following table details the
impact on the net operating balance and net worth of an 11 per cent (2014: 12 per cent)
movement in the value of the AUD relative to financial instruments associated with
the IMF and international financial institutions, and a 10.9 per cent (2014: 11.5 per cent)
movement for financial instruments associated with multi-lateral aid organisations.
Effect on
Effect on
Currency risk
Loans
International Monetary Fund
Change in
risk
variable
Operating
balance
Net Operating
balance
worth
Net worth
2015
2015
2014
2014
$m
$m
$m
$m
+ 10.9%
(191)
(191)
n/a
n/a
- 10.9%
238
238
n/a
n/a
+ 11.5%
n/a
n/a
(159)
(159)
- 11.5%
n/a
n/a
201
201
+ 11.0%
(581)
(581)
n/a
n/a
+ 11.0%
723
723
n/a
n/a
+ 12.0%
n/a
n/a
(547)
(547)
- 12.0%
n/a
n/a
689
689
Management of other price risk in the general government sector
The Australian Government is exposed to equity price risks arising from equity
investments, primarily through Future Fund investments. The equity price risk is the
risk that the value of the equity portfolio will decrease as a result of changes in the
levels of equity indices and the price of individual stocks. The Future Fund holds all of
its equities at fair value through profit or loss.
As at 30 June 2015, the Future Fund’s exposure to equity price risk consisted of
$11,001 million in domestic listed equities and listed managed investment schemes
(2014: $11,190 million) and $30,883 million in international listed equities and listed
management schemes (2014: $27,225 million).
The following table demonstrates the impact on the net operating balance and net
worth of a +/- 20 per cent change in domestic equities and a +/- 15 per cent change in
international equities held by the Future Fund.
143
Notes to the financial statements
Effect on
Effect on
Other price risk
Change in
risk
variable
Operating
balance
Net Operating
balance
worth
Net worth
2015
2015
2014
2014
$m
$m
$m
$m
Assets
Australian equities
International equities
+ 20%
2,869
2,869
3,045
3,045
- 20%
(2,724)
(2,724)
(2,986)
(2,986)
+ 15%
9,259
9,259
8,327
8,327
- 15%
(8,543)
(8,543)
(7,916)
(7,916)
The Fund had open positions in exchange traded equity futures contracts and equity
option contracts as at 30 June 2015. The exchange traded equity futures, swaps and
options are used to manage market exposures to equity price risk to ensure that asset
allocations remain within the Fund’s approved limits. The notional value of the open
contracts and their fair market value are set out below.
Notional
Fair
Notional
Fair
value
market
value
market
Equity price risk
value
value
Buy domestic equity futures contracts
Sell domestic equity futures contracts
Buy international equity futures contracts
Sell international equity futures contracts
Sell equity index swap agreements
Exchange traded international volatility
index call options
Over the counter domestic equity
index put options
Over the counter domestic equity
index call options
Over the counter international equity
index put options
Over the counter international equity
index call options
Exchange traded warrants
Total
2015
2015
$m
$m
2014
$m
2014
$m
220
(5)
100
-
(2,233)
44
(497)
-
2,705
(44)
7,115
37
(1,681)
36
-
-
(18)
-
-
-
1
1
1
-
(46)
3
(8)
-
281
21
214
16
(1,060)
70
(420)
26
4,537
597
2,815
350
-
-
95
159
2,706
723
9,415
588
The Australian Government is exposed to cash flow risk on Treasury Capital Indexed
Bonds on issue. These instruments expose the Australian Government to cash flow risk
on interest payments and the value of principal payable on maturity arising from
indexation against the (all groups) Australian CPI. When the CPI increases, debt
servicing costs and the principal payable on maturity will also rise (subject to a
six-month lag).
144
Notes to the financial statements
At 1 July 2014, if the CPI had experienced an immediate one per cent
increase/(decrease) and that change were to persist for 12 months to 30 June 2015 with
all other variables held constant, the effect on the net operating balance and net worth
position for the year ended 30 June 2015 would be as follows:
Effect on
Effect on
CPI sensitivity analysis
Treasury Capital Indexed Bonds
Change in
risk
variable
Operating
balance
Net Operating
balance
worth
Net worth
2015
2015
2014
$m
$m
$m
$m
+1%
(369)
(369)
(309)
(309)
- 1%
363
363
315
315
2014
Public financial corporations
The PFC sector comprises the RBA and other similar entities.
The RBA is Australia’s central bank. Its role is set out in the Reserve Bank Act 1959. The
RBA’s main responsibility is monetary policy. In addition to conducting monetary
policy, the RBA also holds Australia’s foreign currency reserves, operates Australia’s
main high-value payments system, provides banking services to the Australian
Government and designs, produces and issues Australia’s banknotes. In undertaking
these functions, the RBA has significant exposures to interest rate and currency risk.
The Export Finance and Insurance Corporation (EFIC) is also involved in lending and
borrowing activities with exposures to interest rate and currency risk.
In the PFC sector the market operations of the RBA and EFIC make up the
overwhelming majority of the sector’s exposure to market risk. The following market
risk disclosures are therefore limited to the market operations of the RBA and EFIC.
Management of interest rate risk in the public financial corporations sector
The RBA’s balance sheet is exposed to considerable interest rate risk because most of
its assets are financial assets, such as domestic and foreign securities, which have a
fixed income stream. The price of such securities increases when market interest rates
decline, while the price of a security will fall if market rates rise. Interest rate risk
increases with the maturity of a security because the associated income stream is fixed
for a longer period.
145
Notes to the financial statements
The following table shows the sensitivity to a change in interest rate variables.
Effect on
Effect on
Interest rate risk
Change in
risk
variable
Operating Net worth
balance
Operating
balance
Net worth
2014
2015
2015
2014
$m
$m
$m
$m
Foreign currency securities
+100 bp
300
300
365
365
-100 bp
(300)
(300)
(365)
(365)
Australian dollar securities
+100 bp
156
156
131
131
-100 bp
(156)
(156)
(131)
(131)
As EFIC is also involved in lending and borrowing activities, interest rate risks arise.
EFIC uses interest rate swaps, forward rate agreements, cross-currency swaps and
futures as the primary methods of reducing exposure to interest rate movements.
Management of currency risk in the public financial corporations sector
Foreign exchange risk arises from the RBA’s foreign currency assets, which are held to
support the RBA’s operations in the foreign exchange market. The overall level of
foreign currency exposure is determined by policy considerations and cannot
otherwise be managed to reduce foreign exchange risk. The RBA’s net foreign
currency exposure as at 30 June 2015 was $50 billion (2014: $42 billion). Within the
overall exposure and to a limited extent, foreign currency risk can be reduced by
holding assets across a diversified portfolio of currencies.
The RBA holds foreign reserves in several currencies — the US dollar (55 per cent of
net foreign currency holdings), the Euro (25 per cent), the Canadian dollar (5 per cent),
the Yen (5 per cent), the Chinese renminbi (5 per cent) and the UK pound sterling
(5 per cent) — because the markets for these currencies are typically liquid and
suitable for investing foreign exchange reserves. The RBA also operates in foreign
exchange markets on behalf of its clients, including to assist the
Australian Government in meeting foreign currency obligations. The following table
demonstrates the RBA’s sensitivity to a movement of +/-10 per cent in the value of the
AUD exchange rate as at 30 June 2015.
Effect on
Effect on
Currency risk
Australian dollar exchange rate
Operating Net worth
balance
Operating
balance
Net worth
2015
2015
2014
2014
$m
$m
$m
$m
+ 10%
(4,547)
(4,547)
(3,849)
(3,849)
- 10%
5,557
5,557
4,704
4,704
Change in
risk
variable
146
Notes to the financial statements
The RBA undertakes foreign currency swaps to assist its daily domestic market
operations. These instruments carry no foreign exchange risk since the exchange rates
at which both legs of the transaction are settled are agreed at the time the swap is
undertaken.
EFIC extends facilities in various currencies, principally in US dollars and Euros.
Where the borrowing currency is different from the currency of the assets being
funded, cross-currency swaps, or the foreign exchange markets are used to offset the
exposure (before provisions). EFIC’s exposure in AUD to foreign currency risk at
30 June 2015 totalled $3,013 million on financial assets and $3,044 million on financial
liabilities giving a net exposure of negative $31 million (2014: negative $22 million).
Public non-financial corporations
The PNFC entities primarily hold financial instruments as a direct result of operations,
including trade receivables and payables, or to finance operations. Certain entities in
the PNFC sector also enter into derivative transactions, including interest rate swaps,
forward currency contracts and commodity swap contracts. The purpose is to manage
the interest rate, currency and commodity risks arising from the entity’s operations
and sources of finance.
(c)
Credit risk
Credit risk in relation to financial assets, is the risk that a third party will not meet its
obligations in accordance with agreed terms. Generally, the Australian Government’s
maximum exposure to credit risk in relation to each class of recognised financial asset
is the carrying amount of those assets as indicated in the consolidated balance sheet.
The following table shows the credit quality of financial receivables reported in the
CFS that are not past due or individually determined as impaired.
2015
Not Past
2014
Not Past
2015
Past
2014
Past
Due Nor
Due Nor
Due or
Due or
Impaired
Impaired
Impaired
Impaired
$m
$m
$m
$m
41,682
34,752
88
82
Goods and services receivable
1,262
1,301
245
359
Other receivables
3,488
3,593
817
720
Total
46,432
39,646
1,150
1,161
General Government
Advances and loans
Goods and services receivable
Other receivables
Total
40,570
609
5,584
46,763
33,958
476
4,416
38,850
88
122
776
986
82
193
720
995
Australian Government
Advances and loans
147
Notes to the financial statements
The following table shows the ageing of financial receivables that are past due but not
impaired for 2015:
0 to 30
30 to 60
60 to 90
over 90
days
days
days
days
$m
$m
$m
$m
Total
$m
Australian Government
Advances and loans
Goods and services receivable
Other receivables(a)
Total
38
23
7
20
88
131
37
25
52
245
84
29
28
676
817
253
89
60
748
1,150
38
23
7
20
88
122
General Government
Advances and loans
Goods and services receivable
64
28
18
12
Other receivables(a)
43
29
28
676
776
Total
53
708
145
80
(a) Excludes statutory receivables such as taxes receivable and personal benefits recoverable.
986
The following table provides the corresponding information for 2014:
0 to 30
30 to 60
60 to 90
over 90
days
days
days
days
Total
$m
$m
$m
$m
25
22
23
12
82
359
$m
Australian Government
Advances and loans
Goods and services receivable
Other receivables(a)
Total
214
47
20
78
37
34
27
622
720
276
103
70
712
1,161
General Government
25
22
23
12
82
121
22
15
35
193
37
34
27
622
720
669
183
78
65
Total
(a) Excludes statutory receivables such as taxes receivable and personal benefits recoverable.
995
Advances and loans
Goods and services receivable
Other receivables(a)
The following table illustrates changes in the fair value of loans and receivables
designated at fair value through profit and loss that arose due to credit risk:
Fair value changes due to credit risk:
During the period
Prior Period
Cumulative change
148
2015
$m
2014
$m
1,442
8,787
10,229
1,055
7,160
8,215
Notes to the financial statements
Australian Government entities have assessed the risk of default on payment and have
allocated $236 million to the impairment allowance for advances and loans at
30 June 2015 (2014: $229 million) and $754 million to the impairment allowance for
goods and services and other receivables at 30 June 2015 (2014: $1,978 million).
The majority of Australian Government entities do not have significant exposures to
any concentrations of credit risk. Generally, Australian Government entities’
exposures are to a large number of customers or highly rated counterparties and their
credit risks are very low. Australian Government entities that do have material
concentrations of credit risk include:
•
the Future Fund has a significant exposure to interest bearing securities issued by
domestic banks (including domestic subsidiaries of foreign banks);
•
EFIC’s principal exposure to credit risk arises from the financing and credit
facilities extended to clients. Exposures on the commercial account amounted to
$2,042 million at 30 June 2015 (2014: $1,871 million) and on the national interest
account amounted to $915 million (2014: $867 million);
•
the AOFM’s financial investments include loans to state and territory
governments, deposits, discount securities and RMBS. The credit quality of the
RMBS derives from the underlying quality of the mortgage assets and structural
enhancements such as lenders mortgage insurance, liquidity facilities, and the
issue of different classes of securities. At the time of acquisition, each RMBS issue
must meet a range of eligibility criteria set by the AOFM;
•
for the RBA, credit risk arises from exposure to the issuers of securities that it
holds; banks with which the RBA deposits funds and counterparties that are yet
to settle transactions. The RBA’s credit exposure is low compared with that of
most commercial financial institutions because it manages such risks within a
highly risk-averse framework; and
•
from time to time the Australian Government may have significant exposures to
credit risk in relation to major asset sales.
Collateral
With the exception of the following, the majority of Australian Government entities do
not hold collateral to manage credit risk. Cash invested by the RBA under repurchase
agreements is secured by collateral to a value of between 101 and 127 per cent of the
amount invested. In relation to Indigenous Business Australia’s gross credit risk,
collateral valued at $1,403 million is held against home and business loans
(2014: $1,370 million). For EFIC, collateral held may include first ranking mortgages
over assets financed by EFIC, standby documentary credits, third-party guarantees
and recourse to companies and company directors. No collateral has currently been
called and held at year end.
149
Notes to the financial statements
(d)
Liquidity risk
Liquidity risk is the risk that the Australian Government will not be able to meet its
obligations as they fall due. The following tables disclose the undiscounted value of
the contractual maturities of financial liabilities as at the end of the financial year,
including estimated future interest payments.
The Australian Government has sufficient access to funds to meet its liabilities as they
fall due. The Australian Government is positioned to address liquidity risk through
existing revenue sources, including the power to tax, and its capacity to roll over
existing debt:
150
Liquidity risk(a)(b)
Australian Government
Suppliers
Subsidies payable
Grants liability
Other payables
Deposits
Government securities
Loans
Leases
Other interest bearing liabilities
Australian currency on issue
Total financial liabilities
On
Demand
$m
1 Year
or Less
$m
2015
1 to 5
Years
$m
More than
5 Years(c)
$m
Total
212
17
200
11,398
7
11,834
6,403
171
2,422
3,887
13,726
52,132
1,302
627
5,016
85,686
120
930
1,076
180,570
2,679
2,089
1,001
188,465
2
275
245
239,209
6,484
11,070
7,066
65,481
329,832
$m
On
Demand
$m
1 Year
or Less
$m
6,737
171
3,644
5,408
25,124
471,911
10,465
13,786
13,090
65,481
615,817
977
21
347
12,178
5
13,528
4,798
430
2,461
2,457
11,820
42,790
1,175
584
8,318
74,833
2014 (d)
1 to 5 More than
Years 5 Years(c)
$m
$m
150
982
715
170,200
1,927
1,859
748
176,581
28
394
32
198,141
5,818
10,531
6,749
60,778
282,471
Total
$m
5,953
430
3,858
3,551
23,998
411,131
8,920
12,974
15,820
60,778
547,413
151
Notes to the financial statements
General Government
Suppliers
107
4,492
53
2
53
3,975
124
2
4,654
4,154
Subsidies payable
171
430
171
430
Grants liability
17
2,471
930
275
21
2,509
982
394
3,693
3,906
Other payables
140
1,553
124
29
327
1,165
71
32
1,846
1,595
Deposits
218
211
218
211
Government securities
56,957
181,131
240,027
46,483
170,742
198,890
478,115
416,115
Loans
175
566
5,228
24
157
3,779
5,969
3,960
Leases
180
767
2,278
190
665
2,337
3,225
3,192
Other interest bearing liabilities
7
944
3
5,634
5
811
11
5,055
6,588
5,882
Australian currency on issue
Total financial liabilities
489
66,943
183,574
253,473
504,479
617
55,587
172,752
210,489
439,445
(a) The amounts disclosed in the tables above are the undiscounted values and may not align to the amounts disclosed in the balance sheet.
(b) The Future Fund has entered into forward exchange contracts to manage exposure to currency risk. These contracts are settled on a gross basis with maturities
one year or less. Inflows under contract at 30 June 2015 amounted to $35,564 million (2014: $17,868 million) and outflows amounted to $32,083 million (2014:
$18,163 million). In 2014, the Fund also had contracts in place with maturities greater than 1 year, the values of which were not material to the financial statements.
(c) Includes certain instruments with no specified maturity, such as Australian currency on issue.
(d) The comparatives have been restated to ensure consistency with the current year disclosure. Prior to 2014-15, the above table displayed the discounted value of
the contractual maturities of government securities. These are now shown using the undiscounted value.
Notes to the financial statements
Note 12C: Defined benefit superannuation plans
Accounting policy
The Australian Government recognises actuarial gains or losses immediately in Other
Comprehensive Income in the year in which they occur. Interest on the net defined
benefit liability is recognised in profit and loss; the return on plan assets excluding the
amount included in interest income is recognised in Other Comprehensive Income.
Overview of schemes
GGS employees will usually be members of the Commonwealth Superannuation
Scheme (CSS), Public Sector Superannuation Scheme (PSS) or the Public Sector
Superannuation Accumulation Plan (PSSAP). The PSS and the CSS are closed to new
members, with the PSSAP available to most new employees who commenced
employment on or after 1 July 2005. The CSS and PSS provide defined benefits. The
PSSAP provides fully funded accumulation benefits to members, with no ongoing
liability to the Australian Government.
Australian Government military personnel are members of the Defence Force
Retirement and Death Benefits Scheme (DFRDB) or the Military Superannuation
Benefits Scheme (MSBS). Both schemes are defined benefit schemes. The DFRDB
closed to new members in 1991. The MSBS will close to new members from
1 July 2016. A new accumulation scheme, ADF Super, will commence for new military
personnel that enter on or after this date.
The Parliamentary Contributory Superannuation Scheme (PCSS) was closed to new
members from 9 October 2004 and superannuation accumulation arrangements were
established for parliamentarians joining Parliament on or after that date. The
accumulation arrangements were established under the Parliamentary Superannuation
Act 2004 and involve a Government contribution of 15.4 per cent which is calculated
on total parliamentary salaries. The Government contribution is payable into a
superannuation fund chosen by the parliamentarian.
In addition to the above, several schemes have been established under legislation for
specified personnel, including the Judges’ Pension Scheme (JPS), Governor General
Pension Scheme, Federal Circuit Court Judges Death and Disability Scheme
(FCCJDDS) and the North American and London, Dublin and New Delhi pension
schemes.
152
Notes to the financial statements
Several Public Corporations are responsible for defined benefit schemes for their
employees, including:
Scheme title
Responsible entities
AvSuper(a)
Airservices Australia
Australia Post Superannuation Scheme (APSS)(a)
Australia Post Corporation
State Authorities Superannuation Scheme (SASS), State
Australian Rail Track Corporation
Superannuation Scheme (SSS), State Authorities Non-contributory
Superannuation Scheme (SASCS)(a)
Australian Submarine Corporation Superannuation Fund (ASCSF)
Australian Submarine Corporation
Reserve Bank of Australia Officers’ Superannuation Fund (OSF)
RBA
and UK Pension Scheme (UKPS)(a)
(a) As required under AASB 119, Employee Benefits, the rate used to discount the superannuation liability
is determined by reference to market yields on government bonds. Certain for-profit public corporations
have applied the market yield on high quality corporate bonds in discounting their long-term employee
benefits. On consolidation into these statements, the discount rate and associated disclosures have
been adjusted back to apply government bond rates.
For the purposes of this whole of government disclosure, these ‘less material’ schemes
have been grouped under ‘other’.
Composition
As at 30 June 2015, the composition of the Australian Government’s net liability for the
defined benefit schemes (as reported in Note 8F) was as follows:
General Government
2015
2014
$m
$m
Scheme
Commonwealth Superannuation Scheme (CSS)
Public Sector Superannuation Scheme (PSS)
Parliamentary Contributory Superannuation
Scheme (PCSS)
Defence Force Retirement and Death Benefits
Scheme (DFRDB)
Military Superannuation Benefits Scheme (MSBS)
Other schemes
Other superannuation liabilities
153
Australian Government
2015
2014
$m
$m
76,798
74,800
71,556
64,862
76,798
74,800
71,556
64,862
1,057
1,076
1,057
1,076
42,945
51,156
1,298
155
248,209
41,279
41,598
1,227
149
221,747
42,945
51,156
1,326
457
248,540
41,279
41,598
1,351
226
221,948
Notes to the financial statements
The following chart illustrates the relative mix of the Australian Government
superannuation liability by scheme:
PSS
30.1%
PCSS
0.4%
DFRDB
17.3%
CSS
30.9%
MSBS
20.6%
Other
0.7%
The defined benefit plan asset of $266 million reported in Note 7B (2014: $81 million)
relates to certain of the schemes sponsored by public corporations (included in ‘other’).
Regulatory framework
The following table details the enabling legislation for each of the individually
disclosed defined benefits schemes and whether the scheme must comply with the
requirements of the Superannuation Industry (Supervision) Act 1993.
Scheme
Enabling Act
Period open for new
members
Requirement
CSS
Superannuation Act 1976
PSS
Superannuation Act 1990
• Compliance with the
Superannuation
Industry (Supervision)
Act 1993.
MSBS
Military Superannuation and
Benefits Act 1991
Parliamentary Contributory
Superannuation Act 1948
Defence Force Retirement
and Death Benefits Act 1973
1 July 1976 to
30 June 1990
1 July 1990 to
30 June 2005
From 1 October 1991
Up to 8 October 2004
• Exempt from
Superannuation
Industry (Supervision)
Act 1993.
PCSS
DFRDB
1 October 1972 to
30 September 1991
154
Notes to the financial statements
Funding arrangements
The funding arrangements for the various schemes are as follows:
Scheme
Funding
CSS
PSS
MSBS
PCSS
Partially funded. Contributions generally comprise basic member contributions
and employer productivity (up to three per cent) contributions. Benefits are funded
on an emerging cost basis.
DFRDB
Unfunded. Member’s contributions are a fixed percentage of: parliamentary
allowance; salary for Ministers of State; and allowance by way of salary for office
holders, which is paid into consolidated revenue. Benefits are funded on an
emerging cost basis.
Unfunded. DFRDB’s member’s contribution rate is 5.5% of the highest
incremental salary for rank plus Service Allowance, which is paid into
consolidated revenue. Benefits are funded on an emerging cost basis.
The remaining schemes are a combination of unfunded, partially funded and funded
defined benefit schemes.
Entitlements
The nature of the benefits provided under the schemes are as follows:
Scheme
Benefits paid
CSS
• Employer financed indexed pension defined by a set formula based on the
member’s age at retirement, years of contributory service and final
superannuation salary. Indexation occurs twice yearly (January and July) in
line with changes in the CPI.
• Member’s basic contributions, employer productivity contributions and interest
can be taken as a lump sum or an additional non-indexed lifetime pension.
This benefit is determined by the value of contributions and investment
returns.
• Members who resign before age 55 can claim a preserved resignation benefit
on or after reaching that age. In this case, the indexed pension is calculated by
applying age-based factors to the amount of two and a half times the
member’s accumulated basic member contributions and interest.
PSS
• On retirement a lump sum benefit is payable based on the member’s length of
contributory membership, their rate of member contributions and final average
salary (average of a member’s superannuation salary on their last three
birthdays).
• Members can convert 50 per cent or more of their lump sum to a lifetime
indexed pension based on the member’s age, indexed twice yearly
(January and July) in line with changes in the CPI.
• Where a member resigns before age 55, generally the member’s lump sum
benefit at that time is crystallised with the funded component of the benefit
accumulating with interest and the unfunded component accumulating with
changes in the CPI, until the benefit becomes payable.
155
Notes to the financial statements
Scheme
Benefits paid
MSBS
• Benefits payable comprise a lump sum of accumulated member contributions
and an employer financed defined benefit.
• The defined benefit is calculated on the basis of the member’s final average
salary and length of contributory service.
• Benefits arising from member’s contributions, the employer three per cent
productivity contribution and amounts notionally carried over from the DFRDB
are determined by the value of contributions and investment returns.
• May be taken as a lump sum or as a pension or as a combination of lump sum
and pension.
PCSS
• Lifetime pension or lump sum depending on length of service and additional
offices held.
• Where a retiring member has sufficient parliamentary service to meet the
pension qualification period for a lifetime pension (which is payable as set out
in the Act), pension benefits are expressed as a percentage of the
superannuation salary applicable for the PCSS and are indexed by
movements in that superannuation salary.
• A PCSS member who qualifies for a pension can also elect to convert up to
half of their benefit to a lump sum. Lump sum benefits are payable to PCSS
members who do not have sufficient parliamentary service to qualify for a
lifetime pension.
DFRDB
• Length of service is the primary factor that determines benefit entitlement.
• Members who retire from the Australian Defence Force (Defence) after
20 years of effective service (or after 15 years of service at retirement age for
rank) are entitled to a pension based on a percentage of their annual pay on
retirement.
• Members who have less than 20 years of service but have not reached their
compulsory retiring age for rank are entitled to a refund of their contributions, a
Superannuation Guarantee amount and a productivity benefit; and if
applicable, a gratuity based on completed years of service.
• Members are entitled to a productivity benefit under the Defence Force
(Superannuation) (Productivity Benefit) Determination 1988 (issued under the
Defence Act 1903). The amount of this productivity benefit varies according to
the circumstances under which an individual member has left Defence. It is
paid at the same time as DFRDB Scheme benefits are paid.
Generally, benefits may also be payable to any surviving eligible spouse and children
on the death of a member or pensioner.
156
Notes to the financial statements
Governance
Commonwealth Superannuation Corporation (CSC), was established under the
Governance of Australian Government Superannuation Schemes Act 2011 and is the trustee
for nine schemes, including the CSS, PSS, DFRDB and MSBS. CSC is responsible for:
•
administration of each Scheme;
•
management and investment of Scheme assets;
•
compliance with superannuation and taxation laws and other applicable laws;
and
•
compliance with relevant legislation including the Governance of Australian
Government Schemes Act 2011.
CSC is supported by an administrator, a custodian and other specialist providers.
The trustee for the PCSS is established by the enabling Act and comprises five trustees,
being two Senators, two members of the House of Representatives and the Finance
Minister. The Department of Finance acts as adviser to the Trust. The Finance
Secretary also has certain powers under the Act in relation to administration of the
PCSS.
The governance arrangements for the ‘other’ defined benefit superannuation schemes
are detailed in the annual reports of the respective employing entities.
Risks
The Australian Government is exposed to risks such as interest rate risk, investment
risk, longevity risk and salary risk. The following pages identify and explain the
amounts reported in these financial statements and detail the principal actuarial
assumptions underpinning each of the major schemes, including an analysis of the
sensitivity of changes in these assumptions to the amounts reported in the financial
statements.
157
The reconciliation of the changes in the present value of defined benefit obligation is as follows:
Scheme
158
Present value of defined benefit
obligations at beginning of the year
Current service cost
Productivity contributions
Obligation required
Interest cost
Contributions by scheme participants
Actuarial gains/(losses) arising from
changes in demographic assumptions
Actuarial gains/(losses) arising from
changes in financial assumptions
Actuarial gains/(losses) arising from
liability experience
Actuarial gains/(losses) arising from
other assumptions
Benefits paid(a)
Taxes, premiums and expenses paid
Past service cost
Other
Exchange rate gains/(losses)
Present value of defined benefit
obligations at end of the year
CSS
2015
2014
PSS
2015
2014
PCSS
2015
2014
DFRDB
2014
2015
MSBS
2015
2014
2015
Other
2014
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
(75,322)
(233)
(20)
(3,005)
(70)
(72,738)
(264)
(26)
(3,045)
(75)
(80,213)
(2,761)
(196)
(3,255)
(548)
(67,777)
(2,385)
(210)
(2,888)
(575)
(1,076)
(8)
(43)
-
(1,060)
(12)
(45)
-
(41,279)
(166)
(1,664)
-
(32,399)
(148)
(1,366)
-
(47,362)
(2,391)
(1,985)
(274)
(40,665)
(2,155)
(1,790)
(257)
(10,247)
(311)
(372)
(134)
(9,803)
(375)
(381)
(122)
(765)
(3,560)
(16)
(16)
(2)
(388)
(27)
53
12
(118)
649
91
(17)
(64)
513
5
(2)
(10,810)
(10,246)
(1,849)
-
-
-
-
-
-
(3,401)
(1,704)
(5,289)
(3,135)
7
(32)
(2,537)
(81)
(4,614)
(810)
(426)
(1,315)
(26)
(965)
39
28
1,131
(957)
(1,913)
(2,181)
40
-
45
-
1,570
-
1,525
(7,797)
(56)
-
(42,945)
(41,279)
4,034
4
-
3,841
4
-
1,633
37
-
1,250
32
-
(80,289)
(75,322)
(91,383)
(80,213)
(a) Benefits paid includes estimate of net benefits paid and productivity payments.
(1,057)
(1,076)
585
(57,954)
496
(47,362)
Notes to the financial statements
Reconciliation of the present value of the defined benefit obligation
Reconciliation of the fair value of scheme assets
The reconciliation of the changes in the fair value of scheme assets is as follows:
Scheme
CSS
2015
$m
Fair value of scheme assets at
beginning of the year
Interest income
Actual return on scheme assets less
interest income
Actuarial gains/(losses)
159
Net appropriation from CRF
Employer contributions
productivity contribution
Contributions by scheme
participants
Foreign currency exchange rate changes
Fair value of scheme assets
at end of the year
$m
PSS
2015
$m
2014
$m
PCSS
2015
2014
DFRDB
2015
2014
$m
$m
$m
$m
MSBS
2015
$m
2014
2015
Other(b)
2014
$m
$m
$m
3,765
142
3,895
156
15,351
617
13,856
594
-
-
-
-
5,764
243
4,888
217
8,890
317
8,271
310
202
3,329
230
3,229
1,231
310
972
426
40
45
1,570
1,525
485
617
353
545
536
2
44
453
2
45
20
26
196
210
-
-
-
-
274
257
220
212
70
75
548
575
-
-
-
-
-
-
134
122
7,528
-
18,253
-
1,525
7,383
-
45
1,570
-
16,633
40
-
7,611
6,260
7
10,150
9,419
4,034
3,841
1,633
1,250
40
45
1,570
1,525
585
496
649
514
4
4,037
4
3,845
37
1,670
32
1,282
40
45
1,570
1,525
585
496
13
662
13
527
3,490
3,765
16,583
15,351
-
-
-
-
6,798
5,764
9,488
8,892
5
(a) Benefits paid includes estimate of net benefits paid and productivity payments.
(b) For schemes categorised under ‘other’, the Judge’s Pension Scheme had a net obligation of $1,205 million at 30 June 2015 (2014: $1,149 million), and the RBA
Officer’s fund had a net obligation of $305 million (2014: $197 million). The Australia Post Superannuation Scheme reported a net asset position of $266 million
(2014: $48 million) while the balances of the remaining schemes are immaterial to the CFS.
Notes to the financial statements
Less
Benefits paid(a)
Taxes, premiums and
expenses paid
2014
The fair value of scheme assets is represented by the following:
Scheme
160
Australian equity
Market neutral hedge funds
Long short equities
International equity
Fixed income
Property
Private equity
Credit
Debt instruments
International bonds
Diversfied growth funds
Other
Cash
CSS
2015
2014
25.0%
25.9%
10.0%
9.6%
31.0%
29.5%
12.0%
12.0%
6.6%
7.0%
5.0%
5.1%
5.0%
5.2%
5.0%
6.1%
PSS
2015
2014
25.0%
25.9%
10.0%
9.6%
31.0%
29.5%
12.0%
12.0%
7.0%
6.6%
5.0%
5.1%
5.2%
5.0%
5.0%
6.1%
PCSS
2015
2014
-
DFRDB
2015
2014
-
MSBS
2015
2014
21.0%
22.0%
25.0%
23.0%
12.0%
12.0%
8.0%
9.0%
17.0%
16.0%
17.0%
18.0%
Other
2015
2014
22.5%
14.6%
0.0%
0.0%
1.9%
1.2%
1.5%
1.5%
10.0%
15.2%
6.4%
8.1%
15.1%
14.4%
0.1%
0.3%
0.3%
26.5%
27.9%
15.7%
16.8%
Total expense recognised
The amount recognised in the statement of comprehensive income for the year ended 30 June is as follows:
Scheme
CSS
2015
2014
PSS
2015
2014
PCSS
2015
2014
DFRDB
2015
2014
MSBS
2015
2014
Other
2015
2014
Current service cost
Net Interest
Past service cost
$m
233
2,864
-
$m
264
2,889
-
$m
2,761
2,638
-
$m
2,385
2,293
-
$m
8
43
-
$m
12
45
-
$m
166
1,664
-
$m
148
1,366
7,797
$m
2,391
1,742
-
$m
2,155
1,573
-
$m
311
55
(91)
$m
375
71
(5)
Superannuation expense
3,097
3,153
5,400
4,678
52
56
1,830
9,311
4,133
3,728
275
440
Notes to the financial statements
Composition of scheme assets
Principal actuarial assumptions
The principal actuarial assumptions at 30 June are as follows:
Scheme
CSS
2015
2014
PSS
2015
2014
PCSS
2014
2015
Discount rate (active members)
3.7%
4.1%
3.7%
4.1%
3.7%
4.1%
Discount rate (pensioners)
Expected rate of return on plan
assets (active members)
3.7%
4.1%
3.7%
4.1%
3.7%
4.1%
Expected salary increase rate (a)
1.5%
DFRDB
2014
2015
MSBS
2015
2014
3.7%
3.7%
-
4.1%
-
-
Other
2015
2014
4.1% 3.6-4.9% 3.5-4.6%
-
0
0
3.7%
4.1%
3.7%
4.1%
4.0%
4.0%
4.0%
4.0% 1.5-5.0% 2.5-5.0%
2.5%
2.5%
2.5%
2.5%
Expected pension increase rate (b)
2.5%
2.5%
2.5%
(a) For CSS, PSS and PCSS, general salary increases of 1.5%pa apply to June 2018 then 4.0%pa thereafter.
(b) Not relevant for all schemes. See notes below for more information.
2.5%
2.5%
2.5% 1.0-3.0%
-
4.0%
1.5%
4.0%
1.5%
4.0%
0.0%
0.0%
1.0-3.0%
161
For the defined benefit obligation, assumptions have been made regarding rates of retirement, death (for active, preserved and
pension members), mortality improvements, invalidity, resignation, retrenchment, retention and take up rates of pensions in the
schemes. Assumptions have also been made for the ages of spouses and rates of member contributions.
For the fair value of plan assets, assumptions have been made as to the expected rate of return. For certain schemes, the fair value of
scheme assets as at 30 June 2015 was estimated using the audited fair value of scheme assets at 30 June 2014 rolled forward to
30 June 2015 adjusted for cash flows during the year.
Notes to the financial statements
Membership data for the CSS, PSS, PCSS, DFRDB and MSBS as at 30 June 2014 was projected forward allowing for assumptions in
accordance with the 2014 Long Term Cost Report. The data was then adjusted for the difference between actual benefit payments and
those based on the assumed decrements. Members’ account balances were increased to be consistent with the estimated level of
earning rates prevailing at 30 June 2015.
Notes to the financial statements
Sensitivity analysis for significant actuarial assumptions
The impact of a change in the defined benefit obligation reported as at 30 June 2015
under several scenarios is presented below. The defined benefit obligation has been
recalculated by changing the assumptions as outlined below, whilst retaining all other
assumptions.
CSS
Discount rate
Salary growth rate
Rate of CPI increase
PSS
Discount rate
Salary growth rate
Rate of CPI increase
PCSS
Discount rate
Salary growth rate
Rate of CPI increase
Change in
assumption
Impact on defined benefit obligation
Increase in
Decrease in
$m
$m
0.5%
0.5%
0.5%
(4,662)
158
4,615
5,240
(149)
(4,212)
0.5%
0.5%
0.5%
(8,468)
2,452
6,435
9,811
(2,284)
(5,773)
0.5%
0.5%
0.5%
(77)
84
-
87
(76)
-
DFRDB and MSBS
0.5%
(9,953)
11,498
Discount rate
0.5%
4,730
(4,358)
Salary growth rate
0.5%
4,228
(4,790)
Rate of CPI increase
Other
0.5%
(139)
151
Discount rate(a)
Salary growth rate(b)
0.5%
(133)
145
0.5%
8
(8)
Rate of CPI increase(c)
1.0%
(239)
276
Discount rate(d)
1.0%
225
(196)
Salary growth rate(e)
5.0%
0
(0)
Pensioner mortality rate(f)
0.3%
(50)
54
Discount rate(g)
13
0.3%
(13)
Salary growth rate(h)
0.3%
38
(36)
Pension growth rate(i)
(a) Relates to the percentage change in discount rate applied to G-GPS, JPS, FCCJDDS, APSS, ASCSF
and other.
(b) Relates to the percentage change in salary growth rate applied to G-GPS, JPS, FCCJDDS, APSS,
ASCSF, SASS, SSS, SANCS and other.
(c) Relates to the percentage change in CPI rate applied to SASS, SSS, SANCS and other.
(d) Relates to the percentage change in discount rate applied to APSS, SASS, SSS and SANCS.
(e) Relates to the percentage change in salary growth rate applied to APSS.
(f) Relates to the percentage change in pensioner mortality rate applied to SASS, SSS and SANCS.
(g) Relates to the percentage change in discount rate applied to OSF and Other.
(h) Relates to the percentage change in salary growth rate applied to OSF and Other.
(i) Relates to the percentage change in pension growth rate applied to OSF and Other.
162
Notes to the financial statements
Employer contributions
The following table shows the expected contributions for 2016 by scheme:
Scheme
Commonwealth Superannuation Scheme
Public Sector Superannuation Scheme
Parliamentary Contributory Superannuation Scheme
Defence Force Retirement and Death Benefits Scheme
Military Superannuation Benefits Scheme
Other schemes
2016
$m
19
187
38
110
1,237
256
Maturity profile of defined benefit obligation
The weighted average duration of the defined benefit obligation in years for each of
the schemes is outlined below.
Scheme
Commonwealth Superannuation Scheme 1976
Commonwealth Superannuation Scheme 1922
Public Sector Superannuation Scheme
Parliamentary Contributory Superannuation Scheme
Defence Force Retirement and Death Benefits Scheme
Defence Forces Retirement Benefits Scheme
Military Superannuation Benefits Scheme
Other
AvSuper
Australia Post Superannuation Scheme
State Authorities Superannuation Scheme
State Superannuation Scheme
State Authorities Non contributory Superannuation Scheme
Australian Submarine Corporation Superannuation Fund
North American and London, Dublin and New Delhi pension schemes
Reserve Bank of Australia Officers' Superannuation Fund
UK Pension Scheme
Judges' Pension Scheme
Governor General Pension Scheme
Federal Circuit Court Judges Death and Disability Scheme
163
Weighted average duration
of the defined benefit
obligation in years
12.8 years
7.5 years
21.1 years
16 years
17.6 years
9.4 years
27.5 years
10 years
9 years
12.2 years
12.2 years
12.2 years
8 years
10.5 years
18 years
15.2 years
14.7 years
10.1 years
2.8 years
Notes to the financial statements
Note 13: Events occurring after balance date
In accordance with AASB 110 Events after the Reporting Period, reporting entities are
required to disclose any event between the balance sheet date and the date the
financial statements are authorised for issue that may affect the financial statements.
The standard classifies these events as either ‘adjusting’ or ‘non-adjusting’.
There have been no significant events occurring after reporting date that require the
CFS to be adjusted as at 30 June 2015, nor have there been significant non-adjusting
events that have occurred after reporting date.
Note 14: Reconciliations and explanations
Prepared in accordance with AASB 1049, the whole of government and GGS financial
statements provide users with information about the financial position, performance
and cash flows of the Australian Government and its sectors; and information that
facilitates assessments of the macro-economic impact of the Australian Government
and its sectors.
Reporting at the whole of government and sector level is also distinguished by the
following two characteristics:
•
The application of two international reporting frameworks, being the accounting
standards issued by the International Accounting Standards Board (through the
AASB), and the system of GFS issued by the IMF and, in Australia, administered
by the ABS; and
•
The public release of budget information for the GGS.
To assist the differing users of these whole of government accounts, AASB 1049
requires the following reconciliations and explanations:
•
Reconciliation to ABS GFS measures (refer Note 14A) which compares the key
financial measures contained in this financial report to the corresponding
measures under the ABS GFS Manual and highlights the remaining differences
between the two reporting frameworks;
•
Reconciliation to original budget (refer Note 14B) which compares the reported
results to the original budget for 2014-15 as outlined in May 2014 with
explanations for key movements; and
•
Glossary of key fiscal aggregates (refer Note 14C) which explains the key
technical terms reported in the CFS and which are not common to financial
reports prepared by other entities.
164
Note 14A: Reconciliations to ABS GFS measures
The following tables provide a reconciliation of key fiscal aggregates on the face of the financial statements where the amounts
reported differ from the corresponding key fiscal aggregates measured under the ABS GFS manual as at 1 July 2013(a).
(a)
Reconciliation to GFS net operating balance
General
Government
2015
$m
2014
$m
Public non-financial
corporations
2015
2014
$m
$m
Public financial
corporations
2015
2014
$m
$m
Eliminations and
netting
2015
2014
$m
$m
Australian
Government
2015
$m
2014
$m
165
Notes to the financial statements
Net result from transactions - net
operating balance reported in
9,456
(2,575) (1,730)
(34,259)
(37,415)
(40,587)
(1,788)
(1,398)
957
(40,821)
Statement of Comprehensive Income
Convergence differences:
Unwinding of concessional interest costs(b)
(47)
(146)
(47)
(146)
Concessional interest costs(b)
860
1,061
860
1,061
(111)
Seigniorage(c)
(111)
(112)
(112)
Defence weapons platforms and inventory(d)
Under ABS GFS Manual applicable to 2013-14
(1,712)
(1,712)
162
Under ABS GFS Manual applicable to 2014-15
162
Movement in deferred tax assets and deferred
1
(119)
tax liabilities
111
8
8
(9)
Issue and surrender of free carbon permits(e)
Capital grant to the RBA(e)
8,800
- (8,800)
Dividends to GGS from other sectors(f)
(110)
(222)
(2,198) (1,319)
2,308
1,541
1,532
864
(909)
Total convergence differences
864
7,891
1
(214)
(2,190) (10,118)
2,189
GFS Net operating balance
(36,551)
(32,696)
(1,787)
(1,612)
(1,233)
(662)
(386)
(198)
(39,957)
(35,168)
(a) Under AASB 1049, the financial statements are reconciled to the ABS GFS manual effective at the beginning of the comparative reporting period (1 July 2013).The amounts
reported may differ to the aggregates subsequently reported by the ABS in the 2014-15 GFS publication because of changes in methodology, differences in interpretation
and/or updated information availability subsequent to the release of the financial statements.
(b) The financial statements discount concessional loans by a market rate of a similar instrument whereas the ABS GFS manual does not discount as no secondary market is
considered to exist.
(c) The financial statements treat the profit between the cost and sale of circulating coin (seigniorage) as revenue whereas the ABS GFS manual treats circulating coin as a
liability and the cost to produce the coins as an expense.
(d) For 2014-15, this impact reflects the difference between depreciation reported in the financial statements and the consumption of fixed capital reported for statistical purposes.
(e) The 2013-14 financial statements treated a capital payment to the RBA as a capital grant expense for the GGS and revenue for the PFC sector. The ABS GFS manual treats
this as an equity injection which would not appear on the operating statement.
(f) The financial statements treat dividends to the GGS as a distribution to owners whereas the ABS GFS manual treats dividends to owners as an expense.
Reconciliation to GFS total change in net worth
General
Government
2015
$m
2014
$m
Public non-financial
corporations
2015
2014
$m
$m
Public financial
corporations
2015
2014
$m
$m
Eliminations and
netting
2015
2014
$m
$m
Australian
Government
2015
$m
2014
$m
166
Total change in net worth before
transactions with owners in their
capacity as owners as reported in
(47,253)
(54,423)
(2,154)
(1,105)
6,153
10,116
(1,296) (9,165)
(44,550)
(54,577)
Statement of Comprehensive Income
Convergence differences:
Relating to net operating balance
864
7,891
1
(214)
(2,190) (10,118)
2,189
1,532
864
(909)
Relating to change in treatment of
defence weapons and inventory (a)
43,760
43,760
Relating to other economic flows
7,016
(5,213)
(2,554)
(1,692)
(1,965)
1,321
1,806
9,333
4,303
3,749
Relating to transactions with owners
4,707
3,011
(1,998) (1,319)
(2,709) (1,692)
Total convergence differences
51,640
2,678
2,154
1,105
(6,153) (10,116)
1,286
9,173
48,927
2,840
GFS Total change in net worth
4,387
(51,745)
(10)
8
4,377
(51,737)
(a) Consistent with AASB 1049, the Australian Government elected not to apply Chapter 2 Amendments to Defence Weapons Platforms of the ABS publication Amendments to
Australian System of Government Finance Statistics, 2005 (ABS Catalogue No. 5514.0) — published on the ABS website on 5 April 2011 — until the 2014-15 reporting period.
The 2013-14 comparatives are prepared on the previous basis.
Notes to the financial statements
(b)
(c)
Reconciliation to GFS net lending / (borrowing)
General
Government
2015
$m
2014
$m
Public non-financial
corporations
2015
2014
$m
$m
Public financial
corporations
2015
2014
$m
$m
Eliminations and
netting
2015
2014
$m
$m
Australian
Government
2015
$m
2014
$m
167
Net lending/(borrowing) as reported in
(40,121)
(44,437)
(4,717)
(5,818)
974
8,739
(2,594) (1,778)
(46,458)
(43,294)
Statement of Comprehensive Income
Convergence differences:
Relating to net operating balance
864
7,891
1
(214)
(2,190) (10,118)
2,189
1,532
864
(909)
Defence weapons and inventory
- net acquisition(a)
4,461
4,461
Defence weapons and inventory - depreciation
and consumption(a)
(2,749)
(2,749)
Auction sales of spectrum(b)
(1,965)
(1,965)
Total convergence differences
(1,101)
9,603
1
(214)
(2,190) (10,118)
2,189
1,532
(1,101)
803
GFS Net lending/(borrowing)
(41,222)
(34,834)
(4,716)
(6,032)
(1,216) (1,379)
(405)
(246)
(47,559)
(42,491)
(a) The 2013-14 comparatives show acquisitions of defence weapons platforms and inventory as an expense.
(b) The financial statements recognise the disposal of spectrum licences at the point of issue whereas the ABS GFS manual recognises spectrum licences at the time of auction
and the proceeds from their sale at the point of auction, reflected on the balance sheet as a receivable.
Notes to the financial statements
Reconciliation to GFS net worth
168
Net worth as reported in Balance Sheet
Convergence differences:
Provision for doubtful debts(a)
Concessionality on loans and investments(b)
Investment in other sector entities(c)
Deferred tax assets(d)
Defence weapons platforms and inventory(e)
Under ABS GFS Manual applicable to 2013-14
Under ABS GFS Manual applicable to 2014-15
Dividend payable
Special drawing rights (SDR)
Seigniorage(f)
Deferred tax liability(d)
Auction sales of spectrum(g)
Shares and other contributed capital(h)
Minority interests
Total convergence differences
GFS Net worth
General
Government
2015
$m
2014
$m
Public non-financial
corporations
2015
2014
$m
$m
Public financial
corporations
2015
2014
$m
$m
Eliminations and
netting
2015
2014
$m
$m
(40,159) (36,166)
(308,454)
(261,513)
14,846
12,293
24,802
20,651
25,076
9,435
(707)
-
25,761
8,688
(3,445)
-
15
(909)
13
(909)
1
(4)
8
(12)
707
913
6,844
(3,861)
36,786
(271,668)
(43,760)
(3,750)
1,965
(14,542)
(276,055)
648
(14,600)
(14,846)
-
537
(11,934)
(12,293)
-
(24,799) (20,647)
(24,802) (20,651)
-
(648)
39,187
40,159
-
Australian
Government
2015
$m
2014
$m
(308,965)
(264,735)
3,445
921
25,092
9,435
-
25,782
8,688
-
(537)
32,337
36,166
-
6,844
(3,861)
(212)
37,297
(271,668)
(43,760)
(3,750)
1,965
(244)
(11,320)
(276,055)
(a) The financial statements treat provisions for doubtful debts as an offset to the asset in the balance sheet. The ABS GFS manual does not consider the creation of a provision
to be an economic event and therefore excludes it from the balance sheet.
(b) The financial statements discount concessional loans by a market rate of a similar instrument whereas the ABS GFS manual does not discount as no secondary market is
considered to exist.
(c) The financial statements apply AASB 13 to the valuation of the GGS’s investment in public corporations whereas the ABS GFS manual values public corporations at their net
assets unless the shares in a public corporation are publicly traded. A convergence difference arises where the application of AASB 13 results in a valuation other than net
assets.
(d) Deferred tax assets and deferred tax liabilities are reported in the financial statements whereas the ABS GFS manual does not recognise these items.
(e) Consistent with AASB 1049, the Australian Government elected not to apply Chapter 2 Amendments to Defence Weapons Platforms of the ABS publication Amendments to
Australian System of Government Finance Statistics, 2005 (ABS Catalogue No. 5514.0) — published on the ABS website on 5 April 2011 — until the 2014-15 reporting period.
The ABS GFS Manual recognises defence weapons platforms and inventory as assets at market value. Prior to the 2011 amendment, acquisitions of defence weapons
platforms were treated as an expense at the time of acquisition. The 2014-15 impact reflects the difference between the carrying value reported in the financial statements at
cost (as detailed in Note 1) and the market value calculated by the ABS for statistical purposes. The amount reported may differ to the value subsequently reported by the ABS
in the 2014-15 GFS publication because of revisions made as new information becomes available.
(f) The financial statements treat the profit between the cost and sale of circulating coin (seigniorage) as revenue whereas the ABS GFS manual treats circulating coin as a
liability and the cost to produce the coins as an expense.
(g) The financial statements recognise the disposal of spectrum licences at the point of issue whereas the ABS GFS manual recognises spectrum licences at the time of auction
and the proceeds from their sale at the point of auction, reflected on the balance sheet as a receivable.
(h) The financial statements treat shares and other contributed capital in public corporations as part of net worth whereas the ABS GFS manual deducts shares and other
contributed capital in the calculation of net worth (with net worth calculated as assets less liabilities less shares and other contributed equity).
Notes to the financial statements
(d)
Notes to the financial statements
The ABS GFS manual measures inventory at market value (rather than the lower of
cost and net realisable value). It also does not recognise the provision for
decommissioning/restoration costs. The above reconciliation has not been adjusted for
these items on the basis of materiality and information availability.
Reconciliation to GFS cash surplus/(deficit) is disclosed on the face of the cash flow
statement.
Note 14B: Reconciliation to original budget
The following tables provide a comparison of the original 2014-15 Budget to the final
actual results for the GGS. Explanations are provided for major variances, which are
typically those amounts greater than $1 billion.
The Australian Government does not present budgets at the whole of government
level, and therefore, only the GGS is presented in this note. The Budget is not audited.
169
Notes to the financial statements
General government sector operating statement 2014-15
Revenue from transactions
Taxation revenue
Sales of goods and services
Interest income
Dividend income
Other
Total revenue
Expenses from transactions
Gross operating expenses
Wages and salaries
Superannuation
Depreciation and amortisation
Supply of goods and services
Other operating expenses
Total gross operating expenses
Superannuation interest expense
Interest expenses
Current transfers
Current grants
Subsidy expenses
Personal benefits
Total current transfers
Capital transfers
Mutually agreed write-downs
Other capital grants
Total capital transfers
Total expenses
Net operating balance
Other economic flows included in operating result
Net write-downs of assets
Assets recognised for the first time
Net gain/(loss) from the sale of assets
Net foreign exchange gains
Net swap interest gains/(losses)
Other gains/(losses)
Net result from associates and joint ventures
Total Other economic flows
Operating Result from continuing operations
Discontinued operation
Operating Result
Other non-owner movements in equity
Revaluation of equity investments
Revaluation of non-financial assets
Actuarial revaluations of superannuation
Other economic revaluations
Total other economic flows included in equity
Comprehensive result - Total change in
net worth
Net operating balance
less Net acquisition of non-financial assets
Purchases of non-financial assets
less Sales of non-financial assets
less Depreciation
plus Change in inventories
plus Other movements in non-financial assets
Total net acquisition of non-financial assets
Fiscal balance (net lending/borrowing)
2015
Actual
$m
Original
budget(a)
$m
Budget
variance
$m
Revised
budget(b)
$m
355,009
8,975
3,145
6,178
7,006
380,313
368,814
8,928
4,229
2,570
6,807
391,348
(13,805)
47
(1,084)
3,608
199
(11,035)
359,117
9,277
3,653
4,796
7,255
384,098
18,357
6,927
6,804
79,289
5,742
117,119
8,999
16,024
19,638
4,291
6,644
79,875
6,111
116,559
9,275
15,551
(1,281)
2,636
160
(586)
(369)
560
(276)
473
18,939
6,803
6,804
80,474
5,502
118,522
8,989
15,915
124,635
12,506
129,190
266,331
124,121
12,184
126,336
262,641
514
322
2,854
3,690
124,435
12,522
130,663
267,620
1,857
7,398
9,255
417,728
(37,415)
2,662
8,156
10,818
414,845
(23,497)
(805)
(758)
(1,563)
2,884
(13,918)
2,124
7,164
9,288
420,335
(36,237)
(5,412)
326
10,690
(2,335)
(977)
4,648
27
6,967
(30,448)
(30,448)
(7,037)
346
63
6,630
1
(23,495)
(23,495)
1,625
(20)
10,690
(2,398)
(977)
(1,982)
27
6,966
(6,953)
(6,953)
(6,878)
319
(247)
(799)
6,306
(1,300)
(37,537)
(37,537)
3,201
1,647
(17,780)
(3,873)
(16,805)
(2,237)
17
124
(2,096)
5,438
1,647
(17,797)
(3,997)
(14,709)
2,681
(3,383)
(3,554)
(4,256)
(47,253)
(25,591)
(21,662)
(41,793)
(37,415)
(23,497)
(13,918)
(36,237)
11,337
2,423
6,804
582
14
2,706
(40,121)
10,679
2,370
6,644
492
201
2,359
(25,855)
658
53
160
90
(187)
347
(14,266)
11,622
2,348
6,804
494
174
3,138
(39,375)
(a) Original budget for 2014-15 as presented in the 2014-15 Budget papers released in May 2014.
(b) Revised budget for 2014-15 as presented in the 2015-16 Budget papers released in May 2015.
170
Notes to the financial statements
Fiscal balance
The fiscal balance for the 2014-15 financial year was a deficit of $40.1 billion,
representing a movement of $14.3 billion on the original budget deficit of $25.9 billion.
Revenue
Total revenue for 2014-15 was $380.3 billion, $11.0 billion (2.8 per cent) lower than the
original budget of $391.3 billion.
Total taxation revenue was $355.0 billion, $13.8 billion lower than the original budget
of $368.8 billion. Key drivers included:
• lower company tax of $7.3 billion, reflecting weaker than expected growth in
corporate profitability and commodity prices;
• lower excise duty of $2.8 billion, partially offset by higher customs duty of
$1.6 billion due to:
– faster than expected movement of tobacco products offshore, primarily as a
result of a major tobacco manufacturer shifting production overseas;
– lower petrol prices and weaker than expected demand for diesel; and
– an increase in import volumes for textiles, clothing and footwear and higher
demand for imported building related materials impacting customs duty only.
• lower individuals and other withholding taxes of $2.4 billion, consistent with
weaker than expected growth in wages and salaries; and
• lower superannuation fund tax of $2.0 billion, consistent with lower than expected
taxable contributions and earnings.
Total non-taxation revenue was $25.3 billion, $2.8 billion higher than the original
budget of $22.5 billion. Higher dividend income ($3.6 billion) was the key driver for
this movement, primarily due to the higher than expected RBA dividend accrued in
2014-15. This was attributable to changes in exchange rates for the year, which resulted
in higher earnings for the RBA. The investment portfolio held by the Future Fund 1 for
2014-15 returned higher dividends of $1.7 billion and lower interest income of
$0.7 billion compared to the Budget.
Expenses
Total expenses for 2014-15 were $417.7 billion, $2.9 billion (0.7 per cent) higher than the
original budget of $414.8 billion.
1
It is difficult to accurately predict the financial outcome of the investment activities
undertaken by the Future Fund due to the volatile nature of investment markets. Further
information on variances relating to Future Fund activities can be found in the Future Fund’s
2014-15 financial statements available at: www.futurefund.gov.au/annual_reports.
171
Notes to the financial statements
Total gross operating expenses were $117.1 billion, $0.5 billion higher than the original
budget of $116.6 billion. Key drivers included:
• higher superannuation expense of $2.6 billion, mainly due to the different interest
rates used in calculating the budget and actuals figures for civilian schemes and an
actuarial change to the pension indexation rate from 2.5 per cent to 4 per cent in
2013-14 for military schemes; and
• lower wages and salaries expense of $1.3 billion, in relation to a number of entities,
with the largest movements relating to Defence due to lower staff numbers and the
Australian Taxation Office (ATO) staffing reductions.
Total current and capital transfers were $275.6 billion, $2.1 billion higher than the
original budget of $273.5 billion. Key drivers included:
• higher personal benefit expenses of $2.9 billion, mainly relating to:
– higher childcare benefit and rebate expenditure ($1.7 billion), reflecting a greater
than expected number of people utilising child care services, both in terms of
children in childcare and hours claimed, as well as higher than expected fees;
– higher Family Tax Benefit expenditure ($1.6 billion), as a result of lower than
expected wage growth, which drove up average payment rates and recipient
numbers, and delays in the passage of legislation for the A New Tax System
(Family Assistance)(Administration) Act 1999; and
– lower paid parental leave expenditure ($1.2 billion), as a result of the
Government’s decision in the 2015-16 budget not to proceed with the scheme.
• lower mutually agreed write-downs of $0.8 billion, primarily as a result of a
number of corporate groups entering into settlement agreements with the ATO,
reducing the bad and doubtful debt provision.
Other economic flows
Net losses from other economic flows included in operating result and equity were
$9.8 billion, $7.7 billion higher than the original budget net loss of $2.1 billion. Key
drivers included:
• lower revaluation of superannuation liabilities of $17.8 billion, primarily as a result
of the change in the discount rate which is tied to the government bond rate (the
budget does not estimate changes in discount rates in the estimation of the
superannuation liability);
• net gains from the sale of assets of $10.7 billion, primarily attributable to the Future
Fund gain on the sale of investments ($6.9 billion) and the gain from the sale of
Medibank ($1.6 billion) not included in the original budget;
• higher net market revaluation losses of debt of $7.9 billion, primarily due to much
lower interest rates at the end of the year than at original budget;
172
Notes to the financial statements
• higher revaluation of equity of $5.4 billion relating to investments in controlled
entities and companies such as the RBA, Clean Energy Finance Corporation and
Australian Reinsurance Pool Corporation for which revaluations are not included
in the original budget;
• lower other economic revaluations of $4.0 billion relating to forecasts included in
the original budget that did not occur;
• net foreign exchange losses of $2.4 billion primarily relating to the investment
portfolio held by the Future Fund for which gains/(losses) are not included in the
original budget; and
• other gains/losses of $2.0 billion, primarily attributable to the $1.2 billion
write-back to the Higher Education Superannuation programme liability following
agreement with the NSW Government that NSW will resume making payments to
NSW universities’ superannuation expenses to meet its share.
173
Notes to the financial statements
General government sector balance sheet as at 30 June 2015
Assets
Financial assets
Cash and deposits
Advances paid
Other receivables
Investments, loans and placements
Equity investments
Total financial assets
2015
Actual
$m
Original
budget(a)
$m
Budget
variance
$m
Revised
budget(b)
$m
3,156
40,658
42,335
136,376
83,496
306,021
2,480
45,145
43,080
128,753
75,524
294,983
676
(4,487)
(745)
7,623
7,972
11,038
3,144
45,874
41,765
131,157
84,882
306,821
Non-financial assets
1,066
Land
9,941
8,875
25,425
214
Buildings
25,639
(1,071)
57,347
56,276
Plant, equipment and infrastructure
556
Intangibles
6,544
5,988
Investment property
187
211
(24)
428
8,415
7,987
Inventories
Heritage and cultural assets
11,332
10,588
744
3,217
1,679
Other non-financial assets
4,896
119,638
3,592
Total non-financial assets
123,230
14,631
429,251
414,620
Total assets
Liabilities
Interest bearing liabilities
36
218
182
Deposits held
387,772
22,165
Government securities
409,937
(1,028)
13,436
Loans and other interest bearing liabilities
12,408
133
Other borrowing
1,509
1,376
21,306
402,766
Total interest bearing liabilities
424,072
Provisions and payables
248,209
163,228
84,981
Superannuation liability
15,291
1,761
Other employee liabilities
17,052
(104)
Suppliers payable
4,601
4,705
5,983
3,958
2,025
Personal benefits payable
4,529
3,937
592
Subsidies payable
65
Grants payable
3,239
3,174
448
30,020
29,572
Other payables and provisions
89,768
Total provisions and payables
313,633
223,865
737,705
626,631
111,074
Total liabilities
(96,444)
Net worth
(308,454)
(212,010)
(a) Original budget for 2014-15 as presented in the 2014-15 Budget papers released in May 2014.
(b) Revised budget for 2014-15 as presented in the 2015-16 Budget papers released in May 2015.
174
9,287
26,043
57,012
6,312
195
8,360
10,843
3,794
121,847
428,668
211
418,307
10,347
1,545
430,409
167,327
16,030
4,956
5,716
4,585
2,394
28,562
229,571
659,979
(231,311)
Notes to the financial statements
Net worth
Net worth at 30 June 2015 was negative $308.5 billion, $96.4 billion higher than the
original budget net worth of negative $212.0 billion.
Assets
Total assets at 30 June 2015 were $429.3 billion, $14.6 billion (3.5 per cent) higher than
the original budget of $414.6 billion.
Total financial assets were $306.0 billion, $11.0 billion higher than the original budget
of $295.0 billion. Key drivers included:
• higher equity investments of $8.0 billion, due to:
– an increase of $6.4 billion in the Treasury’s investment in the RBA, the
Australian Reinsurance Pool Corporation and the Clean Energy Finance
Corporation which increased during 2014-15; and
– a higher value of equity investments managed by the Future Fund of
$3.3 billion.
• higher investments, loans and placements of $7.6 billion, due to:
– a higher value of deposits and securities held by the AOFM of $9.2 billion,
primarily due to a more conservative cash management approach in estimating
government expenditures and due to the imprecision in forecasting the highly
volatile daily flows of revenue, expenditure and financing items across the GGS;
– a higher value of investments managed by the Future Fund of $6.3 billion;
– a lower value of the IMF quota payments of $5.1 billion, relating to the shift of
the IMF quota increase under the 2010 reform from 2014-15 to 2015-16 as a result
of the delay by the United States in implementing these reforms (refer below for
related decrease in liabilities); and
– lower ‘other’ investments of $1.8 billion primarily relating to the sale of
Medibank which was not disclosed in the original budget due to commercial
confidentiality reasons.
• lower advances paid of $4.5 billion. This was mainly due to the different
measurement techniques used in the Budget and the CFS for the value of the
advances paid to the International Development Association (IDA) and Asian
Development Fund (ADF). In the budget, IDA/ADF was recorded at nominal value
whilst fair value was used for the CFS (see Note 1.3 and Statement 9 in the 2014-15
Budget Paper No. 1 for more detail).
Total non-financial assets were $123.2 billion, $3.6 billion higher than the original
budget of $119.6 billion. Key drivers included:
• revaluation of non-financial assets ($1.6 billion), as the budget does not include
estimates for these revaluations; and
175
Notes to the financial statements
• higher ‘other’ non-financial assets ($1.6 billion), primarily attributable to defence
prepayments for foreign military sales.
Liabilities
Total liabilities at 30 June 2015 were $737.7 billion, $111.1 billion (17.7 per cent) higher
than the original budget of $626.6 billion.
Total provisions and payables were $313.6 billion, $89.8 billion higher than the original
budget of $223.9 billion. Key drivers included:
• higher Australian Government’s superannuation liabilities of $85.0 billion,
primarily due to different discount rates used to value the liability. In the original
budget, a discount rate applied by the actuaries in preparing the Long-term Cost
Report was used to allow comparability between years for budget estimates.
Consistent with the AAS, the long-term government bond rate as at 30 June 2015
was used for the CFS. Additional information on the measurement is provided in
Note 12C and the Statement 7 in the 2014-15 Budget Paper No. 1.
• higher personal benefits payable of $2.0 billion. Contributing factors included:
– Low Income Earner Superannuation Contribution ($0.9 billion), not being
budgeted for at the beginning of the year (as per the Government’s policy
decision at the time); and
– Family Tax Benefit ($0.6 billion), which was higher as a result of lower than
expected wage growth, which drove up average payment rates and recipient
numbers.
• higher other employee liabilities of $1.8 billion, primarily due to the provision for
military compensation claims. This provision is difficult to estimate due to the
uncertainty surrounding the inputs that determine this long-term liability.
• lower other payables and provisions of $0.4 billion, primarily due to two major
offsetting variances:
– an increase of $1.2 billion to the provision for the Natural Disaster Relief and
Recovery Arrangements to reflect actual reconstruction costs in Queensland;
and
– a decrease of $1.0 billion for a write-back to the Higher Education
Superannuation programme liability (refer Other Economic Flows above).
176
Notes to the financial statements
Total interest bearing liabilities were $424.1 billion, $21.3 billion higher than the
original budget of $402.8 billion. Key drivers included:
• higher Australian Government Securities (AGS) of $22.2 billion managed by the
AOFM. This was due to a larger financing task as well as lower interest rates and
lower nominal and real issuance yields for the year. 2
• lower loans and other interest bearing liabilities of $1.0 billion, mainly due to:
– lower Treasury Promissory Notes of $2.8 billion, relating to the shift of the IMF
quota increase under the 2010 reform from 2014-15 to 2015-16 as a result of the
delay by the United States in implementing these reforms (refer above for
related decrease in assets);
– higher swap principal payables of $0.9 billion held by the Future Fund; and
– higher Treasury Special Drawing Rights of $0.5 billion relating to changes in
exchange rates.
2 The AOFM’s projections of AGS are a consequence of the expenditure, investment and revenue decisions
and assumptions made by the Government in producing its original budget. The debt issuance program
was set at $67 billion for the original budget and as at 30 June 2015 the AGS on issue was $7.6 billion
higher than this forecast. Further information can be found in the AOFM’s 2014-15 financial statements
available at: http://aofm.gov.au/publications/annual-reports/.
177
Notes to the financial statements
General government sector cash flow statement 2014-15
2015
Actual
$m
Original
budget(a)
$m
Budget
variance
$m
Revised
budget(b)
$m
351,675
8,839
3,056
4,745
7,598
375,913
360,372
8,910
3,657
4,257
6,339
383,534
(8,697)
(71)
(601)
488
1,259
(7,621)
351,452
9,218
3,131
4,121
7,164
375,087
(25,775)
(80,252)
(144,512)
(13,924)
(130,891)
(5,289)
(400,643)
(24,730)
(27,022)
(79,807)
(147,617)
(14,174)
(127,221)
(5,890)
(401,730)
(18,196)
1,247
(445)
3,105
250
(3,670)
601
1,087
(6,534)
(26,061)
(80,293)
(146,048)
(14,037)
(131,520)
(5,247)
(403,206)
(28,119)
2,305
(11,280)
2,244
(10,753)
61
(527)
2,222
(11,795)
(8,975)
(8,509)
(466)
(9,572)
Cash flows from investments in financial
assets for policy purposes
Net advances repaid/(paid)
Net cash flows from investments in financial
assets for policy purposes
(5,163)
(6,819)
1,656
(5,500)
(5,163)
(6,819)
1,656
(5,500)
Cash flows from investments in financial
assets for liquidity purposes
Decrease/(Increase) in investments
Net cash flows from investments in financial
assets for liquidity purposes
(11,953)
(7,017)
(4,936)
(9,021)
(11,953)
(7,017)
(4,936)
(9,021)
OPERATING ACTIVITIES
Cash received
Taxes received
Receipts from sales of goods and services
Interest receipts
Dividend receipts
Other receipts
Total cash received
Cash used
Payments for employees
Payments for goods and services
Grants and subsidies paid
Interest paid
Personal benefits
Other payments
Total cash used
Net cash from discontinued operating activities
Net cash from/(used by) operating activities
INVESTING ACTIVITIES
Cash flows from investments in
non-financial assets
Sales of non-financial assets
Purchases of non-financial assets
Net cash flows from investments in
non-financial assets
Net cash from discontinued investing activities
-
-
-
-
Net cash from/(used by) investing activities
(26,091)
(22,345)
(3,746)
(24,093)
FINANCING ACTIVITIES
Cash flows from financing activities
Cash received
Borrowings
Other financing
Total cash received
52,381
52,381
42,308
42,308
10,073
10,073
53,695
48
53,743
Cash used
Other financing
Total cash used
(2,248)
(2,248)
(2,289)
(2,289)
41
41
(2,231)
(2,231)
Net cash from discontinued financing activities
Net cash flows from financing activities
50,133
40,018
10,115
51,512
(688)
(523)
(165)
(701)
Net (decrease)/increase in cash held
178
Notes to the financial statements
General government sector cash flow statement 2014-15 (continued)
Cash at beginning of year
2015
Actual
$m
3,844
Original
budget(a)
$m
(47)
Budget
variance
$m
3,891
Revised
budget(b)
$m
3,844
Cash at end of year
3,156
(570)
3,726
3,144
Key fiscal aggregate
Net cash flows from operating activities
(24,730)
(18,196)
(6,534)
(28,119)
Net cash flows from investments in
non-financial assets
(8,975)
(8,509)
(466)
(9,572)
Cash surplus/(deficit)
(33,705)
(26,705)
(7,000)
(37,691)
Finance leases and similar arrangements
(72)
(72)
GFS cash surplus/(deficit)
(33,777)
(26,705)
(7,072)
(37,691)
(a) Original budget for 2014-15 as presented in the 2014-15 Budget papers released in May 2014.
(b) Revised budget for 2014-15 as presented in the 2015-16 Budget papers released in May 2015.
The 2014-15 GFS cash deficit for the Australian Government was $33.8 billion, a
movement of $7.1 billion compared to the original budget deficit of $26.7 billion.
The variances for the cash flow statement reflect the movements in the operating
statement and balance sheet.
Note 14C: Glossary of key fiscal aggregates
Key technical terms
Balance sheet
The balance sheet shows stocks of assets, liabilities and net worth. In accordance with
the Accrual Uniform Presentation Framework, net debt, net financial worth and net
financial liabilities are also reported in the balance sheet.
Comprehensive result (total change in net worth before transactions with owners as
owners)
The net result of all items of income and expense recognised for the period. It is the
aggregate of operating result and other movements in equity, other than transactions
with owners as owners.
Fiscal balance
The fiscal balance (or net lending/borrowing) is the net operating balance less net
capital investment. Thus, the fiscal balance includes the impact of net expenditure
(effectively purchases less sales) on non-financial assets rather than consumption
(depreciation) of non-financial assets.
The fiscal balance measures the Australian Government’s investment-saving balance.
It measures in accrual terms the gap between government savings plus net capital
transfers, and investment in non-financial assets. As such, it approximates the
contribution of the GGS to the balance on the current account in the balance of
payments.
179
Notes to the financial statements
Mutually agreed bad debts
Financial assets written off where there was prior knowledge and consent by the
counterparties.
Net actuarial gains
Includes actuarial gains and losses on defined benefits superannuation plans.
Net financial liabilities
Total liabilities less financial assets, other than equity in PNFCs and PFCs. This
measure is broader than net debt as it includes significant liabilities, other than
borrowings (for example accrued employee liabilities such as superannuation and long
service leave entitlements). For the PNFC and PFC sectors, it is equal to negative net
financial worth.
Net financial worth
Net financial worth is equal to financial assets minus liabilities. It is a broader measure
than net debt in that it incorporates provisions made (such as superannuation, but
excluding depreciation and bad debts) as well as holdings of equity. Net financial
worth includes all classes of financial assets and liabilities, only some of which are
included in net debt.
Net lending/borrowing
This is the net operating balance minus the net acquisition/(disposal) of non-financial
assets. It is also equal to transactions in the net acquisition/(disposal) of financial
assets minus the net incurrence of liabilities. It indicates the extent to which financial
resources are placed at the disposal of the rest of the economy or the utilisation of
financial resources generated by the rest of the economy. It is an indicator of the
financial impact on the rest of the economy.
Net other economic flows
The net change in the volume or value of assets and liabilities that does not result from
transactions.
Net operating balance
This is calculated as income from transactions minus expenses from transactions.
Net result from transactions — net operating balance
The revenue from transactions minus expenses from transactions. It is a summary
measure of the ongoing sustainability of operations. It excludes gains and losses
resulting from changes in price levels and other changes in the volume of assets. It is
the component of the change in net worth that is due to transactions and can be
attributed directly to government policies.
180
Notes to the financial statements
Net worth
The net worth of the GGS, PNFC and PFC sectors are defined as assets less liabilities.
This differs from the ABS GFS definition for the PNFC and PFC sectors where net
worth is defined as assets less liabilities less shares and other contributed capital. Net
worth is an economic measure of wealth, reflecting the Australian Government’s
contribution to the wealth of Australia.
Operating result
A measure of financial performance of the operations for the period. It is the net result
of items of revenue, gains and expenses (including losses) recognised for the period,
excluding those that are classified as ‘other non-owner movements in equity’.
Operating statement
The operating statement presents details of transactions in revenues, expenses, the net
acquisition of non-financial assets (net capital investment) and other economic flows
for an accounting period.
Transactions
Interactions between two units by mutual agreement or an action within a unit that is
analytically useful to treat as a transaction.
Unilaterally determined bad debts
Financial assets written off without an agreement with the debtor in cases such as
bankruptcy of the debtor.
Note 15: Audit expenses
With the exception of a small number of entities, audit services within the reporting
entity are provided by the Auditor–General. The cost of these services which include
performance and financial statement audits, totalled $76.6 million (2014: $75.2 million).
The audit of the CFS cost $1.1 million (2014: $0.7 million).
181
Notes to the financial statements
Note 16: List of Australian Government reporting entities
The following is a list of Australian Government reporting entities which have been
consolidated for the purposes of the financial report. Unless otherwise noted, all such
entities are wholly owned. The list is based on the Australian Government
Administrative Arrangement Orders in place at 30 June 2015.
Agriculture Portfolio
General Government:
Australian Fisheries Management Authority
Australian Grape and Wine Authority
Australian Pesticides and Veterinary Medicines
Authority
Cotton Research and Development Corporation
Department of Agriculture
Fisheries Research and Development Corporation
Grains Research and Development Corporation
Rural Industries Research and Development
Corporation
Attorney-General’s Portfolio
General Government:
Administrative Appeals Tribunal
Attorney-General’s Department
Australian Business Arts Foundation Ltd (Creative
Partnerships Australia) (company limited by
guarantee)
Australian Commission for Law Enforcement
Integrity
Australia Council
Australian Crime Commission
Australian Federal Police
Australian Film, Television and Radio School
Australian Financial Security Authority
Australian Human Rights Commission
Australian Institute of Criminology
Australian Law Reform Commission
Australian National Maritime Museum
Australian Security Intelligence Organisation
Australian Transaction Reports and Analysis
Centre
Bundanon Trust (company limited by guarantee)
CrimTrac Agency
Family Court and Federal Circuit Court
Federal Court of Australia
High Court of Australia
National Archives of Australia
National Film and Sound Archive Australia
National Gallery of Australia
National Library of Australia
National Museum of Australia
National Portrait Gallery of Australia
Office of the Australian Information Commissioner
Office of Parliamentary Counsel
Office of the Director of Public Prosecutions
Old Parliament House
Screen Australia
Public non-financial corporations:
Australian Government Solicitor
Communications Portfolio
General Government:
Australian Broadcasting Corporation
Australian Communications and Media Authority
Department of Communications
Special Broadcasting Service Corporation
Telecommunications Universal Service
Management Agency
Public non-financial corporations:
Australian Postal Corporation
NBN Co Ltd
182
Notes to the financial statements
Defence Portfolio
General Government:
AAF Company (company limited by guarantee)
Army and Air Force Canteen Service
Australian Military Forces Relief Trust Fund
Australian Strategic Policy Institute Ltd (company
limited by guarantee)
Australian War Memorial
Department of Defence
Department of Veterans’ Affairs
Defence Housing Australia
Defence Materiel Organisation
Royal Australian Air Force Veterans’ Residences
Trust Fund
Royal Australian Air Force Welfare Recreational
Company (company limited by guarantee)
Royal Australian Air Force Welfare Trust Fund
Royal Australian Navy Central Canteens Board
Royal Australian Navy Relief Trust Fund
Education and Training Portfolio
General Government:
Australian Curriculum, Assessment and Reporting
Authority
Australian Institute of Aboriginal and Torres Strait
Islander Studies
Australian Institute for Teaching and School
Leadership Ltd (company limited by guarantee)
Australian Research Council
Australian Skills Quality Authority (National
Vocational Education and Training Regulator)
Department of Education and Training
Tertiary Education Quality and Standards Agency
Employment Portfolio
General Government:
Asbestos Safety and Eradication Agency
Comcare
Department of Employment
Fair Work Commission
Office of the Fair Work Building Industry
Inspectorate
Office of the Fair Work Ombudsman
Safe Work Australia
Seafarers Safety, Rehabilitation and
Compensation Authority (Seacare Authority)
Workplace Gender Equality Agency
Public financial corporations:
Coal Mining Industry (Long Service Leave
Funding) Corporation
Environment Portfolio
General Government:
Bureau of Meteorology
Clean Energy Regulator
Climate Change Authority
Department of the Environment
Director of National Parks
Great Barrier Reef Marine Park Authority
Murray-Darling Basin Authority
Sydney Harbour Federation Trust
Finance Portfolio
General Government:
Australian Electoral Commission
Commonwealth Superannuation Corporation
ComSuper
Department of Finance
Future Fund Management Agency
Public non-financial corporations:
ASC Pty Ltd
183
Notes to the financial statements
Foreign Affairs and Trade Portfolio
General Government:
Australian Centre for International Agricultural
Research
Australian Secret Intelligence Service
Australian Trade Commission
Department of Foreign Affairs and Trade
Export Finance and Insurance Corporation
(National Interest Account)
Tourism Australia
Public financial corporations:
Export Finance and Insurance Corporation
Health Portfolio
General Government:
Australian Commission on Safety and Quality in
Health Care
Australian Institute of Health and Welfare
Australian National Preventive Health Agency
Australian Organ and Tissue Donation and
Transplantation Authority
Australian Radiation Protection and Nuclear Safety
Agency
Australian Sports Anti-Doping Authority
Australian Sports Commission
Australian Sports Foundation Ltd (company limited
by guarantee)
Cancer Australia
Department of Health
Food Standards Australia New Zealand
Independent Hospital Pricing Authority
National Blood Authority
National Health Funding Body
National Health and Medical Research Council
National Health Performance Authority
National Mental Health Commission
Private Health Insurance Administration Council
Private Health Insurance Ombudsman
Professional Services Review Scheme
Public non-financial corporations:
ANSTO Nuclear Medicine Pty Ltd
Immigration and Border Protection Portfolio
General Government:
Migration Review Tribunal and Refugee Review
Tribunal
Department of Immigration and Border Protection
Australian Customs and Border Protection Service
Industry and Science Portfolio
General Government:
Australian Institute of Marine Science
Australian Nuclear Science and Technology
Organisation
Australian Renewable Energy Agency
Commonwealth Scientific and Industrial Research
Organisation
Department of Industry and Science
Geoscience Australia
IIF Investments Pty Ltd
IP Australia
National Offshore Petroleum Safety and
Environmental Management Authority
Infrastructure and Regional Development Portfolio
General Government:
Australian Maritime Safety Authority
Australian Transport Safety Bureau
Civil Aviation Safety Authority
Department of Infrastructure and Regional
Development
Infrastructure Australia
National Capital Authority
National Transport Commission
Public non-financial corporations:
Airservices Australia
Australian Rail Track Corporation Ltd
Moorebank Intermodal Company Ltd
184
Notes to the financial statements
Prime Minister and Cabinet Portfolio
General Government:
Aboriginal Hostels Ltd (company limited by
guarantee)
Australian National Audit Office
Australian Public Service Commission
Department of the Prime Minister and Cabinet
Indigenous Business Australia
Indigenous Land Corporation
National Australia Day Council Ltd (company
limited by guarantee)
Outback Stores Pty Ltd
Torres Strait Regional Authority
Office of National Assessments
Office of the Commonwealth Ombudsman
Office of the Inspector-General of Intelligence and
Security
Office of the Official Secretary to the
Governor-General
Public non-financial corporations:
Voyages Indigenous Tourism Australia Pty Ltd
Social Services Portfolio
General Government:
National Disability Insurance Scheme Launch
Transition Agency (National Disability Insurance
Scheme)
Australian Aged Care Quality Agency
Australian Institute of Family Studies
Department of Human Services
Department of Social Services
Public non-financial corporations:
Australian Hearing Services (Australian Hearing)
Treasury Portfolio
General Government:
Australian Bureau of Statistics
Australian Competition and Consumer Commission
Australian Office of Financial Management
Australian Prudential Regulation Authority
Australian Securities and Investments Commission
Australian Taxation Office
Clean Energy Finance Corporation
Commonwealth Grants Commission
Corporations and Markets Advisory Committee
Department of the Treasury
Inspector-General of Taxation
National Competition Council
Office of the Auditing and Assurance Standards
Board
Office of the Australian Accounting Standards
Board
Productivity Commission
Royal Australian Mint
Public financial corporations:
Australian Reinsurance Pool Corporation
Reserve Bank of Australia
Parliamentary Departments
General Government:
Department of Parliamentary Services
Department of the House of Representatives
Department of the Senate
Parliamentary Budget Office
185
Notes to the financial statements
Entity changes during 2014-15
Entities no longer consolidated
Albury-Wodonga Development Corporation (31 December 2014)
Anindilyakwa Land Council (1 July 2014)
Australian River Co Ltd (24 April 2015)
Central Land Council (1 July 2014)
General Practice Education and Training Ltd (company limited by guarantee)
(17 June 2015)
Grape and Wine Research Development Corporation (30 June 2014)
Health Workforce Australia (8 October 2014)
Low Carbon Australia Ltd (company limited by guarantee) (12 October 2014)
Medibank Private Ltd (1 December 2014)
National Water Commission (17 June 2015)
Northern Land Council (1 July 2014)
Tiwi Land Council (1 July 2014)
Wine Australia Corporation (30 June 2014)
Wreck Bay Aboriginal Community Council (1 July 2014)
Entities newly controlled/established in 2014-15
Australian Grape and Wine Authority (1 July 2014)
Infrastructure Australia (1 September 2014)
Entities with name changes
Department of Education and Training (previously the Department of Education)
Department of Industry and Science (previously the Department of Industry)
The Australian Government Organisations Register (www.finance.gov.au/resourcemanagement/governance/agor/) provides, in a searchable online format, information
on the function, composition, origin and other details of more than 1,100 Australian
Government bodies, including the reporting entities consolidated in the financial
report.
186