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Annual Report 2007-08 Financial Statements


Independent Auditor's Report

Independent Auditor's Report 


Independent Auditor's Report 

Statement by the Chief Executive Officer and Chief Finance Officer

In our opinion, the attached financial statements for the year ended 30 June 2008 have been prepared based on properly maintained financial records and give a true and fair view of the matters required by the Finance Minister's Orders made under the Financial Management and Accountability Act 1997, as amended.

Robert Cornall's signature 

Robert Cornall AO
Chief Executive
27 August 2008

 

Sue-Ellen Bickford's signature 

Sue-Ellen Bickford
Chief Finance Officer
27 August 2008

Financial Statements

INCOME STATEMENT
for the period ended 30 June 2008
    2008 2007
  Notes $’000 $’000
INCOME      
Revenue      
Revenue from Government 3A 216,933 212,702
Sale of goods and rendering of services 3B 23,872 18,945
Interest revenue 3C 1 -
Total revenue   240,806 231,647
 
Gains      
Other gains 3D 415 363
Total gains   415 363
Total Income   241,221 232,010
 
EXPENSES      
Employee benefits 4A 139,972 117,885
Suppliers 4B 94,061 89,972
Depreciation and amortisation 4C 13,182 9,424
Finance costs 4D 540 308
Write-down and impairment of assets 4E 4,737 303
Other expenses 4F 421 -
Total Expenses   252,913 217,892
Surplus/(deficit)   (11,692) 14,118
Surplus/(deficit) attributable to the Australian Government   (11,692) 14,118
 

The above statement should be read in conjunction with the accompanying notes.

BALANCE SHEET
as at 30 June 2008
    2008 2007
  Notes $’000 $’000
ASSETS      
Financial Assets      
Cash and cash equivalents 5A 1,293 3,593
Loans and Receivables 5B 158,985 140,104
Total financial assets   160,278 143,697
Non-Financial Assets      
Land and buildings 6A 31,150 12,679
Infrastructure, plant and equipment 6B 19,777 16,078
Intangibles 6D 5,877 6,385
Inventories 6E 103 112
Other non-financial assets 6F 1,269 1,499
Total non-financial assets   58,176 36,753
Total Assets   218,454 180,450
 
LIABILITIES      
Payables      
Suppliers 7A 16,160 17,263
Other payables 7B 1,258 665
Total payables   17,418 17,928
Interest Bearing Liabilities      
Leases 8A 8,397 5,437
Other interest bearing liabilities 8B 132 193
Total interest bearing liabilities   8,529 5,630
Provisions      
Employee provisions 9A 35,517 26,878
Other provisions 9B 1,160 805
Total provisions   36,677 27,683
Total Liabilities   62,624 51,241
 
Net Assets   155,830 129,209
 
EQUITY      
Contributed equity   110,991 72,678
Reserves   16,077 16,077
Retained surplus   28,762 40,454
Total Equity   155,830 129,209
 
 
Current assets   161,650 145,308
Non-current assets   56,804 35,142
Current liabilities   51,544 42,028
Non-current liabilities   11,080 9,214

The above statement should be read in conjunction with the accompanying notes.

STATEMENT of CHANGES in EQUITY
as at 30 June 2008
  Retained Earnings Asset Revaluation
Reserves
Contributed
Equity/Capital
Total Equity
  2008 2007 2008 2007 2008 2007 2008 2007
  $’000 $'000 $’000 $’000 $’000 $’000 $’000 $’000
Opening balance                
Balance carried forward from previous period 40,454 26,333 16,077 16,076 72,678 59,564 129,209 101,973
Adjustment for errors - 4 - 1 - - - 5
Adjusted opening balance 40,454 26,336 16,077 16,077 72,678 59,564 129,209 101,978
                 
Income and expense                
Revaluation adjustment - - - - - - - -
Sub-total income and expenses recognised directly in equity - - - - - - - -
                 
Surplus/(deficit) for the period (11,692) 14,118 - - - - (11,692) 14,118
Total income and expenses (11,692) 14,118 - - - - (11,692) 14,118
Transactions with owners                
Distributions to owners                
Returns of capital:                
Prior year appropriation returned - - - - - (15,000) - (15,000)
Contributions by Owners                
Restructuring - - - - 2,531 - 2,531 -
Appropriation (equity injection) - - - - 35,782 28,114 35,782 28,114
Sub-total transactions with owners - - - - 38,313 13,114 38,313 13,114
Transfers between equity components - - - - - - - -
Closing balance at 30 June 28,762 40,454 16,077 16,077 110,991 72,678 155,830 129,209

The above statement should be read in conjunction with the accompanying notes

CASH FLOW STATEMENT
for the period ended 30 June 2008
    2008 2007
  Notes $’000 $’000
OPERATING ACTIVITIES      
Cash received      
Goods and services   20,278 20,191
Appropriations   221,584 188,281
Interest revenue   1 -
GST received   9,939 8,746
Total cash received   251,802 217,218
Cash used      
Employees   133,299 104,717
Suppliers   93,622 96,664
Financing costs   540 308
Other expenses   1 -
GST paid   10,185 9,658
Total cash used   237,647 211,347
Net cash from or (used by) operating activities 11 14,155 5,871
 
INVESTING ACTIVITIES      
Cash received      
Proceeds from sales of property, plant and equipment   - -
Total cash received   - -
Cash used      
Purchase of land and buildings   21,663 5,385
Purchase of infrastructure, plant and equipment   6,116 4,196
Purchase of intangibles   5,284 5,204
Total cash used   33,063 14,785
Net cash from or (used by) investing activities   (33,063) ( 14,785)
 
FINANCING ACTIVITIES      
Cash received      
Appropriations - contributed equity   15,730 12,684
Cash received - restructuring   4,051 -
Total cash received   19,781 12,684
Cash used      
Repayment of borrowings   3,173 2,398
Total cash used   3,173 2,398
Net cash from or (used by) financing activities   16,608 10,286
Net increase or (decrease) in cash held   (2,300) 1,372
Cash at the beginning of the reporting period   3,593 2,221
Cash at the end of the reporting period 5A 1,293 3,593

The above statement should be read in conjunction with the accompanying notes.

SCHEDULE OF COMMITMENTS
as at 30 June 2008
  2008 2007
BY TYPE $’000 $’000
Capital commitments    
Land and buildings 1 25,930 16,760
Infrastructure, plant and equipment 10 1,200
Total capital commitments 25,940 17,960
Other commitments    
Operating leases 2 236,575 227,095
Other commitments 14,031 16,289
Total other commitments 250,606 243,384
Commitments receivable (25,084) (23,645)
Net commitments by type 251,462 237,699
 
BY MATURITY    
Commitments payable    
Capital commitments    
One year or less 25,940 17,960
From one to five years - -
Total capital commitments 25,940 17,960
Operating lease commitments    
One year or less 17,019 11,913
From one to five years 66,870 50,776
Over five years 152,686 164,406
Total operating lease commitments 236,575 227,095
 
Other commitments    
One year or less 9,092 10,146
From one to five years 4,875 6,143
Over five years 64 -
Total other commitments 14,031 16,289
Commitments receivables (25,084) (23,645)
Net commitments by maturity 251,462 237,699
Commitments are GST inclusive where relevant.

Notes:

  1. Outstanding contractual payments for fitout under construction.
  2. Operating leases included are effectively non-cancellable and comprise:
Nature of lease General description of leasing arrangement
Leases for office accommodation. Each lease is individual and may be subject to an automatic percentage increase depending on the terms of the agreement.
The period of office accommodation leases are current and may be renewed subject to renegotiations.
Agreements for the provision of motor vehicles to senior executive officers. There are no renewal or purchase options available to the Department.

The above schedule should be read in conjunction with the accompanying notes.

SCHEDULE OF CONTINGENCIES
as at 30 June 2008
Contingent assets Guarantees Indemnities Claims for damages or costs TOTAL
  2008 2007 2008 2007 2008 2007 2008 2007
  $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Balance from previous period - - - - 150 168 150 168
New - - - - - - - -
Re-measurement - - - - (150) (18) (150) (18)
Assets crystallised - - - - - - - -
Obligations expired - - - - - - - -
Total Contingent assets - - - - - 150 - 150
 
Contingent liabilities Guarantees Indemnities Claims for damages or costs TOTAL
  2008 2007 2008 2007 2008 2007 2008 2007
  $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Balance from previous period - - - - 17 118 17 118
New - - - - - 17 - 17
Re-measurement - - - - - (118) - (118)
Liabilities crystallised - - - - (17) - (17) -
Obligations expired - - - - - - - -
Total Contingent liabilities - - - - - 17 - 17
Net contingent assets (liabilities)       - 133

Details of each class of contingent liabilities and contingent assets, including those not included above because they cannot be quantified, are disclosed in Note 12: Contingent assets and liabilities.

The above schedule should be read in conjunction with the accompanying notes.

SCHEDULE OF ADMINISTERED ITEMS
 
    2008 2007
  Notes $’000 $’000
Income administered on behalf of Government      
for the period ended 30 June 2008      
 
Revenue      
 
Non-taxation revenue      
Dividends 16A 5,686 6,766
Competitive Neutrality 16B 5,118 4,767
Sale of goods and rendering of services 16C 13,656 -
Levies, fees, taxes and fines 16D 1,270 -
Interest 16E 8,493 -
Rental income 16F 1,585 -
Royalties 16G 651 -
Other revenue 16H 8,085 566
Gains 16I 8,087 -
Total revenues administered on behalf of Government   52,631 12,099
Total income administered on behalf of Government 52,631 12,099
 
Expenses administered on behalf of Government    
for the period ended 30 June 2008      
 
Employee benefits 17A 4,407 425
Suppliers 17B 56,440 14,054
Subsidies 17C 52,416 24,361
Personal benefits 17D 56,550 54,900
Grants 17E 623,768 410,884
Write-down and impairment of assets 17F 4,035 898
Depreciation and amortisation 17G 10,841 -
Total expenses administered on behalf of Government   808,457 505,522

The major administered activities of the Department are directed towards achieving the three outcomes described in Note 1 to the Financial Statements. The major activities in 2007-08 were funding of legal aid, community legal services, the Family Relationship Services Program, Indigenous law and justice programs, the Family Court of WA operating expenses, the National Counter-Terrorism Committee, National Community Crime Prevention Program, emergency management programs, natural disaster relief and mitigation and services to territories. Details of planned activities for the year can be found in the Attorney-General's Portfolio Budget Statements and Portfolio Additional Estimates Statements for 2007-08, which have been tabled in Parliament.

Territories and natural disaster mitigation and relief functions were transferred to the Department following the Administrative Arrangements Order of 3 December 2007. As a result there are a number of items with no comparative figures for the 2006-07 financial year in these financial statements.

This schedule should be read in conjunction with the accompanying notes.

Assets administered on behalf of Government      
as at 30 June 2008      
 
Financial assets      
Cash and cash equivalents 18A 182 63
Loans and receivables 18B 148,721 15,894
Investments 18C 350,992 325,382
Total financial assets   499,895 341,339
Non-financial assets      
Land and buildings 18D 111,749 -
Infrastructure, plant and equipment 18E 198,233 -
Inventories 18F 2,001 32
Intangibles 18G 1,618 -
Other non-financial assets 18H 13 37
Assets held for sale 18I 6,327 -
Total non-financial assets   319,941 69
Total assets administered on behalf of Government   819,836 341,408
 
Liabilities administered on behalf of Government    
as at 30 June 2008      
 
Payables      
Suppliers 19A 14,621 2,865
Personal benefits 19B 572,057 550,400
Grants and subsidies 19C 24,894 13,335
Employee provisions 19D 1,482 -
Other payables 19E 1,546 -
Asbestos removal provision 19F 7,162 -
Phosphate mine rehabilitation provision 19G 2,914 -
Total liabilities administered on behalf of Government 624,676 566,600
     
This schedule should be read in conjunction with the accompanying notes.
    2008 2007
  Notes $’000 $’000
Administered Cash Flows      
for the period ended 30 June 2008      
OPERATING ACTIVITIES      
Cash received      
Dividends   6,766 21,516
Net GST received   21,614 14,766
Competitive Neutrality   5,200 9,975
Sale of goods and rendering of services   14,673 -
Levies, fees, taxes and fines   1,271 -
Interest revenue   6,066 -
Rental income   1,585 -
Royalties   651 -
Other revenue   6,611 247
Total cash received   64,437 46,504
Cash used      
Grant payments   612,684 414,006
Subsidies paid   49,853 24,626
Personal benefits   27,069 23,964
Suppliers   46,731 10,097
Net GST paid   21,757 19,429
Employees   4,409 -
Other   - 308
Total cash used   762,503 492,430
Net Cash from or (used by) Operating Activities   (698,066) (445,926)
 
INVESTING ACTIVITIES      
Cash received      
Repayments of advances and loans   5,367 -
Proceeds from sale of property plant and equipment   62  
Total cash received   5,429 -
Cash used      
Purchase of property, plant and equipment   4,102 -
Total cash used   4,102 -
Net Cash from or (used by) Financing Activities   1,327 -
 
FINANCING ACTIVITIES      
Cash received      
GST Appropriation cash from Official Public Account   26,819 22,302
Total cash received   26,819 22,302
Cash used      
Cash to Official Public Account   26,197 14,507
Total cash used   26,197 14,507
Net Cash from or (used by) Financing Activities   622 7,795
Net Increase (Decrease) in Cash Held   (696,117) (438,131)
 
Cash at the beginning of the reporting period   63 2
Cash received - restructuring   25 -
Cash from Official Public Account for:      
Appropriations   745,226 473,731
Appropriations - capital   3,736 -
Special accounts   3,580 2,260
    752,542 475,991
Cash to Official Public Account for:      
Appropriations   (51,164) (34,745)
Special accounts   (5,167) (3,054)
    (56,331) (37,799)
 
Cash at End of Reporting Period 18A 182 63
This schedule should be read in conjunction with the accompanying notes.
Administered Commitments      
as at 30 June 2008      
 
BY TYPE      
Commitments receivable   (9,875) (9,621)
Commitments payable      
Other commitments      
Grants - Multi year agreements   1,341,739 899,082
Total other commitments   1,341,739 899,082
Net commitments by type   1,331,864 889,461
 
BY MATURITY      
Other commitments receivable      
One year or less   (8,850) (7,487)
From one to five years   (1,025) (2,134)
Total other commitment receivables   (9,875) (9,621)
Commitments payable      
Other commitments      
One year or less   398,348 325,532
From one to five years   943,391 573,550
Total other commitments   1,341,739 899,082
Net commitments by maturity   1,331,864 889,461

The nature of other commitments is grant amounts payable under agreements in respect of which the grantee has yet to provide the services required under the agreement. It comprises mainly grants for the provision of legal aid and the Family Relationship Services Program.

Note: Comparative figures have been amended due to reclassification of expenditure refer Note 1.5.

This schedule should be read in conjunction with the accompanying notes.

Administered Contingencies
as at 30 June 2008
 
Administered Contingent Assets Guarantees Indemnities Claims for damages or costs APEC Assets TOTAL
  2008 2007 2008 2007 2008 2007 2008 2007 2008 2007
  $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Balance from previous period - - - - - - 10,623 - 10,623 -
New - - - - - - - 10,623 - 10,623
Assets held for sale at fair value - - - - - - (8,025) - (8,025) -
Plant and equipment expensed - - - - - - (2,598) - (2,598) -
Expired - - - - - - -   - -
Total Administered Contingent Assets - - - - - - - 10,623 - 10,623
                     
  2008 2007 2008 2007 2008 2007 2008 2007 2008 2007
Administered Contingent Liabilities $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Balance from previous period - - - - - - - - - -
New - - - - - - - - - -
Re-measurement - - - - - - - - - -
Liabilities crystallised - - - - - - - - - -
Obligations expired - - - - - - - - - -
Total Administered Contingent Liabilities - - - - - - - - - -
Net Contingent Assets (Liabilities)                 - 10,623

Details of each class of contingent assets and contingent liabilities including those not included above because they cannot be quantified, or are considered remote, are shown at Note 21. Further information on assets held for sale is shown at Note 18I and Note 21.

This schedule should be read in conjunction with the accompanying notes.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
as at 30 June 2008
Note 1: Summary of Significant Accounting Policies
Note 2: Events after the Balance Sheet Date
Note 3: Income
Note 4: Expenses
Note 5: Financial Assets
Note 6: Non-Financial Assets
Note 7: Payables
Note 8: Interest Bearing Liabilities
Note 9: Provisions
Note 10: Restructuring
Note 11: Cash Flow Reconciliation
Note 12: Contingent Assets and Liabilities
Note 13: Executive Remuneration
Note 14: Remuneration of Auditors
Note 15: Financial Instruments
Note 16: Income Administered on Behalf of Government
Note 17: Expenses Administered on Behalf of Government
Note 18: Assets Administered on Behalf of Government
Note 19: Liabilities Administered on Behalf of Government
Note 20: Administered Reconciliation Table
Note 21: Administered Contingent Assets and Liabilities
Note 22: Administered Investments
Note 23: Administered Financial Instruments
Note 24: Appropriations
Note 25: Special Accounts
Note 26: Compensation and Debt Relief in Special Circumstances
Note 27: Reporting of Outcomes
Note 28: Administered Expenditure by Outcome

Note 1: Summary of Significant Accounting Policies

1.1 Objectives of the Attorney-General's Department

The Attorney-General's Department (the Department) is an Australian Public Service organisation. The Department serves the people of Australia by providing essential expert support to the Australian Government in the maintenance and improvement of Australia’s system of law and justice, its national security and emergency management systems, natural disaster relief and mitigation and services to territories and advice on their administration.

The Department is the central policy and coordinating element of the Attorney-General’s portfolio, for which the Attorney-General and the Minister for Home Affairs are responsible.

The Department is structured to meet three outcomes and sixteen outputs as follows:
Outcome 1: An equitable and accessible system of federal civil justice
Output 1.1: Legal services and policy advice on family law, federal courts and tribunals, civil procedure, alternative dispute resolution, administrative law and administration of related government programs
Output 1.2: Support for the Attorney-General as First Law Officer, advice on constitutional policy, advice on personal insolvency, advice and support for the administration of the National Classification Scheme, and promotion of Australian legal services internationally
Output 1.3: Legal services and policy advice on information law and human rights
Output 1.4: Legal services and policy advice on international law
Output 1.5: Drafting of legislative and other instruments, maintenance of the Federal Register of Legislative Instruments (FRLI), publication of legislative materials and provision of related legal services
Output 1.6: Legal services and policy advice on native title
Output 1.7: Legal services and policy advice on Indigenous law and justice and legal assistance, and administration of related government programs
Output 1.8: Legal services and policy advice on personal property securities law, and development of a national system for the registration and enforcement of personal property securities
Outcome 2: Coordinated federal criminal justice, security and emergency management activity, for a safer Australia
Output 2.1: Policy advice on, and program administration and regulatory activities associated with, the Commonwealth’s domestic and international responsibilities for criminal justice and crime prevention
Output 2.2: Policy advice on, and program administration and regulatory activities associated with, the Commonwealth's responsibilities for international criminal justice and meeting Australia's obligations in relation to extradition and mutual assistance
Output 2.3: National leadership and coordination of legal and policy advice on national security and counter-terrorism laws and critical infrastructure protection
Output 2.4: Provide national leadership in the development of emergency management measures to reduce risk to communities and manage the consequences of disasters
Output 2.5: Development and promotion of protective security policy advice and common standards and practices; the coordination of protective security services, including counter-terrorism and dignitary protection; the provision of security for special events; the development of counter-terrorism capabilities; and the coordination of national security crises and information through the Watch Office and National Security Hotline
Output 2.6: Provide a fast, fair and reliable background checking service
Outcome 3: Assisting regions to manage their own futures
Output 3.1: Services to territories and advice on their administration
Output 3.2: Natural disaster relief and mitigation

The activities of the Department contributing toward these outcomes are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, revenues and expenses controlled or incurred by the Department in its own right. Administered activities involve the management or oversight by the Department, on behalf of the Government, of items controlled or incurred by the Government.

The continued existence of the Department in its present form and with its present programs is dependent on Government policy and on continuing appropriations by Parliament for the Department’s administration and programs.

1.2 Basis of Preparation of the Financial Report

The financial statements are required by section 49 of the Financial Management and Accountability Act 1997 and are a general purpose financial report.

The financial statements and notes have been prepared in accordance with:

  • Finance Minister’s Orders (or FMOs) for reporting periods ending on or after 1 July 2007, and
  • Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period including Interpretations issued by the AASB that apply for the reporting period.

The financial report has been prepared on an accrual basis and is in accordance with historical cost convention, except for certain assets which are at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

The financial report is presented in Australian dollars and values are rounded to the nearest thousand dollars unless disclosure of the full amount is specifically required.

Unless an alternative treatment is specifically required by an Accounting Standard or the FMOs, assets and liabilities are recognised in the Balance Sheet when and only when it is probable that future economic benefits will flow to the Department and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under agreements equally proportionately unperformed are not recognised unless required by an Accounting Standard. Liabilities and assets that are unrealised are reported in the Schedule of Commitments and the Schedule of Contingencies (other than unquantifiable or remote contingencies, which are reported at Note 12).

Unless alternative treatment is specifically required by an Accounting Standard, revenues and expenses are recognised in the Income Statement when and only when the flow, consumption or loss of economic benefits has occurred and can be reliably measured.

Administered revenues, expenses, assets and liabilities and cash flows reported in the Schedule of Administered Items and related notes are accounted for on the same basis and using the same policies as for departmental items except where otherwise stated at Note 1.21.

1.3 Significant Accounting Judgements and Estimates

In the process of applying the accounting policies listed in this note, the Department has made the following judgements that have the most significant impact on the amounts recorded in the financial statements:

  • the fair value of land and buildings has been taken to be the market value of similar properties. In some instances, the Department's buildings are purpose built and may in fact realise more or less in the market, and
  • the fair value of the Department’s infrastructure, plant and equipment has been taken to be the market selling price.
  • The fair value of land administered on behalf of the Australian Government has been taken to be the market value of similar properties. The fair value of individual land parcels has been considered representative of their existing use and the fundamental assumption that they could be sold on a freehold basis
  • the fair value of artwork within the Nolan collection that is either owned or controlled by the Australian Government is determined using indicative market rates, and
  • an actuarial assessment was made of the liability in relation to judges’ pensions (personal benefits in the Schedule of Administered Items) in accordance with AASB 119.

No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next accounting period.

1.4 Statement of Compliance

Adoption of new Australian Accounting Standard requirements

No accounting standard has been adopted earlier than the application date as stated in the standard. The following new standards are applicable to the current reporting period:

Financial Instrument Disclosure

AASB 7 Financial Instruments: Disclosures is effective for reporting periods beginning on or after 1 January 2007 (the 2007-08 financial year) and amends the disclosure requirements for financial instruments. In general AASB 7 requires greater disclosure than that previously required. Associated with the introduction of AASB 7 a number of accounting standards were amended to reference the new standard or remove the present disclosure requirements through 2005-10 Amendments to Australian Accounting Standards [AASB 132, AASB 101, AASB 114, AASB 117, AASB 133, AASB 139, AASB 1, AASB 4, AASB 1023 and AASB 1038]. These changes have no financial impact but will effect the disclosure presented in future financial reports.

The following new standards, amendments to standards or interpretations for the current financial year have no material financial impact on the Department:

  • 2007-4 Amendments to Australian Accounting Standards arising from ED 151 and Other Amendments
  • 2007-7 Amendments to Australian Accounting Standard, and
  • UIG Interpretation 11 AASB 2 - Group and Treasury Share Transactions and 2007-1 Amendments to Australian Accounting Standards arising from AASB Interpretation 11.
Future Australian Accounting Standard requirements

The following new standards, amendments to standards or interpretations have been issued by the AASB but are effective for future reporting periods. It is estimated that the impact of adopting these pronouncements when effective will have no material financial impact on future reporting periods:

  • AASB Interpretation 12 Service Concession Arrangements and 2007-2 Amendments to Australian Accounting Standards arising from AASB Interpretation 12
  • AASB 8 Operating Segments and 2007-3 Amendments to Australian Accounting Standards arising from AASB 8
  • 2007-6 Amendments to Australian Accounting Standards arising from AASB 123
  • AASB Interpretation 13 Customer Loyalty Programmes, and
  • AASB Interpretation 14 AASB 119 - the Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interactions.
Other

The following standards and interpretations have been issued but are not applicable to the operations of the Department:

AASB 1049 Financial Reporting of General Government Sectors by Governments

AASB 1049 specifies the reporting requirements for the General Government Sector. The FMOs do not apply to this report or the consolidated financial statements of the Australian Government.

1.5 Changes in Accounting Policy and Correction of Errors

The Department has reviewed its procedure for recognition and disclosure of personal benefits. This review identified the current disclosure was not in accordance with AASB 119 as the Judges' Pension Act 1968 provides a defined benefit pension scheme for federal court judges. This has now been corrected and the understated expense of $34,828,000 for 2006-07 based on the actuarial report has been restated in this 2007-08 financial report (refer Note 17D).

The Department has reviewed its procedure for the classification of expenditure on its administered items to improve the relevance of the financial report. While there was no change to the overall expenditure reported, the following recategorisation of expenditure and associated liabilities has been made for 2006-07:

  • administered employee benefits have been increased by $124,000 to take into account employee benefits previously included in administered grants (refer Note 17A)
  • administered suppliers have increased by $5,233,000 to take into account supplier expenses previously included in administered grants (refer Note 17B), and
  • administered grants have decreased by $5,357,000 from transferring expenditure into employee benefits ($124,000) and suppliers ($5,233,000) (refer Note 17E).
  • administered trade creditors have increased and grants and subsidies payable have decreased each by $1,056,000 from transferring liabilities from grants and subsidies payables to trade creditors (refer Note 19A and 19C).

An additional Administered commitment $32,430,500 was identified in 2007-08 for which commitments in 2006-07 were omitted from the 2006-07 financial statements. These have now been included in the comparatives (refer Schedule of Administered Items).

The closing balance in the appropriation note has been reconciled to the Department of Finance and Deregulation appropriation management system. This has identified an error in the carry forward of available appropriation from previous years and represented in the opening balance for 2006-07. The error has been corrected in the 2007-08 financial statements with an adjustment of $5,453,000 in outcome 1 and $15,210,000 in outcome 2. In addition the departmental output for 2006-07 recognised $2,105,000 in regard to previous years outputs that were included in the 2007-08 Appropriation Act Bill 2. An adjustment to the opening balance has been recorded in table 24 A to enable the appropriation to be correctly recognised against the 2007-08 appropriation line in table 24B previous years outputs.

1.6 Revenue

Revenue from Government

Amounts appropriated for departmental outputs appropriations for the year (adjusted for any formal additions and reductions) are recognised as revenue when the Department gains control of the appropriation, except for appropriations which relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned.

Appropriations receivable are recognised at their nominal amounts.

Other Types of Revenue

Revenue from the sale of goods is recognised when:

  • the risks and rewards of ownership have been transferred to the buyer
  • the seller retains no 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 Department.

Revenue from 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 associated with the transaction will flow to the Department.

The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any provision for bad and doubtful debts. Collectability of debts is reviewed at balance date. Provisions are made when collectability of the debt is no longer probable.

Interest revenue is recognised using the effective interest method as set out in AASB 139 Financial Instruments: Recognition and Measurement.

1.7 Gains

Resources Received Free of Charge

Resources received free of charge are recognised as gains when and only when a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Australian Government agency or authority as a consequence of a restructuring of administrative arrangements (refer to Note 1.8).

Sale of Assets

Gains from disposal of non-current assets are recognised when control of the asset has passed to the buyer.

1.8 Transactions with the Government as Owner

Equity injections

Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) are recognised directly in contributed equity in that year.

Restructuring of Administrative Arrangements

Net assets received from or relinquished to another Australian Government agency or authority under a restructuring of administrative arrangements are adjusted at their book value directly against contributed equity.

Other distributions to owners

The FMOs require that distributions to owners be debited to contributed equity unless in the nature of a dividend.

1.9 Employee Benefits

Liabilities for services rendered by employees are recognised at the reporting date to the extent that they have not been settled.

Liabilities for ‘short-term employee benefits’ (as defined in AASB 119) and termination benefits due within twelve 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.

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.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the Department is estimated to be less than the annual entitlement for sick leave.

The leave liabilities are calculated on the basis of employees’ remuneration, including the Department’s employer superannuation contribution rates, to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave has been determined by reference to actuarial advice. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and Redundancy

Provision is made for separation and redundancy benefit payments. The Department recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

Staff of the Department are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the PSS accumulation plan (PSSap). From 1 July 2005, new employees are only eligible to join the PSSap scheme.

The CSS and PSS are defined benefit schemes for the Australian Government. The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. The PSSap is a defined contribution scheme.

The Department makes employer contributions to the employee superannuation scheme at rates determined by an actuary to be sufficient to meet the cost to the Government of the superannuation entitlements of the Department’s employees. The Department accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June represents outstanding contributions for the final fortnight of the year.

1.10 Leases

A distinction is made between finance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to ownership of leased non-current assets. An operating lease is a lease that is not a finance lease. In operating leases the lessor effectively retains substantially all such risks and benefits.

Where a non-current asset is acquired by means of a finance lease, the asset is capitalised at either the fair value of the lease property or, if lower, the present value of minimum lease payments at the inception of the contract and a liability is recognised at the same time and for the same amount.

The discount rate used is the interest rate implicit in the lease. Leased assets are amortised over the period of the lease. Lease payments are allocated between the principal component and the interest expense.

1.11 Borrowing Costs

All borrowing costs are expensed as incurred.

1.12 Cash

Cash means notes and coins held and any deposits held at call with a bank or financial institution. Cash is recognised at its nominal amount.

1.13 Financial Assets

The Department classifies its financial assets in the following categories: loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Financial assets are recognised and derecognised at 'trade date'.

Effective interest method

The effective interest method is a methods of calculation the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Income is recognised on an effective interest rate basis except for financial assets 'at fair value through profit or loss'.

Loans and Receivables

Trade receivables, loans and other receivables that have fixed or determinable payment that are not quoted in an active market are classified as 'loans and receivables'. They are included in current assets, except for maturities greater than 12 months after the balance sheet date, which are classified as non current assets. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate.

Impairment of financial assets

Financial assets are assessed for impairment at each balance date.

Financial assets held at amortised cost - if there is objective evidence that an impairment loss has been incurred for loans and receivables held at amortised cost, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the asset's original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the Income Statement.

1.14 Financial Liabilities

Financial liabilities are classified as either financial liabilities 'at fair value through profit or loss' or other financial liabilities.

Financial liabilities are recognised and derecognised upon 'trade date'.

Other financial liabilities

Other financial liabilities including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments throughout the expected life of the financial liability, or where appropriate, a shorter period.

Supplier and other payables

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

1.15 Contingent Assets and Contingent Liabilities

Contingent Assets and Contingent Liabilities are not recognised in the Balance Sheet but are reported in the relevant schedules and notes. They may arise from uncertainty as to the existence of an asset or liability, or represent an existing asset or liability in respect of which settlement is not probable or the amount cannot be reliably measured. Remote contingencies are part of this disclosure. Contingent assets are disclosed when settlement is probable, and contingent liabilities are recognised when settlement is greater than remote.

1.16 Acquisition of Assets

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and revenues at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor agency’s accounts immediately prior to the restructuring.

1.17 Infrastructure, Plant and Equipment

Asset recognition threshold

Purchases of infrastructure, plant and equipment are recognised initially at cost in the Balance Sheet, except for purchases costing less than $2,000 which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘makegood’ provisions in property leases taken up by the Department where there exists an obligation to restore the property to its original condition. These costs are included in the value of leasehold improvements with a corresponding provision for the ‘makegood’ taken up.

Revaluations
Fair values for each class of asset are determined as shown below:
Asset class: Fair value measured at:
Land Market selling price
Buildings Market selling price
Leasehold improvements Depreciated replacement cost
Infrastructure plant & equipment Market selling price
Heritage and cultural assets Active liquid market

Following initial recognition at cost, property plant and equipment are carried at fair value less accumulated depreciation and accumulated impairment losses. 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. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised through surplus and deficit. Revaluation decrements for a class of assets are recognised directly through surplus and deficit except to the extent that they reverse a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

Depreciation

Depreciable infrastructure, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the Department using, in all cases, the straight-line method of depreciation. Leasehold improvements are depreciated on a straight-line basis over the lesser of the estimated useful life of the improvements or the unexpired period of the lease. The library assets which have been recognised as heritage assets are not depreciated, and all other library acquisitions are expensed in the year of acquisition.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. Residual values are re-estimated for a change in price only when assets are revalued.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:
  2008 2007
Buildings on freehold land 25-50 years 25-50 years
Leasehold improvements Lease term Lease term
Infrastructure, plant and equipment 3 to 10 years 3 to 10 years
Heritage and cultural (where applicable) up to 200 years n/a
Impairment

All assets were assessed for impairment at 30 June 2008. 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 costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. 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 Department were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

1.18 Intangibles

The Department's intangibles comprise internally developed software and purchased software for internal use. These assets are carried at cost.

Software is amortised on a straight-line basis over its anticipated useful life. The useful life of the Department's software is 3 to 5 years (2006-07: 3 to 5 years).

1.19 Inventories

Inventories held for sale are valued at the lower of cost and net realisable value.

Inventories held for distribution are valued at cost, adjusted for any loss of service potential.

1.20 Taxation

The Department is exempt from all forms of taxation except fringe benefits tax (FBT) and the goods and services tax (GST).

Revenues, expenses and assets are recognised net of GST:

  • except where the amount of GST incurred is not recoverable from the Australian Taxation Office, and
  • except for receivables and payables.

1.21 Reporting of Administered Activities

Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the Schedule of Administered Items and related notes.

Except where otherwise stated below, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.

Administered cash transfers to and from the Official Public Account

Revenue collected by the Department for use by the Government rather than the Department is Administered Revenue. Collections are transferred to the Official Public Account (OPA) maintained by the Department of Finance and Deregulation. Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of Government. These transfers to and from the OPA are adjustments to the administered cash held by the Department on behalf of the Government and reported as such in the Statement of Cash Flows in the Schedule of Administered Items and in the Administered Reconciliation Table in Note 20. Thus the Schedule of Administered Items largely reflects the Government’s transactions, through the Department, with parties outside the Government.

Revenue

All administered revenues are revenues relating to the course of ordinary activities performed by the Department on behalf of the Government.

Revenue from the sale of goods is recognised when:

  • the risks and rewards of ownership have been transferred to the buyer
  • the seller retains no managerial involvement or 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 Department.

Revenue from 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 associated with the transaction will flow to the Department.

Revenue from levies, fees and fines is recognised when it is probable that the economic benefit comprising the consideration will flow to the Australian Government.

Dividend revenue is recognised when the dividend has been declared and the right to receive the dividend has been established.

The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any provision for bad and doubtful debts. Collectability of debts is reviewed at balance date. Provisions are made when collectability of the debt is no longer probable.

Interest revenue is recognised using the effective interest method as set out in AASB 139 Financial Instruments: Recognition and Measurement.

Competitive Neutrality

The Australian Government Solicitor (AGS) is a portfolio related entity and operates on a for profit basis. As an agency within the Australian Government it is not subject to taxation other than GST and FBT. However, under Competitive Neutrality arrangements, the AGS is required to make payroll tax, income tax, and practicing certificates equivalent payments to the Government.

Loans and Receivables

Where receivables are not subject to concessional treatment, they are carried at amortised cost using the effective interest method. Gains and losses due to impairment, derecognition and amortisation are recognised through surplus and deficit.

Concessional loans are initially recognised at their fair value. If the rate of interest charged is lower than the government bond rate (for government/public sector loans) or the counterparty's borrowing rate (for non government loans) the difference between the amortised cost and the fair value of the loan is treated as an expense.

Administered Investments

Administered investments in controlled entities are not consolidated because their consolidation is relevant only at the whole of Government level.

Administered investments other than those held for sale are measured at their fair value as at 30 June 2008. Fair value has been taken to be the net assets of the entities as at balance date. For the comparative period, administered investments were measured at fair value as at 30 June 2007.

Personal Benefits

Personal Benefits are measured at the present value of the estimated future cash outflows to be made in respect of service provided up to the reporting date. The current year figure is calculated with reference to AASB 119.

Grants and Subsidies

The Department administers a number of grant and subsidy schemes on behalf of the Government.

Grant and subsidy liabilities are recognised to the extent that (i) the services required to be performed by the grantee have been performed or (ii) the grant eligibility criteria have been satisfied, but payments due have not been made. A commitment is recorded when the Government enters into an agreement to make these grants but services have not been performed or criteria satisfied.

Note 2: Events after the Balance Sheet Date

There are no known events after the Balance Sheet date which will have a material impact on the Department.

Note 3: Income

 
  2008 2007
Revenue $’000 $’000
 
Note 3A: Revenue from Government    
Appropriation:    
Departmental outputs 216,933 212,702
Total revenue from Government 216,933 212,702
 
Note 3B: Sale of goods and rendering of services    
Sale of goods - related entities 31 -
Sale of goods - external entities 324 344
Total sale of goods 355 344
Rendering of services - related entities 8,007 7,558
Rendering of services - external entities 15,510 11,043
Total rendering of services 23,517 18,601
Total sale of goods and rendering of services 23,872 18,945
 
Note 3C: Interest revenue    
Interest on bank accounts 1 -
Total interest revenue 1 -
 
Gains    
 
Note 3D: Other gains    
Resources received free of charge 415 363
Total other gains 415 363

Note 4: Expenses

 
  2008 2007
  $’000 $’000
 
Note 4A: Employee benefits    
Wages and salaries 102,203 86,259
Superannuation 19,268 16,864
Separation and redundancies 215 -
Leave and other entitlements 14,100 10,286
Other employee expenses 4,186 4,476
Total employee benefits 139,972 117,885
 
Note 4B: Suppliers    
Provision of goods – related entities 9,367 7,946
Provision of goods – external entities 39,919 41,634
Rendering of services – related entities 10,084 8,237
Rendering of services – external entities 20,695 20,609
Operating lease rentals:    
Minimum lease payments 13,468 10,258
Contingent rentals 4 -
Workers compensation premiums 524 1,288
Total supplier expenses 94,061 89,972
 
Note 4C: Depreciation and amortisation    
Depreciation:    
Buildings and leasehold improvements 5,411 3,485
Infrastructure, plant and equipment 3,011 1,995
Total depreciation 8,422 5,480
Amortisation:    
Assets held under finance leases 3,534 2,470
Intangibles:    
- Computer software 1,226 1,474
Total amortisation 4,760 3,944
Total depreciation and amortisation 13,182 9,424
 
Note 4D: Finance costs    
Finance leases 540 308
Total finance costs 540 308
 
Note 4E: Write-down and impairment of assets    
Inventory 30 20
Write down of non-financial assets    
Infrastructure, plant and equipment 71 25
Impairment of non-financial assets    
Intangibles 4,595 -
Impairment of financial assets    
Bad and doubtful debts expense 41 258
Total write-down and impairment of assets 4,737 303
 
Note 4F: Other expenses    
Defective Administration Scheme Payments 66 -
Goods provided free of charge 355 -
  421 -

Note 5: Financial Assets

 
  2008 2007
  $’000 $’000
 
Note 5A: Cash and cash equivalents    
Cash on hand 14 5
Cash at bank 1,279 3,588
Total cash and cash equivalents 1,293 3,593
 
Note 5B: Loans and receivables    
Goods and services 6,923 3,239
Appropriations receivable:    
for prior year outputs 149,870 134,826
Total appropriations receivable 156,793 138,065
 
GST receivable from the Australian Taxation Office 1,286 983
Other:    
Other receivables 1,239 1,370
Total other receivables 2,525 2,353
Total loans and receivables (gross) 159,318 140,418
Less Allowance for doubtful debts:    
Goods and services (333) (314)
Total loans and receivables (net) 158,985 140,104
 
Receivables are aged as follows:    
Not overdue 157,884 139,018
Overdue by:    
Less than 30 days 377 309
30 to 60 days 269 68
61 to 90 days 112 73
More than 90 days 676 950
Total receivables (gross) 159,318 140,418
 
The allowance for doubtful debts is aged as follows:    
Not overdue - -
Overdue by:    
Less than 30 days - -
30 to 60 days - -
61 to 90 days - -
More than 90 days (333) (314)
Total allowance for doubtful debts (333) (314)
 
Receivables are represented by:    
Current 158,985 140,104
Total loans and receivables (net) 158,985 140,104
Reconciliation of the allowance for doubtful debts:
Movements in relation to 2008 $18,501 (2007: $246,406)
 
Goods and services receivable Total
  2008 2008
  $'000 $'000
Opening balance 314 314
Amounts written off (10) (10)
Increase/decrease recognised in net surplus 29 29
Closing balance 333 333
 
Goods and services receivable Total
  2007 2007
  $'000 $'000
Opening balance 68 68
Amounts written off (1) (1)
Increase/decrease recognised in net surplus 247 247
Closing balance 314 314

Note 6: Non-Financial Assets

 
  2008 2007
  $’000 $’000
 
Note 6A: Land and buildings    
Freehold land (at fair value) 650 650
Total freehold land 650 650
 
Buildings on freehold land:    
- fair value 600 600
- accumulated depreciation (40) (20)
Total buildings on freehold land 560 580
 
Leasehold improvements    
- fair value 32,715 12,976
- accumulated depreciation (8,831) (3,555)
  23,884 9,421
- work in progress (at cost) 6,056 2,028
Total leasehold improvements 29,940 11,449
Total land and buildings (non-current) 31,150 12,679
 
No indicators of impairment were found for land and buildings.
 
Note 6B: Infrastructure, plant and equipment    
Infrastructure, plant and equipment:    
- fair value 28,689 20,087
- accumulated depreciation/amortisation (11,284) (6,381)
Total infrastructure, plant and equipment 17,405 13,706
 
Heritage and cultural:    
- library fair value 2,372 2,372
Total heritage and cultural 2,372 2,372
Total infrastructure, plant and equipment (non-current) 19,777 16,078
 

Infrastructure, plant and equipment under finance leases are subject to revaluation. The carrying amount is included in the valuation figures above and is separately disclosed in Table A.

All revaluations are conducted in accordance with the revaluation policy stated at Note 1. In 2007-08 an independent valuer conducted a review of the valuations.

No revaluation increments were credited to the asset revaluation reserve by asset class and included in the equity section of the Balance Sheet (2007: no increments); no increments were expensed (2007: no increments expensed).

No indicators of impairment were found for infrastructure, plant and equipment.

Note 6C: Analysis of infrastructure, plant and equipment
Table A – Reconciliation of the opening and closing balances of infrastructure, plant and equipment (2007-08)
  Land Buildings Buildings - Leasehold Improvements Buildings - Total Land and Buildings Total Other IP & E Library Total
  $’000 $’000 $’000 $'000 $'000 $’000 $'000 $’000
As at 1 July 2007                
Gross book value 650 600 15,004 15,604 16,254 20,087 2,372 38,713
Accumulated depreciation/amortisation - (20) (3,555) (3,575) (3,575) (6,381) - (9,956)
Net book value 1 July 2007 650 580 11,449 12,029 12,679 13,706 2,372 28,757
Additions:                
by purchase - - 22,513 22,513 22,513 4,417 - 26,930
by finance lease - - - - - 6,134 - 6,134
by acquisition of entities or operations - - 1,837 1,837 1,837 176   2,013
Revaluations and impairments through equity - - - - - - - -
Depreciation/amortisation expense - (20) (5,391) (5,411) (5,411) (6,545) - (11,956)
Disposals:                
from disposal of entities or operations - - (468) (468) (468) (58) - (526)
Other disposals - - - - - (425) - (425)
Net book value 30 June 2008 650 560 29,940 30,500 31,150 17,405 2,372 50,927
                 
Net book value as of 30 June 2008 represented by:                
Gross book value 650 600 38,771 39,371 40,021 28,689 2,372 71,082
Accumulated depreciation/amortisation - (40) (8,831) (8,871) (8,871) (11,284) - (20,155)
  650 560 29,940 30,500 31,150 17,405 2,372 50,927
Table A – Reconciliation of the opening and closing balances of infrastructure, plant and equipment (2006-07)
  Land Buildings Buildings - Leasehold Improvements Buildings - Total Land and Buildings Total Other IP & E Library Total
  $’000 $’000 $’000 $'000 $'000 $’000 $'000 $’000
As at 1 July 2006                
Gross book value 650 600 9,626 10,226 10,876 10,398 2,374 23,648
Accumulated depreciation/amortisation - - (103) (103) (103) (2,628) - (2,731)
Correction to opening depreciation - - 5 5 5 - - 5
Net book value 1 July 2006 650 600 9,528 10,128 10,778 7,770 2,374 20,922
Additions:                
by purchase - - 5,388 5,388 5,388 6,252 - 11,640
by finance lease - - - - - 4,172 - 4,172
Revaluations and impairments through equity - - - - - - - -
Depreciation/amortisation expense - (20) (3,465) (3,485) (3,485) (4,465) - (7,950)
Disposals:                
Other disposals - - (2) (2) (2) (23) (2) (27)
Net book value 30 June 2007 650 580 11,449 12,029 12,679 13,706 2,372 28,757
                 
Net book value as of 30 June 2007 represented by:                
Gross book value 650 600 15,004 15,604 16,254 20,087 2,372 38,713
Accumulated depreciation/amortisation - (20) (3,555) (3,575) (3,575) (6,381) - (9,956)
  650 580 11,449 12,029 12,679 13,706 2,372 28,757
Note 6D: Intangibles
 
  2008 2007
  $’000 $’000
 
Computer software at cost:    
Purchased computer software 5,615 5,360
Internally developed – in use 8,855 6,680
Accumulated amortisation (11,579) (10,385)
  2,891 1,655
Internally developed – in progress 2,986 4,730
Total intangibles 5,877 6,385
 
Intangible assets were assessed for impairment and $4,595,319 was recognised as an expense (2007: $0).
Table B: Reconciliation of the opening and closing balances of intangibles (2007-08)
 
  Computer software internally developed Computer software purchased Total
  $’000 $’000 $’000
As at 1 July 2007      
Gross book value 11,410 5,360 16,770
Accumulated depreciation/amortisation and impairment (5,177) (5,208) (10,385)
Net book value 1 July 2007 6,233 152 6,385
Additions:      
by purchase or internally developed 5,026 258 5,284
by acquisition of entities or operations - 29 29
Amortisation (1,069) (157) (1,226)
Impairment (4,595) - (4,595)
Net book value 30 June 2008 5,595 282 5,877
 
Net book value as of 30 June 2008 represented by:      
Gross book value 11,841 5,615 17,456
Accumulated depreciation/amortisation and impairment (6,246) (5,333) (11,579)
  5,595 282 5,877
  $’000 $’000 $’000
As at 1 July 2006      
Gross book value 6,239 5,327 11,566
Accumulated amortisation and impairment (3,887) (5,024) (8,911)
Net book value 1 July 2006 2,352 303 2,655
Additions:      
by purchase or internally developed 5,171 33 5,204
Amortisation (1,290) (184) (1,474)
Net book value 30 June 2007 6,233 152 6,385
 
Net book value as of 30 June 2007 represented by:      
Gross book value 11,410 5,360 16,770
Accumulated depreciation/amortisation and impairment (5,177) (5,208) (10,385)
  6,233 152 6,385
Note 6E: Inventories
 
  2008 2007
  $’000 $’000
 
Inventories held for distribution 103 112
Total inventories (current) 103 112
 
During 2007-08 $29,791 of inventory held for distribution was recognised as an expense (2007: $19,947).
No items of inventory are recognised at fair value less cost to sell.
 
Note 6F: Other non-financial assets    
Prepayments 1,269 1,499
Total other non-financial assets 1,269 1,499

All other non-financial assets are current assets.

No indicators of impairment were found for other non-financial assets.

Note 7: Payables

 
  2008 2007
  $’000 $’000
 
Note 7A: Suppliers    
Trade creditors 16,160 17,263
Total supplier payables 16,160 17,263
 
Supplier payables are current liabilities. Settlement is usually made net 30 days.
 
Note 7B: Other payables    
Prepayments received/unearned income 883 573
Fringe Benefits Tax payable 375 92
Total other payables 1,258 665
 
All other payables are current liabilities.

Note 8: Interest Bearing Liabilities

 
  2008 2007
  $’000 $’000
Note 8A: Leases    
Finance leases 8,397 5,437
Total finance leases 8,397 5,437
 
Payable:    
Within one year    
Minimum lease payments 4,335 3,010
Deduct: future finance charges (636) (318)
  3,699 2,692
 
In one to five years    
Minimum lease payments 5,223 2,931
Deduct: future finance charges (525) (186)
  4,698 2,745
 
Finance leases recognised on the balance sheet 8,397 5,437
 
Finances leases exist in relation to certain computer and office equipment assets. The leases are non-cancellable and for fixed terms of varying periods depending on the type of the equipment leased. The lease assets secure the lease liabilities. There are no contingent rentals for finance leases.
 
Note 8B: Other interest bearing liabilities    
Lease incentives 132 193
 
Other interest bearing liabilities are represented by:    
Current 52 61
Non-current 80 132
Total other interest bearing liabilities 132 193

Note 9: Provisions

 
  2008 2007
  $’000 $’000
 
Note 9A: Employee provisions    
Salaries and wages 1,251 709
Leave 29,684 22,645
Superannuation 4,365 3,509
Separation and redundancies 176 -
Other 41 15
Total employee provisions 35,517 26,878
 
Employee provisions are represented by:    
Current 30,375 21,345
Non-current 5,142 5,533
Total employee provisions 35,517 26,878
The classification of current includes amounts for which there is a present obligation, therefore in the case of employee provisions the above classification does not equal the amount expected to be settled within one year of reporting date. Employee provisions expected to be settled in one year $10,866,194 (2007: $8,225,668), in excess of one year $24,651,115 (2007: $18,652,049).
 
Note 9B: Other provisions    
Provisions for makegood 1,160 805
Total other provisions 1,160 805
 
Other provisions are represented by:    
Non-current 1,160 805
Total other provisions 1,160 805
 
  Provision for makegood  
  $’000  
Carrying amount 1 July 2007 805  
Additional provisions made 384  
Amounts reversed (29)  
Closing balance 2008 1,159  

The Department has six agreements for the leasing of premises which have provisions requiring the Department to restore the premises to their original condition at the conclusion of the lease. The Department has made a provision to reflect the present value of this obligation.

Note 10: Restructuring

 
Note 10A: Departmental Restructuring
 
As a result of a restructuring of administrative arrangements the Department assumed responsibility for the following functions:
- Administration of the National Classification Scheme
- Services to territories and advice on their administration, and
- Natural disaster relief and mitigation
 
As a result of a restructuring of administrative arrangements the Department relinquished responsibility for the following functions:
- Privacy and freedom of information
- Australian Commission for Law Enforcement Integrity
 
In respect of the functions assumed and relinquished, the net book values of assets and liabilities transferred for no consideration are recognised as at the date of transfer:
  2008 2007
  $’000 $’000
Administration of the National Classification Scheme    
Assets recognised 6,688  
Liabilities recognised (1,386)  
  5,302 -
 
Service to territories and advice on their administration, and natural disaster relief and mitigation    
Assets recognised 2,459 -
Liabilities recognised (1,561) -
  898 -
 
Total assets recognised 9,147 -
Total liabilities recognised (2,947) -
Net assets assumed 6,200 -
 
 
Privacy and freedom of information    
Assets relinquished 515 -
Liabilities relinquished (466) -
  49 -
 
Australian Commission for Law Enforcement Integrity    
Assets relinquished 3,928 -
Liabilities relinquished (308) -
  3,620 -
 
Total assets relinquished 4,443 -
Total liabilities relinquished (774) -
Net assets relinquished 3,669 -
 
Net increase (decrease) in net assets during the year 2,531 -
 
Administration of the National Classification Scheme    
Revenues    
Recognised by the Department 7,534 -
Total Revenues 7,534 -
 
Expenses    
Recognised by the Department 7,184 -
Total Expenses 7,184 -
 
The transfer took effect on 1 July 2007 therefore no revenue or expenses were recognised by the former Office of Film and Literature Classification
 
Service to territories and advice on their administration, and natural disaster relief and mitigation    
Revenues    
Recognised by the Department of Infrastructure, Transport, Regional Development and Local Government 4,218 -
Recognised by the Department 5,152 -
Total Revenues 9,370 -
 
Expenses    
Recognised by the Department of Infrastructure, Transport, Regional Development and Local Government 4,218 -
Recognised by the Department 3,557 -
Total Expenses 7,775 -
 
Note 10B: Administered Restructuring
 
As a result of a restructuring of administrative arrangements the Department assumed responsibility for the following Administered functions:
- Administration of the National Classification Scheme    
- Services to territories and advice on their administration    
- Natural disaster relief and mitigation    
 
In respect of the functions assumed, the net book values of assets and liabilities transferred for no consideration are recognised as at the date of transfer were:
  2008 2007
  $’000 $’000
 
Administration of the National Classification Scheme    
Assets recognised 27 -
Liabilities recognised (529) -
  (502) -
 
Service to territories and advice on their administration, and natural disaster relief and mitigation    
Assets recognised 449,243 -
Liabilities recognised (11,654) -
  437,589 -
 
Total assets recognised 449,270 -
Total liabilities recognised (12,183) -
Net assets assumed 437,087 -
 
Net increase (decrease) in net assets during the year 437,087 -
 
Administration of the National Classification Scheme    
Revenues    
Recognised by the Department 7,311 -
Total Revenues 7,311 -
 
Expenses    
Recognised by the Department 796 -
Total Expenses 796 -
 
The transfer took effect on 1 July 2007 therefore no revenue or expenses were recognised by the former Office of Film and Literature Classification
 
Service to territories and advice on their administration, and natural disaster relief and mitigation    
Revenues    
Recognised by the Department of Infrastructure, Transport, Regional Development and Local Government 8,658 -
Recognised by the Department 16,549 -
Total Revenues 25,207 -
 
Expenses    
Recognised by the Department of Infrastructure, Transport, Regional Development and Local Government 88,683 -
Recognised by the Department 102,372 -
Total Expenses 191,055 -

Note 11: Cash Flow Reconciliation

 
  2008 2007
  $’000 $’000
Reconciliation of cash and cash equivalents as per Balance Sheet to Cash Flow Statement    
 
Report cash and cash equivalents as per:    
Cash Flow Statement 1,293 3,593
Balance Sheet 1,293 3,593
Difference - -
 
Reconciliation of operating result to net cash from operating activities:
Operating result (11,692) 14,118
Depreciation /amortisation 13,182 9,424
Goods provided free of charge 355 -
Net write down of financial assets 41 258
Impairment of non-financial assets 4,595 -
Loss on disposal of assets 71 45
Lease incentive - 69
Net operating items from restructure (3,079) -
(Increase) / decrease in inventories 9 (9)
(Increase) / decrease in prepayments 230 (662)
(Increase) / decrease in net receivables (18,881) (24,225)
Increase / (decrease) in capital receivables 20,052 -
Increase / (decrease) in employee provisions 8,639 3,510
Increase / (decrease) in supplier payables (1,103) 4,857
(Increase) / decrease in capital creditors 849 (1,975)
Increase / (decrease) in lease incentives (61) (69)
Increase / (decrease) in other provisions 355 5
Increase / (decrease) in other liabilities 593 525
Net cash from / (used by) operating activities 14,155 5,871

Note 12: Contingent Assets and Liabilities

Quantifiable contingencies

The Schedule of Contingencies reports contingent liabilities in respect of claims for damages/costs of $0 (2007: $16,948). The amount represents an estimate of the Department's liability based on precedent cases.

The Schedule also reports contingent assets in respect of claims for damages/costs of $0 (2007: $150,000). The estimate is based on precedent cases.

Unquantifiable contingencies

At 30 June 2008 the Department was involved in a number of legal matters for which it is not possible to estimate the amounts of any eventual payments that may be required in relation to these claims.

Remote contingencies

The Department was involved in a number of legal matters where there was a remote possibility of potential losses. It is not possible to provide a reliable estimate of any eventual payments that may be required in relation to the claims.

Note 13: Executive Remuneration

 
  2008 2007
The number of senior executives who received or were due
to receive total remuneration of $130,000 or more:
   
$130 000 to $144 999 2 1
$145 000 to $159 999 3 10
$160 000 to $174 999 5 6
$175 000 to $189 999 9 7
$190 000 to $204 999 14 6
$205 000 to $219 999 8 15
$220 000 to $234 999 8 6
$235,000 to $249,999 9 2
$250,000 to $264,999 1 3
$265,000 to $279,999 4 3
$280,000 to $294,999 1 -
$295,000 to $309,999 - 1
$325,000 to $339,999 1 1
$460,000 to $474,999 - 1
$490,000 to $504,999 1 -
Total 66 62
 
The aggregate amount of total remuneration of executives shown above. 14,166,838 12,857,574
 
The aggregate amount of separation and redundancy/termination benefit payments during the year to executives shown above. - -
 
The above includes cash and non-cash components of the remuneration packages.

Note 14: Remuneration of Auditors

 
  2008 2007
  $ $
Financial statement audit services are provided free of charge to the Department.    
 
The fair value of the services provided was: 322,500 299,682
  322,500 299,682
 
No other services were provided by the Auditor-General.    

Note 15: Financial Instruments

 
  2008 2007
  $'000 $'000
Note 15A: Categories of financial instruments    
Financial Assets    
Loans and receivables financial assets    
Cash and cash equivalents 1,293 3,593
Loans and receivables 6,923 3,239
  8,216 6,832
 
Carrying amount of financial assets 8,216 6,832
 
Financial Liabilities    
at cost    
Finance leases 8,397 5,437
Other interest bearing liabilities 132 193
Trade creditors 16,160 17,263
Prepayments received/unearned income 883 573
Other payables 375 92
  25,947 23,558
 
Carrying amount of financial liabilities 25,947 23,558
 
Note 15B: Net income and expense from financial assets    
Loans and receivables    
Impairment 41 258
Net gain/(loss) loans and receivables 41 258
 
Net gain/(loss) from financial assets 41 258
 
The net income/expense from financial assets not at fair value from profit and loss is $41,068
(2007: $257,753)
 
Note 15C: Net income and expense from financial liabilities    
Financial liabilities - at cost    
Interest expense 540 308
Net gain/(loss) financial liabilities - at cost 540 308
 
Net gain/(loss) from financial liabilities 540 308
 
The net income/expense from financial liabilities not at fair value from profit and loss is $540,276
(2007: $307,587).
Note 15D: Credit risk
The Department is exposed to minimal credit risk as loans and receivables are cash equivalents and trade receivables. The maximum exposure to credit risk is the risk that arises from potential default of a debtor. This amount is equal to the total amount of receivables $159,318,276 (2007: $140,418,475). The Department has assessed the risk of default on payment and has allocated $332,809 (2007: $314,308) to an allowance for doubtful debts account.

 

The Department has policies and procedures that guide employees on debt recovery techniques that are to be applied.

The following table illustrates the Departments gross exposure to credit risk. The Department holds no collateral to mitigate credit risk.

  2008 2007
  $'000 $'000
Loans and receivables    
Cash and cash equivalents 1,293 3,593
Trade receivables 6,923 3,239
Total 8,216 6,832
Credit quality of financial instruments not past due or individually determined as impaired
  Not Past Due
Nor Impaired
2008
$'000
Not Past Due
Nor Impaired
2007
$'000
Past due or
impaired
2008
$'000
Past due or
impaired
2007
$'000
Loans and receivables        
Cash and cash equivalents 1,293 3,593 - -
Trade receivables 5,489 1,840 1,434 1,399
Total 6,782 5,433 1,434 1,399
Ageing of financial assets that are past due but not impaired for 2008:
  0 to 30 days
$'000
31 to 60days
$'000
61 to 90days
$'000
90+days
$'000
Total
$'000
Loans and receivables          
Trade receivables 377 269 112 343 1,101
Total 377 269 112 343 1,101
Ageing of financial assets that are past due but not impaired for 2007:
  0 to 30 days
$'000
31 to 60days
$'000
61 to 90days
$'000
90+days
$'000
Total
$'000
Loans and receivables          
Trade receivables 309 68 73 636 1,086
Total 309 68 73 636 1,086

The following list of assets have been individually assessed as impaired

Trade receivables have been individually assessed for impairment by departmental officers. Recovery of the debt has been considered based on communication with the debtor and where determined to be unrecoverable an allowance was recognised.

Note 15F: Liquidity risk
The Department's financial liabilities are payables, finance leases and other interest bearing liabilities. The exposure to liquidity risk is based on the notion that the Department will encounter difficulty in meeting its obligations associated with financial liabilities. This is highly unlikely due to appropriation funding and mechanisms available to the Department (e.g. Advance to the Finance Minister) and internal policies and procedures in place to ensure there are appropriate resources to meet its financial obligations.
The following tables illustrates the maturities for financial liabilities:
  On demand
2008
$'000
within 1year
2008
$'000
1 to 5years
2008
$'000
> 5years
2008
$'000
Total
2008
$'000
Liabilities at cost          
Finance leases - 3,699 4,698 - 8,397
Other interest bearing liabilities - 52 80 - 132
Trade creditors - 16,160 - - 16,160
Prepayments received/unearned income - 883 - - 883
Other payables - 375 - - 375
Total - 21,169 4,778 - 25,947
  On demand
2007
$'000
within 1year
2007
$'000
1 to 5years
2007
$'000
> 5years
2007
$'000
Total
2007
$'000
Liabilities at cost          
Finance leases - 2,692 2,745 - 5,437
Other interest bearing liabilities - 61 132 - 192
Trade creditors - 17,263 - - 17,263
Prepayments received/unearned income - 573 - - 573
Other payables - 92 - - 92
Total - 20,680 2,876 - 23,556
The Department receives appropriations and manages its funds to ensure it is able to meet its payments as they fall due. In addition, the Department has policies in place to ensure timely payments are made and has no past history of default.
Note 15G: Market risk

The Department holds basic financial instruments that do not expose the Department to certain market risks. The Department is not exposed to 'Currency risk' or 'Other price risk'.

Interest rate risk

The only interest-bearing items on the Balance Sheet are the 'Finance leases' and 'Other interest bearing liabilities'. All bear interest at a fixed interest rate and will not fluctuate due to changes in the market interest rate.

Note 16: Income Administered on Behalf of Government

 
  2008 2007
  $'000 $'000
Revenue    
 
Non–taxation revenue    
 
Note 16A: Dividends    
Australian government entities - Australian Government Solicitor 5,686 6,766
Total dividends 5,686 6,766
 
Note 16B: Competitive Neutrality    
Australian government entities - Australian Government Solicitor 5,118 4,767
Total competitive neutrality 5,118 4,767
 
Note 16C: Sale of goods and rendering of services    
Sale of goods – external parties 189 -
Total sale of goods 189 -
Rendering of services – related entities 1,366 -
Rendering of services – external parties 12,101 -
Total rendering of services 13,467 -
Total sale of goods and rendering services 13,656 -
 
Note 16D: Levies, fees, taxes and fines    
Levies 598 -
Fees 168 -
Taxes and fines 504 -
Total levies, fees, taxes and fines 1,270 -
 
Note 16E: Interest    
Loans - State and Territory governments 7,974 -
Other Loans 519 -
Total interest 8,493 -
 
Note 16F: Rental income    
Operating lease:    
Investment properties 1,585 -
Total rental income 1,585 -
 
Note 16G: Royalties    
Mining royalties 651 -
Total royalties 651 -
 
Note 16H: Other revenue    
Refund of grant monies paid 8,082 564
Other 3 2
Total other revenue 8,085 566
 
Note 16I: Gains    
Sale of land 62 -
Recognition of asset held for sale 8,025 -
Total gains 8,087 -

Note 17: Expenses Administered on Behalf of Government

 
  2008 2007
  $'000 $'000
Expenses    
     
Note 17A: Employee benefits 1    
Wages and salaries 2,998 413
Superannuation 493 12
Leave and other entitlements 72 -
Other employee expenses 844 -
Total employee benefits expense 4,407 425
 
Note 17B: Suppliers 1    
Provision of goods – related entities 645 819
Provision of goods – external entities 22,816 5,695
Rendering of services – related parties 3,821 2,130
Rendering of services – external parties 28,788 5,218
Operating lease rentals:    
Minimum lease payments 370 192
Total suppliers 56,440 14,054
 
Note17C: Subsidies    
National Counter-Terrorism Committee 16,597 9,364
Law Courts Limited 35,037 14,997
Services to Indian Ocean Territories 782 -
Total subsidies 52,416 24,361
 
Note 17D: Personal benefits 1    
Judges' Pensions Act 1968    
Current service cost 20,600 22,200
Interest on obligation 35,000 32,700
High Court Justices (Long Leave Payments) Act 1979 326 -
Federal Magistrates Act 1999    
Current service cost 609 -
Interest on obligation 15 -
Total personal benefits 56,550 54,900
 
Note 17E: Grants 1    
Public sector:    
Australian government entities (related entities) 110,036 72,220
State and Territory governments 336,591 218,558
Local governments 20,447 9,554
Private sector:    
Non-profit organisations 144,096 97,838
Other 89 -
Overseas 4,269 4,849
Other 8,240 7,865
Total grants 623,768 410,884
 
Note 1: Comparative figures have been amended due to recategorisation of expenses refer Note 1.5
 
Note 17F: Write down and impairment of assets    
Inventory 32 58
Write down of dividend receivable - 834
Bad debts written off 119 6
Write-down of non-financial assets    
Land and buildings 2,024 -
Infrastructure, plant and equipment 99 -
Heritage and cultural 63 -
Assets held for sale 1,698  
Total write down and impairment of assets 4,035 898
 
Note 17G: Depreciation and amortisation    
Depreciation:    
Buildings and leasehold improvements 2,180 -
Infrastructure, plant and equipment 8,344 -
Heritage and cultural assets 250 -
Total depreciation 10,774 -
 
Amortisation:    
Intangibles:    
- Phosphate mine lease 67 -
Total amortisation 67 -
Total depreciation and amortisation 10,841 -

Note 18: Assets Administered on Behalf of Government

  2008 2007
  $'000 $'000
Financial Assets    
Note 18A: Cash and cash equivalents    
Administered bank accounts 182 63
Total cash and cash equivalents 182 63
 
Note 18B: Loans and receivables    
Goods and services receivable 5,583 4,960
Advances and loans:    
State and Territory governments 122,314 -
Other loans and advances 9,796 -
Other receivables:    
Dividends receivable 4,436 5,516
Other receivables 2,360 1,190
GST receivable from ATO 4,372 4,228
Total receivables 148,861 15,894
 
Less: Allowance for doubtful debts:    
Goods and services (140) -
Total receivables (net) 148,721 15,894
 
Receivables are aged as follows:    
Not overdue 146,103 13,848
Overdue by:    
Less than 30 days 379 112
30 to 60 days 131 -
61 to 90 days 107 17
More than 90 days 2,001 1,917
Total receivables (net) 148,721 15,894
 

Goods and services receivables are with entities external to the Australian Government. Credit terms are net 30 days (2007: 30 days).

Loans are made for periods up to 100 years. No security is required. Principal will be repaid in full by maturity. Interest rates are either fixed or variable. Interest payments are made annually.

Reconciliation of the allowance for doubtful debts:
Movements in relation to 2008 $139,716 (2007: no movement)
  Other receivables Total
  2008 2008
  $'000 $'000
Opening balance - -
Allowance acquired through restructure 21 21
Increase/decrease recognised in net surplus 119 119
Closing balance 140 140
  2008 2007
  $’000 $’000
Note 18C: Investments    
Associated entities    
- Law Courts Limited 119,990 99,889
Controlled entities    
- Australian Institute of Criminology 2,388 3,566
- Australian Law Reform Commission 1,152 1,656
- High Court of Australia 193,638 189,637
- Australian Government Solicitor 33,824 30,634
Total investments 350,992 325,382
 
This not should be read in conjunction with note 22.
 
Non-financial Assets    
 
Note 18D: Land and buildings    
Freehold land (at fair value) 47,541 -
Total freehold land 47,541 -
 
Buildings on freehold land:    
- fair value 66,388 -
- accumulated depreciation (2,180) -
Total buildings on freehold land 64,208 -
Total land and buildings (non-current) 111,749 -
 
No indicators of impairment were found for land and buildings.
 
Note 18E: Infrastructure, plant and equipment    
Infrastructure, plant and equipment:    
- fair value 152,274 -
- accumulated depreciation/amortisation (8,340) -
Total infrastructure, plant and equipment 143,934 -
Heritage and cultural:    
- fair value 54,537 -
- accumulated depreciation (238) -
Total heritage and cultural 54,299 -
Total infrastructure, plant and equipment (non-current) 198,233 -
 
No indicators of impairment were found for infrastructure, plant and equipment.
Table A – Reconciliation of the opening and closing balances of infrastructure, plant and equipment (2007-08)
  Land Buildings Land and Buildings Total Other
IP & E
Heritage and Cultural Total
  $’000 $’000 $'000 $’000 $'000 $’000
As at 1 July 2007            
Gross book value - - - - - -
Accumulated depreciation/amortisation and impairment - - - - - -
Net book value 1 July 2007 - - - - - -
Additions:            
by purchase - 1,086 1,086 9,766 1,285 12,137
from acquisition of entities or operations (including restructuring) 49,565 65,302 114,867 142,611 53,327 310,805
Depreciation/amortisation expense - (2,180) (2,180) (8,344) (250) (10,774)
Disposals:           -
Other disposals (2,024) - (2,024) (99) (63) (2,186)
Net book value 30 June 2008 47,541 64,208 111,749 143,934 54,299 309,982
             
Net book value as of 30 June 2008 represented by:            
Gross book value 47,541 66,388 113,929 152,274 54,537 320,740
Accumulated depreciation/amortisation and impairment - (2,180) (2,180) (8,340) (238) (10,758)
  47,541 64,208 111,749 143,934 54,299 309,982
  2008 2007
  $’000 $’000
Note 18F: Inventories    
Inventories held for sale - 32
Inventories held for distribution 2,001 -
Total inventories 2,001 32
  2008 2008
  $'000 $'000
Note 18G: Intangibles    
 
Phosphate mine lease at cost 1,685 -
Purchased computer software (non-current) - -
Accumulated amortisation (67) -
Total intangibles (non-current) 1,618 -
Table B: Reconciliation of the opening and closing balances of intangibles (2007-08)
  Purchased software Phosphate mine
intangible lease
Total
  $’000 $’000 $’000
As at 1 July 2007      
Gross book value - - -
Accumulated depreciation/amortisation and impairment - - -
Net book value 1 July 2007 - - -
Additions:      
from acquisition of entities or operations (including restructuring) - 1,685 1,685
Revaluations and impairments through equity - - -
Amortisation - (67) (67)
Disposals:      
other disposals - - -
Net book value 30 June 2008 - 1,618 1,618
 
Net book value as of 30 June 2008 represented by:      
Gross book value - 1,685 1,685
Accumulated depreciation/amortisation and impairment - (67) (67)
  - 1,618 1,618
  2008 2007
  $’000 $’000
Note 18H: Other non-financial assets    
Prepayments 13 37
Total other non-financial assets 13 37
 
Note 18I: Assets held for sale    
Plant and equipment 6,262 -
Software 65 -
Total assets held for sale 6,327 -

Distribution of the remaining security related equipment from APEC 2007 is expected to be finalised within the next twelve months in accordance with arrangements between the Australian Government and the State jurisdictions.

Note 19: Liabilities administered on behalf of Government

  2008 2007
  $’000 $’000
Payables    
 
Note 19A: Suppliers    
Trade creditors 14,621 2,865
Total suppliers 14,621 2,865
 

All creditors are entities that are not part of the Australian Government. Settlement is usually made net 30 days.

Note: Comparative figures have been amended due to recategorisation of expenses refer Note 1.5

 
Note 19B: Personal benefits    
 
The Judges' Pension Scheme is a defined benefit scheme. It provides a pension benefit of 60% of salary to those judges with more than 10 years of service on retirement on or after age 60. The scheme is unfunded. Members do not contribute towards the cost of benefits.
 
Present value of unfunded obligations 572,057 550,400
Net liability Administered on behalf of the Government 572,057 550,400
 
Changes in the value of the defined benefit obligation are as follows:  
Net liability at 1 July 550,400 554,600
Service cost 20,600 22,200
Interest cost 35,000 32,700
Actuarial losses/(gains) (7,200) (35,100)
Benefits paid (26,743) (24,000)
Net liability at 30 June 572,057 550,400
 
Changes in the fair value of scheme assets are as follows:    
Opening fair value of scheme assets - -
Contributions by employer 26,743 24,000
Benefits paid (26,743) (24,000)
Closing value of scheme assets - -
 
Principal actuarial assumptions at the reporting date (expressed as weighted averages):  
Discount rate at 30 June 6.6% 6.4%
Future expected salary increases 4.0% 4.0%
Future pension increases 4.0% 4.0%
 
The demographic assumptions used as at 30 June 2008 and 30 June 2007 are those used for the preparation of the Long Term Cost Report for the Judges' Pension Scheme as at 30 June 2005.
 
Benefits payable under the Judges' Pensions Act 1968 are paid from Consolidated Revenue on an emerging (or pay as you go) basis. Thus, contributions made equal benefits paid for the Judges' Pension Scheme.
 
The expected employer contributions in respect of 2008-09 are $30,000,000.  
The cumulative actuarial losses and gains recognised in equity are as follows:
 
  $'000
Opening balance as at 30 June 2004 -
2004-05 loss 78,400
30 June 2005 cumulative loss 78,400
2005-06 (gain) (50,700)
30 June 2006 cumulative loss 27,700
2006-07 (gain) (35,100)
30 June 2007 cumulative (gain) (7,400)
2007-08 (gain) (7,000)
30 June 2008 cumulative (gain) (14,400)
The Federal Magistrates Act 1999 was amended to allow for the provision of lump sum benefits and invalidity pensions to Federal Magistrates with effect from September 2007. The scheme is unfunded and financed solely by the employer (the Australian Government).
 
Present value of unfunded obligations - -
Net liability Administered on behalf of the Government - -
 
Changes in the value of the defined benefit obligation are as follows:
 
Net liability at 1 July - -
Service cost 609 -
Interest cost 15 -
Actuarial losses/(gains) (624) -
Benefits paid - -
Net liability at 30 June - -
 
Changes in the fair value of scheme assets are as follows:
Opening fair value of scheme assets - -
Contributions by employer - -
Benefits paid - -
Closing value of scheme assets - -
 
Principal actuarial assumptions at the reporting date (expressed as weighted averages):
 
Discount rate at 30 June 6.6% 6.4%
Future expected salary increases 4.0% 4.0%
Future pension increases 4.0% 4.0%

Benefits payable are paid from Consolidated Revenue on an emerging (or pay as go) basis. Thus contributions made equal benefits paid.

The expected employer contributions in respect of 2008-09 are $0 which is the expected amount of benefit payments.

The cumulative actuarial losses and gains recognised in equity are as follows:

  $'000
Opening balance as at 30 June 2007 -
2007-08 (gain) (624)
30 June 2008 cumulative (gain) (624)
  2008 2007
  $’000 $’000
Note 19C: Grants and subsidies    
Public sector:    
Australian Government entities (related entities) 5,930 2,949
State and Territory governments 10,872 6,749
Local governments 1,369 158
Private sector:    
Non-profit organisations 1,365 1,002
Other 3,483 -
Other 1,875 2,477
Total grants 24,894 13,335
 

Settlement is usually made according to the terms and conditions of each grant. This is usually within 30 days of performance or eligibility.

Note: Comparative figures have been amended due to recategorisation of expenses refer Note 1.5

Note 19D: Employee provisions    
Salaries and wages 51 -
Leave 1,254 -
Superannuation 177 -
Total employee provisions 1,482 -
 
Employee provisions are represented by:    
Current 1,239 -
Non-current 243 -
Total employee provisions 1,482 -
 
The classification of current includes amounts for which there is a present obligation, hence in the case of employee provisions the above classification does not equal the amount expected to be settled within one year of reporting date. Employee provisions expected to be settled in one year $453,530 (2007: $0), in excess of one year $1,028,022 (2007: $0).
 
Note 19E: Other payables    
Prepayments received/unearned income 1,546 -
Total other payables 1,546 -
 
Note 19F: Asbestos removal provision    
Asbestos removal provision 7,162 -
Total Asbestos removal provision 7,162 -
 
Note 19G: Phosphate mine rehabilitation provision    
Phosphate mine rehabilitation provision 2,914 -
Total Phosphate mine rehabilitation provision 2,914 -

Note 20: Administered Reconciliation Table

 
  2008 2007
  $’000 $’000
Opening administered assets less administered liabilities as at 1 July (225,191) (245,877)
Plus: Administered revenues 52,631 12,099
Less: Administered expenses (808,457) (505,522)
Appropriation transfers from OPA:    
Annual appropriations administered items 742,067 468,246
Annual appropriations capital items 3,736 -
Special appropriations (unlimited) 29,865 24,809
Transfers to OPA (77,599) (49,511)
Restructuring 437,087 -
Administered revaluations taken to/from reserves 33,197 35,737
Actuarial Gain - Judges' Pension Scheme taken to equity 7,200 -
Actuarial Gain - Federal Magistrates Scheme taken to equity 624 -
Correction of error for Judges' Pension Scheme taken to equity - 34,828
Closing administered assets less administered liabilities as at 30 June 195,160 (225,191)

Note 21: Administered Contingent Assets and Liabilities

The Department reported a contingent liability of $10,623,179 in its 2006-07 financial statements for assets acquired for the NSW Government for security arrangements for APEC 2007, as under the arrangement between the Australian and NSW governments the assets may have been returned to the Australian Government. Since the completion of APEC 2007 it has been agreed that assets totalling $2,598,304 are to be retained by the NSW Government for no compensation as they relate to consumable low cost items, or upgrades to existing NSW Government assets. Distribution of the written down value of $6,326,597 is yet to be finalised. Therefore these assets have been recognised as Administered assets held for sale in the Department's 2007-08 statements.

Note 22: Administered Investments

Law Courts Limited is a company jointly controlled by the Australian and New South Wales Governments. The primary purpose of the company is to provide a courts facility being the Sydney Law Courts Building. The building is currently undergoing a major refurbishment program. Consistent with long standing policy direction agreed by previous Australian and New South Wales Attorneys-General on the sharing of operating costs, the net assets of the company are apportioned 47.5% Australian Government and 52.5% New South Wales Government.

In addition the Commonwealth has control of the following entities:

  • Australian Institute of Criminology - s5(2)(a) of the Criminology Research Act 1971
  • Australian Law Reform Commission - s5(2)(a) of the Australian Law Reform Commission Act 1996
  • High Court of Australia - s17 of the High Court of Australia Act 1996
  • Australian Government Solicitor - s55M of the Judiciary Act 1903

The principal activities of each of the Department's administered investments are:

  • Law Courts Limited is a jointly controlled Australian Government/New South Wales company limited by guarantee established to manage the Sydney Law Courts Building
  • The Australian Institute of Criminology has an objective and independent national focus in studying crime and criminal justice and disseminating criminal justice information
  • The Australian Law Reform Commission conducts independent references (inquiries) into areas of federal law reform at the request of the Attorney-General
  • The High Court, as the highest court in the Australian judicial system, interprets and applies the law of Australia, decides cases of special federal significance including challenges to the constitutional validity of laws, and hears appeals from Federal, State and Territory Courts
  • The Australian Government Solicitor is a Commonwealth Authority providing national legal services to the Government and its agencies in a contestable environment.

Note 23: Administered Financial Instruments

 
  2008 2007
  $'000 $'000
Note 23A: Categories of financial instruments    
Financial Assets    
Loans and receivables financial assets    
Cash and cash equivalents 182 63
Trade receivables 5,583 4,960
Loans 132,110 -
  137,875 5,023
 
Carrying amount of financial assets 137,875 5,023
 
Financial Liabilities    
at amortised cost    
Trade creditors 14,621 2,865
Grants and subsidies payable 24,894 13,335
Prepayments received/unearned income 1,546 -
  41,061 16,200
 
Carrying amount of financial liabilities 41,061 16,200
 
Note 23B: Net income and expense from financial assets    
Loans and receivables    
Interest 8,493 -
Impairment (119) (840)
Net gain/(loss) loans and receivables 8,374 (840)
 
Net gain/(loss) from financial assets 8,374 (840)
 
The net income/expense from financial assets not at fair value from profit and loss is $8,374,773.
 
Note 23C: Credit risk    

The Department is exposed to minimal credit risk as loans and receivables are cash equivalents and trade receivables. The maximum exposure to credit risk is the risk that arises from potential default of a debtor. This amount is equal to the total amount of receivables $148,861,002 (2007: $15,894,334). The Department has assessed the risk of default on payment and has allocated $139,716 (2007: $0) to an allowance for doubtful debts account.

The Department has policies and procedures that guide employees on debt recovery techniques that are to be applied.

The following table illustrates the Department's gross exposure to credit risk. The Department holds no collateral to mitigate credit risk.
  2008 2007
  $'000 $'000
Loans and Receivables    
Cash and cash equivalents 182 63
Trade receivables 5,583 4,960
Loans 132,110 -
Total 137,875 5,023
Credit quality of financial instruments not past due or individually determined as impaired
  Not Past Due
Nor Impaired
2008
$'000
Not Past Due
Nor Impaired
2007
$'000
Past due or
impaired
2008
$'000
Past due or
impaired
2007
$'000
Loans and Receivables        
Cash and cash equivalents 182 63 - -
Trade receivables 2,965 - 2,478 2,046
Loans 132,110 - - -
Total 135,257 63 2,478 2,046
Ageing of financial assets that are past due but not impaired for 2008
  0 to 30 days
$'000
31 to 60 days
$'000
61 to 90 days
$'000
90+ days
$'000
Total
$'000
Loans and Receivables          
Trade receivables 379 131 107 1,861 2,478
Total 379 131 107 1,861 2,478

Ageing of financial assets that are past due but not impaired for 2007

  0 to 30 days
$'000
31 to 60days
$'000
61 to 90days
$'000
90+days
$'000
Total
$'000
Loans and Receivables          
Trade receivables 112 - 17 1,917 2,046
Total 112 - 17 1,917 2,046

The following list of assets have been individually assessed as impaired:

Trade receivables have been individually assessed for impairment by departmental officers. Recovery of the debt has been considered based on communication with the debtor, and where determined to be unrecoverable an allowance was recognised.

Note 23F: Liquidity risk
The Department's financial liabilities are payables, finance leases and other interest bearing liabilities. The exposure to liquidity risk is based on the notion that the Department will encounter difficulty in meeting its obligations associated with financial liabilities. This is highly unlikely due to appropriation funding and mechanisms available to the Department (e.g. Advance to the Finance Minister) and internal policies and procedures in place to ensure there are appropriate resources to meet its financial obligations.
The following tables illustrates the maturities for financial liabilities:
  On demand
2008
$'000
within 1year
2008
$'000
1 to 5years
2008
$'000
> 5years
2008
$'000
Total
2008
$'000
Liabilities at amortised cost          
Trade creditors - 14,621 - - 14,621
Grants and subsidies payable - 24,894 - - 24,894
Prepayments received/unearned income - 1,546 - - 1,546
Total - 41,061 - - 41,061
 
  On demand
2007
$'000
within 1year
2007
$'000
1 to 5years
2007
$'000
> 5years
2007
$'000
Total
2007
$'000
Liabilities at amortised cost          
Trade creditors - 2,865 - - 2,865
Grants and subsidies payable - 13,335 - - 13,335
Total - 16,200 - - 16,200
           
The Department receives appropriations and manages its funds to ensure it is able to meet its payments as they fall due. In addition, the Department has policies in place to ensure timely payments are made and has no past history of default.
Note 23G: Market risk

The Department holds basic financial instruments that do not expose the Department to certain market risks. The Department is not exposed to 'Currency risk' or 'Other price risk'.

Interest rate risk

The only interest-bearing items on the Balance Sheet are the 'Loans'. All those bearing interest at a fixed interest do not fluctuate due to changes in the market interest rate. Those with variable interest rates are significantly concessional so that any movement in the market rate will not have a material impact on the carrying amount of the receivable.

Note 24: Appropriations

Table A: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund for Ordinary Annual Services Appropriations and borrowings
       
Particulars Administered Expenses Departmental Outputs Total
  Outcome 1 Outcome 2 Outcome 3
  2008 2007 2008 2007 2008 2007 2008 2007 2008 2007
  $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance carried from previous period 56,065 21,886 78,547 47,731 - - 108,866 81,115 243,478 150,732
Adjustment to opening balance - (5,453) - (15,290) - - (2,105) - (2,105) (20,743)
Appropriation Act:                    
Appropriation Act (No.1) 2007-08 446,838 383,909 116,916 126,384 - - 207,158 207,997 770,912 718,290
Appropriation Act (No.3) 2007-08 17,452 3,009 47,458 14,002 12,288 - - 1,731 77,198 18,742
Appropriation Act (No.5) 2007-08 8,218               8,218 -
Appropriation Act (Northern Territory National Emergency Response) 10,761 - - - - - 287 - 11,048 -
Departmental adjustments by the Finance Minister (Appropriation Acts) - - - - - - - - - -
Administered appropriation lapsed (Appropriation Act section 8) (46,546) (6,293) (71,329) (26,758) - -     (117,875) (33,051)
Reductions of appropriations (Appropriation Act section 9)                    
- current year - - - - - - (1,251) - (1,251) -
Advance to the Finance Minister (Appropriation Act section 11) - - - - - - - - - -
Comcover receipts (Appropriation Act section 12) - - - - - - - - - -
FMA Act:                    
Refunds credited (FMA section 30) 3,364 1,262 666 130 64 -   - 4,094 1,392
Appropriations to take account of recoverable GST (FMA section 30A) 17,651 19,536 4,273 2,910 1,360 - 9,939 10,834 33,223 33,280
Annotations to ‘net appropriations’ (FMA section 31) - - - - - - 20,278 20,191 20,278 20,191
Adjustment of appropriations on change of entity function (FMA section 32) - - - - - - - - - -
- Privacy and Freedom of Information Function   -   -   - (1,138) - (1,138) -
- Australian Commission for Law Enforcement Integrity   -   -   - (5,137) - (5,137) -
- Administration of the National Classification Scheme   -   -   - 9,358 - 9,358 -
- Services to territories and advice on their administration   -   - 110,124 - 5,962 869 116,086 869
- Natural disaster relief and mitigation   -   - 4,000 - 1,587 - 5,587 -
Total appropriation available for payments 513,803 417,855 176,531 149,109 127,836 - 353,804 322,737 1,171,974 889,702
Cash payments made during the year (GST inclusive) 494,938 361,789 118,256 70,562 37,855 - 254,101 213,871 905,150 646,223
Appropriations credited to Special Accounts (excluding GST) - - - - - - - - - -
Balance of Authority to Draw Cash from the Consolidated Revenue Fund for Ordinary Annual Services Appropriations 18,865 56,065 58,275 78,547 89,981 - 99,703 108,866 266,824 243,478
                     
Represented by                    
Cash at bank and on hand 182 63 - - - - 1,293 3,593 1,475 3,655
Departmental appropriations receivable - - - - - - 97,741 104,590 97,741 104,590
Receivables - GST - - - - - - 669 683 669 683
Undrawn, unlapsed administered appropriations 18,683 56,002 58,275 78,547 89,981 - - - 166,939 134,549
Total 18,865 56,065 58,275 78,547 89,981 - 99,703 108,866 266,824 243,478
Table B: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund for Other than Ordinary Annual Services Appropriations
       
Particulars Operating Non – operating Total
  Outcome 1 Outcome 2 Outcome 3
  SPPs NAEs SPPs NAEs SPPs NAEs Equity Loans Previous Years’ Outputs Admin assets and liabilities
  2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007
  $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance carried from previous period 11,000 11,001 - - - - - - - - - - 30,236 31,907 - - - - - - 41,236 42,908
Appropriation Act:                                            
Appropriation Act (No.2) 2007-08 41,028 50,537 - - - - - - - - - - 34,472 27,911 - - 2,105 - - - 77,605 78,448
Appropriation Act (No.4) 2007-08 - - - - - - - -   - - - 1,310 203 - - - - 5,000 - 6,310 203
Appropriation Act (No.6) 2007-08 - - - - - - - - - - - - - - - - - - - - - -
Administered appropriation lapsed (Appropriation Act section 7 & 8) (11,000) (11,001) - - - - - - - - - - - - - - - - - - (11,000) (11,001)
Advance to the Finance Minister (Appropriation Act section 12)                                         - -
-Appropriation reduced by a section 12 determination - - - - - - - - - - - - - (15,000) - - - - - - - (15,000)
FMA Act:                                         - -
Appropriations to take account of recoverable GST (FMA s30A) 1,557 - - - - - - - 1,696 - - - - - - - - - 139 - 3,392 -
Adjustment of appropriations on change of entity function (FMA s32)                                         - -
- Australian Commission for Law Enforcement Integrity - - - - - - - - - - - - (264) - - - - - - - (264) -
- Administration of the National Classification Scheme 833 - - - - - - - - - - - - - - - - - - - 833 -
- Services to territories and advice on their administration - - - - - - - - 18,086 - - - - - - - - - 71,072 - 89,158 -
- Natural disaster relief and mitigation - - - - - - - - 115,784 - - - - - - - - - 71,587   187,371 -
Total appropriations available for payments 43,418 50,537 - - - - - - 135,566       65,754 45,021 - - 2,105 - 147,798 - 394,641 95,558
Cash payments made during the year (GST inclusive) 43,381 39,537 - - - - - - 47,242 - - - 15,730 14,785 - - - - 3,875 - 110,228 54,321
Appropriations credited to Special Accounts (GST exclusive) - - - - - - - - - - - - - - - - - - - - - -
Balance of Authority to Draw Cash from the Consolidated Revenue Fund for Other Than Ordinary Annual Services Appropriations 37 11,000 - - - - - - 88,324 - - - 50,024 30,236 - - 2,105 - 143,923 - 284,413 41,236
Represented by:
Cash - - - - - - - - - - - - - - - - - - - - - -
Appropriation receivable - - - - - - - - - - - - 50,024 30,236 - - 2,105 - - - 52,129 30,236
Receivables - GST - - - - - - - - - - - - - - - - - - - - - -
Undrawn, unlapsed administered appropriations 37 11,000 - - - - - - 88,324 - - - - - - - - - 143,923 - 232,284 11,000
Total 37 11,000 - - - - - - 88,324 - - - 50,024 30,236 - - 2,105 - 143,923 - 284,413 41,236

Departmental and non-operating appropriations do not lapse at financial year end. However, the responsible Minister may decide that part or all of a departmental or non-operating appropriation is not required and request the Finance Minister to reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister's determination and is disallowable by Parliament. The Finance Minister determine a reduction in departmental outputs appropriations in 2007-08 of $1,251,000.

Table C: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund - Special Appropriations (Unlimited Amount)
Legislation: National Handgun Buyback Act 2003
Purpose
: To provide for financial assistance for qualifying payments made by States and other expenditure in connection with the implementation of the handgun buyback, and for related purposes.
All transactions under this Act are recognised as administered items
2008 2007
$'000 $'000
Cash payments made during the year 3,695 528
Refunds credited (net) (FMA Act section 30) 12 -
Total charged to appropriation 3,707 528
Estimated actual 6,457 6,985
 
Legislation: Judges' Pensions Act 1968
Purpose
: To make provision for pensions for judges and their families.
All transactions under this Act are recognised as administered
2008 2007
$'000 $'000
Cash payments made during the year - federal court justices 22,526 20,969
Cash payments made during the year - former Presidential Members of the Australian Industrial Relations Commission 3,267 2,996
Refunds credited (net) (FMA Act section 30) 45 -
Total Charged to appropriation 25,838 23,965
Estimated actual accrual (1) 28,368 52,597
(1) The estimate includes funding for the recognition of the future obligations for superannuation.
The Department has given the Australian Industrial Registry drawing rights for the 2007-08 financial year in relation to this special appropriation.
The Australian Industrial Registry makes pension payments directly to former Presidential Members of the Australian Industrial Relations Commission. The 2007-08 estimated actual figure includes $3,268,000 for the Australian Industrial Registry (2007: $2,996,281).
 
Legislation: Law Officers Act 1964
Purpose
: To make provision for pensions of Solicitors General. All transactions under this Act are recognised as administered items
2008 2007
$'000 $'000
Cash payments made during the year 321 308
Total charged to appropriation 321 308
Estimated actual 450 633
 
Legislation: High Court Justices (Long Leave Payments) Act 1979
Purpose
: To make provision for long leave payments for Justices of the High Court
2008 2007
$'000 $'000
Cash payments made during the year 326 -
Total charged to appropriation 326 -
Estimated actual 326 -
Table D: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund - Special Appropriations (Refund Provisions)
Legislation: Financial Management and Accountability Act 1997
Purpose
: To provide for payments under Section 28 of the FMA Act.
All transactions under this Act are recognised as administered
2008 2007
$'000 $'000
Cash payments made during the year 8 -
Total charged to special appropriation 8 -
Estimated actual 8 -
Table E: Disclosure by agent in relation to Special Appropriations
 
Remuneration Tribunal Act 1973 Department of Jobs and Small Business Total
Departmental Administered Departmental Administered
2008 2007 2008 2007 2008 2007 2008 2007
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Total receipts - - 2,926 2,821 - - 2,926 2,821
Total payments - - 2,926 2,817 - - 2,926 2,817
Balance - - - 4 - - - 4
                 
Parliamentary Entitlements Act 1990 Department of Finance and Administration Total
Departmental Administered Departmental Administered
2008 2007 2008 2007 2008 2007 2008 2007
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Total receipts - - 7 280 - - 7 280
Total payments - - 7 280 - - 7 280
Balance - - - - - - - -

Other Special Appropriations that had nil balances at the end of the 2007-08 financial year and where there were no transactions debited or credited to them during the 2007-08 financial year are:

  • Native Title Act 1993 Purpose: Payment of successful Native Title compensation claims
  • National Firearms Program Implementation Act 1998 Purpose: Payment of compensation for firearms surrendered in 3 External Territories
  • National Firearms Program Implementation Act 1997 Purpose: Payment of compensation for surrendered firearms not covered by the 1996 legislation (certain automatic weapons)
  • National Firearms Program Implementation Act 1996 Purpose: To provide for financial assistance and other expenditure in connection with the implementation of the national firearms program
  • National Crime Authority (Status and Rights of former Chairman) Act 1984 Purpose: Payments of remuneration and allowances
  • High Court of Australia Act 1979 Purpose: Salary and Allowances of Judges
  • Judges (Long Leave Payments) Act 1979 Purpose: To make provision for long leave payments for judges
  • Federal Court of Australia Act 1976 Purpose: Salary and allowances of judges
  • Family Law Act 1975 Purpose: Salary and allowances of judges
  • Crimes (Superannuation Benefits) Act 1989 Purpose: Superannuation benefits paid or payable to or in respect of certain persons convicted of corruption offences
  • Commonwealth Places (Application of Laws) Act 1970 Purpose: Application and administration of laws in places acquired by the Commonwealth for public purposes
  • Classification (Publications, Films and Computer Games) Act 1995 Purpose: Payments to the States regarding costs of administering the scheme
  • Appropriation (Dr Carmen Lawrence's Legal Costs) Act 1999-2000 Purpose: Payment of legal cost relating to the case of Vass & Ors v The Commonwealth of Australia
  • Federal Magistrates Act 1999 Purpose: To make provision for death or invalidity benefits for judges

Note 25: Special Accounts

Christmas Island Phosphate Mining Rehabilitation (Administered) 2008 2007
$'000 $'000
Legal Authority: Financial Management and Accountability Act 1997; s20
Purpose: To manage the funding provided for the rehabilitation of phosphate mine sites on Christmas Island in accordance with the requirements of the lease between Phosphate Resources Limited and the Australian Government
This account is non-interest bearing
Balance carried from previous period - -
Receipts 598 -
Other receipts:
Transfer of balance from Department of Infrastructure, Transport, Regional Development and Local Government
3,034 -
Total credits 3,632 -
Available for payments 3,632 -
Payments made to suppliers (718) -
Balance carried to next year 2,914 .
 
Represented by:    
Cash - transferred to the Official Public Account 2,914 -
Total balance carried to the next period 2,914 -
Services on behalf of other Governments and non public bodies (Administered) 2008 2007
$'000 $'000
Legal Authority: Financial Management and Accountability Act 1997; s20
Purpose: For expenditure in connection with services performed on behalf of other Governments and bodies that are not Agencies under the FMA Act
This account is non-interest bearing
Balance carried from previous period 1,786 934
Costs recovered 2,188 2,510
Available for payments 3,974 3,444
Payments made to suppliers (1,684) (1,658)
Balance carried to next year 2,290 1,786
 
Represented by:    
Cash - transferred to the Official Public Account 2,290 1,786
Total balance carried to the next period 2,290 1,786
Other Trust moneys (Administered) 2008 2007
$'000 $'000
Legal Authority: Financial Management and Accountability Act 1997; s20
Purpose: For expenditure of moneys temporarily held on trust or otherwise for the benefit of a person other than the Australian Government
This account is non-interest bearing
Balance carried from previous period 456 518
Other receipts 2,387 535
Available for payments 2,843 1,053
Payments made to suppliers (1,178) (597)
Balance carried to next period 1,665 456
 
Represented by:    
Cash - transferred to the Official Public Account 1,659 456
Cash - held by agency 6 -
Total balance carried to the next period 1,665 456
Northern Territory Flexible Funding Pool Special Account  

The Department of Families, Housing, Community Services and Indigenous Affairs made the following payments out of the Northern Territory Flexible Funding Pool Special Account, directly to third parties, on behalf of the Attorney-General's Department:
Administered: $1,474,000

These amounts have been recognised in the schedule of items administered on behalf of the Government as appropriate.

Note 26: Compensation and Debt Relief in Special Circumstances

  2008 2007
  $ $
Administered    
 
No ‘Act of Grace’ expenses were incurred during the reporting period. (2007: no expenses) - -
 
No waivers of amounts owing to the Australian Government were made pursuant to subsection 34(1) of the Financial Management and Accountability Act 1997. (2007: No waivers) - -
 
No payments were made under the 'Defective Administration Scheme' during the reporting period. (2007: No payments) - -
 
No payments were made under s73 of the Public Service Act 1999 during the reporting period. (2007: No payments) - -
 
No ex-gratia payments were provided for during the reporting period. (2007: No payments) - -
Departmental    
 
No ‘Act of Grace’ expenses were incurred during the reporting period. (2007: no expenses). - -
 
No waivers of amounts owing to the Australian Government were made pursuant to subsection 34(1) of the Financial Management and Accountability Act 1997. (2007: No waivers) - -
 
2 payments were made under the 'Defective Administration Scheme' during the reporting period. (2007: No payments) 597 -
 
No payments were made under s73 of the Public Service Act 1999 during the reporting period. (2007: No payments) - -
 
No ex-gratia payments were provided for during the reporting period. (2007: No payments) - -

Note 27: Reporting of Outcomes

The Department uses budgeted average staffing levels to determine the attribution of its shared items. The attribution is based on the number of staff that can be directly costed to an operational function. The basis of attribution in the Table is consistent with the basis used for the 2007-08 Budget.

Note 27A: Net Cost of Outcome Delivery
  Outcome 1 Outcome 2 Outcome 3 Total
2008 2007 2008 2007 2008 2007 2008 2007
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Expenses                
Administered 570,668 435,877 135,417 69,649 102,372 - 808,457 505,526
Departmental 98,648 80,367 148,847 137,524 5,418 - 252,913 217,891
Total expenses 669,316 516,244 284,264 207,173 107,790 - 1,061,370 723,417
Costs recovered from provision of goods and services to the non government sector
Administered - - - - 14,628 - 14,628 -
Departmental 5,342 5,856 18,502 13,089 28 - 23,872 18,945
Total costs recovered 5,342 5,856 18,502 13,089 14,656 - 38,500 18,945
Other external income                
Administered 25,203 11,691 10,879 409 1,921 - 38,003 12,100
Departmental 144 160 262 203 10 - 416 363
Total other external income 25,347 11,851 11,141 611 1,931 - 38,419 12,462
Net cost/(contribution) of outcome 638,627 498,537 254,621 193,473 91,203 - 984,451 692,010
Outcomes 1, 2 and 3 are described in Note 1.1. Net costs shown include intra-government costs that are eliminated in calculating the actual Budget Outcome. Refer to Outcome 1 Resourcing Table, Outcome 2 Resourcing Table and Outcome 3 Resourcing Table of this Annual Report.
Note 27B: Major Classes of Departmental Revenues and Expenses by Output Groups and Outputs
Outcome 1 Output Group 1.1 Output Group 1.2 Output Group 1.3 Output Group 1.4 Output Group 1.5 Output Group 1.6 Output Group 1.7 Output Group 1.8 Outcome 1 Total
2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Departmental expenses                                    
Employees 17,147 14,831 5,604 3,881 11,405 5,650 4,257 3,881 8,005 7,494 2,455 2,832 12,006 11,230 1,879 - 62,758 49,800
Suppliers 7,345 8,080 5,941 3,890 3,331 2,240 1,683 1,670 2,235 2,199 2,804 2,868 5,274 6,143 2,092 - 30,705 27,091
Depreciation and amortisation 1,168 948 1,019 148 698 406 259 221 591 516 138 234 914 842 111 - 4,898 3,313
Other expenses 70 43 62 7 22 22 20 16 43 26 8 10 55 40 7 - 287 163
Total departmental expenses 25,730 23,902 12,626 7,926 15,456 8,318 6,219 5,788 10,874 10,235 5,405 5,944 18,249 18,254 4,089 - 98,648 80,367
                                     
Funded by:                                    
Revenues from government 25,570 22,653 6,045 5,300 16,445 8,105 6,016 5,001 7,971 7,747 5,557 5,886 18,327 17,539 4,717 - 90,648 72,231
Sale of goods and services 258 242 119 506 1,431 1,771 219 233 3,209 2,428 12 15 84 660 10 - 5,342 5,856
Other income 37 46 32 7 12 19 8 11 19 25 4 11 28 41 4 - 144 160
Total departmental income 25,865 22,941 6,196 5,813 17,888 9,895 6,243 5,245 11,199 10,200 5,573 5,912 18,439 18,240 4,731 - 96,134 78,247
 
Outcome 2 Output Group 2.1 Output Group 2.2 Output Group 2.3 Output Group 2.4 Output Group 2.5 Output Group 2.6 Outcome 2 Total
2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Departmental expenses                            
Employees 15,173 22,120 7,700 8,331 10,084 11,999 12,844 25,636 25,348 - 2,835 - 73,984 68,086
Suppliers 13,778 19,827 4,505 8,654 8,828 18,853 15,799 15,549 13,514 - 5,111 - 61,535 62,882
Depreciation and amortisation 1,139 1,358 610 531 704 838 976 3,382 4,177 - 393 - 7,999 6,109
Other expenses 53 68 36 36 41 273 54 70 536 - 4,609 - 5,329 447
Total departmental expenses 30,143 43,373 12,851 17,552 19,657 31,963 29,673 44,637 43,575 - 12,948 - 148,847 137,524
                             
Funded by:                            
Revenues from government 23,609 47,193 10,086 16,538 16,583 29,315 29,771 47,425 40,667 - 421 - 121,137 140,471
Sale of goods and services 6,075 8,881 57 33 63 1,090 513 3,085 4,082 - 7,712 - 18,502 13,089
Other income 32 65 19 25 22 39 29 74 153 - 7 - 262 203
Total departmental income 29,716 56,139 10,162 16,596 16,668 30,444 30,313 50,584 44,902 - 8,140 - 139,901 153,763
 
Outcome 3 Output Group 3.1 Output Group 3.2 Outcome 3 Total
2008 2007 2008 2007 2008 2007
$’000 $’000 $’000 $’000 $’000 $’000
Departmental expenses            
Employees 2,851 - 379 - 3,230 -
Suppliers 1,412 - 409 - 1,821 -
Depreciation and amortisation 244 - 41 - 285 -
Other expenses 80 - 2 - 82 -
Total departmental expenses 4,587 - 831 - 5,418 -
             
Funded by:            
Revenues from government 4,041 - 1,107 - 5,148 -
Sale of goods and services 24 - 4 - 28 -
Other income 9 - 1 - 10 -
Total departmental income 4,074 - 1,112 - 5,186 -
 
Note 27C: Major Classes of Administered Revenues and Expenses by Outcomes
  Outcome 1 Outcome 2 Outcome 3 Total
2008 2007 2008 2007 2008 2007 2008 2007
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Administered Income                
Dividends 5,686 6,766 - - - - 5,686 6,766
Competitive Neutrality 5,118 4,767 - - - - 5,118 4,767
Sale of goods and rendering of services 7,311 - 1,857 - 4,488 - 13,656 -
Levies fees and fines - - - - 1,270 - 1,270 -
Interest - - - - 8,493 - 8,493 -
Rental income - - - - 1,585 - 1,585 -
Royalties - - - - 651 - 651 -
Other revenue 7,088 158 997 409 - - 8,085 566
Gains - - 8,025 - 62 - 8,087 -
Total administered income 25,203 11,691 10,879 409 16,549 - 52,631 12,100
Administered Expenses                
Employee benefits 884 301 217 124 3,306 - 4,407 425
Suppliers 14,286 8,842 9,400 5,212 32,754 - 56,440 14,054
Subsidies 35,037 14,997 16,597 9,368 782 - 52,416 24,365
Personal benefits 56,550 54,900 - - - - 56,550 54,900
Grants 463,872 355,939 105,849 54,945 54,047 - 623,768 410,884
Write-down and impairment of assets 35 898 1,705 - 2,295 - 4,035 898
Depreciation and Amortisation 4 - 1,649 - 9,188 - 10,841 -
Total Administered Expenses 570,668 435,877 135,417 69,649 102,372 - 808,457 505,526

Note 28 Administered Expenditure by Outcome

  2008 2007
  $'000 $'000
Note 28: Administered item expenditure    
Outcome 1    
Payments for the provision of legal aid for Indigenous Australians 64,012 51,771
Payments for the provision of law and justice advocacy services for Indigenous Australians 2,495 2,477
Payments for the provision of prevention, diversion, rehabilitation, and restorative justice services for Indigenous Australians 26,837 8,487
Payments for the provision of family violence prevention legal services for Indigenous Australians 18,681 12,512
Payments for the provision of legal aid 137,266 115,499
Payments for the provision of legal aid - States and Territories 41,028 39,537
Financial assistance towards legal costs and related expenses 4,923 6,520
Payments for the provision of community legal services 32,493 25,826
Payments for Indigenous interpreter services in the Northern Territory 1,681 1,107
Family Relationships Services Program 124,468 80,558
Family Court of Western Australia 13,265 12,575
Payments for services under the Family Law Act 1975 and the Child Support Scheme legislation 1,823 2,175
Payments to Law Courts Limited for contributions to operating and capital expenses 35,037 14,997
Publication of Acts and Select Legislative Instruments 1,016 742
Payments for memberships of international bodies 650 610
Payments for grants to Australian organisations 1,339 793
Judges' Pensions Act 1968 55,600 54,900
High Court Justices (Long Leave Payments) Act 1979 326 -
Federal Magistrates Act 1999 624 -
Equine Influenza Inquiry 5,708 -
Clarke Inquiry into the case of Dr Mohamed Haneef 600 -
UN Oil-for-food Inquiry - 4,791
Administration of the National Classification Scheme 796 -
Outcome 1 Total 570,668 435,877
 
Outcome 2    
National Community Crime Prevention Program 18,073 8,141
Australia's contribution to the International Criminal Court 3,536 4,179
Payments for memberships of international bodies 83 60
Payments for grants to Australian organisations 500 -
National Emergency Volunteers Support Fund 5,410 4,324
Local Grants Scheme 10,606 7,649
Urban search and rescue - capability 9,806 937
APEC 2007 security arrangements 53,860 29,246
Safer Suburbs 1,500 -
National Handgun Buyback Act 2003 4,447 588
Anti-money laundering and counter-terrorism financing - information and public awareness 152 154
National Security Public Information Campaign 9,198 5,003
National Counter-Terrorism Committee - Special Fund and operating expenses 18,246 9,368
Outcome 2 Total 135,417 69,649
 
Outcome 3    
Christmas Island phosphate mining rehabilitation 598 -
Norfolk Island - refurbishment of Kingston Pier 3 -
Office of the Administrator in the Northern Territory 119 -
Office of the Administrator on Norfolk Island 215 -
 
Payments to the ACT - assistance for National Capital type functions 637 -
Payments to the ACT - assistance for water and sewerage services 5,187 -
Payments to the ACT - compensation for the effects of National Capital influence on the cost of providing municipal services 12,899 -
Services to Indian Ocean Territories 37,063 -
Services to Jervis Bay Territory 3,174 -
Bushfire mitigation 2,071 -
National aerial firefighting 4,000 -
Natural disaster mitigation 18,784 -
Natural disaster relief and recovery arrangements 5,747 -
Disaster appeal funds 500 -
Services to Jervis Bay Territory - depreciation 239 -
Norfolk Island administration - depreciation 2,447 -
Services to Indian Ocean Territories - depreciation 8,689 -
Outcome 3 Total 102,372 -
 
Total administered expenses 808,457 505,526