Section 1: Agency overview and resources
1.1 Strategic direction statement
The Australian Office of Financial Management (AOFM) is responsible for the management of Australian Government debt and certain financial assets. It issues Treasury Bonds, Treasury Indexed Bonds and Treasury Notes, manages the Government's cash balances and invests from time to time in high quality financial assets including term deposits and investment grade fixed interest investments.
The AOFM aims to meet the Government's financing needs in a cost‑effective manner subject to acceptable risk and to meet the Government's policy objectives of maintaining liquid and efficient Bond and Bond futures markets. Treasury Bonds are the main issuance instrument used by the AOFM. The use of Treasury Indexed Bonds facilitates diversification of the investor base by tapping into additional sources of investor demand. The development of this market has also, at times, been used to facilitate development of the Treasury Bond market.
In managing the Government's cash balances, the AOFM aims to ensure that the Government is able to meet its financial obligations when they fall due, while seeking to minimise the net cost of funding. The issue of Treasury Notes is used to manage cash flow volatility arising from the Government's within‑year financing task, while investment in financial assets helps to defray the cost of this task.
The AOFM manages the Government's holdings of highly rated residential mortgage‑backed securities acquired between 2008‑09 and 2012‑13 in accordance with the Treasurer's directions. No assets have been added to the portfolio since April 2013.
1.2 Agency resource statement
Table 1.1 shows the total resources for AOFM.
Estimate of prior year amounts available in 2014‑15 $'000 |
+ | Proposed at Budget 2014‑15 $'000 |
= | Total estimate 2014‑15 $'000 |
Actual available appropriation 2013‑14 $'000 |
||
---|---|---|---|---|---|---|---|
Ordinary annual services | |||||||
Departmental | |||||||
Prior year departmental appropriation | 25,563 | 4 | - | 25,563 | - | ||
Departmental appropriation3 | - | 12,134 | 1 | 12,134 | 11,887 | ||
Receipts from other sources (s31) | - | 828 | 2 | 828 | 828 | ||
Total departmental | 25,563 | 12,962 | 38,525 | 12,715 | |||
Administered expenses | |||||||
Outcome 1 | - | 10 | 1 | 10 | 10 | ||
Total ordinary annual services | A | 25,563 | 12,972 | 38,535 | 12,725 | ||
Other services | |||||||
Departmental non-operating | |||||||
Equity injections | - | - | - | - | |||
Total other services | B | - | - | - | - | ||
Total available annual appropriations (A+B) | 25,563 | 12,972 | 38,535 | 12,725 | |||
Special appropriations expenses | |||||||
Commonwealth Inscribed Stock Act 1911 | - | 14,707,384 | 14,707,384 | 13,452,773 | |||
Financial Agreement Act 1994 | - | 20 | 20 | 20 | |||
Loans Securities Act 1919 | - | 720 | 720 | 862 | |||
Subtotal | - | 14,708,124 | 14,708,124 | 13,453,655 | |||
Special appropriations capital | |||||||
Commonwealth Inscribed Stock Act 1911 | - | 101,393,024 | 101,393,024 | 47,786,586 | |||
Financial Management and Accountability Act 1997 | - | 228,698,704 | 228,698,704 | 624,873,763 | |||
Subtotal | - | 330,091,728 | 330,091,728 | 672,660,349 | |||
Total special appropriations | C | - | 344,799,852 | 344,799,852 | 686,114,004 | ||
Total appropriations e xcluding special accounts |
25,563 | 344,812,824 | 344,838,387 | 686,126,729 | |||
Special accounts | |||||||
Opening balance5 | 742 | - | 742 | - | |||
Total special account | D | 742 | - | 742 | - | ||
Total net resourcing for the AOFM (A+B+C+D) | 26,305 | 344,812,824 | 344,839,129 | 686,126,729 |
1. Appropriation Bill (No. 1) 2014‑15.
2. Receipts received under section 31 (s31) of the Financial Management and Accountability Act 1997.
3. Includes $0.7 million in 2014‑15 for the departmental capital budget (also refer to Table 3.2.5).
4. Estimated adjusted balance carried forward from previous year.
5. Estimated opening balance for special accounts. For further detail on special accounts see Table 3.1.2.
1.3 Budget measures
Budget measures relating to the AOFM are summarised below.
Program | 2013‑14 $'000 |
2014‑15 $'000 |
2015‑16 $'000 |
2016‑17 $'000 |
2017‑18 $'000 |
|
---|---|---|---|---|---|---|
Expense measures | ||||||
Efficiency Dividend - temporary increase in the rate1 | ||||||
Departmental expenses | 1.1 | - | (124) | (279) | (436) | (436) |
Efficiency Dividend - a further temporary increase of 0.25 per cent | ||||||
Departmental expenses | 1.1 | - | (29) | (58) | (87) | (87) |
Public Service efficiencies2 | ||||||
Departmental expenses | 1.1 | (3) | (16) | (35) | (49) | (49) |
Reforms to APS management and efficient procurement of agency software1 | ||||||
Departmental expenses | 1.1 | (3) | (15) | (34) | (48) | (48) |
South Australian Government housing stimulus assistance1 | ||||||
Administered expenses | 1.1 | - | - | - | - | - |
Total expense measures | (6) | (184) | (406) | (620) | (620) | |
Capital measures | ||||||
Efficiency Dividend - a further temporary increase of 0.25 per cent | ||||||
Departmental capital | 1.1 | - | (2) | (4) | (6) | (6) |
Total capital measures | - | (2) | (4) | (6) | (6) | |
Revenue measures | ||||||
South Australian Government housing stimulus assistance1 | ||||||
Administered revenue | 1.1 | (16,700) | (16,000) | (15,400) | (14,600) | (14,600) |
Total revenue measures | (16,700) | (16,000) | (15,400) | (14,600) | (14,600) |
1. This measure was included in the Economic Statement 2013 and has not previously appeared in a portfolio statement.
2. This measure was included in Budget Paper No. 2, Budget Measures 2013‑14 and has not previously appeared in a portfolio statement.
Prepared on a Government Finance Statistics (fiscal) basis.
Section 2: Outcomes and planned performance
2.1 Outcomes and performance information
Government outcomes are the intended results, impacts or consequences on the Australian community arising from policy or regulatory actions by the Government. Australian Government programmes are the primary vehicle by which government agencies achieve the intended results of their outcome statements. Agencies are required to identify the programmes which contribute to government outcomes over the budget and forward years.
The outcome of AOFM's activities is described below, specifying the strategy, programme objective, programme deliverables and programme key performance indicators used to assess and monitor the performance of the AOFM.
Outcome 1: The advancement of macroeconomic growth and stability, and the effective operation of financial markets, through issuing debt, investing in financial assets and managing debt, investments and cash for the Australian Government
Outcome 1 strategy
The AOFM's activities include debt issuance, cash management, investment, portfolio management, compliance monitoring, financial reporting, transaction settlement, debt administration, regular communication with investors, monitoring of market conditions and liaison with market intermediaries.
Debt issuance is directed to meeting the Government's Budget funding needs. Both Treasury Bonds and Treasury Indexed Bonds are issued to meet this objective. The composition and
maturity of debt issuance will remain flexible to achieve an appropriate balance between the following considerations: domestic financial market efficiency, managing investor demand, refinancing risk and the costs of the debt portfolio faced by the Government.
The within‑year cash management task results from differences in the timing of receipts and payments in the Official Public Account. In managing the Government's cash balances, the AOFM will issue Treasury Notes, and make short‑term term deposits with the Reserve Bank of Australia. The AOFM may also from time to time invest in fixed interest investments (as provided for under the Financial Management and Accountability Act 1997) and may raise funds by entering into repurchase agreements using its fixed interest investments as collateral.
The AOFM's financial assets and financial liabilities are managed in accordance with legislative requirements; delegations and directions from the Treasurer; and instructions from the Secretary to the Treasury and the AOFM Chief Executive.
Outcome expense statement
Table 2.1 provides an overview of the total expenses for Outcome 1.
Outcome 1: The advancement of macroeconomic growth and stability, and the effective operation of financial markets, through issuing debt, investing in financial assets and managing debt, investments and cash for the Australian Government | 2013‑14 Estimated actual expenses $'000 |
2014‑15 Estimated expenses $'000 |
---|---|---|
Programme 1.1: Australian Office of Financial Management | ||
Departmental expenses | ||
Departmental appropriation | 10,807 | 12,230 |
Expenses not requiring appropriation in budget year | 803 | 803 |
Administered expenses | ||
Ordinary annual services (Appropriation Bill No. 1) | 10 | 10 |
Expenses not requiring appropriation in budget year | 188,571 | - |
Special appropriations | ||
Commonwealth Inscribed Stock Act 1911 | 13,452,771 | 14,707,384 |
Financial Agreement Act 1994 | 20 | 20 |
Loans Securities Act 1919 | 864 | 722 |
Total expenses for Outcome 1 | 13,653,846 | 14,721,169 |
2013‑14 | 2014‑15 | |
Average staffing level (number) | 42 | 43 |
Contributions to Outcome 1
Programme 1.1: Australian Office of Financial Management
Programme objective
Achievement of the Government's financing task in a cost‑effective manner, subject to acceptable risk and promoting liquidity in the Treasury Bond, Treasury Indexed Bond and Treasury Bond futures markets.
Programme expenses
With the increased level of debt on the AOFM's administered balance sheet, total debt servicing costs arising from the issuance will also rise.
2013‑14 Revised budget $'000 |
2014‑15 Budget $'000 |
2015‑16 Forward year 1 $'000 |
2016‑17 Forward year 2 $'000 |
2017‑18 Forward year 3 $'000 |
|
---|---|---|---|---|---|
Annual departmental expenses: | |||||
Departmental items | 11,610 | 13,033 | 12,902 | 12,848 | 12,970 |
Annual administered expenses: | |||||
Administered items | 188,581 | 10 | 10 | 10 | 10 |
Special Appropriations: | |||||
Commonwealth Inscribed Stock Act 1911 | 13,452,771 | 14,707,384 | 16,133,697 | 17,155,943 | 17,875,948 |
Financial Agreement Act 1994 | 20 | 20 | 20 | 20 | 20 |
Loans Securities Act 1919 | 864 | 722 | 724 | 588 | - |
Total programme expenses | 13,653,846 | 14,721,169 | 16,147,353 | 17,169,409 | 17,888,948 |
Programme deliverables
The AOFM has the following key deliverables:
- issue Treasury Bonds, Treasury Indexed Bonds and Treasury Notes; and
- manage the Official Public Account balance.
Programme key performance indicators
The AOFM has the following key performance indicators:
- debt issuance;
- efficiency of issuance (through coverage and pricing ratios); and
- meeting the planned debt issuance programme;
- efficient management of the Government's cash balances;
- maintaining the 91 day moving average of the Government's cash balances within operational limits and within the Ministerial limit throughout the year; and
- only using the overdraft facility with the Reserve Bank of Australia to cover unexpected events;
- encourage take up of Commonwealth Government Securities by intermediaries and investors;
- liaise with the Commonwealth Government Securities investor community to improve investor understanding of the Commonwealth Government Securities market and AOFM understanding of investor issues through face-to-face meetings and conference presentations; and
- operating within legal and policy limits;
- compliance with legislative and policy limits.
Section 3: Explanatory tables and budgeted financial statements
Section 3 presents explanatory tables and budgeted financial statements which provide a comprehensive snapshot of agency finances for the budget year 2014‑15. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations, programme expenses, movements in administered funds and special accounts.
3.1 Explanatory tables
3.1.1 Movement of administered funds between years
The AOFM has not moved any administered funds between years.
3.1.2 Special accounts
Special accounts provide a means to set aside and record amounts used for specified purposes. Special accounts can be created by a Finance Minister's Determination under the Financial
Management and Accountability Act 1997or under separate enabling legislation. Table 3.1.2 shows the expected additions (receipts) and reductions (payments) for each account used by the AOFM.
Outcome | Opening balance 2014‑15 2013‑14 $'000 |
Receipts 2014‑15 2013‑14 $'000 |
Payments 2014‑15 2013‑14 $'000 |
Adjustments 2014‑15 2013‑14 $'000 |
Closing balance 2014‑15 2013‑14 $'000 |
|
---|---|---|---|---|---|---|
Debt Retirement Reserve Trust | 1 | 742 | - | - | - | 742 |
Account | 742 | - | - | - | 742 | |
Total special accounts | ||||||
2014‑15 Budget estimate | 742 | - | - | - | 742 | |
Total special accounts | ||||||
2013‑14 estimated actual | 742 | - | - | - | 742 |
Until 1990, the Australian Government borrowed on behalf of the State and Northern Territory Governments and allocated a portion of its Treasury Bond raisings to those governments to fund the redemption of previous allocations of bonds. Until 1986, the Australian Government also borrowed on behalf of State and Northern Territory Governments to raise new borrowings. In addition, there are outstanding balances of various loans raised by the State Governments.
The annual funding to meet the redemption of debt allocated to the States and the Northern Territory is governed by the Financial Agreement Act 1994, which requires the Australian Government to establish and maintain the Debt Retirement Reserve Trust Account for the States and the Northern Territory. Monies standing to the credit of a State or the Northern Territory are applied by the Australian Government in connection with the repurchase and repayment of the debt of that State or the Northern Territory.
Only perpetual debt with no fixed maturity date remains outstanding under these arrangements for New South Wales and Victoria. Redemption of the perpetual debt is at the discretion of the relevant State.
3.1.3 Australian Government Indigenous expenditure
The AOFM does not have any Australian Government Indigenous expenditure.
3.2 Budgeted financial statements
3.2.1 Differences in agency resourcing and financial statements
Departmental
Sales of goods and services revenue as recorded in the comprehensive income statement (Table 3.2.1) includes resources received free of charge from the Australian National Audit Office for audit services. Departmental agency receipts as recorded in the agency resource statement (Table 1.1) exclude the estimated value of these services received free of charge.
Administered
The AOFM receives administered appropriations for expenses and for capital expenditure arising from managing a portfolio of debt and assets. This is reflected in the agency resource statement (Table 1.1). The administered financial statements identify expenses in the schedule of budgeted income and expenses (Table 3.2.7), and capital expenditures in the capital budget schedule (Table 3.2.10).
3.2.2 Analysis of budgeted financial statements
Departmental
The AOFM forecasts that during the forward estimates period it will need to make renewed capital investment in agency infrastructure. Capital expenditure on the AOFM's specialist debt management systems, both for development and replacement, represents the majority of this expenditure. Significant capital expenditure on specialist debt management systems is forecast to occur in 2013‑14 and 2014‑15.
Administered
The budget and forward estimates reflect expected increases in debt issuance and debt levels to meet the Government's funding needs. With the increased level of debt, total debt servicing costs will also rise.
Assets administered on behalf of the Government include investments in residential mortgage‑backed securities which were made in accordance with the Government's policy to support competition in lending for housing and small business. They also include investments in short term assets held as part of the AOFM's management of the Government's cash balances.
3.2.3 Budgeted financial statements tables
Estimated actual 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
---|---|---|---|---|---|
EXPENSES | |||||
Employee benefits | 7,275 | 7,854 | 8,090 | 8,332 | 8,562 |
Supplier | 3,835 | 4,679 | 4,312 | 4,016 | 3,908 |
Depreciation and amortisation | 500 | 500 | 500 | 500 | 500 |
Total expenses | 11,610 | 13,033 | 12,902 | 12,848 | 12,970 |
LESS: | |||||
OWN-SOURCE INCOME | |||||
Sale of goods and rendering of services | 1,131 | 1,131 | 1,131 | 1,131 | 1,131 |
Total own-source income | 1,131 | 1,131 | 1,131 | 1,131 | 1,131 |
Net cost of (contribution by) services | 10,479 | 11,902 | 11,771 | 11,717 | 11,839 |
Appropriation revenue | 11,479 | 11,402 | 11,271 | 11,217 | 11,339 |
Surplus (deficit) attributable to the Australian Government | 1,000 | (500) | (500) | (500) | (500) |
Note: Impact of Net Cash Appropriation Arrangements | |||||
2013‑14 $'000 |
2014‑15 $'000 |
2015‑16 $'000 |
2016‑17 $'000 |
2017‑18 $'000 |
|
Total Comprehensive Income (loss) less depreciation/amortisation expenses previously funded through revenue appropriations | 1,500 | - | - | - | - |
plus depreciation/amortisation expenses previously funded through revenue appropriations | (500) | (500) | (500) | (500) | (500) |
Total Comprehensive Income (loss) - as per the Statement of Comprehensive Income | 1,000 | (500) | (500) | (500) | (500) |
Prepared on Australian Accounting Standards basis.
Estimated actual 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
---|---|---|---|---|---|
ASSETS | |||||
Financial assets | |||||
Cash and equivalents | 100 | 100 | 100 | 100 | 100 |
Trade and other receivables1 | 25,605 | 24,410 | 23,958 | 24,008 | 24,063 |
Total financial assets | 25,705 | 24,510 | 24,058 | 24,108 | 24,163 |
Non-financial assets | |||||
Infrastructure, plant and equipment | 616 | 648 | 1,440 | 1,734 | 2,038 |
Intangibles | 1,191 | 2,633 | 2,567 | 2,501 | 2,435 |
Other | 84 | 84 | 84 | 84 | 84 |
Total non-financial assets | 1,891 | 3,365 | 4,091 | 4,319 | 4,557 |
Total assets | 27,596 | 27,875 | 28,149 | 28,427 | 28,720 |
LIABILITIES | |||||
Provisions | |||||
Employees | 2,077 | 2,124 | 2,172 | 2,222 | 2,277 |
Other | 137 | 137 | 137 | 137 | 137 |
Total provisions | 2,214 | 2,261 | 2,309 | 2,359 | 2,414 |
Payables | |||||
Suppliers | 237 | 237 | 237 | 237 | 237 |
Total payables | 237 | 237 | 237 | 237 | 237 |
Total liabilities | 2,451 | 2,498 | 2,546 | 2,596 | 2,651 |
Net assets | 25,145 | 25,377 | 25,603 | 25,831 | 26,069 |
EQUITY | |||||
Contributed equity | 1,892 | 2,624 | 3,350 | 4,078 | 4,816 |
Retained surpluses | 23,253 | 22,753 | 22,253 | 21,753 | 21,253 |
Total equity | 25,145 | 25,377 | 25,603 | 25,831 | 26,069 |
Current assets | 1,484 | 242 | 242 | 242 | 242 |
Non-current assets | 26,112 | 27,633 | 27,907 | 28,185 | 28,478 |
Current liabilities | 860 | 874 | 889 | 904 | 920 |
Non-current liabilities | 1,591 | 1,624 | 1,657 | 1,692 | 1,731 |
1. Includes undrawn appropriations.
Prepared on Australian Accounting Standards basis.
Estimated actual 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
---|---|---|---|---|---|
OPERATING ACTIVITIES | |||||
Cash received | |||||
Goods and services | 828 | 828 | 828 | 828 | 828 |
Appropriations | 11,091 | 12,597 | 11,723 | 11,167 | 11,284 |
Total cash received | 11,919 | 13,425 | 12,551 | 11,995 | 12,112 |
Cash used | |||||
Employees | 7,229 | 7,807 | 8,042 | 8,282 | 8,507 |
Suppliers | 3,532 | 4,376 | 4,009 | 3,713 | 3,605 |
Total cash used | 10,761 | 12,183 | 12,051 | 11,995 | 12,112 |
Net cash from or (used by) operating activities | 1,158 | 1,242 | 500 | - | - |
INVESTING ACTIVITIES | |||||
Cash used | |||||
Purchase of property, plant and equipment and intangibles | 1,566 | 1,974 | 1,226 | 728 | 738 |
Total cash used | 1,566 | 1,974 | 1,226 | 728 | 738 |
Net cash from or (used by) investing activities | (1,566) | (1,974) | (1,226) | (728) | (738) |
FINANCING ACTIVITIES | |||||
Cash received | |||||
Contributed equity | 408 | 732 | 726 | 728 | 738 |
Total cash received | 408 | 732 | 726 | 728 | 738 |
Net cash from or (used by) financing activities | 408 | 732 | 726 | 728 | 738 |
Net increase or (decrease) in cash held | - | - | - | - | - |
Cash at the beginning of the reporting period | 100 | 100 | 100 | 100 | 100 |
Cash at the end of the reporting period | 100 | 100 | 100 | 100 | 100 |
Prepared on Australian Accounting Standards basis.
Retained surpluses $'000 |
Asset revaluation reserve $'000 |
Other reserves $'000 |
Contributed equity/capital $'000 |
Total equity $'000 |
|
---|---|---|---|---|---|
Opening balance as at 1 July 2014 | |||||
Balance carried forward from previous period | 23,253 | - | - | 1,892 | 25,145 |
Adjusted opening balance | 23,253 | - | - | 1,892 | 25,145 |
Comprehensive income | |||||
Surplus (deficit) for the period | (500) | - | - | - | (500) |
Total comprehensive income recognised directly in equity | (500) | - | - | - | (500) |
Transactions with owners | |||||
Contributions by owners Appropriation (departmental capital budget) | - | - | - | 732 | 732 |
Total transactions with owners | - | - | - | 732 | 732 |
Estimated closing balance as at 30 June 2015 | 22,753 | - | - | 2,624 | 25,377 |
Prepared on Australian Accounting Standards basis.
Estimated actual 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
---|---|---|---|---|---|
NEW CAPITAL APPROPRIATIONS | |||||
Capital budget - Bill 1 DCB | 408 | 732 | 726 | 728 | 738 |
Total new capital appropriations | 408 | 732 | 726 | 728 | 738 |
Provided for: | |||||
Purchase of non-financial assets | 408 | 732 | 726 | 728 | 738 |
Total Items | 408 | 732 | 726 | 728 | 738 |
PURCHASE OF NON-FINANCIAL ASSETS | |||||
Funded by capital appropriation - DCB | 1,566 | 1,974 | 1,226 | 72 8 |
738 |
Funded by prior year equity injections | - | - | - | - | - |
TOTAL | 1,566 | 1,974 | 1,226 | 728 | 738 |
RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE | |||||
Total purchases | 1,566 | 1,974 | 1,226 | 728 | 738 |
Total cash used to acquire assets | 1,566 | 1,974 | 1,226 | 728 | 738 |
Prepared on Australian Accounting Standards basis.
Buildings $'000 |
Other infrastructure, plant & equipment $'000 |
Intangibles $'000 |
Total $'000 |
|
---|---|---|---|---|
As at 1 July 2014 | ||||
Gross book value | - | 1,827 | 4,680 | 6,507 |
Accumulated depreciation/amortisation and impairment | - | 1,211 | 3,489 | 4,700 |
Opening net book balance | - | 616 | 1,191 | 1,807 |
Capital Asset Additions/Disposals | ||||
By purchase - appropriation ordinary annual services | - | 232 | 1,742 | 1,974 |
Disposals - gross value | - | - | - | - |
Total asset additions/disposals | - | 232 | 1,742 | 1,974 |
Other movements | ||||
Depreciation/amortisation expense | - | 200 | 300 | 500 |
Disposals - accumulated depreciation/amortisation | - | - | - | - |
Total other movements | - | 200 | 300 | 500 |
As at 30 June 2015 | ||||
Gross book value | - | 2,059 | 6,422 | 8,481 |
Accumulated depreciation/amortisation and impairment | - | 1,411 | 3,789 | 5,200 |
Closing net book balance | - | 648 | 2,633 | 3,281 |
Prepared on Australian Accounting Standards basis.
Estimated actual 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
---|---|---|---|---|---|
EXPENSES ADMINISTERED ON BEHALF OF GOVERNMENT | |||||
Grants | 20 | 20 | 20 | 20 | 20 |
Interest costs | 13,429,145 | 14,707,116 | 16,133,431 | 17,155,541 | 17,874,958 |
Other | 24,500 | 1,000 | 1,000 | 1,000 | 1,000 |
Total expenses before re-measurements | 13,453,665 | 14,708,136 | 16,134,451 | 17,156,561 | 17,875,978 |
LESS: | |||||
OWN-SOURCE INCOME | |||||
Non-taxation revenue | |||||
Interest | 1,060,751 | 812,992 | 673,132 | 524,316 | 287,914 |
Total revenues before re-measurements | 1,060,751 | 812,992 | 673,132 | 524,316 | 287,914 |
GAIN (LOSSES) BEFORE RE-MEASUREMENTS | |||||
Net loss on repurchase of debt | (188,571) | - | - | - | - |
Net gain on sale of financial assets | 9,255 | - | - | - | - |
Total gains (losses) | (179,316) | - | - | - | - |
Operating result before re-measurements | (12,572,230) | (13,895,144) | (15,461,319) | (16,632,245) | (17,588,064) |
Re-measurements | |||||
Net market valuation gains (losses) | 2,414,245 | 363,957 | 151,906 | 26,936 | (54,261) |
Total re-measurements | 2,414,245 | 363,957 | 151,906 | 26,936 | (54,261) |
Net result | (10,157,985) | (13,531,187) | (15,309,413) | (16,605,309) | (17,642,325) |
Prepared on Australian Accounting Standards basis.
Estimated actual 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
---|---|---|---|---|---|
ASSETS ADMINISTERED ON BEHALF OF GOVERNMENT | |||||
Financial assets | |||||
Cash and cash equivalents | 622 | 622 | 622 | 622 | 622 |
Receivables | 2,106,572 | 2,033,379 | 1,958,353 | 1,881,297 | 1,801,908 |
Investments (s39 FMA Act) | 33,571,839 | 29,352,604 | 23,061,940 | 28,184,954 | 21,384,331 |
Total assets administered on behalf of government | 35,679,033 | 31,386,605 | 25,020,915 | 30,066,873 | 23,186,861 |
LIABILITIES ADMINISTERED ON BEHALF OF GOVERNMENT | |||||
Interest bearing liabilities | |||||
Commonwealth Government Securities | 346,651,502 | 387,774,241 | 421,425,506 | 460,520,337 | 475,213,491 |
Other | 307 | 307 | 307 | 307 | 307 |
Total liabilities administered on behalf of government | 346,651,809 | 387,774,548 | 421,425,813 | 460,520,644 | 475,213,798 |
Net assets/(liabilities) | (310,972,776) | (356,387,943) | (396,404,898) | (430,453,771) | (452,026,937) |
Prepared on Australian Accounting Standards basis.
Estimated actual 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
---|---|---|---|---|---|
OPERATING ACTIVITIES | |||||
Cash received | |||||
Interest | 1,031,958 | 799,060 | 663,521 | 502,595 | 278,458 |
Total cash received | 1,031,958 | 799,060 | 663,521 | 502,595 | 278,458 |
Cash used | |||||
Interest and other costs paid | 15,073,138 | 15,653,956 | 17,199,326 | 18,376,695 | 19,275,958 |
Grants | 20 | 20 | 20 | 20 | 20 |
Total cash used | 15,073,158 | 15,653,976 | 17,199,346 | 18,376,715 | 19,275,978 |
Net cash from or (used by) operating activities | (14,041,200) | (14,854,916) | (16,535,825) | (17,874,120) | (18,997,520) |
INVESTING ACTIVITIES | |||||
Cash received | |||||
Repayments of advances | 88,674 | 90,681 | 92,229 | 93,947 | 95,937 |
Total cash received | 88,674 | 90,681 | 92,229 | 93,947 | 95,937 |
Net cash from or (used by) investing activities | 88,674 | 90,681 | 92,229 | 93,947 | 95,937 |
FINANCING ACTIVITIES | |||||
Cash received | |||||
Proceeds from borrowing | 112,524,666 | 143,833,193 | 169,499,747 | 183,132,135 | 226,864,275 |
Investment redemptions | 620,598,237 | 232,906,749 | 199,351,189 | 144,122,952 | 52,916,863 |
Total cash received | 733,122,903 | 376,739,942 | 368,850,936 | 327,255,087 | 279,781,138 |
Cash used | |||||
Repayments of borrowings | 47,786,586 | 101,393,024 | 134,626,503 | 142,786,916 | 210,821,434 |
Investments made | 624,873,763 | 228,698,704 | 193,073,294 | 149,244,433 | 46,127,279 |
Total cash used | 672,660,349 | 330,091,728 | 327,699,797 | 292,031,349 | 256,948,713 |
Net cash from or (used by) financing activities | 60,462,554 | 46,648,214 | 41,151,139 | 35,223,738 | 22,832,425 |
Net increase or (decrease) in cash held |
46,510,028 | 31,883,979 | 24,707,543 | 17,443,565 | 3,930,842 |
Cash at beginning of reporting period | 622 | 622 | 622 | 622 | 622 |
Cash from Official Public Account for: appropriations | 688,586,051 | 346,426,270 | 345,579,573 | 311,032,477 | 276,836,877 |
Cash to Official Public Account for: receipts | (735,096,079) | (378,310,249) | (370,287,116) | (328,476,042) | (280,767,719) |
Cash at end of reporting period | 622 | 622 | 622 | 622 | 622 |
Prepared on Australian Accounting Standards basis.
Estimated actual 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
---|---|---|---|---|---|
NEW CAPITAL APPROPRIATIONS | |||||
Special appropriations | 672,660,349 | 330,091,728 | 327,699,797 | 292,031,349 | 256,948,713 |
Total new capital appropriations | 672,660,349 | 330,091,728 | 327,699,797 | 292,031,349 | 256,948,713 |
Provided for: | |||||
Repayments of borrowings and purchase of investments | 672,660,349 | 330,091,728 | 327,699,797 | 292,031,349 | 256,948,713 |
Total Items | 672,660,349 | 330,091,728 | 327,699,797 | 292,031,349 | 256,948,713 |
Prepared on Australian Accounting Standards basis.
3.2.4 Notes to the financial statements
The financial statements contain estimates prepared in accordance with the requirements of the Australian Government's financial budgeting and reporting framework, including Australian Accounting Standards and Statements of Accounting Concepts, as well as specific guidelines issued by the Department of Finance.
The departmental financial statements have been prepared on an accrual basis and are in accordance with the historical cost convention, except for infrastructure, plant and equipment assets and employee entitlements.
With the exception of loans to the States and the Northern Territory, the administered financial statements have been prepared on a fair value basis in accordance with Australian Accounting Standards. Loans to the States and the Northern Territory are measured on an amortised cost basis, after initial recognition at fair value.
Fair value is synonymous with market value and represents the estimated exchange equivalent price using relevant inputs from reference markets and valuation techniques. Fair value is determined on the presumption of normal market conditions and that the reporting entity is not undertaking transactions on adverse terms.
Budgeted departmental and administered financial statements
Under the Australian Government's accrual budgeting framework, transactions that agencies control (agency transactions) are separately budgeted for and reported from transactions agencies do not have control over (administered transactions). This ensures that agencies are only held fully accountable for the transactions over which they have control.
Agency assets, liabilities, revenue and expenses are those which are controlled by the agency. Agency expenses include employee and supplier expenses and other administrative costs, which are incurred by the agency in providing its goods and services to government.
Administered assets, liabilities, revenue and expenses are those which are managed on behalf of the Australian Government according to set government directions. Administered expenses include interest incurred on Commonwealth Government Securities. Administered revenue includes interest earned on housing agreement loans, and interest on investments.
Administered internal transactions
Administered transactions between the AOFM and other agencies within the general government sector (administered internal transactions) are not reported in the schedule of budgeted administered income and expenses or the schedule of budgeted administered assets and liabilities.
However, for the purposes of disclosing all cash flows through the AOFM's administered bank accounts, cash flows in the schedule of budgeted administered cash flows are reported inclusive of administered internal transactions.
Goods and services tax
Supplies provided by the AOFM are predominantly input taxed under A New Tax System (Goods and Services Tax) Act 1999.
Budgeted departmental comprehensive income statement
Appropriations
Under the net cash appropriation framework the AOFM receives an output appropriation to meet budgeted expenses (except depreciation). The output appropriation is recognised in revenue in the year it is appropriated.
The AOFM also receives a capital appropriation for the replacement of infrastructure, plant and equipment and intangibles. The capital appropriation is not recognised in revenue. It is recognised as contributed equity in the departmental balance sheet in the year the appropriation takes effect.
Budgeted departmental balance sheet
Cash and undrawn appropriations
The estimated cash reserves and undrawn appropriations will be maintained to ensure that the AOFM is well placed to:
- settle employee liabilities as they fall due;
- fund future asset replacements; and
- repay liabilities.
Administered schedule of budgeted income and expenses
Estimated actual 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
---|---|---|---|---|---|
Interest revenue | |||||
Interest on housing agreements | 127,748 | 123,582 | 119,273 | 114,865 | 110,336 |
Interest from investments | 933,003 | 689,410 | 553,859 | 409,451 | 177,578 |
Total interest revenue | 1,060,751 | 812,992 | 673,132 | 524,316 | 287,914 |
Net market valuation gains (losses)
Net market valuation gains (losses) represent the estimated unrealised fair value gains or losses on the financial asset and financial liability portfolio. The revaluation effect represents the change in financial exposures due to changes in market conditions and the passage of time.
In a passive 'issue and hold to maturity' strategy, such as that relating to the AOFM's debt issuance and management activities, the revaluation effect will net to zero over the life of a financial instrument.
Administered schedule of budgeted assets and liabilities
Financial assets — investments
The AOFM manages the cash balances in the Official Public Account and invests surplus funds in deposits and fixed interest securities. Investments also include holdings of residential mortgage‑backed securities. Estimates of the fair value of these asset holdings are disclosed as administered investments. The asset holdings of the Future Fund and other government agencies are not included in these estimates.
Interest bearing liabilities — Commonwealth Government Securities
Interest bearing liabilities represent the fair value of Commonwealth Government Securities on issue.
Estimated actual 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
---|---|---|---|---|---|
Commonwealth Government Securities (at fair value) | |||||
Treasury Bonds | 309,258,795 | 345,275,797 | 372,850,928 | 407,266,803 | 417,681,055 |
Treasury Indexed Bonds | 31,377,994 | 35,984,642 | 38,564,821 | 43,251,291 | 47,530,193 |
Treasury Notes | 5,993,820 | 6,493,305 | 9,989,700 | 9,988,400 | 9,988,400 |
Other | 20,893 | 20,497 | 20,057 | 13,843 | 13,843 |
Total Commonwealth Government Securities (at fair value) | 346,651,502 | 387,774,241 | 421,425,506 | 460,520,337 | 475,213,491 |