Department of the Prime Minister and Cabinet financial ......Prime Minister and Cabinet's financial...

64 Part 4: Financial statements

Department of the Prime Minister and Cabinet financial statements

The following pages 64 to 148 contain PDFs of the Department of the

Prime Minister and Cabinet's financial statements for the period ended

30 June 2015. If you require assistance accessing these pages, please

email [email protected]

65Part 4: Financial statements


DEPARTMENT OF THE PRIME MINISTER AND CABINET STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2015

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

2015 2014 Notes $'000 $'000 NET COST OF SERVICES Expenses

Employee benefits 4A 272,603 222,904 Suppliers 4B 267,414 142,678 Grants 4C 1,236 729 Depreciation and amortisation 8A 28,225 19,748 Finance costs - unwinding of discount on make good 10B 52 131 Write-down and impairment of assets 8A 497 31 Losses from asset sales 4D 31 -

Total expenses 570,058 386,221 Own-source income Own-source revenue

Sale of goods and rendering of services 5A 13,285 21,466 Resources received free of charge 5B 10,623 6,903

Total own-source revenue 23,908 28,369 Gains

Sale of assets 4D - 54 Gain on reversal of make good 10B 93 -

Total gains 93 54 Total own-source income 24,001 28,423 Net cost of services 546,057 357,798 Revenue from Government - departmental appropriations 528,523 351,150 Deficit attributable to the Australian Government (17,534) (6,648) OTHER COMPREHENSIVE INCOME Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation surplus 3,822 - Total comprehensive loss attributable to the Australian Government

(13,712) (6,648)

Following the changes to the Administrative Arrangements Order of 18 September, 3 October and 12 December 2013, the Department assumed responsibility for the Indigenous Affairs function, Deregulation and Women’s policy, as well as relinquishing National Compact, Philanthropy and Volunteering. As a result, 2015 includes 12 months of revenue and expenses for the transferred functions while 2014 includes approximately six months.


DEPARTMENT OF THE PRIME MINISTER AND CABINET STATEMENT OF FINANCIAL POSITION as at 30 June 2015


2015 2014 Notes $'000 $'000 ASSETS Financial assets

Cash and cash equivalents 12,063 1,633 Trade and other receivables 7A 118,512 123,928 Accrued revenue - recovery of departmental costs 5,397 2,159

Total financial assets 135,972 127,720 Non-financial assets

Property, plant and equipment 8A 119,415 136,147 Intangibles 8A 13,913 9,698 Prepayments 8B 2,604 6,213

Total non-financial assets 135,932 152,058 Land and buildings held for sale 430 785 Total assets 272,334 280,563 LIABILITIES Payables

Suppliers 9A 31,714 35,549 Grants - private sector 370 - Other payables 9B 26,339 39,414

Total payables 58,423 74,963 Provisions

Employee provisions 10A 72,758 76,061 Make good provisions 10B 1,190 1,302

Total provisions 73,948 77,363 Total liabilities 132,371 152,326 Net assets 139,963 128,237 EQUITY

Contributed equity 147,056 121,618 Reserves 12,053 8,231 Accumulated deficit (19,146) (1,612)

Total equity 139,963 128,237


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DEPARTMENT OF THE PRIME MINISTER AND CABINET CASH FLOW STATEMENT for the period ended 30 June 2015


2015 2014 Notes $'000 $'000 OPERATING ACTIVITIES Cash received

Sales of goods and rendering of services 12,788 21,504 Net GST received 18,022 9,919 Appropriations 558,648 313,642

Total cash received 589,458 345,065 Cash used

Employees 280,763 196,781 Suppliers 291,477 123,694 Grants 866 1,257 Retained receipts transferred to the Official Public Account1 12,533 21,219

Total cash used 585,639 342,951 Net cash from operating activities 12 3,819 2,114 INVESTING ACTIVITIES Cash received

Proceeds from sales of property, plant and equipment 409 54 Total cash received 409 54 Cash used

Purchase of property, plant and equipment 3,193 7,351 Purchase of intangibles 4,252 4,218

Total cash used 7,445 11,569 Net cash used by investing activities (7,036) (11,515) FINANCING ACTIVITIES Cash received

Contributed equity Equity injections 2,631 3,171 Departmental capital budget 11,016 6,936

Total cash received 13,647 10,107 Net cash from financing activities 13,647 10,107 Net increase in cash held 10,430 706

Cash and cash equivalents at the beginning of the reporting period 1,633 927

Cash and cash equivalents at the end of the reporting period 12,063 1,633 1 PGPA Act s74 for 2014-15 and FMA Act s31 for 2013-14


DEPARTMENT OF THE PRIME MINISTER AND CABINET SCHEDULE OF COMMITMENTS as at 30 June 2015

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

Within 1 year Between 1 to

5 years More than 5

years Total 2015 $'000 $'000 $'000 $'000 Commitments receivable

Other commitments (4,553) (8,094) (3,834) (16,481) Total commitments receivable (4,553) (8,094) (3,834) (16,481) Commitments payable

Operating leases 29,141 91,853 49,724 170,718 Other commitments payable 22,912 2,500 - 25,412

Total commitments payable 52,053 94,353 49,724 196,130 Net commitments 47,500 86,259 45,890 179,649


5 years More than 5


Sublease rental income (65) (3) - (68) Other commitments (6,268) (8,818) (5,532) (20,618)

Total commitments receivable (6,333) (8,821) (5,532) (20,686) Commitments payable

Operating leases 29,218 92,355 69,820 191,393 Grant commitments 45 - - 45 Other commitments payable 56,101 10,377 - 66,478

Total commitments payable 85,364 102,732 69,820 257,916 Net commitments 79,031 93,911 64,288 237,230

Note: Commitments are GST inclusive where relevant. Operating lease commitment - leases for office accommodation Office accommodation lease payments are subject to periodic increases in accordance with the rent review provisions in the lease agreements. Other commitments payable/receivable Other commitments payable includes contracts entered into for the provision of information and communication technology services for the Department and shared services for a number of agencies.


DEPARTMENT OF THE PRIME MINISTER AND CABINET ADMINISTERED SCHEDULE OF COMPREHENSIVE INCOME for the period ended 30 June 2015


2015 2014 Notes $'000 $'000 NET COST OF SERVICES Expenses

Employee benefits 17A 874 988 Suppliers 17B 65,403 66,149 Subsidies - Petrol Sniffing Prevention Strategy 1,601 851 Grants 17C 1,218,600 728,033 Depreciation and amortisation 21A 332 356 Finance costs 17D 547 4,096 Impairment of receivables 11,248 2,570 Losses from asset sales 21A 821 1 Payments associated with land councils 17E 88,313 45,999 Payments to corporate Commonwealth entities and companies 17F 130,058 90,076 Payments to Indigenous Land Corporation 49,865 52,463 Mining withholding tax 4,995 2,243

Total expenses 1,572,657 993,825 Income Revenue Non-taxation revenue

Interest - investments 86,688 73,793 Other 18A 20,070 29,062

Total non-taxation revenue 106,758 102,855 Total revenue 106,758 102,855 Gains

Assets received free of charge 21A 818 - Total gains 818 - Total income 107,576 102,855 Net cost of services 1,465,081 890,970

Deficit (1,465,081) (890,970) OTHER COMPREHENSIVE INCOME Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation reserves 61,595 (40,373) Items subject to subsequent reclassification to net cost of services

Actuarial losses relating to former Governors-General entitlements 23B (1,903) (1,150)

Total other comprehensive income 59,692 (41,523) Total comprehensive loss (1,405,389) (932,493)

Following the changes to the Administrative Arrangements Order of 18 September, 3 October and 12 December 2013, the Department assumed administered responsibility for the Indigenous Affairs function and Women’s policy. As a result, 2015 includes 12 months of revenue and expenses for the transferred functions while 2014 includes approximately eight months.


DEPARTMENT OF THE PRIME MINISTER AND CABINET ADMINISTERED SCHEDULE OF ASSETS AND LIABILITIES as at 30 June 2015


2015 2014 Notes $'000 $'000 ASSETS Financial assets

Cash and cash equivalents 20A 14,563 17,739 Trade and other receivables 20B 72,636 80,447 Other investments 20C 2,480,243 2,420,216 Investments in corporate Commonwealth entities 20D 1,777,729 1,678,032

Total financial assets 4,345,171 4,196,434 Non-financial assets

Property, plant and equipment 21A 1,437 1,753 Prepayments 21B 6,120 9,322

Total non-financial assets 7,557 11,075 Total assets administered on behalf of Government 4,352,728 4,207,509 LIABILITIES Payables

Suppliers 22A 11,490 9,343 Grants 22B 18,640 18,823 Other payables 22C 149 2,536

Total payables 30,279 30,702 Provisions

Employee provisions 23A 272 325 Non-cash benefits - former Governors-General benefits 23B 17,509 16,594 Other provisions 23C 227 324

Total provisions 18,008 17,243 Total liabilities administered on behalf of Government 48,287 47,945 Net assets 4,304,441 4,159,564


DEPARTMENT OF THE PRIME MINISTER AND CABINET ADMINISTERED RECONCILIATION SCHEDULE for the period ended 30 June 2015


2015 2014 $'000 $'000 Opening assets less liabilities as at 1 July 4,159,564 (10,902) Net cost of services Income 107,576 102,855 Expenses

Payments to entities other than corporate Commonwealth entities and companies (1,392,734) (851,286) Payments to Indigenous Land Corporation (49,865) (52,463) Payments to Corporate Commonwealth entities and companies (130,058) (90,076)

Transfers (to)/from the Australian Government

Appropriation transfers from Official Public Account Annual appropriation for administered expenses (non-corporate Commonwealth entities and companies) 1,290,468 646,540 Annual appropriation for payment to corporate Commonwealth entities and companies 130,058 90,076 Special appropriations (non-corporate Commonwealth entities and companies) 216,420 211,306 Special account 18,434 15,792

Transfers to Official Public Account (124,618) (16,881) Transfers to Official Public Account Special accounts (18,620) (15,792)

Equity injection to corporate Commonwealth entities and companies 38,124 21,065 Movement in make good asset 22 21 Restructuring (Note 11) - 4,150,832 Administered investments 61,573 (40,373) Revaluation of liabilities relating to former Governors-General entitlements (1,903) (1,150) Closing assets less liabilities as at 30 June 4,304,441 4,159,564


DEPARTMENT OF THE PRIME MINISTER AND CABINET ADMINISTERED CASH FLOW STATEMENT for the period ended 30 June 2015


2015 2014 Notes $'000 $'000 OPERATING ACTIVITIES Cash received

Net GST received 98,080 18,635 Other 9,538 5,835

Total cash received 107,618 24,470 Cash used

Employees 905 1,067 Suppliers 63,956 66,392 Subsidy payments 1,601 851 Grant payments 1,309,520 739,632 Payments to corporate Commonwealth entities and companies 130,058 90,076 Payments associated with land councils administration 40,803 20,598 Land councils distributions 47,510 27,644 Payments to Indigenous Land Corporation 49,865 52,463 Other 4,995 2,053

Total cash used 1,649,213 1,000,776 Net cash used by operating activities 24 (1,541,595) (976,306) INVESTING ACTIVITIES Cash received

Proceeds from realisation of investments 3,982,951 2,616,273 Interest on investments 87,710 45,193

Total cash received 4,070,661 2,661,466 Cash used

Purchase of property, plant and equipment 1 357 Payments to corporate Commonwealth entities and companies 38,124 21,065 Purchase of investments 4,044,383 2,616,740

Total cash used 4,082,508 2,638,162 Net cash used by investing activities (11,847) 23,304

Cash received - restructuring - 7,248 Net decrease in cash held (1,553,442) (945,754) Cash and cash equivalents at the beginning of the reporting period 17,739 5 Cash from Official Public Account

Appropriations 1,675,070 968,987 Special Accounts 18,434 27,174

Total cash from the Official Public Account 1,693,504 996,161 Cash to Official Public Account

Appropriations (124,618) (16,881) Special Accounts (18,620) (15,792)

Total cash to the Official Public Account (143,238) (32,673) Cash and cash equivalents at the end of the reporting period 20A 14,563 17,739


DEPARTMENT OF THE PRIME MINISTER AND CABINET SCHEDULE OF ADMINISTERED COMMITMENTS for the period ended 30 June 2015



5 years More than 5


Net GST recoverable on commitments (85,831) (134,708) (32) (220,571) Total commitments receivable (85,831) (134,708) (32) (220,571) Commitments payable

Operating leases1 746 946 1,761 3,453 Grants2 1,011,370 1,544,320 - 2,555,690 Other3 109,365 177,914 - 287,279

Total commitments payable 1,121,481 1,723,180 1,761 2,846,422 Net commitments 1,035,650 1,588,472 1,729 2,625,851


5 years More than 5


Net GST recoverable on commitments (41,817) (22,023) (197) (64,037) Total commitments receivable (41,817) (22,023) (197) (64,037) Commitments payable

Operating leases1 757 1,548 2,163 4,468 Grants2 866,464 968,561 - 1,835,025 Other3 170,514 231,017 - 401,531

Total commitments payable 1,037,735 1,201,126 2,163 2,241,024 Net commitments 995,918 1,179,103 1,966 2,176,987

Note: Commitments are GST inclusive where relevant. 1 Operating leases comprise seven leases, six for office accommodation for the former Governors-General and one relating to the Indigenous Education (Northern Territory Facilities) program. Lease payments are subject to periodic increase in accordance with the rent review provisions of the lease. 2 Grant commitments relate to amounts payable under agreements in respect of which the grantee has yet to provide the services required or legislative obligations such as the Indigenous Education (Targeted Assistance) Act 2000. Legislative obligations relate to amounts specified in legislation where funding determination has not yet been made. 3 Other commitments mainly relate to activities under the Aboriginal Benefits Account and the Aboriginal and Torres Strait Islander Land Account.


DEPARTMENT OF THE PRIME MINISTER AND CABINET NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS for the period ended 30 June 2015

Note 1: Summary of significant accounting policies

Note 2: Events after the reporting period

Note 3: Net cash appropriation arrangements

Note 4: Expenses

Note 5: Own-source income

Note 6: Fair value measurement

Note 7: Financial assets

Note 8: Non-financial assets

Note 9: Payables

Note 10: Provisions

Note 11: Restructuring

Note 12: Cash flow reconciliation

Note 13: Impact of the G20 Taskforce on the 2014-15 Statement of Comprehensive Income

Note 14: Senior management personnel remuneration

Note 15: Financial instruments

Note 16: Financial assets reconciliation

Note 17: Administered expenses

Note 18: Administered income

Note 19: Administered fair value measurement

Note 20: Administered financial assets

Note 21: Administered non-financial assets

Note 22: Administered payables

Note 23: Administered provisions

Note 24: Administered cash flow reconciliation

Note 25: Administered investments

Note 26: Administered financial instruments

Note 27: Administered financial assets reconciliation

Note 28: Appropriations

Note 29: Special accounts

Note 30: Compliance with statutory conditions for payments from the consolidated revenue fund

Note 31: Assets held in trust

Note 32: Reporting of outcomes

Note 33: Explanations of major budget variances

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Note 1: Summary of significant accounting policies 1.1 Objectives of the Department The Department of the Prime Minister and Cabinet (the Department) is a not-for-profit Australian Government controlled Department of State. The objective of the Department is to provide policy advice and support to the Prime Minister, the Cabinet, Portfolio Ministers and Parliamentary Secretaries on matters that are on the forefront of public and government administration.

The Department is structured to meet two outcomes as outlined below:

Outcome 1: Provide high quality policy advice and support to the Prime Minister, the Cabinet, Portfolio Ministers and Parliamentary Secretaries including through the coordination of government activities, policy development and programme delivery. Outcome 2: Improve results for Indigenous Australians including in relation to school attendance, employment and community safety, through delivering services and programmes, and through measures that recognise the special place that Indigenous people hold in this Nation.

In 2014-15 the Department’s activities were identified under the following programmes: Programme 1.1: Prime Minister and Cabinet

Domestic policy National security and international policy Support services for Government operations Group of 20 summit 2014 Official and ceremonial support Women’s policy.

Programme 2.1: Indigenous

Commonwealth Aboriginal and Torres Strait Islander policy. The continued existence of the Department in its present form and with its present programmes is dependent on Government policy and on continuing funding by Parliament for the Department’s administration and programmes. The Department’s activities contributing toward these outcomes are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, income 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 Department conducts the following administered activities on behalf of the Government:

Secretariat support to the National Counter-Terrorism Committee Parliament House Briefing Room Grant payments to the National Australia Day Council Limited Compensation and legal expenses Operations support for the Prime Minister’s official residences Support to former Governors-General State occasions and official visits Commonwealth Aboriginal and Torres Strait Islander grant programmes Commonwealth Aboriginal and Torres Strait Islander service delivery Women’s grant programmes.

1.2 Basis of preparation of the financial statements The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.

The financial statements have been prepared in accordance with:

Financial Reporting Rule (FRR) for reporting periods ending on or after 1 July 2014; and Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board

(AASB) that apply for the reporting period.



The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except where certain assets and liabilities are recorded 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 statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified. Due to the reclassification in the Portfolio Budget Statements 2015-16 for administered supplier, subsidies and grant expenses, the Department identified changes to be made to the comparatives. As a result, the comparatives in relation to suppliers, subsidies and grants were adjusted in the following: Administered Schedule of Comprehensive Income, Administered Schedule of Assets and Liabilities and Administered Cash Flow Statement. Due to the changes to the Administrative Arrangements Order of 18 September, 3 October and 12 December 2013, the Department assumed responsibility for the Indigenous Affairs function, Deregulation and Women’s policy, as well as relinquishing National Compact, Philanthropy and Volunteering. As a result, the 2014 Statement of Comprehensive Income includes approximately six months of the revenue and expenses for the transferred functions, and the 2014 Administered Schedule of Comprehensive Income includes approximately eight months. The 2015 Statement of Comprehensive Income and the 2015 Administered Schedule of Comprehensive Income includes 12 months of the transferred functions. 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 provision for the restoration of leased premises (make good) is based on future obligations relating to the underlying assets and is supported by external valuers’ opinions

The fair value of buildings and property, plant and equipment has been taken to be the market value of similar properties as determined by an independent valuer. Where an active market does not exist these assets are valued at their replacement cost as determined by an independent valuer

The relevant government bond rate has been used to discount non-current liabilities The liability for long service leave has been estimated using an actuarial assessment based on the FRR

requirements. This takes into account expected salary growth, attrition and future discounting using the government bond rates and is based on the actuarial assessment determined by the Australian Government Actuary.

The provision for non-cash former Governors-General entitlements relate to post-employment benefits such as office facilities, administrative support and transport. The future liability for these benefits is based on the actuarial assessment determined by the Australian Government Actuary.

The Department made no other assumptions or estimates identified as having a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period. 1.4 New Australian accounting standards 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/revised standards/interpretations/amending standards issued prior to the sign-off date that were applicable to the current reporting period:

AASB 1055 - Budgetary Reporting - March 2013 (Principal) – Disclosure impact. Other new standards, revised standards, interpretations and amending standards that were issued prior to the sign-off date and are applicable to the current reporting period did not have a financial impact, and are not expected to have a future financial impact on the Department. Future Australian Accounting Standard requirements

There are no new/revised/amending standards and/or interpretations issued by the Australian Accounting Standards Board prior to the sign-off date, that are expected to have a future material impact on the Department’s financial statements which are applicable to the Department for future reporting periods.

The following new standards will have a disclosure impact only in future reporting periods:

2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative



2015-16 Amendments to Australian Accounting Standards – Extending Related Party Disclosures to Not-for-Profit Public Sector Entities.

1.5 Revenue 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 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 impairment allowance account. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable. Resources received free of charge Resources received free of charge are recognised as revenue 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. Resources received free of charge are recorded as either revenue or gains depending on their nature. Revenue from Government Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as revenue from Government when the Department gains control of the appropriation, except for certain amounts that 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. 1.6 Gains Sale of assets Gains from disposal of assets are recognised when control of the asset has passed to the buyer. 1.7 Transactions with the Australian Government as owner Equity injections Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year. Restructuring of Administrative Arrangements Net assets received from or relinquished to another Government entity under a restructuring of administrative arrangements are adjusted at their book value directly against contributed equity. Other Distributions to/from Owners The FRR require that distributions to owners be debited to contributed equity unless it is in the nature of a dividend. 1.8 Grants The Department applies a uniform policy for all grants. Grant 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 Department enters into an agreement to make these grants but services have not been performed or criteria satisfied. Where grant moneys are paid in advance of performance or eligibility, a prepayment is recognised. Settlement is usually made according to the terms and conditions of each grant. This is usually within 30 days of performance or eligibility.



1.9 Employee benefits Liabilities for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits due within twelve months of the end of reporting period are measured at their nominal amounts. 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 at the estimated salary rates that will be applied at the time the leave is taken, 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 the work of an actuary as at 30 June 2015. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation. Separation and redundancy A liability is made for separation and redundancy benefit payments. The Department recognises a liability 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 The Department's staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or another fund of their choice. The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme. 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. This liability is reported in the Department of Finance’s administered schedules and notes. The Department makes employer contributions to the employees' superannuation scheme. For Commonwealth defined benefits schemes, these rates are determined by an actuary to be sufficient to meet the current cost to the Government. 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. During 2014-15, an error in the calculation of superannuation benefits to employee participating in accumulation superannuation plan was identified. Adjustments to rectify the error were posted during the 2014-15 year. No adjustment to prior years occurred. 1.10 Leases Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets. 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 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. 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. The Department currently has 24 (2014: 26) agreements for the leasing of premises which have provisions requiring the premises to be restored to their original condition at the conclusion of the lease. The Department has made a make good provision to reflect the present value of this obligation. The Department administers 5 (2014: 5) agreements for the leasing of premises which have provisions requiring the premises to be restored to their original condition at the conclusion of the lease. A make good provision has been raised to reflect the present value of this obligation.



1.11 Cash and cash equivalents Cash is recognised at its nominal amount. Cash and cash equivalents include:

Cash on hand Demand deposits in bank accounts with an original maturity of three months or less that are readily convertible

to known amounts of cash and subject to insignificant risk of changes in value Cash in special accounts.

1.12 Financial assets The Department classifies its financial assets in the following categories:

Held-to-maturity investments Available for sale financial assets Loans and receivables.

All financial assets are expected to be recovered within 12 months except where indicated. Interest is recognised by applying the effective interest rate. Impairment of financial assets Financial assets are assessed for impairment at the end of each reporting period. 1.13 Financial liabilities 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). Financial liabilities are recognised and derecognised upon ‘trade date’. 1.14 Contingent liabilities and contingent assets Contingent liabilities and contingent assets are not recognised in the Statement of Financial Position but are reported in the relevant notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote. The Department is not aware of any material departmental quantifiable or unquantifiable contingent assets or liabilities as at the signing date that would require disclosure in the financial statements (2014: Nil). The Department is not aware of any significant departmental remote contingencies that would require disclosure (2014: Nil). 1.15 Property, plant and equipment and intangibles Asset recognition threshold Purchases of property, plant and equipment and intangibles are recognised initially at cost in the Statement of Financial Position, except for purchases costing less than $5,000, which are expensed in the year of acquisition (other than IT assets 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 ‘make good’ provisions in property leases taken up by the Department where there exists an obligation to restore the asset to its original condition. These costs are included in the value of the Department's property, plant and equipment with a corresponding provision for the ‘make good’ recognised.



Revaluations Fair values for each class of asset are determined as shown below:

Asset class Fair value measurement Land Market selling price

Buildings excluding leasehold improvements

Market selling price and depreciated replacement cost

Leasehold improvements

Depreciated replacement cost

Property, plant and equipment Market selling price and depreciated replacement cost

Intangibles Depreciated replacement cost

All property, plant and equipment assets were formally valued in 2015 by independent valuers. Upon revaluation, any accumulated depreciation is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount. Depreciation Depreciable property, 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. 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. Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

2015 2014

Departmental assets

Buildings excluding leasehold improvements 2 to 50 years 2 to 50 years

Leasehold improvements Lease term Lease term

Property, plant and equipment 1 to 50 years 1 to 50 years

Intangibles 2 to 7 years 2 to 7 years

Administered assets

Buildings excluding leasehold improvements 38 to 50 years 38 to 50 years

Leasehold improvements Lease term Lease term

Property, plant and equipment 4 to 112 years 4 to 112 years Impairment All assets were assessed for impairment during 2015. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount. Derecognition An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.



1.16 Taxation The Department is exempt from all forms of taxation except Fringe Benefits Tax (FBT), the Goods and Services Tax (GST) and Mining Withholding Tax (WHT). Revenues, expenses and assets are recognised net of GST except:

Where the amount of GST incurred is not recoverable from the Australian Taxation Office For receivables and payables Commitments payable and receivable.

1.17 Reporting of administered activities Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules 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. 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 Administered Cash Flow Statement and in the Administered Reconciliation Schedule. Revenue All administered revenues are revenues relating to ordinary activities performed by the Department on behalf of the Australian Government. As such, administered appropriations are not revenues of the individual entity that oversees distribution or expenditure of the funds as directed. Interest revenue is recognised using the effective interest method. Loans and receivables Where loans and 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 the Administered Schedule of Comprehensive Income. Former Governors-General benefits The Department has responsibility for the administration of non-cash benefits provided to former Governors-General. These entitlements are regarded as post-employment benefits and represent the provision of office facilities, administrative support and transport. A future liability for these benefits is recognised in the administered accounts. Administered investments Administered investments in subsidiaries are not consolidated because their consolidation is relevant only at the whole-of-government level. Administered investments other than those held for sale are classified as available-for-sale and are measured at their fair value as at 30 June 2015. Fair value has been taken to be the Australian Government's proportional interest in the net assets as advised by the entities as at the end of reporting period. Administered contingent assets and liabilities The Department is not aware of any material administered quantifiable or unquantifiable contingent assets or liabilities as at the signing date that would require disclosure in the financial statements (2014: Nil). The Department is not aware of any significant administered remote contingencies that would require disclosure (2014: Nil). Administered employee benefits The expense and liabilities for services rendered by staff employed in the Prime Minister’s Official Establishments and in support for former Governors-General are recognised as administered items. Accounting policies are consistent with those applied to departmental items. Grants and Subsidies The Department administers a number of grants and subsidy schemes on behalf of the Government. Settlement is usually made according to the terms and conditions of each grant. This is usually within 30 days of performance or eligibility.



All subsidies are in connection with external parties and are expected to be settled in no more than 12 months. The Indigenous grants and subsidies are driven by five programmes that constitute the flexible and need-focused Indigenous Advancement Strategy (IAS):

Jobs, land and economy Children and schooling Safety and wellbeing Culture and capability Remote Australia strategies.

Payments to corporate Commonwealth entities and companies Payments to corporate Commonwealth entities and companies from amounts appropriated for that purpose are classified as administered expenses, equity injections or loans of the Department. The appropriation to the Department is disclosed in Table A of the Appropriations Note.

1.18 Commonwealth Expenditure The Australian Government continues to have regard to developments in case law, including the High Court’s most recent decision on Commonwealth expenditure in Williams v Commonwealth [2014] HCA 23, as they contribute to the larger body of law relevant to the development of Commonwealth programs. In accordance with its general practice, the Government will continue to monitor and assess risk and decide on any appropriate actions to respond to risks of expenditure not being consistent with constitutional or other legal requirements.



Note 2: Events after the reporting period Departmental

The Digital Transformation Office was established as an executive agency under the Communications portfolio on 1 July 2015. Net liabilities estimated at $0.580 million and commitments estimated at $0.090 million will be transferred from the Department to the Digital Transformation Office during 2015-16. Administered There are no known events occurring after the reporting period that could impact on the financial statements.



Note 3: Net cash appropriation arrangements 2015 2014 $'000 $'000 Total comprehensive income less depreciation/amortisation expenses previously funded through revenue appropriations1 14,513 13,100 Plus: depreciation/amortisation expenses previously funded through revenue appropriation (28,225) (19,748)

Total comprehensive loss - as per the Statement of Comprehensive Income (13,712) (6,648) 1From 2010-11, the Government introduced net cash appropriation arrangements, where revenue appropriations for depreciation/amortisation expenses ceased. Entities now receive a separate capital budget provided through equity appropriations. Capital budgets are to be appropriated in the period when cash payment for capital expenditure is required.



Note 4: Expenses 2015 2014 $'000 $'000 Note 4A: Employee benefits Wages and salaries 197,825 149,254 Superannuation

Defined contribution plans 17,413 12,294 Defined benefit plans 24,264 18,553

Leave and other entitlements 29,100 18,630 Separation and redundancies 103 18,988 Other 3,898 5,185 Total employee benefits 272,603 222,904

Note 4B: Suppliers Goods and services supplied or rendered

Consultants, legal, contractors and secondees 62,066 40,845 Equipment, repairs and maintenance 16,137 3,311 General expenses1 13,138 7,917 Venue hire 21,772 3,000 Office accommodation, facility management and security 13,779 4,133 Information technology and communication 93,567 48,383 Travel 12,621 8,354

Total goods and services 233,080 115,943 Goods supplied in connection with

Related parties 13,095 2,161 External parties 5,849 3,648

Total goods supplied 18,944 5,809 Services rendered in connection with


Total services rendered 214,136 110,134 Total goods and services supplied or rendered 233,080 115,943 Other supplier expenses Operating lease rentals in connection with

External parties Minimum lease payments 30,008 24,953

Workers compensation expenses 4,326 1,782 Total other supplier expenses 34,334 26,735 Total suppliers 267,414 142,678

1 Includes $0.029 million audit fees to the ANAO for the financial statement audit of the Aboriginal and Torres Strait Islander Land Account (ATSILA) (2014: $0.029 million), which was not a resource received free of charge. Note 4C: Grants Public sector

Australian Government entities (related parties) 80 - Private sector

Commercial entities 390 13 Non-profit organisations 766 716

Total grants 1,236 729



2015 2014 $'000 $'000 Note 4D: Sale of assets Property, plant and equipment

Proceeds from sale 421 985 Carrying value of asset sold (440) (908) Selling expense (12) (23)

Total losses from asset sales 31 (54)

Note 5: Own-source income Own-source revenue Note 5A: Sale of goods and rendering of services Sale of goods in connection with

Related parties - 1 External parties 1 8

Total sale of goods 1 9 Rendering of services in connection with


Total rendering of services 13,284 21,457 Total sale of goods and rendering of services 13,285 21,466

Note 5B: Resources received free of charge Seconded staff 9,633 1,756 Employee benefits received free of charge - 4,055 ANAO audit fee

PM&C - Financial Statements Audit 412 432 Aboriginal Benefits Account - Financial Statements Audit 64 62

Accommodation received free of charge 514 319 Assets received free of charge - 279 Total resources received free of charge 10,623 6,903


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(a) A significant increase (decrease) in the price per square metre would result in a significantly higher (lower) fair value measurement. (b) A significant increase (decrease) in the consumed economic benefit / obsolescence of asset would result in a significantly lower (higher) fair value measurement. 1Recurring and non-recurring Level 3 fair value measurements - valuation process The Department procured valuation services from valuation experts and relied on the valuations made by these experts. The experts provided written assurance that the models developed to value assets are in compliance with accounting standards. The Department tests the procedures of the valuation model as an internal management review at least once every 12 months (with a formal revaluation undertaken once every three years). If a particular asset class experiences significant and volatile changes in fair value (i.e. where indicators suggest that the value of the class has changed materially since the previous reporting period), that class is subject to specific valuation in the reporting period, where practicable, regardless of the timing of the last specific valuation. There is no change in the valuation technique since the prior year. Assets that do not transact with enough frequency or transparency to develop objective opinions of value from observable market evidence have been measured utilising the cost (Depreciated Replacement Cost or DRC) approach. Professional judgement has been applied in calculating the consumed economic benefit / asset obsolescence relevant to the asset under consideration. The weighted average is determined by assessing the fair value measurement as a proportion of the total fair value for the class against the total useful life of each asset. 2 PM&C is currently marketing one residential property (staff housing) that is no longer essential to operational requirements. The asset is measured at the lesser of its carrying amount and fair value less cost to sell and is valued at a non-recurring basis. All other assets are valued on a recurring basis. 3Fair value measurement - highest and best use PM&C's assets are held for operational purposes and not held for the purposes of deriving a profit. The current use of all controlled assets is considered their highest and best use.


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ets'

2.

The

se g

ains

/(los

ses)

are

pre

sent

ed in

Oth

er C

ompr

ehen

sive

Inco

me

unde

r 'C

hang

es in

ass

et re

valu

atio

n su

rplu

s'.

3. T

he D

epar

tmen

t und

erto

ok a

n as

set v

alua

tion

proc

ess

as a

t 30

June

201

5, re

sulti

ng in

mov

emen

ts o

f a n

umbe

r of a

sset

s be

twee

n le

vel 2

and

leve

l 3.



Note 7: Financial assets 2015 2014 $'000 $'000 Note 7A: Trade and other receivables Goods and services receivables in connection with

Related parties 1,311 1,472 External parties 452 94

Total goods and services receivables 1,763 1,566 Appropriations receivable

Existing programs 113,325 86,236 Total appropriations receivable 113,325 86,236 Other receivables

Statutory receivables 3,502 3,235 Employee provision funding receivable1 - 32,891

Total other receivables 3,502 36,126 Total trade and other receivables (gross) 118,590 123,928 Less impairment allowance

Goods and services (78) - Total impairment allowance (78) - Total trade and other receivables (net) 118,512 123,928 All receivables are expected to be recovered in no more than 12 months. Trade and other receivables (gross) aged as follows

Not overdue 117,668 123,453 Overdue by

0 to 30 days 120 183 31 to 60 days 396 189 61 to 90 days 38 68 More than 90 days 368 35

Total receivables (gross) 118,590 123,928 Impairment allowance aged as follows

Not overdue - - Overdue by

0 to 30 days - - 31 to 60 days - - 61 to 90 days - - More than 90 days (78) -

Total impairment allowance (78) - 1 This relates to the appropriation funding for employee leave entitlements transferred as a result of the Administrative Arrangements Orders on 18 September and 12 December 2013. This funding has been transferred to the Department and is recognised as appropriation receivable in 2015. Refer to Note 11.



Note 8: Non-financial assets The Department is currently drafting a property portfolio divestment strategy. This strategy will result in a number of properties throughout Australia being sold within the next 12 months. Impairment of non-financial assets

A net impairment of $382,000 was recognised in 2015 (2014: $31,000) for property plant and equipment. A revaluation was conducted in 2015 by independent valuers. All revaluations were conducted in accordance with the revaluation policy stated at Note 1. A net impairment of $36,000 was recognised in 2015 (2014: Nil) for intangibles. No intangibles are expected to be sold or disposed of within the next 12 months.


DEP

AR

TMEN

T O

F TH

E PR

IME

MIN

ISTE

R A

ND

CA

BIN

ET

NO

TES

TO A

ND

FO

RM

ING

PA

RT

OF

THE

FIN

AN

CIA

L ST

ATE

MEN

TS

for t

he p

erio

d en

ded

30 J

une

2015

Not

e 8A

: Rec

onci

liatio

n of

the

open

ing

and

clos

ing

bala

nces

of p

rope

rty,

pla

nt a

nd e

quip

men

t and

inta

ngib

les

Rec

onci

liatio

n of

the

open

ing

and

clos

ing

bala

nces

of p

rope

rty,

pla

nt a

nd e

quip

men

t and

inta

ngib

les

for 2

015

La

nd

Bui

ldin

gs

Leas

ehol

d im

prov

emen

ts

Plan

t and

eq

uipm

ent

Com

pute

r so

ftwar

e in

tern

ally

de

velo

ped

Com

pute

r so

ftwar

e pu

rcha

sed

Tota

l

$’00

0 $’00

0 $’00

0 $’00

0 $’00

0 $’00

0 $’00

0 A

s at

1 J

uly

2014

Gro

ss b

ook

valu

e 23

,560

67

,876

36

,774

19

,144

12

,194

5,

256

164,

804

Wor

k in

pro

gres

s -

887

449

3,96

9 2,

886

- 8,

191

Acc

umul

ated

dep

reci

atio

n/am

ortis

atio

n an

d im

pairm

ent

- (6

,154

) (5

,377

) (4

,981

) (7

,578

) (3

,060

) (2

7,15

0)

Tota

l as

at 1

Jul

y 20

14

23,5

60

62,6

09

31,8

46

18,1

32

7,50

2 2,

196

145,

845

Add

ition

s

By

purc

hase

-

353

63

6,39

5 6,

142

- 12

,953

R

eval

uatio

ns a

nd im

pairm

ents

reco

gnis

ed in

oth

er c

ompr

ehen

sive

in

com

e (3

,925

) 1,

463

3,11

2 1,

104

818

1,16

5 3,

737

Rec

lass

ifica

tions

-

(2)

(5)

(556

) (1

) -

(564

) D

epre

ciat

ion/

amor

tisat

ion

- (1

2,40

3)

(6,0

20)

(5,9

29)

(2,9

96)

(877

) (2

8,22

5)

Writ

e-do

wn

and

impa

irmen

ts re

cogn

ised

in n

et c

ost o

f ser

vice

s -

- (1

46)

(236

) (2

8)

(8)

(418

) To

tal a

s at

30

June

201

5 19

,635

52

,020

28

,850

18

,910

11

,437

2,

476

133,

328

Tota

l as

at 3

0 Ju

ne 2

015

repr

esen

ted

by

G

ross

boo

k va

lue

Fa

ir va

lue

19,6

35

51,5

75

28,9

77

14,4

89

5,18

9 2,

476

122,

341

Wor

k in

pro

gres

s -

474

92

5,62

0 6,

536

- 12

,722

A

ccum

ulat

ed d

epre

ciat

ion/

amor

tisat

ion

and

impa

irmen

t -

(29)

(2

19)

(1,1

99)

(288

) -

(1,7

35)

Tota

l as

at 3

0 Ju

ne 2

015

19,6

35

52,0

20

28,8

50

18,9

10

11,4

37

2,47

6 13

3,32

8


DEP

AR

TMEN

T O

F TH

E PR

IME

MIN

ISTE

R A

ND

CA

BIN

ET

NO

TES

TO A

ND

FO

RM

ING

PA

RT

OF

THE

FIN

AN

CIA

L ST

ATE

MEN

TS

for t

he p

erio

d en

ded

30 J

une

2015

Rec

onci

liatio

n of

the

open

ing

and

clos

ing

bala

nces

of p

rope

rty, p

lant

and

equ

ipm

ent a

nd in

tang

ible

s fo

r 201

4

La

nd

Bui

ldin

gs

Leas

ehol

d im

prov

emen

ts

Pla

nt a

nd

equi

pmen

t

Com

pute

r so

ftwar

e in

tern

ally

de

velo

ped

Com

pute

r so

ftwar

e pu

rcha

sed

Tota

l

$’000

$’000

$’000

$’000

$’000

$’000

$’000

As

at 1

Jul

y 20

13

G

ross

boo

k va

lue

Fa

ir va

lue

- -

16,1

89

10,0

41

5,61

0 3,

407

35,2

47

Wor

k in

pro

gres

s -

- -

3,95

5 4,

733

- 8,

688

Acc

umul

ated

dep

reci

atio

n/am

ortis

atio

n an

d im

pairm

ent

- -

(263

) (3

03)

(4,7

75)

(2,1

03)

(7,4

44)

Tota

l as

at 1

Jul

y 20

13

- -

15,9

26

13,6

93

5,56

8 1,

304

36,4

91

Add

ition

s

By

purc

hase

-

- 1,

171

7,36

8 2,

596

1,62

1 12

,756

Fr

om a

cqui

sitio

ns o

f ent

ities

or o

pera

tions

(inc

l. re

stru

ctur

e)

23,5

60

68,7

63

19,0

50

2,63

5 2,

141

228

116,

377

Rec

lass

ifica

tions

-

- 81

3 (8

13)

- -

- D

epre

ciat

ion/

amor

tisat

ion

- (6

,154

) (5

,114

) (4

,720

) (2

,803

) (9

57)

(19,

748)

Im

pairm

ents

reco

gnis

ed in

net

cos

t of s

ervi

ces

- -

- (3

1)

- -

(31)

To

tal a

s at

30

June

201

4 23

,560

62

,609

31

,846

18

,132

7,

502

2,19

6 14

5,84

5

To

tal a

s at

30

June

201

4 re

pres

ente

d by

Gro

ss b

ook

valu

e

Fair

valu

e 23

,560

67

,876

36

,774

19

,144

12

,194

5,

256

164,

804

Wor

k in

pro

gres

s -

887

449

3,96

9 2,

886

- 8,

191

Acc

umul

ated

dep

reci

atio

n/am

ortis

atio

n an

d im

pairm

ent

- (6

,154

) (5

,377

) (4

,981

) (7

,578

) (3

,060

) (2

7,15

0)

Tota

l as

at 3

0 Ju

ne 2

014

23,5

60

62,6

09

31,8

46

18,1

32

7,50

2 2,

196

145,

845



2015 2014 $'000 $'000 Note 8B: Prepayments Prepayments expected to be recovered

No more than 12 months 2,451 6,137 More than 12 months 153 76

Total prepayments 2,604 6,213 Note 9: Payables Note 9A: Suppliers Trade creditors and accruals 31,714 35,549 Total suppliers 31,714 35,549 Suppliers expected to be settled within 12 months


Total suppliers 31,714 35,549 Settlement is usually made within 30 days. Note 9B: Other payables Salaries and wages 7,202 6,636 Separation and redundancies payable 520 15,186 Superannuation 1,451 1,352 Unearned income 81 51 Lease liability 12,478 12,310 Lease incentive 3,700 2,974 Other 907 905 Total other payables 26,339 39,414 Other payables expected to be settled

No more than 12 months 11,086 23,401 More than 12 months 15,253 16,013

Total other payables 26,339 39,414 Note 10: Provisions

Note 10A: Employee provisions Annual Leave 25,680 28,443 Long service leave 47,078 47,618 Total employee provisions 72,758 76,061 Employee provisions expected to be settled

No more than 12 months 21,926 22,393 More than 12 months 50,832 53,668

Total employee provisions 72,758 76,061



Note 10B: Make good provisions

Make good

Provision Total $’000 $’000 As at 1 July 2014 1,302 1,302 Additional provisions made 79 79 Amounts used (150) (150) Gain on reversal of provision (93) (93) Unwinding of discount or change in discount rate 52 52 Total as at 30 June 2015 1,190 1,190


DEP

AR

TMEN

T O

F TH

E PR

IME

MIN

ISTE

R A

ND

CA

BIN

ET

NO

TES

TO A

ND

FO

RM

ING

PA

RT

OF

THE

FIN

AN

CIA

L ST

ATE

MEN

TS

for t

he p

erio

d en

ded

30 J

une

2015

Not

e 11

: Res

truc

turin

g N

ote

11A

: Dep

artm

enta

l res

truc

turin

g

D

epar

tmen

tal r

estr

uctu

ring

(201

4-15

) Th

e D

epar

tmen

t did

not

ass

ume

or re

linqu

ish

any

depa

rtmen

tal f

unct

ions

as

a re

sult

of re

stru

ctur

ing

durin

g 20

15.

Dep

artm

enta

l res

truc

turin

g (2

013-

14)

D

ereg

ulat

ion

Offi

ce

for

Wom

en

IND

IGEN

OU

S A

FFA

IRS

Fi

nanc

e D

SS

AG

D

DoC

D

EEW

R

Ed

Emp

DSS

D

oE

Hea

lth

Indu

stry

$'00

0 $'

000

$'00

0 $'

000

$'00

0 $'

000

$'00

0 $'

000

$'00

0 $'

000

$'00

0 FU

NC

TIO

N A

SSU

MED

Asse

ts re

cogn

ised

Rec

eiva

bles

1,

791

460

825

456

- -

- 28

,115

1,

265

- -

App

ropr

iatio

n re

ceiv

able

-

- -

- 3,

942

- -

- -

1,75

0 -

Land

and

bui

ldin

gs

- -

- -

- 2,

535

119

108,

719

- -

- P

rope

rty, p

lant

and

equ

ipm

ent

- -

- -

- 18

27

2,

550

- 40

-

Inta

ngib

les

93

- -

- -

197

- 2,

079

- -

- A

sset

s he

ld fo

r sal

e -

- -

- -

- -

1,69

3 -

- -

Tota

l ass

ets

reco

gnis

ed

1,88

4 46

0 82

5 45

6 3,

942

2,75

0 14

6 14

3,15

6 1,

265

1,79

0 -

Liab

ilitie

s re

cogn

ised

Leas

e pa

yabl

es

- -

- -

- -

- 8,

171

- -

- Em

ploy

ee p

rovi

sion

s 1,

969

474

970

456

- 2,

941

9,97

0 30

,656

1,

564

2,10

2 36

4 M

ake

good

pro

visi

ons

- -

- -

- -

- 75

4 -

- -

Tota

l lia

bilit

ies

reco

gnis

ed

1,96

9 47

4 97

0 45

6 -

2,94

1 9,

970

39,5

81

1,56

4 2,

102

364

Net

ass

ets/

(liab

ilitie

s) a

ssum

ed

(85)

(1

4)

(145

) -

3,94

2 (1

91)

(9,8

24)

103,

575

(299

) (3

12)

(364

) In

com

e

Rec

ogni

sed

by th

e re

ceiv

ing

entit

y 18

8 -

- -

- -

- -

- -

- R

ecog

nise

d by

the

losi

ng e

ntity

40

1

- -

- -

- 1,

785

2,47

7 -

- To

tal i

ncom

e 22

8 1

- -

- -

- 1,

785

2,47

7 -

- Ex

pens

es

R

ecog

nise

d by

the

rece

ivin

g en

tity

4,86

9 1,

811

- -

- -

- -

- -

- R

ecog

nise

d by

the

losi

ng e

ntity

3,

482

703

1,61

5 55

0 12

,814

4,

620

6,93

3 64

,880

2,

477

2,63

2 46

3 To

tal e

xpen

ses

8,35

1 2,

514

1,61

5 55

0 12

,814

4,

620

6,93

3 64

,880

2,

477

2,63

2 46

3


DEP

AR

TMEN

T O

F TH

E PR

IME

MIN

ISTE

R A

ND

CA

BIN

ET

NO

TES

TO A

ND

FO

RM

ING

PA

RT

OF

THE

FIN

AN

CIA

L ST

ATE

MEN

TS

for t

he p

erio

d en

ded

30 J

une

2015

Not

es:

1. A

s a

resu

lt of

mac

hine

ry o

f gov

ernm

ent c

hang

es th

at w

ere

refle

cted

in th

e A

dmin

istra

tive

Arra

ngem

ents

Ord

er (A

AO) o

f 18

Sep

tem

ber 2

013,

3 O

ctob

er 2

013

and

12 D

ecem

ber 2

013

(the

AAO

ch

ange

s), t

he D

epar

tmen

t ass

umed

resp

onsi

bilit

y fo

r the

follo

win

g fu

nctio

ns:

- D

ereg

ulat

ion

from

the

Dep

artm

ent o

f Fin

ance

, how

ever

no

Adm

inis

tere

d fu

ndin

g or

bal

ance

s w

ere

trans

ferre

d;

- O

ffice

for W

omen

from

the

Dep

artm

ent o

f Soc

ial S

ervi

ces

(DSS

); an

d -

Indi

geno

us A

ffairs

func

tions

from

Atto

rney

Gen

eral

's D

epar

tmen

t (A

GD

), D

epar

tmen

t of C

omm

unic

atio

ns (D

oC),

form

er D

epar

tmen

t of E

mpl

oym

ent,

Edu

catio

n an

d W

orkp

lace

Rel

atio

ns

(DE

EWR

), D

epar

tmen

t of E

duca

tion

(Ed)

, Dep

artm

ent o

f Em

ploy

men

t (Em

p), D

epar

tmen

t of E

nviro

nmen

t (D

oE),

Dep

artm

ent o

f Hea

lth (H

ealth

) and

the

Dep

artm

ent o

f Ind

ustry

(Ind

ustry

). 2.

The

net

ass

ets

assu

med

from

all

entit

ies

wer

e $9

6.28

3m.

3. T

he In

dige

nous

Affa

irs fu

nctio

n fo

r inc

ome

and

expe

nses

reco

gnis

ed b

y th

e re

ceiv

ing

entit

y ha

ve n

ot b

een

split

by

trans

ferr

ing

Dep

artm

ent f

or th

e R

estru

ctur

e N

ote.

The

tota

l for

Indi

geno

us

Affa

irs is

sho

wn

in N

ote

34B,

Out

com

e 2.

Nat

iona

l C

ompa

ct,

Phila

nthr

opy

and

Volu

ntee

ring

D

SS

$'

000

FUN

CTI

ON

REL

INQ

UIS

HED

Liab

ilitie

s re

linqu

ishe

d

Empl

oyee

pro

visi

ons

123

Tota

l lia

bilit

ies

relin

quis

hed

123

Net

liab

ilitie

s re

linqu

ishe

d 12

3

N

otes

: 1.

As

a re

sult

of m

achi

nery

of g

over

nmen

t cha

nges

that

wer

e re

flect

ed in

the

AAO

of 1

8 S

epte

mbe

r 201

3, 3

Oct

ober

201

3 an

d 12

Dec

embe

r 201

3 (th

e AA

O c

hang

es),

the

Dep

artm

ent t

rans

ferre

d re

spon

sibi

lity

for t

he N

atio

nal C

ompa

ct, P

hila

nthr

opy

and

Vol

unte

erin

g fu

nctio

n to

DS

S.

2. T

he n

et li

abilit

ies

relin

quis

hed

to a

ll en

titie

s w

as $

0.12

3m.


DEP

AR

TMEN

T O

F TH

E PR

IME

MIN

ISTE

R A

ND

CA

BIN

ET

NO

TES

TO A

ND

FO

RM

ING

PA

RT

OF

THE

FIN

AN

CIA

L ST

ATE

MEN

TS

for t

he p

erio

d en

ded

30 J

une

2015

Not

e 11

B: A

dmin

iste

red

rest

ruct

urin

g A

dmin

iste

red

rest

ruct

urin

g (2

014-

15)

N

o ad

min

iste

red

func

tions

wer

e as

sum

ed o

r rel

inqu

ishe

d as

a re

sult

of re

stru

ctur

ing

durin

g 20

15.

Adm

inis

tere

d re

stru

ctur

ing

(201

3-14

)

O

ffice

for

Wom

en

IND

IGEN

OU

S AF

FAIR

S

DSS

AG

D

DoC

D

EEW

R

Emp

Ed

DSS

D

oE

Hea

lth

Indu

stry

$'00

0 $'

000

$'00

0 $'

000

$'00

0 $'

000

$'00

0 $'

000

$'00

0 $'

000

FUN

CTI

ON

S A

SSU

MED

As

sets

reco

gnis

ed

Cas

h -

- -

- -

- 7,

248

- -

- Tr

ade

and

othe

r rec

eiva

bles

-

- -

946

63

1,84

7 25

,393

68

58

9 14

5 A

dmin

iste

red

inve

stm

ents

-

- -

- -

- 1,

696,

285

- -

38,4

28

Oth

er In

vest

men

ts

- -

- -

- -

2,42

1,33

0 -

- -

Oth

er n

on-fi

nanc

ial a

sset

s -

- -

- -

- 8,

859

- -

- To

tal a

sset

s re

cogn

ised

-

- -

946

63

1,84

7 4,

159,

115

68

589

38,5

73

Liab

ilitie

s re

cogn

ised

S

uppl

ier p

ayab

les

- -

- 13

8 4,

556

6 1,

716

- 19

9 31

G

rant

s pa

yabl

e -

- -

- -

- 83

0 -

- -

Oth

er p

ayab

le

- -

-

- 96

0 3,

501

- -

- To

tal l

iabi

litie

s re

cogn

ised

-

- -

138

4,55

6 96

6 6,

047

- 19

9 31

N

et a

sset

s/(li

abili

ties)

ass

umed

-

- -

808

(4,4

93)

881

4,15

3,06

8 68

39

0 38

,542

In

com

e

R

ecog

nise

d by

the

rece

ivin

g en

tity

- -

- -

- -

- -

- -

Rec

ogni

sed

by th

e lo

sing

ent

ity

- -

11

771

82

14,3

58

24,6

80

3 -

- To

tal I

ncom

e -

- 11

77

1 82

14

,358

24

,680

3

- -

Expe

nses

R

ecog

nise

d by

the

rece

ivin

g en

tity

2,55

3 -

- -

- -

- -

- -

Rec

ogni

sed

by th

e lo

sing

ent

ity

1,15

3 30

,835

8,

077

80,2

25

32,5

37

9,59

2 13

5,64

3 32

,468

71

,754

7,

894

Tota

l exp

ense

s 3,

706

30,8

35

8,07

7 80

,225

32

,537

9,

592

135,

643

32,4

68

71,7

54

7,89

4


DEP

AR

TMEN

T O

F TH

E PR

IME

MIN

ISTE

R A

ND

CA

BIN

ET

NO

TES

TO A

ND

FO

RM

ING

PA

RT

OF

THE

FIN

AN

CIA

L ST

ATE

MEN

TS

for t

he p

erio

d en

ded

30 J

une

2015

Not

es:

1. A

s a

resu

lt of

mac

hine

ry o

f gov

ernm

ent c

hang

es th

at w

ere

refle

cted

in th

e A

dmin

istra

tive

Arra

ngem

ents

Ord

er (A

AO) o

f 18

Sep

tem

ber 2

013,

and

12

Dec

embe

r 201

3 (th

e A

AO c

hang

es),

PM

&C

ass

umed

resp

onsi

bilit

y fo

r the

follo

win

g fu

nctio

ns:

- D

ereg

ulat

ion

from

the

Dep

artm

ent o

f Fin

ance

, how

ever

no

Adm

inis

tere

d fu

ndin

g or

bal

ance

s w

ere

trans

ferre

d;

- O

ffice

for W

omen

from

the

Dep

artm

ent o

f Soc

ial S

ervi

ces

(DSS

); an

d -

Indi

geno

us A

ffairs

func

tions

from

Atto

rney

Gen

eral

's D

epar

tmen

t (A

GD

), D

epar

tmen

t of C

omm

unic

atio

ns (D

oC),

form

er D

epar

tmen

t of E

mpl

oym

ent,

Edu

catio

n an

d W

orkp

lace

Rel

atio

ns

(DE

EWR

), D

epar

tmen

t of E

nviro

nmen

t (E

nviro

nmen

t), D

epar

tmen

t of H

ealth

(Hea

lth) a

nd th

e D

epar

tmen

t of I

ndus

try (I

ndus

try).

2. T

he n

et a

sset

s as

sum

ed fr

om a

ll en

titie

s w

ere

$4,1

89.2

64m

. 3.

The

Indi

geno

us A

ffairs

func

tion

for i

ncom

e an

d ex

pens

es re

cogn

ised

by

the

rece

ivin

g en

tity

have

not

bee

n sp

lit b

y tra

nsfe

rring

Dep

artm

ent f

or th

e R

estru

ctur

e N

ote.

The

tota

l for

Indi

geno

us

Affa

irs is

sho

wn

in N

ote

34C

, Out

com

e 2.

Nat

iona

l C

ompa

ct,

Phila

nthr

opy

and

Volu

ntee

ring

AIA

TSIS

DSS

Ed

$'00

0 $'

000

FUN

CTI

ON

S R

ELIN

QU

ISH

ED

Asse

ts re

linqu

ishe

d

Tr

ade

and

othe

r rec

eiva

bles

4

-

A

dmin

iste

red

inve

stm

ent

- 38

,428

To

tal a

sset

s re

linqu

ishe

d 4

38,4

28

Net

ass

ets

relin

quis

hed

(4)

(38,

428)

Not

es:

1. A

s a

resu

lt of

mac

hine

ry o

f gov

ernm

ent c

hang

es th

at w

ere

refle

cted

in th

e A

dmin

istra

tive

Arra

ngem

ents

Ord

er (A

AO) o

f 18

Sep

tem

ber 2

013,

and

12

Dec

embe

r 201

3 (th

e A

AO c

hang

es),

PM

&C

tran

sfer

red

resp

onsi

bilit

y fo

r the

Nat

iona

l Com

pact

, Phi

lant

hrop

y an

d V

olun

teer

ing

func

tion

to th

e D

epar

tmen

t of S

ocia

l Ser

vice

s an

d th

e A

ustra

lian

Inst

itute

of A

borig

inal

and

Tor

res

Stra

it Is

land

er S

tudi

es to

the

Dep

artm

ent o

f Edu

catio

n.

2. T

he n

et a

sset

s re

linqu

ishe

d fro

m a

ll en

titie

s w

as $

38.4

32m

.



Note 12: Cash flow reconciliation 2015 2014 $'000 $'000 Reconciliation of net cost of services to net cash from operating activities

Net cost of services (546,057) (357,798) Revenue from Government 528,523 351,150

Adjustments for non-cash items

Depreciation and amortisation 28,225 19,748 Sale of assets 31 (54) Net write down of non-financial assets 418 31 Assets received free of charge - (279) Reclassification of non-financial assets 565 -

Movements in assets and liabilities Assets

(Increase) / decrease in net receivables 17,206 (60,044) (Increase) / decrease in accrued revenue (3,238) (849) (Increase) / decrease in prepayments 3,609 (2,200)

Liabilities Increase / (decrease) in employee provisions (3,303) 1,056 Increase / (decrease) in supplier payables (9,343) 30,882 Increase / (decrease) in grants payable 370 (528) Increase / (decrease) in other payables (13,075) 20,676 Increase / (decrease) in other provisions (112) 323

Net cash from operating activities 3,819 2,114



Note 13: Impact of the G20 Taskforce on the 2014-15 Statement of Comprehensive Income

Departmental (excluding G20

Taskforce)

G20 Taskforce1

Total

$'000 $'000 $'000 EXPENSES Employee benefits 255,164 17,439 272,603 Supplier expenses 157,606 109,808 267,414 Grants 1,236 - 1,236 Depreciation and amortisation 28,153 72 28,225 Finance costs 52 - 52 Write-down and impairment of assets 442 55 497 Losses from asset sales 31 - 31 Total expenses 442,684 127,374 570,058 LESS: OWN-SOURCE INCOME Revenue Sale of goods and rendering of services 13,264 21 13,285 Resources received free of charge 10,623 - 10,623 Total revenue 23,887 21 23,908 Gains Unwinding of discount on make good 42 51 93 Total gains 42 51 93 Total own-source income 23,929 72 24,001 Net cost of services 418,755 127,302 546,057 Revenue from Government 396,065 132,458 528,523 Surplus (Deficit) attributable to the Australian Government (22,690) 5,156 (17,534)

1 G20 Appropriation was provided to the Department in the 2013-14 Budget process. The revenue from Government amount differs to the amount published in the 2014-15 Portfolio Budget Statements as the budget for the corporate components are included under departmental. The Department actively sought efficiencies in hosting the G20 Summit resulting in $26.600 million being returned to Budget.



Note 14: Senior management personnel remuneration 2015 2014 $ $ Short-term employee benefits

Salary 23,493,120 17,451,178 Other 4,167,228 1,967,609

Total short-term employee benefits 27,660,348 19,418,787 Post-employment benefits:

Superannuation 5,482,994 3,955,410 Total post-employment benefits 5,482,994 3,955,410 Other long-term benefits

Annual leave 1,999,197 1,447,790 Long-service leave 639,979 464,086

Total other long-term benefits 2,639,176 1,911,876 Termination and cessation payments

Termination and cessation payments 1,264,165 623,824 Total termination and cessation payments 1,264,165 623,824 Total senior executive remuneration expenses 37,046,683 25,909,897

The total number of senior management personnel that are included in the above table are 183 (2014: 133).

Senior management on acting arrangements are included where the length of the arrangement is longer than 6 months.

Following the changes to the Administrative Arrangements Order of 18 September, 3 October and 12 December 2013, the Department assumed responsibility for the Indigenous Affairs function, Deregulation and Women’s policy, as well as relinquishing National Compact, Philanthropy and Volunteering. As a result, 2015 includes 12 months of expenses for the transferred functions while 2014 includes approximately six months.



Note 15: Financial instruments 2015 2014 $'000 $'000 Note 15A: Categories of financial instruments Financial assets Loans and receivables

Cash and cash equivalents 12,063 1,633 Goods and services receivables 1,685 1,566 Accrued revenue 5,397 2,159

Carrying amount of financial assets 19,145 5,358 Financial liabilities At amortised cost

Trade creditors and accruals 31,714 35,549 Grants 370 -

Carrying amount of financial liabilities 32,084 35,549 Note 15B: Net gains or losses on financial assets Loans and receivables

Impairment 78 - Net loss on loans and receivables 78 - Net loss on financial assets 78 -

Note 15C: Fair value of financial instruments The fair value of financial instruments approximate their carrying amounts.

Note 15D: Credit risk The Department is exposed to minimal credit risk as loans and receivables are comprised of cash, goods and services receivable and accrued revenue. 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 these outstanding receivables, 2015: $1.763 million (2014: $1.566 million). The Department has assessed the risk of the default on payment and has allocated $0.078 million to an impairment allowance account (2014: Nil). The Department manages its credit risk by undertaking background and credit checks prior to allowing a debtor relationship. The Department holds no collateral to mitigate against credit risk. Note 7A provides aging of gross receivables past due and an analysis of impaired receivables.

Note 15E: Liquidity risk The Department’s financial liabilities are suppliers and grants payable. 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 put in place to ensure there are appropriate resources to meet its financial obligations. The maturities for non-derivative financial liabilities of the Department are within one year in both the current and prior year.



Note 15F: Market risk The Department holds basic financial instruments that do not expose the Department to interest risk, currency risk or other price risk.

Note 16: Financial assets reconciliation 2015 2014 $'000 $'000 Financial assets Notes Total financial assets as per Statement of Financial Position 135,972 127,720 Less non-financial instrument components

Appropriation receivables 7A 113,325 86,236 Other receivables 7A 3,502 36,126

Total non-financial instrument components 116,827 122,362 Total financial assets as per Financial Instruments Note 15A 19,145 5,358



Note 17: Administered expenses 2015 2014 $'000 $'000 Note 17A: Employee benefits Wages and salaries 676 662 Superannuation

Defined contribution plans 89 81 Defined benefit plans 41 33

Leave and other entitlements 68 190 Separation and redundancies - 22 Total employee benefits 874 988

Note 17B: Suppliers Goods and services supplied or rendered

Outsourced providers, contractors and consultants 50,323 50,038 Equipment, repairs and maintenance 7,570 7,475 General expenses 4,699 4,761 Travel 1,952 2,439 Information technology and communications 830 1,371

Total goods and services supplied or rendered 65,374 66,084 Goods supplied in connection with

Related parties 28 50 External parties 758 620

Total goods supplied 786 670 Services rendered in connection with

Related parties 932 813 External parties 63,656 64,601

Total services rendered 64,588 65,414 Total goods and services supplied or rendered 65,374 66,084 Other supplier expenses Operating lease rentals in connection with

External parties Minimum lease payments 10 61

Workers compensation expenses 19 4 Total other supplier expenses 29 65 Total suppliers 65,403 66,149



2015 2014 $'000 $'000 Note 17C: Grants Public sector

Australian Government entities (related parties) 12,159 5,214 Local Governments 47,465 22,027 State and Territory Governments 45,052 56,045

Private sector Non-profit organisations 937,931 561,017 Commercial entities 175,993 83,730

Total grants 1,218,600 728,033 Note 17D: Finance costs Service costs - 3,686 Unwinding of discount 547 410 Total finance costs 547 4,096

Note 17E: Payments associated with land councils Payments associated with land councils administration 40,803 18,355 Land councils distributions 47,510 27,644 Total payments associated with land councils 88,313 45,999

Note 17F: Payments to corporate Commonwealth entities and companies Aboriginal Hostels Limited 38,044 25,582 Australian Institute of Aboriginal and Torres Strait Islander Studies - 2,279 Indigenous Business Australia 34,328 22,675 Indigenous Land Corporation 9,527 6,443 Torres Strait Regional Authority 48,159 33,097 Total payments to corporate Commonwealth entities and companies 130,058 90,076

Note 18: Administered income Note 18A: Other revenue Return of grant funding 18,463 25,361 Lease rental income 1,607 1,465 Other - 2,236 Total other revenue 20,070 29,062


DEP

AR

TMEN

T O

F TH

E PR

IME

MIN

ISTE

R A

ND

CA

BIN

ET

NO

TES

TO A

ND

FO

RM

ING

PA

RT

OF

THE

FIN

AN

CIA

L ST

ATE

MEN

TS

for t

he p

erio

d en

ded

30 J

une

2015

Not

e 19

: A

dmin

iste

red

fair

valu

e m

easu

rem

ent

Not

e 19

A: F

air v

alue

mea

sure

men

ts, v

alua

tion

tech

niqu

e an

d in

puts

use

d

Fa

ir va

lue

mea

sure

men

ts a

t the

en

d of

the

repo

rtin

g pe

riod

For L

evel

s 2

and

3 fa

ir va

lue

mea

sure

men

ts

20

15

2014

C

ateg

ory

(Lev

el 1

, 2

or 3

) Va

luat

ion

tech

niqu

es1

Inpu

ts u

sed

Ran

ge (w

eigh

ted

aver

age)

Sens

itivi

ty o

f the

fair

valu

e m

easu

rem

ent t

o ch

ange

s in

ob

serv

able

inpu

ts

$'

000

$'00

0 Fi

nanc

ial a

sset

s

Inve

stm

ents

in c

orpo

rate

C

omm

onw

ealth

ent

ities

and

co

mpa

nies

1,77

7,72

9 1,

678,

032

3 C

ost a

ppro

ach

Aust

ralia

n G

over

nmen

t's p

ropo

rtion

al

inte

rest

in th

e ne

t ass

ets

of th

e en

titie

s at

bal

ance

dat

e.

Net

ass

ets

n/a

Tota

l fin

anci

al a

sset

s 1,

777,

729

1,67

8,03

2

Non

-fina

ncia

l ass

ets

Pr

oper

ty, p

lant

and

equ

ipm

ent

1,43

7 1,

753

3 C

ost a

ppro

ach

Con

sum

ed e

cono

mic

be

nefit

/Obs

oles

cenc

e of

ass

et

6%-1

00%

(a

)

Tota

l non

-fina

ncia

l ass

ets

1,43

7 1,

753

To

tal f

air v

alue

mea

sure

men

ts

of a

sset

s in

the

stat

emen

t of

finan

cial

pos

ition

1,

779,

166

1,67

9,78

5

1 The

met

hods

and

val

uatio

n te

chni

ques

use

d fo

r the

pur

pose

of m

easu

ring

fair

valu

e of

ass

ets

and

liabi

litie

s in

201

5 ar

e un

chan

ged

from

the

prev

ious

repo

rting

per

iod.

R

ecur

ring

and

non-

recu

rrin

g Le

vel 3

fair

valu

e m

easu

rem

ents

- va

luat

ion

proc

ess

Inve

stm

ents

in c

orpo

rate

Com

mon

wea

lth e

ntiti

es a

nd c

ompa

nies

Fa

ir va

lue

is a

sses

sed

as th

e A

ustra

lian

Gov

ernm

ent's

pro

porti

onal

inte

rest

in th

e ne

t ass

ets

of th

e en

titie

s at

bal

ance

dat

e.

Pro

perty

, pla

nt a

nd e

quip

men

t Th

e fa

ir va

lue

of p

rope

rty, p

lant

and

equ

ipm

ent a

sset

s ha

ve b

een

take

n to

be

the

depr

ecia

ted

repl

acem

ent c

ost a

s as

sess

ed b

y an

inde

pend

ent v

alue

r. R

epla

cem

ent c

ost i

s m

easu

red

by re

fere

nce

to th

e lo

wes

t cos

t of r

epla

cing

the

asse

t or r

epai

ring

the

asse

t.

(a) R

ecur

ring

Leve

l 3 fa

ir va

lue

mea

sure

men

ts -

sens

itivi

ty o

f inp

uts

Pro

perty

, Pla

nt a

nd E

quip

men

t Th

e si

gnifi

cant

uno

bser

vabl

e in

puts

use

d in

the

fair

valu

e m

easu

rem

ent o

f the

ent

ity's

leas

ehol

d im

prov

emen

ts a

sset

cla

sses

rela

te to

the

cons

umed

eco

nom

ic b

enef

it / a

sset

ob

sole

scen

ce. A

sig

nific

ant i

ncre

ase

(dec

reas

e) in

this

inpu

t wou

ld re

sult

in a

sig

nific

antly

low

er (h

ighe

r) fa

ir va

lue

mea

sure

men

t.


DEP

AR

TMEN

T O

F TH

E PR

IME

MIN

ISTE

R A

ND

CA

BIN

ET

NO

TES

TO A

ND

FO

RM

ING

PA

RT

OF

THE

FIN

AN

CIA

L ST

ATE

MEN

TS

for t

he p

erio

d en

ded

30 J

une

2015

Fair

valu

e m

easu

rem

ent -

hig

hest

and

bes

t use

P

M&

C's

ass

ets

are

held

for o

pera

tiona

l pur

pose

s an

d no

t hel

d fo

r the

pur

pose

s of

der

ivin

g a

prof

it. T

he c

urre

nt u

se o

f all

cont

rolle

d as

sets

is c

onsi

dere

d th

eir h

ighe

st a

nd b

est u

se.

Not

e 19

B: R

econ

cilia

tion

for r

ecur

ring

Leve

l 3 fa

ir va

lue

mea

sure

men

ts

R

ecur

ring

Leve

l 3 fa

ir va

lue

mea

sure

men

ts -

reco

ncili

atio

n fo

r ass

ets

Fi

nanc

ial a

sset

s N

on-fi

nanc

ial a

sset

s

A

dmin

iste

red

inve

stm

ents

Pr

oper

ty, p

lant

and

equ

ipm

ent

20

15

2014

20

15

2014

$'00

0 $'

000

$'00

0 $'

000

As

at 1

Jul

y 1,

678,

032

1,05

4 1,

753

1,48

3 To

tal g

ains

/(los

ses)

reco

gnis

ed in

net

cos

t of s

ervi

ces1

- -

(1,1

57)

(357

) To

tal g

ains

/(los

ses)

reco

gnis

ed in

Adm

inis

tere

d ot

her c

ompr

ehen

sive

inco

me2

99,6

97

(19,

307)

22

-

Loss

es th

roug

h re

stru

ctur

e (r

efer

Not

e 11

)3 -

(38,

428)

-

- P

urch

ases

-

- 1

627

Ass

ets

rece

ived

free

of c

harg

e -

- 81

8 -

Add

ition

s th

roug

h re

stru

ctur

e (re

fer N

ote

11)

- 1,

734,

713

- -

Tota

l as

at 3

0 Ju

ne

1,77

7,72

9 1,

678,

032

1,

437

1,75

3

1. T

hese

gai

ns/ (

loss

es) a

re p

rese

nted

in th

e A

dmin

iste

red

Sche

dule

of C

ompr

ehen

sive

Inco

me

unde

r 'D

epre

ciat

ion'

and

'Los

ses

from

ass

et s

ales

'. 2.

The

se g

ains

/ (lo

sses

) are

pre

sent

ed in

the

Adm

inis

tere

d R

econ

cilia

tion

Sche

dule

und

er ‘A

dmin

iste

red

Inve

stm

ents

’ and

‘Equ

ity in

ject

ion

to c

orpo

rate

Com

mon

wea

lth e

ntiti

es a

nd

com

pani

es’.

3. T

hese

gai

ns/ (

loss

es) a

re p

rese

nted

in th

e A

dmin

iste

red

Res

truct

urin

g N

ote

unde

r fun

ctio

ns re

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Note 20: Administered financial assets 2015 2014 $'000 $'000 Note 20A: Cash and cash equivalents

Cash on hand or on deposit 428 169 Aboriginal Benefit Account - Special Account 14,133 17,569 Aboriginal and Torres Strait Islander Land Account - Special Account 2 1 Total cash and cash equivalents 14,563 17,739

Note 20B: Trade and other receivables Goods and services receivables in connection with

Related parties 5 298 External parties 67 -

Total goods and services receivables 72 298 Other receivables

Statutory receivables 19,587 17,293 Interest receivable 30,920 30,536 Grants receivable 23,278 27,061 Special account receivable from the OPA 9,947 13,493 Other 305 376

Total other receivables 84,037 88,759 Total trade and other receivables (gross) 84,109 89,057 Less impairment allowance

Other receivables (11,473) (8,610) Total impairment allowance (11,473) (8,610) Total trade and other receivables (net) 72,636 80,447 All receivables are expected to be recovered in no more than 12 months. Trade and other receivables (gross) aged as follows

Not overdue 66,363 62,513 Overdue by:

0 to 30 days 1,127 13,095 31 to 60 days 112 613 61 to 90 days 494 955 More than 90 days 16,013 11,881

Total trade and other receivables (gross) 84,109 89,057 Impairment allowance aged as follows

Not overdue - - Overdue by:

0 to 30 days - - 31 to 60 days - - 61 to 90 days - - More than 90 days (11,473) (8,610)

Total impairment allowance (11,473) (8,610) Credit terms were within 30 days (2014: 30 days).



Reconciliation of the Impairment Allowance Movements in relation to 2015

Other

receivables Total $'000 $'000 Opening balance (8,610) (8,610)

Amounts recognised through restructure - - Amounts written off - - Amounts recovered and reversed - - Increase recognised in net surplus (2,863) (2,863)

Closing balance (11,473) (11,473)

Movements in relation to 2014

Other

receivables Total $'000 $'000 Opening balance - -

Amounts recognised through restructure (6,715) (6,715) Amounts written off - - Amounts recovered and reversed - - Increase recognised in net surplus (1,895) (1,895)

Closing balance (8,610) (8,610) 2015 2014 $'000 $'000 Note 20C: Other Investments

Bank term deposits 2,480,243 2,186,810 Nominal semi-government bonds - 233,406 Total other investments 2,480,243 2,420,216

All other investments are expected to be recovered in no more than 12 months. Note 20D: Investments in corporate Commonwealth entities and companies Equity interest in

Aboriginal Hostels Limited 146,282 149,541 Anindilyakwa Land Council 8,639 5,769 Central Land Council 35,559 36,129 Indigenous Land Corporation 217,821 193,767 Indigenous Business Australia 1,185,459 1,116,246

National Australia Day Council Limited 1,168 1,098 Northern Land Council 10,105 3,999 Outback Stores Pty Ltd 41,496 41,520 Tiwi Land Council 1,613 1,670 Torres Strait Regional Authority 73,876 72,356 Wreck Bay Aboriginal Community Council 55,711 55,937

Total investments in corporate Commonwealth entities and companies 1,777,729 1,678,032

All investments in corporate Commonwealth entities and companies are expected to be recovered in more than 12 months. Additional information relating to investments is disclosed in Note 25.

.


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2015 2014 $'000 $'000 Note 21B: Prepayments

Prepayments 6,120 9,322 Total prepayments 6,120 9,322 Prepayments expected to be recovered

No more than 12 months 607 2,923 More than 12 months 5,513 6,399

Total prepayments 6,120 9,322 Note 22: Administered payables Note 22A: Suppliers

Trade creditors and accruals 11,490 9,343 Total suppliers 11,490 9,343 Suppliers expected to be settled within 12 months

Related parties - 37 External parties 11,490 9,306

Total suppliers 11,490 9,343 Settlement is usually made within 30 days Note 22B: Grants Public sector

Australian Government entities (related parties) 623 - Local Governments 144 - State and Territory Governments 17 3,561

Private sector Commercial entities 3,325 2,588 Non-profit organisations 14,531 12,674

Total grants 18,640 18,823 Grant payables are expected to be settled in no more than 12 months.

Note 22C: Other payables Salaries, wages and superannuation 59 37 Lease liability 46 49 Other 44 2,450 Total other payables 149 2,536 All other payables are expected to be settled in no more than 12 months.



Note 23: Administered provisions 2015 2014 $'000 $'000 Note 23A: Employee provisions

Annual leave 112 141 Long service leave 160 184 Total employee provisions 272 325 Employee provisions expected to be settled

No more than 12 months 90 107 More than 12 months 182 218

Total employee provisions 272 325 Note 23B: Non-cash benefits - former Governors-General benefits Non-cash benefits - former Governors-General 17,509 16,594 Total non-cash benefits - former Governors-General benefits 17,509 16,594 The amounts recognised in the Administered Schedule of Assets and Liabilities are as follows: Present value of unfunded obligations 17,509 16,594 Net liability in the Administered Schedule of Assets and Liabilities 17,509 16,594 Amounts in the Administered Schedule of Assets and Liabilities: Liabilities 17,509 16,594 Net liability in the Administered Schedule of Assets and Liabilities 17,509 16,594

The amounts recognised in the Administered Schedule of Comprehensive Income are as follows: Current service cost - 3,686 Finance costs 547 410 Expense 547 4,096 Net actuarial losses recognised in the Administered Reconciliation Schedule 1,903 1,150 Changes in the value of the defined benefit obligations are as follows: Net liability at 1 July 16,594 12,820 Service cost - 3,686 Finance costs 547 410 Actuarial losses 1,903 1,150 Benefits paid (1,535) (1,472) Net liability at 30 June 17,509 16,594 Principal actuarial assumptions at the reporting date (expressed as weighted averages): Discount rate at 30 June 2.60% 3.30% Future salary increases 4.00% 4.00% Inflation rate 2.50% 2.50% Rate of expenditure slow down with age 3.00% 3.00%



Note 23C: Other provisions Reconciliation of movements in other provisions

Make good

provision Other

provision Total $’000 $’000 As at 1 July 2014 129 195 324 Additional provisions made - - - Amounts used - (97) (97) Amounts reversed - - - Unwinding of discount or change in discount rate - - - Total as at 30 June 2015 129 98 227

2015 2014 $'000 $'000 Other provisions expected to be settled

No more than 12 months 86 119 More than 12 months 141 205

Total other provisions 227 324



Note 24: Administered cash flow reconciliation 2015 2014 $'000 $'000 Reconciliation of net cost of services to net cash from operating activities Net cost of services (1,465,081) (890,970) Adjustments

Depreciation / amortisation 332 356 Losses from asset sales 821 1 Assets received free of charge (818) - Interest on investments recognised in investing (86,688) (73,793)

Movements in assets and liabilities Assets

(Increase) / decrease in net receivables 8,195 (33,312) (Increase) / decrease in prepayments 3,202 (399)

Liabilities Increase / (decrease) in supplier payables 2,147 (597) Increase / (decrease) in grants payable (183) 21,674 Increase / (decrease) in other payable (2,387) (2,082) Increase / (decrease) in employee provisions (53) (40) Increase / (decrease) in former Governors-General benefits (985) 2,625 Increase / (decrease) in other provisions (97) 231

Net cash used by operating activities (1,541,595) (976,306)



Note 25: Administered investments Investment in Commonwealth Entities The Commonwealth holds a 100% equity interest in the following administered investments:

Aboriginal Hostels Limited

Provides temporary accommodation to Aboriginal and Torres Strait Islander people through a national network of hostels.

Land Councils

The Land Councils include: - Anindilyakwa Land Council - Central Land Council - Northern Land Council - Tiwi Land Council; and - Wreck Bay Aboriginal Community Council

The Land Councils represent the Aboriginal peoples living in the area of the Land Council in the management of Aboriginal land in the area, and in relation to legislation concerning that land. The Land Councils also consult and protect the interests of traditional owners and take measures to assist in the protection of sacred sites in the area of the Land Council. Wreck Bay Aboriginal Community Council holds title to land and provides services to the Aboriginal community of Jervis Bay.

Indigenous Land Corporation

The Indigenous Land Corporation provides economic, environmental, social and cultural benefits for Aboriginal persons and Torres Strait Islanders by assisting in the acquisition and management of an Indigenous Land base.

Indigenous Business Australia

Indigenous Business Australia creates opportunities for Aboriginal and Torres Strait Islander people and communities to build assets and gain wealth.

National Australia Day Council Limited

Promotes national pride, active citizenship and the observance and celebration of Australia Day; administration of the Australian of the Year awards, which includes awards for the Young Australian of the Year, the Senior Australian of the Year and Australia’s Local Hero; distribution of grants to State and Territory Australia Day Councils and provision of recommendations and advice to the Australian Government on all matters relating to year-round national pride activities.

Torres Strait Regional Authority

The Torres Strait Regional Authority formulates, implements and monitors the effectiveness of programmes for Aboriginal and Torres Strait Islander people living in the Torres Strait and Northern Peninsula Area.

Outback Stores Pty Ltd.

Outback Stores Pty Ltd improves access to affordable, healthy food for Indigenous communities, particularly in remote areas, through providing food supply and store management and support services.



Investments in Deposits and Government Securities Investments in Deposits and Government Securities relate to the investment portfolios managed for the Aboriginal Benefit Account (ABA) and Aboriginal and Torres Strait Islander Land Account (ATSILA). The investment portfolios are managed to ensure sufficient funds are available for payments when required. Monies which are surplus to immediate requirements are invested in accordance with section 58 of the PGPA Act and the ABA’s and ATSILA’s respective legislative instruments. Under section 58 of the PGPA Act and regulation 22 of the PGPA Act, public money may only be invested in authorised investments which include:

(a) securities of the Commonwealth, a State or a Territory (b) securities guaranteed by the Commonwealth, a State or a Territory (c) a deposit with a bank, including a deposit evidenced by a certificate of deposit (d) a bill of exchange accepted or endorsed only by a bank.



Note 26: Administered financial instruments 2015 2014 $'000 $'000 Note 26A: Categories of financial instruments Financial assets Held-to-maturity Bank term deposits 2,480,243 2,186,810 Nominal semi-government bonds - 233,406 Total held-to-maturity 2,480,243 2,420,216 Loans and receivables Cash and cash equivalents 14,563 17,739 Goods and services receivable 72 298 Interest receivable 30,920 30,536 Grants receivable 11,805 18,451 Total loans and receivables 57,360 67,024 Available for sale

Aboriginal Hostels Limited 146,282 149,541 Anindilyakwa Land Council 8,639 5,769 Central Land Council 35,559 36,129 Indigenous Land Corporation 217,821 193,767 Indigenous Business Australia 1,185,459 1,116,246

National Australia Day Council Limited 1,168 1,098 Northern Land Council 10,105 3,999 Outback Stores Pty Ltd 41,496 41,520 Tiwi Land Council 1,613 1,670 Torres Strait Regional Authority 73,876 72,356 Wreck Bay Aboriginal Community Council 55,711 55,937

Total available for sale 1,777,729 1,678,032 Carrying amount of financial assets 4,315,332 4,165,272 Financial liabilities At amortised cost

Trade creditors and accruals 11,490 9,343 Grants 18,640 18,823

Total financial liabilities at amortised cost 30,130 28,166 Carrying amount of financial liabilities 30,130 28,166

Note 26B: Net gains or losses on financial assets Financial Assets Held-to-maturity Interest revenue 86,325 73,562 Net gains on held-to-maturity 86,325 73,562 Loans and receivables Interest revenue 363 231 Impairment (11,248) (2,570) Net losses on loans and receivables (10,885) (2,339) Net losses on financial assets 75,440 71,223



Note 26C: Fair value of financial instruments Carrying Fair Carrying Fair amount value amount value 2015 2015 2014 2014 $'000 $'000 $'000 $'000 Financial Assets Bank term deposits 2,480,243 2,480,243 2,186,810 2,186,810 Nominal semi-government bonds1 - - 233,406 233,533 Cash and cash equivalents 14,563 14,563 17,739 17,739 Goods and services receivable 72 72 298 298 Interest receivable 30,920 30,920 30,536 30,536 Grants receivable 11,805 11,805 18,451 18,451 Administered investments 1,777,729 1,777,729 1,678,032 1,678,032 Total 4,315,332 4,315,332 4,165,272 4,165,399 Financial Liabilities

Trade creditors and accruals 11,490 11,490 9,343 9,343 Grants 18,640 18,640 18,823 18,823

Total 30,130 30,130 28,166 28,166 1 The difference between the carrying amount and the fair value of the semi-government bonds is attributed to the amortised cost and the market value obtained from financial institutions as at reporting date. Note 26D: Credit risk The administered activities of the Department are not exposed to a high level of credit risk as the majority of financial assets are cash and cash equivalents, and trade receivables. The Department manages its credit risk by undertaking background and credit checks prior to allowing a debtor relationship. The maximum amount of credit risk is the risk that arises from potential default of a debtor. This amount is equal to the amount of these outstanding trade receivables, 2015: $0.072 million (2014: $0.298 million). The Department has assessed the risk of the default on payment of receivables and has allocated amounts to an impairment allowance in relation to grant receivables, 2015: $11.473 million (2014: $8.610 million). The Department holds no collateral to mitigate against administered credit risk. The Department has no significant exposures to any concentrations of credit risk.



Credit quality of financial instruments not past due or individually determined as impaired

Not past due nor

impaired

Not past due nor

impaired

Past due or

impaired Past due

or impaired 2015 2014 2015 2014 $'000 $'000 $'000 $'000 Bank term deposits 2,480,243 2,186,810 - - Nominal semi-government bonds - 233,406 - - Cash and cash equivalents 14,563 17,739 - - Goods and services receivable 72 298 - - Interest receivable 30,920 30,536 - - Grant receivable 5,532 517 17,746 26,544 Equity interest in:

Aboriginal Hostels Limited 146,282 149,541 - - Anindilyakwa Land Council 8,639 5,769 - - Central Land Council 35,559 36,129 - - Indigenous Land Corporation 217,821 193,767 - - Indigenous Business Australia 1,185,459 1,116,246 - - National Australia Day Council Limited 1,168 1,098 - - Northern Land Council 10,105 3,999 - - Outback Stores Pty Ltd 41,496 41,520 - - Tiwi Land Council 1,613 1,670 - - Torres Strait Regional Authority 73,876 72,356 - - Wreck Bay Aboriginal Community Council 55,711 55,937 - -

Total 4,309,059 4,147,338 17,746 26,544 Note 20B provides aging of gross receivables past due and an analysis of impaired receivables. Aging of financial assets that were past due but not impaired for 2015 0 to 30 31 to 60 61 to 90 90+ days days days days Total $'000 $'000 $'000 $'000 $'000 Grant receivable 1,127 112 494 4,540 6,273 Total 1,127 112 494 4,540 6,273 Aging of financial assets that were past due but not impaired for 2014 0 to 30 31 to 60 61 to 90 90+ days days days days Total $'000 $'000 $'000 $'000 $'000 Grant receivable 13,095 613 955 3,271 17,934 Total 13,095 613 955 3,271 17,934

Note 26E: Liquidity risk The Department’s administered financial liabilities are supplier and grant payables. The exposure to liquidity risk is based on the notion that the Department will encounter difficulty in meeting its obligations associated with administered 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 put in place to ensure there are appropriate resources to meet its financial obligations. The ATSILA has sufficient capital base available to meet its obligations when they fall due. The ABA investment policy ensures sufficient cash is available to meet payments as they fall due. All non-derivative financial liabilities are expected to mature within one year.



Note 26F: Market risk The Department holds basic financial instruments, available for sale and held-to-maturity investments that do not expose the entity to certain market risks. The Department is not exposed to 'Currency risk', 'Other price risk' or 'Interest rate risk'.



Note 27: Administered financial assets reconciliation 2015 2014 Notes $'000 $'000 Financial assets Total financial assets per Administered Schedule of Assets and Liabilities 4,345,171 4,196,434 Less non-financial instrument components:

Statutory receivables 20B 19,587 17,293 Special account receivable from OPA 20B 9,947 13,493 Other receivables 20B 305 376

Total non-financial instrument components 29,839 31,162 Total financial assets as per Financial Instruments Note 26A 4,315,332 4,165,272


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. App

ropr

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(No.

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ectio

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3 an

d 14

. Dep

artm

enta

l app

ropr

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se a

t fin

anci

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ear-

end.

How

ever

, the

resp

onsi

ble

Min

iste

r may

dec

ide

that

par

t or a

ll of

a d

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ques

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t the

Fin

ance

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r red

uce

that

ap

prop

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n. T

he re

duct

ion

in th

e ap

prop

riatio

n is

effe

cted

by

the

Fina

nce

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iste

r's d

eter

min

atio

n an

d is

dis

allo

wab

le b

y P

arlia

men

t. In

201

3-14

, the

re w

as a

n ad

just

men

t tha

t met

th

e re

cogn

ition

crit

eria

of a

form

al re

duct

ion

in re

venu

e (in

acc

orda

nce

with

FM

O D

iv 1

01) b

ut a

t law

the

appr

opria

tions

had

not

bee

n am

ende

d be

fore

the

end

of th

e re

porti

ng p

erio

d.

2. T

he v

aria

nce

in d

epar

tmen

tal o

rdin

ary

annu

al s

ervi

ces

is m

ainl

y du

e to

und

raw

n cu

rrent

yea

r app

ropr

iatio

ns.


DEP

AR

TMEN

T O

F TH

E PR

IME

MIN

ISTE

R A

ND

CA

BIN

ET

NO

TES

TO A

ND

FO

RM

ING

PA

RT

OF

THE

FIN

AN

CIA

L ST

ATE

MEN

TS

for t

he p

erio

d en

ded

30 J

une

2015

N

ote

28B

: Dep

artm

enta

l and

adm

inis

tere

d ca

pita

l bud

gets

('re

cove

rabl

e G

ST e

xclu

sive

')

20

14-1

5 C

apita

l Bud

get A

ppro

pria

tions

C

apita

l Bud

get A

ppro

pria

tions

app

lied

in 2

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15 (c

urre

nt a

nd p

rior y

ears

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Varia

nce3

Sect

ion

51

dete

rmin

atio

ns4

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ppro

pria

tion

Act

PG

PA A

ct

Tota

l Cap

ital

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get

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Paym

ents

for

non-

finan

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as

sets

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for

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l pa

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ts

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nual

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get

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ion

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000

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nual

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s

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get1

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) Ad

min

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inar

y an

nual

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vice

s

C

apita

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get1

151

- 15

1 (3

00)

- (3

00)

(149

) -

1. D

epar

tmen

tal a

nd A

dmin

iste

red

Cap

ital B

udge

ts a

re a

ppro

pria

ted

thro

ugh

App

ropr

iatio

n A

cts

(No.

1,3,

5). T

hey

form

par

t of o

rdin

ary

annu

al s

ervi

ces,

and

are

not

sep

arat

ely

iden

tifie

d in

the

App

ropr

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n A

cts.

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mor

e in

form

atio

n on

ord

inar

y an

nual

ser

vice

s ap

prop

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leas

e se

e N

ote

28A

: Ann

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ppro

pria

tions

. 2.

Pay

men

ts m

ade

on n

on-fi

nanc

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sset

s in

clud

e pu

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ses

of a

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re o

n as

sets

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ch h

as b

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ed, c

osts

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rred

to m

ake

good

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its o

rigin

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ition

, and

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capi

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pone

nt o

f fin

ance

leas

es.

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ork

on c

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ject

s w

as d

elay

ed d

ue to

the

focu

s on

G20

pro

ject

s du

ring

2014

-15.

4.

A p

erm

anen

t qua

rant

ine

of $

0.81

6m w

as re

turn

ed u

nder

sec

tion

51 o

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to d

ecis

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e E

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mitt

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has

been

reco

gnis

ed a

s a

redu

ctio

n in

cap

ital a

ppro

pria

tion

rece

ivab

le b

y th

e D

epar

tmen

t.


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AR

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F TH

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R A

ND

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ET

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TO A

ND

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OF

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ded

30 J

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2015

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l Bud

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get A

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013-

14 (c

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prio

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ianc

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l Cap

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ropr

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r non

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tal p

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ual C

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1 9,

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36)

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) 2,

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inis

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inar

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nual

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9 -

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(347

) -

(347

) (5

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udge

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(No.

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arat

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iden

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ropr

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n A

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mor

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form

atio

n on

ord

inar

y an

nual

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vice

s ap

prop

riatio

ns, p

leas

e se

e N

ote

28A

: Ann

ual A

ppro

pria

tions

. 2.

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men

ts m

ade

on n

on-fi

nanc

ial a

sset

s in

clud

e pu

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of a

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s, e

xpen

ditu

re o

n as

sets

whi

ch h

as b

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capi

talis

ed, c

osts

incu

rred

to m

ake

good

an

asse

t to

its o

rigin

al

cond

ition

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the

capi

tal r

epay

men

t com

pone

nt o

f fin

ance

leas

es.



Note 28C: Unspent annual appropriations ('recoverable GST exclusive')

Authority 2015 2014 $'000 $'000

Departmental1 Appropriation Act (No.1) 2013-142 5,000 36,951 Appropriation Act (No.2) 2013–14 - 1,965 Appropriation Act (No.1) 2013–14 - cash held by the department - 1,633 Appropriation Act (No.3) 2013–14 - 8,200 Appropriation Act (No.5) 2013–14 - 35,634 Appropriation Act (No.5) 2013-14 - Capital Budget (DCB) - 2,958 Appropriation Act (No.6) 2013–14 Non Operating Equity Injection 4,861 5,528 Appropriation Act (No.1) 2014-15 130,618 - Appropriation Act (No.1) 2014-15 - cash held by the department 12,063 - Appropriation Act (No.1) 2014-15 - Capital Budget (DCB) 13,991 - Appropriation Act (No 2) 2014-15 - Non Operating Equity Injection 5,887 - Appropriation Act (No.3) 2014-15 1,912 - Appropriation Act (No 4) 2014-15 - Non Operating Equity Injection 318 - Total 174,650 92,869 Administered3 Appropriation Act (No.1) Capital Budget (ACB) 2012–13 240 240 Appropriation Act (No.1) 2013–14 - cash held by the department - 17,739 Appropriation Act (No.1) 2013–14 10 26,626 Appropriation Act (No.1) Capital Budget (ACB) 2013–14 - 289 Appropriation Act (No.3) 2013–14 - 2,456 Appropriation Act (No.5) 2013–14 24,263 125,610 Appropriation Act (No.6) 2013–14 23,837 23,837 Appropriation Act (No.1) 2014-15 35,700 - Appropriation Act (No.1) Capital Budget (ACB) 2014-15 140 - Appropriation Act (No.1) 2014-15 - cash held by the department 14,563 - Appropriation Act (No.2) SPP 2014-15 1 - Total 98,754 196,797

1. The current year Departmental unspent annual appropriation is shown inclusive of Section 51 Permanent Quarantines, which will reduce Appropriation Act (No. 1) 2014-15 by $41.446m and $2.000m from prior year recognised through contributed equity and reduce Appropriation Act (No.1) 2014-15 - Capital Budget (DCB) by $0.816m. 2. The prior year Departmental unspent annual appropriation is shown inclusive of a Quarantine which reduced Appropriation Act (No.1) 2013-14 by $5.000m. 3. The current year Administered unspent annual appropriation is shown inclusive of Section 51 Permanent Quarantines which will reduce Appropriation Act (No. 1) 2014-15 by $26.497m.



Note 28D: Special appropriations ('recoverable GST exclusive')

Authority Type Purpose

Appropriation applied 2015 2014 $'000 $'000

Aboriginal Land Rights (Northern Territory) Act 1976

Unlimited amount

To enable payments to aboriginal land councils from the equivalent of mining royalties derived from mining operations on Aboriginal land in the Northern Territory

165,268 92,766

Indigenous Education (Targeted Assistance) Act 2000

Limited amount

An Act to provide targeted financial assistance to advance the education of Indigenous persons, and for other related purposes.

- 91,912

Higher Education Support Act 2003 Unlimited amount

An Act to grant financial assistance to support the higher education system for individuals and universities.

51,152 26,628

Total 216,420 211,306 As a consequence of the Administrative Arrangements Order of 18 September 2013, these special appropriations were transferred from Department of Social Services and the former Department of Education, Employment and Workplace Relations. The Indigenous Education (Targeted Assistance) Act 2000 was amended to allow non-ABSTUDY payments to be funded by annual Appropriations Acts from 1 July 2014.


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e 29

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1Appropriation: Public Governance, Performance and Accountability Act 2013; section 78 Establishing Instrument: Determination 2008/13 Purpose: This account was created to disburse amounts held on trust or otherwise for the benefit of a person other than the Commonwealth. This account is non-interest bearing and the balance is held in the Official Public Account. 2Appropriation: Public Governance, Performance and Accountability Act 2013; section 80 Establishing Instrument: Corporations (Aboriginal and Torres Strait Islander) Act 2006; section 551-20 Purpose: To administer unclaimed monies received by the Registrar of Aboriginal and Torres Strait Islander Corporations. This account is non-interest bearing and the balance is held in the Official Public Account. 3Appropriation: Public Governance, Performance and Accountability Act 2013; section 78 Establishing Instrument: Determination 2003/05 Purpose: To provide a source of finance for the liability for the Superannuation Productivity Benefit entitlements owing to tutors contracted under the Aboriginal Tutorial Assistance Scheme (ATAS). This account is non-interest bearing and the balance is held in the Official Public Account. 4Appropriation: Public Governance, Performance and Accountability Act 2013; section 78 Establishing Instrument: Determination 2010/06 Purpose: To support the implementation of the Remote Service Delivery National Partnership Agreement. It will provide the Australian Government with the capacity to address high priority projects in a timely way and support projects identified through the local implementation planning process. This account is non-interest bearing and the balance is held in the Official Public Account. 5Appropriation: Public Governance, Performance and Accountability Act 2013; section 78 (repealed 1 July 2014) Establishing Instrument: Determination 2008/24 Purpose: Administering the Indigenous Communities Strategic Investment Programme. This account is non-interest bearing and the balance is held in the Official Public Account. 6Appropriation: Public Governance, Performance and Accountability Act 2013; section 80 Establishing Instrument: Aboriginal Land Rights (Northern Territory) Act 1976; sections 62, 63, 64 and 65 Purpose: For the receipt and disbursement of the equivalent of mining royalty monies derived from mining operations on Aboriginal land in the Northern Territory. This account is interest bearing. 7Appropriation: Public Governance, Performance and Accountability Act 2013; section 80 Establishing Instrument: Section 192W of the Aboriginal and Torres Strait Islander Act 2005 Purpose: To provide a secure stream of income to the Indigenous Land Corporation in perpetuity to provide economic, environmental, social and cultural benefits for Aboriginal people and Torres Strait Islanders by assisting in the acquisition and management of an Indigenous land base. This account is interest bearing. Aboriginal Advancement Account The Aboriginal Advancement Account was established under section 80 of the PGPA Act.

The purpose of the account is for furthering the social and economic advancement of Aboriginal people living in Victoria. As a result of the Administrative Arrangement Orders, this account was transferred from DSS as part of the Indigenous Affairs function as at 18 September 2013 with a nil balance. There were no transactions credited or debited to the special account during 2014 and 2015.



Note 30: Compliance with statutory conditions for payments from the consolidated revenue fund Section 83 of the Constitution provides that no amount may be paid out of the Consolidated Revenue Fund except under an appropriation made by law. Commonwealth Agencies are required to assess the potential for breaches of section 83 to occur, recognising the increased risk of non-compliance where additional statutory requirements are attached to an appropriation.

During 2014-15 PM&C reviewed its exposure to the risk of not complying with statutory conditions on payments from appropriations. The review included:

identifying statutory conditions in any new special appropriations and special accounts identifying any changes to statutory conditions in existing special appropriations and special accounts reviewing legislation associated with annual appropriations to identify statutory conditions on payments determining the risk of non-compliance by assessing the difficulty of administering the statutory conditions and

assessing the extent to which payment systems and processes satisfy those conditions determining procedures to confirm risk assessments in medium risk cases and to quantify the extent of non-

compliance, if any, in higher risk situations obtaining legal advice, as appropriate, to resolve questions of potential non-compliance considering legislative or procedural changes to reduce the risk of non-compliance in the future to an acceptably

low level. PM&C identified five appropriations involving statutory conditions for payment:

two special appropriations two special accounts one annual appropriation

During 2014-15 all appropriations with statutory conditions attached were reviewed. Administered payments of $501.714 million (30.4 percent of total administered payments) and departmental payments of $24.671 million (4.2 percent of total departmental payments) were subject to additional statutory conditions.

The review identified the following:

1. Special Accounts

PM&C currently has seven special accounts, of which two have payment requirements incorporated in legislation.

a. The Aboriginal and Torres Strait Islander Land Account (ATSILA) – testing of transactions revealed no issues.

b. The Aboriginals Benefit Account (ABA) – testing of transactions revealed that two payments made from the ABA under section 64(3) of the Aboriginal Land Rights (Northern Territory) Act 1976 contravened section 83 of the Constitution. Payments are required to be made out of the ABA based on royalties received by the Northern Territory and Commonwealth governments. The contraventions occured when the royalties upon which the payments were based had been estimated at a greater value than required. Legislation has been prepared, and is awaiting presentation to Parliament, to reduce the risks of non-compliance associated with these payments to an acceptably low level.

The two payments made in contravention of section 83 totalled $0.314 million. Both were technical contraventions, despite the payments having been made in accordance with the requirements of section 64(3) of the Aboriginal Land Rights (Northern Territory) Act 1976. Of this amount, $0.136 million has been recovered through the reduction of subsequent payments, and $0.178 million will be offset against future payments.

2. Special appropriations

Special appropriations considered were:

Aboriginal Land Rights (Northern Territory) Act 1976 Higher Education Support Act 2003.

No contraventions of section 83 of the Constitution were identified for these special appropriations.

3. Annual appropriations

Administered - Consistent with the Finance guidelines on annual Appropriation Acts, payments made in accordance with the Native title Act 2003 were considered to have medium risks of section 83 breach. PM&C’s other annual



administered appropriations have limited specificity and none have been assessed as likely to have breached section 83 in the 2014-15 financial year.

Departmental – PM&C has identified two pieces of legislation that impose payment preconditions over departmental payments. These are:

Long Service Leave (Commonwealth Employees) Act 1976 – testing of payments made under this legislation has revealed 16 breaches of section 83 of the Constitution. These relate to overpayments of Long Service Leave for a voluntary redundancy. The total value of the breaches is $0.096 million. At 30 June 2015, the appropriate mechanisms for recovery or other action in relation to this amount were being investigated.

Superannuation Act 2005 - testing of payments made under this legislation has revealed 5,895 breaches of section 83 of the Constitution. These relate to contributions to the Public Sector Superannuation Accumulation Plan (PSSAP) that were calculated using the wrong basis for superannuation salary. PM&C is investigating mechanisms to improve controls over the selection of the superannuation salary basis. The total value of the potential breaches is $0.532 million.

PM&C’s other annual departmental appropriations have limited specificity and none have been assessed as likely to have breached section 83 in the 2014-15 financial year.

PM&C will continue to monitor its level of compliance with section 83 of the Constitution across all legislation for which it is administratively responsible. Where possible, amendments to legislation will continue to be progressed.


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Note 31: Assets held in trust 2015 2014 $'000 $'000 Monetary assets - Cash at bank As at 1 July 11 1

Receipts 154 150 Payments (43) (140)

Total as at 30 June 122 11 Total monetary assets held in trust 122 11

Financial assets held in trust are disclosed in Note 29 Special accounts in the account titled Services for Other Entities and Trust Moneys Special Account.



Note 32: Reporting of outcomes The Department attributes corporate shared items based upon average staffing levels to reflect full cost of delivery. The basis of attribution in the table below is consistent with the basis used for the Budget.

Note 32A: Net cost of outcome delivery

Outcome 1 Outcome 2

Payments to corporate Commonwealth entities

and companies Total 2015 2014 2015 2014 2015 2014 2015 2014

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Departmental

Expenses (274,396) (230,653) (295,662) (155,568) (570,058) (386,221)

Own-source income 14,306 21,801 9,695 6,622 24,001 28,423

Administered Expenses (12,978) (18,274) (1,429,621) (885,475) (130,058) (90,076) (1,572,657) (993,825)

Income - 532 107,576 102,323 - - 107,576 102,855

Net cost of outcome delivery (273,068) (226,594) (1,608,012) (932,098) (130,058) (90,076) (2,011,138) (1,248,768)

Note: Further information on outcomes is detailed in Note 1.1.



Note 32B: Major classes of departmental expense income assets and liabilities by outcome Outcome 1 Outcome 2 Total 2015 2014 2015 2014 2015 2014 $'000 $'000 $'000 $'000 $'000 $'000 Departmental Expenses

Employee benefits (94,593) (111,773) (178,010) (111,131) (272,603) (222,904) Suppliers (168,775) (108,552) (98,639) (34,126) (267,414) (142,678) Grants - non-profit organisations (1,047) (557) (189) (172) (1,236) (729) Depreciation and amortisation (9,783) (9,716) (18,442) (10,032) (28,225) (19,748) Finance costs (9) (24) (43) (107) (52) (131) Write-down and Impairment of assets (189) (31) (308) - (497) (31) Losses from asset sales - - (31) - (31) -

Total (274,396) (230,653) (295,662) (155,568) (570,058) (386,221) Departmental income

Sales of goods and rendering of services 4,491 18,747 8,794 2,719 13,285 21,466 Resources received free of charge 9,722 3,054 901 3,849 10,623 6,903 Sale of assets - - - 54 - 54 Gain on reversal of make good 93 - - - 93 - Revenue from Government 239,665 184,936 288,858 166,214 528,523 351,150

Total 253,971 206,737 298,553 172,836 552,524 379,573 Departmental assets

Cash and cash equivalents 4,427 644 7,636 989 12,063 1,633 Trade and other receivables 41,398 91,031 77,114 32,897 118,512 123,928 Accrued revenue 1,959 1,775 3,438 384 5,397 2,159 Property, plant and equipment 18,263 29,313 101,152 106,834 119,415 136,147 Intangibles 5,167 8,156 8,746 1,542 13,913 9,698 Prepayments 848 2,452 1,756 3,761 2,604 6,213 Assets held for sale - - 430 785 430 785

Total 72,062 133,371 200,272 147,192 272,334 280,563 Departmental liabilities

Suppliers (14,290) (14,030) (17,424) (21,519) (31,714) (35,549) Grants - non-profit organisations (370) - - - (370) - Other payables (9,086) (23,821) (17,253) (15,593) (26,339) (39,414) Employee provisions (19,762) (30,019) (52,996) (46,042) (72,758) (76,061) Other provisions (232) (714) (958) (588) (1,190) (1,302)

Total (43,740) (68,585) (88,631) (83,741) (132,371) (152,326)



Note 32C: Major classes of administered expenses, income, assets, and liabilities by outcomes

Outcome 1 Outcome 2

Payments to corporate

Commonwealth entities and companies Total

2015 2014 2015 2014 2015 2014 2015 2014

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Administered expenses

Employee benefits (850) (839) (24) (149) - - (874) (988)

Suppliers (4,589) (4,507) (60,814) (61,642) - - (65,403) (66,149)

Subsidies - - (1,601) (851) - - (1,601) (851)

Grants (6,657) (8,303) (1,211,943) (719,730) - - (1,218,600) (728,033)

Depreciation and amortisation (332) (356) - - - - (332) (356)

Finance costs (547) (4,096) - - - - (547) (4,096)

Impairment of receivables - (172) (11,248) (2,398) - - (11,248) (2,570)

Losses from asset sales (3) (1) (818) - - - (821) (1) Payments associated with land councils - - (88,313) (45,999) - - (88,313) (45,999)

Payments to corporate Commonwealth entities and companies - - - - (130,058) (90,076) (130,058) (90,076)

Payments to Indigenous Land Corporation - - (49,865) (52,463) - (49,865) (52,463)

Mining withholding tax - - (4,995) (2,243) - - (4,995) (2,243)

Total (12,978) (18,274) (1,429,621) (885,475) (130,058) (90,076) (1,572,657) (993,825)

Administered income

Interest - investments - - 86,688 73,793 - - 86,688 73,793

Other - 532 20,070 28,530 - - 20,070 29,062

Gains - - 818 - - - 818 -

Total - 532 107,576 102,323 - - 107,576 102,855

Administered assets

Cash and cash equivalents 1 169 14,562 17,570 - - 14,563 17,739

Trade and other receivables 71 71 72,565 80,376 - - 72,636 80,447

Other investments - - 2,480,243 2,420,216 - - 2,480,243 2,420,216

Investments in corporate Commonwealth entities 1,168 1,098 1,776,561 1,676,934 - - 1,777,729 1,678,032

Property, plant and equipment 1,437 1,753 - - - - 1,437 1,753

Prepayments 37 2,265 6,083 7,057 - - 6,120 9,322

Total 2,714 5,356 4,350,014 4,202,153 - - 4,352,728 4,207,509

Administered liabilities

Suppliers (239) (699) (11,251) (8,644) - - (11,490) (9,343)

Grants (276) (881) (18,364) (17,942) - - (18,640) (18,823)

Other payables (108) (765) (41) (1,771) - - (149) (2,536)

Employee provisions (270) (325) (2) - - - (272) (325)

Former Governors-General provision (17,509) (16,594) - - - - (17,509) (16,594)

Other provisions (129) (129) (98) (195) - - (227) (324)

Total (18,531) (19,393) (29,756) (28,552) - - (48,287) (47,945)



Note 33: Budgetary reports and explanations of major variances The following tables provide a comparison of the original budget as presented in the 2014-15 Portfolio Budget Statements (PBS) to the 2014-15 final outcome as presented in accordance with Australian Accounting Standards for the entity. The Budget is not audited. Note 33A: Departmental budgetary reports Statement of Comprehensive Income for the period ended 30 June 2015 Actual Budget estimate Original1 Variance2 2015 2015 2015 $'000 $'000 $'000 NET COST OF SERVICES Expenses

Employee benefits 272,603 297,355 (24,752) Suppliers 267,414 290,189 (22,775) Grants 1,236 45 1,191 Depreciation and amortisation 28,225 8,836 19,389 Finance costs - unwinding of discount on make good 52 24 28 Write-down and impairment of assets 497 - 497 Losses from asset sales 31 - 31

Total expenses 570,058 596,449 (26,391) Own-source income Own-source revenue

Sale of goods and rendering of services 13,285 8,613 4,672 Resources received free of charge 10,623 2,143 8,480

Total own-source revenue 23,908 10,756 13,152 Gains

Other 93 - 93 Total gains 93 - 93 Total own-source income 24,001 10,756 13,245 Net cost of services 546,057 585,693 (39,636) Revenue from Government - departmental appropriations 528,523 576,857 (48,334) Deficit attributable to the Australian Government (17,534) (8,836) (8,698) OTHER COMPREHENSIVE INCOME Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation surplus 3,822 - 3,822 Total comprehensive loss attributable to the Australian Government (13,712) (8,836) (4,876)

1. PM&C’s original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the PM&C’s 2014-15 Portfolio Budget Statements (PBS)). 2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided in Note 33B.



Statement of Financial Position as at 30 June 2015 Actual Budget estimate Original1 Variance2 2015 2015 2015 $'000 $'000 $'000 ASSETS Financial assets

Cash and cash equivalents 12,063 1,038 11,025 Trade and other receivables 123,909 23,852 100,057

Total financial assets 135,972 24,890 111,082 Non-financial assets

Property, plant and equipment 119,415 49,335 70,080 Intangibles 13,913 8,501 5,412 Prepayments 2,604 3,479 (875)

Total non-financial assets 135,932 61,315 74,617 Land and buildings held for sale 430 - 430 Total assets 272,334 86,205 186,129 LIABILITIES Payables

Suppliers 31,714 2,671 29,043 Grants - private sector 370 528 (158) Other payables 26,339 163 26,176

Total payables 58,423 3,362 55,061 Provisions

Employee provisions 72,758 61,571 11,187 Make good provisions 1,190 6,772 (5,582)

Total provisions 73,948 68,343 5,605 Total liabilities 132,371 71,705 60,666 Net assets 139,963 14,500 125,463 EQUITY

Contributed equity 147,056 43,684 103,372 Reserves 12,053 8,231 3,822 Accumulated deficit (19,146) (37,415) 18,269

Total equity 139,963 14,500 125,463 1. PM&C’s original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the PM&C’s 2014-15 Portfolio Budget Statements (PBS)). 2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided in Note 33B.



Note 33B: Departmental major budget variances for 2015 The purpose of this note is to outline the reasons for significant variances betweeen the Department's original budget estimates, as published in the 2014-15 Portfolio Budget Statements, and the actual expenditure and net asset position for the year. In 2014-15 the Department delivered the following key priorities:

successful delivery of the G20 Summit in Brisbane which saw governments and central bank governors from 20 major economies gather to discuss policy issues relating to international financial stability;

a restructure of the Regional Network to simplify reporting structures and enable decisions to be made closer to the people and communities impacted. This restructure is in line with the Government's commitment to achieve better outcomes for Indigenous people in the priority areas of schooling, jobs and community safety;

development and delivery of the Indigenous Advancement Strategy (IAS) which streamlined and combined approximately 150 programmes to deliver services through five broad based programmes. The IAS is designed to provide flexibility within the progamme structure to allow the Department to focus on priority areas that can make a real difference; and

finalisation of funding and asset transfers arising from the 2013 Machinery of Government changes which resulted in functions and staff transferring in from nine other Commonwealth agencies.

These activities combined with the usual business of the Department have driven the financial result for the year. Where the results have varied significantly from the original budget, explanations are provided below.

Explanation of major variances Affected line items (and statement)

Employee Benefits: staff vacancies and recruitment delays were experienced across the Department leading to lower than budgeted expenses. A key driver was establishing the structure of the Indigenous Affairs Group, including the regional network, a prerequisite to recruiting the right capabilities.

Employee benefits expense - Statement of Comprehensive Income

Supplier expense: was lower than budget due to close management of expenditure on the G20 Summit as well as a focus on establishing the IAS and restructuring the regional network. Resources and effort were diverted from other planned activities towards the G20 Summit and establishing the IAS and as a result, supplier expense in other areas was reduced.

Suppliers expense - Statement of Comprehensive Income

Grant payments: grants paid in 2014-15 were unforeseen when the original 2014-15 budget was established.

Grants expense - Statement of Comprehensive Income

Depreciation: due to the complexity associated with bringing together functions and funding from nine Commonwealth agencies, arrangements for the transfer of some assets weren't settled in the previous year. Assets valued at approximately $116 million were transferred after the budget was finalised. This resulted in higher than budgeted expense to represent the decline in value of those assets.

Depreciation - Statement of Comprehensive Income Non-financial assets - Statement of Financial Position

Own-source revenue: corporate services provided to other Commonwealth agencies continued for longer than expected and the scope of some services were finalised post budget, resulting in higher than budgeted revenue. In addition, sub-lease arrangements of office accommodation in the regional network to other Commonwealth agencies were finalised post budget, resulting in higher than budgeted revenue.

Sale of goods and rendering of services - Statement of Comprehensive Income

Resources received free of charge: represents benefits the Department derives from receiving goods or services that it is not required to pay for. At the time the budget was prepared, it was unknown that the Digital Transformation Office Taskforce would be established during the financial year. The taskforce was located in office accommodation that was provided free of charge by another agency and the staff were largely seconded from other agencies with the costs being paid by those agencies.

Resources received free of charge - Statement of Comprehensive Income



Note 33C: Administered budgetary reports Administered Schedule of Comprehensive Income for the period ended 30 June 2015 Actual Budget estimate Original1 Variance2 2015 2015 2015 $'000 $'000 $'000 NET COST OF SERVICES Expenses

Employee benefits 874 882 (8) Suppliers 65,403 299,830 (234,427) Subsidies 1,601 65,182 (63,581) Grants 1,218,600 941,669 276,931 Depreciation and amortisation 332 122 210 Finance costs 547 467 80 Payments to corporate Commonwealth entities and companies 130,058 130,367 (309) Other 155,242 117,078 38,164

Total expenses 1,572,657 1,555,597 17,060 Income Revenue Non-taxation revenue

Interest - investments 86,688 95,087 (8,399) Other 20,070 575 19,495

Total non-taxation revenue 106,758 95,662 11,096 Total revenue 106,758 95,662 11,096 Gains

Assets received free of charge 818 - 818 Total gains 818 - 818 Total income 107,576 95,662 11,914 Net cost of services 1,465,081 1,459,935 5,146 Deficit (1,465,081) (1,459,935) (5,146) OTHER COMPREHENSIVE INCOME Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation reserves 61,595 - 61,595 Items subject to subsequent reclassification to net cost of services

Actuarial losses relating to former Governors-General entitlements (1,903) - (1,903)

Total other comprehensive income 59,692 - 59,692 Total comprehensive loss (1,405,389) (1,459,935) 54,546

1. PM&C’s original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the PM&C’s 2014-15 Portfolio Budget Statements (PBS)). 2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided in Note 33D.



Administered Schedule of Assets and Liabilities as at 30 June 2015 Actual Budget estimate Original1 Variance2 2015 2015 2015 $'000 $'000 $'000 ASSETS Financial assets

Cash and cash equivalents 14,563 22,900 (8,337) Trade and other receivables 72,636 7,894 64,742 Investments in corporate Commonwealth entities 1,777,729 1,756,528 21,201 Other investments 2,480,243 2,397,538 82,705

Total financial assets 4,345,171 4,184,860 160,311 Non-financial assets

Property, plant and equipment 1,437 1,957 (520) Prepayments 6,120 8,210 (2,090)

Total non-financial assets 7,557 10,167 (2,610) Total assets administered on behalf of Government 4,352,728 4,195,027 157,701 LIABILITIES Payables

Suppliers 11,490 39,877 (28,387) Grants 18,640 8,264 10,376 Other payables 149 109 40

Total payables 30,279 48,250 (17,971) Provisions

Employee provisions 272 380 (108) Non-cash benefits - former Governors-General benefits 17,509 14,778 2,731 Other provisions 227 114 113

Total provisions 18,008 15,272 2,736 Total liabilities administered on behalf of Government 48,287 63,522 (15,235) Net assets 4,304,441 4,131,505 172,936

1. PM&C’s original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the PM&C’s 2014-15 Portfolio Budget Statements (PBS)). 2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided in Note 33D.



Note 33D: Administered major budget variances for 2015

In line with the Government's commitment to achieve better outcomes for Indigenous people in the priority areas of schooling, jobs and community safety, the Department developed and delivered the Indigenous Advancement Strategy (IAS) which came into effect in 2014-15. The IAS has been designed to provide flexibility within the programme structure, which saw approximately 150 programmes being consolidated into five programmes, allowing the Department to focus on the priority areas that can make a real difference. The Department also restructured the Regional Network to simplify reporting structures and enable decisions to be made closer to the people and communities that are impacted. These key activities resulted in significant changes to the original budget through the Portfolio Additional Estimates Statements (PAES) and resulted in reclassification of budget amounts between the categories included in the Statement of Comprehensive Income. These activities combined with the usual business of the Department have driven the financial result for the year. Where the results have varied significantly from the original budget, explanations are provided below. Explanation of major variances Affected line items (and schedule) Suppliers: The implementation of the IAS included a significant reallocation from supplier expense to grants. The reallocation predominantly related to the classification of payments under the Jobs, Land and Economy Programme.

Suppliers expense - Administered Schedule of Comprehensive Income Suppliers payable - Administered Schedule of Assets and Liabilities

Subsidies: Under the IAS, wage support payments in the Jobs, Land and Economy programme that were previously reported as subsidies have been reclassified to grants.

Subsidies expense - Administered Schedule of Comprehensive Income

Grants payments: Payments under the Jobs, Land and Economy programmes have been reclassified from suppliers and subsidies to grants. The budget allocation was revised through the PAES process to reflect the reallocation and the actual expenditure for the year was in line with the revised PAES budget. The Indigenous Advancement Strategy is designed to have the flexibility within programmes to allow for the allocation of funds to assist in meeting emerging priorities. Accordingly, funding was re-allocated between sub-programmes during the year as priorities were identified. The most significant adjustment was an increase in the funding allocated to the Remote Jobs and Communities Programme (RJCP) following a commitment by Government to increase the number of structured activities available to job seekers.

Grants expense - Administered Schedule of Comprehensive Income Grants payable - Administered Schedule of Assets and Liabilities

Other expenses: Payments to the Indigenous Land Corporation and the related withholding tax payments were higher than budgeted as a flow on effect of higher than budgeted mining royalties being received.

Other expenses - Administered Schedule of Comprehensive Income Other payables - Administered Schedule of Assets and Liabilities



Interest - Investments: The Interest rates on offer in the market were lower than expected at the time the budget was prepared, in line with decreases in the official cash rate set by the Reserve Bank of Australia.

Interest - investments - Administered Schedule of Comprehensive Income

Other revenue: Returns of unused grant funding were higher than expected. Where possible, and in line with relevant approvals, the Department reallocates this funding to other providers to deliver services.

Other revenue - Administered Schedule of Comprehensive Income

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