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Productivity Commission

Date

Section 1: Agency overview and resources

1.1 Strategic direction statement

The Productivity Commission (the Commission) is the Australian Government's independent research and advisory body on a range of economic, social and environmental issues affecting the welfare of Australians. The Commission's work encompasses all sectors of the economy as well as social and environmental issues. Its activities cover all levels of government responsibility — Federal, State, Territory and Local.

As a review and advisory body, the Commission does not have responsibility for implementing government programs. It carries out inquiry, research, advising and incidental functions prescribed under the Productivity Commission Act 1998.

The Commission contributes to well‑informed policy decision‑making and public understanding on matters relating to Australia's economic performance and community wellbeing, based on independent and transparent analysis that takes a broad view encompassing the interests of the community as a whole, rather than just particular industries or groups. The Commission has four broad components of work:

  • government commissioned projects;
  • performance reporting and other services to government bodies;
  • competitive neutrality complaints activities; and
  • supporting research and activities and statutory annual reporting.

It is anticipated the Commission's work in 2013‑14 and the forward years will be integral to the national reform agenda. The Commission will continue to examine a variety of economic, social and environmental issues through its public inquiry and commissioned research program. Commissioned projects currently underway and carrying over into 2013‑14 include: inquiries into Non‑financial barriers to mineral and energy resource exploration, and the National Access Regime; and studies to benchmark Australia's Major Project Development Assessment Processes, and Regulator Engagement with Small Business.

Several of the commissioned projects have been initiated by the Council of Australian Governments (COAG). The Commission is also working with Australia's jurisdictions in respect of standing research responsibilities and specific projects. In particular, the Commission is providing cross‑jurisdictional reporting to COAG on performance of government services; indicators of Indigenous disadvantage; and expenditure on services to Indigenous Australians. The Commission prepares and reports performance information to the COAG Reform Council in respect of the Intergovernmental Agreement on Federal Financial Relations. The Commission is also undertaking data development, modelling and analysis to report on the economic impacts and benefits of COAG's agreed reform agenda.

The Australian Government Competitive Neutrality Complaints Office (AGCNCO) is an autonomous office located within the Commission. Its function is to receive and investigate complaints and provide advice to the Assistant Treasurer on the application of competitive neutrality arrangements. AGCNCO also provides informal advice on, and assists agencies in, implementing competitive neutrality requirements.

The Commission has a statutory mandate to undertake research to complement its other activities. The supporting research program includes work on productivity performance and its determinants, environmental and resources management, labour markets (including social dimensions) and development of economic models and frameworks. The Commission's most recent research publications include staff working papers on Trends in the Distribution of Income in Australia and Changes in the Prevalence of Forms of Work in Australia. A full list of the Commission's research reports and staff working papers is provided on the Commission's website.

1.2 Agency resource statement

Table 1.1 shows the total resources for the Commission.

Table 1.1: Productivity Commission — Budget estimates for 2013‑14 as at Budget May 2013
Estimate
of prior
year amounts
available in
2013‑14
$'000
+ Proposed
at Budget
2013‑14
$'000
= Total
estimate
2013‑14
$'000
Actual
available
appropriation
2012‑13
$'000
Ordinary annual services            
Departmental            
Prior year departmental appropriation 19,836 4 -   19,836 -
Departmental appropriation3 -   38,233 1 38,233 37,709
Receipts from other sources (s31) -   10 2 10 10
Total net resourcing for the Productivity Commission 19,836   38,243   58,079 37,719

1. Appropriation Bill (No. 1) 2013‑14.

2. Receipts received under section 31 (s31) of the Financial Management and Accountability Act 1997.

3. Includes $0.3 million in 2013‑14 for the departmental capital budget (also refer to Table 3.2.5).

4. Estimated adjusted balance carried from previous year for annual appropriations.

1.3 Budget measures

Budget measures relating to the Commission are summarised below.

Table 1.2: Australian Bureau of Statistics 2013‑14 Budget measures
Program 2012‑13
$'000
2013‑14
$'000
2014‑15
$'000
2015‑16
$'000
2016‑17
$'000
Expense measures            
Targeted savings — public service efficiencies1 1.1 (172) (250) (227) (197) (185)
Total expense measures   (172) (250) (227) (197) (185)

1 This measure was included in a cross portfolio measure in the Mid‑Year Economic and Fiscal Outlook 2012‑13.

Prepared on a Government Finance S
tatistics (fiscal) basis.

Section 2: Outcomes and planned performance

2.1 Outcomes and performance information

Government outcomes are the intended results, impacts or consequences of actions by the Government on the Australian community. Commonwealth programs are the primary vehicle by which government agencies achieve the intended results of their outcome statements. Agencies are required to identify the programs which contribute to Government outcomes over the Budget and forward years.

The Commission's outcome is described below, specifying the strategy, program objective, program deliverables and program key performance indicators used to assess and monitor the performance of the Commission.

Outcome 1: Well‑informed policy decision‑making and public understanding on matters relating to Australia's productivity and living standards, based on independent and transparent analysis from a community‑wide perspective

Outcome 1 strategy

The Commission's activities derive from its statutory functions outlined in the Productivity Commission Act 1998 and reported in detail in the Annual Report. The Commission aims to demonstrate its effectiveness by reporting annually on the relevance, quality, timeliness and cost‑effectiveness of its activities.

Outcome expense statement

Table 2.1 provides an overview of the total expenses for Outcome 1.

Table 2.1: Budgeted Expenses for Outcome 1
Outcome 1: Well-informed policy decision-making and public understanding on matters relating to Australia's productivity and living standards, based on independent andtransparent analysis from a community-wide perspective 2012‑13
Estimated
actual
expenses
$'000
2013 ‑14
Estimated
expenses
$'000
Program 1: Productivity Commission    
Departmental expenses    
Departmental appropriation 37,439 37,964
Expenses not requiring appropriation in the budget year 1,013 1,013
Total expenses for Outcome 1 38,452 38,977
     
  2012‑13 2013‑14
Average staffing level (number) 198 193

Contributions to Outcome 1

Program 1.1: Productivity Commission
Program objective

The Commission's objective is to contribute to well‑informed policy decision‑making and public understanding on matters relating to Australia's productivity and living standards, based on independent and transparent analysis from a community‑wide perspective.

Program expenses

There are no significant changes to the pre‑existing forward estimates.

Table 2.2: Program expenses
2012‑13
Revised
budget
$'000
2013‑14
Budget
$'000
2014‑15
Forward
year 1
$'000
2015‑16
Forward
year 2
$'000
2016‑17
Forward
year 3
$'000
Annual departmental expenses          
Departmental items 38,452 38,977 38,942 34,672 34,903
Total departmental expenses 38,452 38,977 38,942 34,672 34,903
Program deliverables

The Commission will deliver:

  • public inquiry reports (for example, the inquiry report on Non‑financial barriers to mineral and energy resource exploration), and reports concerning other commissioned work (such as the benchmarking of Australia's Major Project Development Assessment Processes study);
  • government services performance reports including Australian Government or State or Territory service provision, key indicators of Indigenous disadvantage, and the Indigenous expenditure report;
  • investigation of competitive neutrality complaints and associated activities such as research, advice and education; and
  • statutory annual reporting including the Trade and Assistance Review; Commission research and staff working papers prepared in support of the Commission's inquiry program and to contribute to better understanding of public policy issues; and associated activities such as submissions, conference reports and speeches delivered by the Chairman, Commissioners and Commission staff.
Program key performance indicators

The Commission aims to complete projects, reports and associated activities that are:

  • high quality;
  • useful to stakeholders; and
  • timely.

Indicators of performance include:

  • the Commission's work being widely referenced in public policy forums;
  • projects and reports are completed in accordance with commissioned timelines; and
  • independent and transparent processes are followed.

Section 3: Explanatory tables and budgeted financial statements

Section 3 presents explanatory tables and budgeted financial statements which provide a comprehensive snapshot of agency finances for the budget year 2013‑14. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations, program expenses, movements in administered funds, special accounts and government Indigenous expenditure.

3.1 Explanatory tables

3.1.1 Movement of administered funds between years

The Commission does not have any administered funds.

3.1.2 Special accounts

The Commission does not have any special accounts.

3.1.3 Australian Government Indigenous Expenditure

Table 3.1.3: Australian Government Indigenous Expenditure
  Appropriations     Other Total Program
    Bill
No. 1
$'000
Bill
No. 2
$'000
Special
approp
$'000
Total
approp
$'000
  $'000   $'000    
Productivity Commission              
Outcome 1         &
nbsp;
   
Departmental 2013‑14 1,170 - - 1,170 - 1,170 1.1
Departmental 2012‑13 731 - - 731 - 731 1.1

3.2 Budgeted financial statements

3.2.1 Differences in agency resourcing and financial statements

There are no material differences between agency resourcing and financial statements.

3.2.2 Analysis of budgeted financial statements

The budgeted financial statements have been prepared on an Australian Accounting Standards basis.

The Commission is budgeting for a break‑even result in 2013‑14 and the forward years.

3.2.3 Budgeted financial statements tables

Table 3.2.1: Comprehensive income statement (Showing Net Cost of Services)
(for the period ended 30 June)
Estimated
actual
2012‑13
$'000
Budget
estimate
2013‑14
$'000
Forward
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
EXPENSES          
Employee benefits 28,774 29,224 29,275 25,915 26,129
Supplier 8,676 8,750 8,763 7,757 7,818
Depreciation and amortisation 980 980 880 975 930
Finance costs 22 23 24 25 26
Total expenses 38,452 38,977 38,942 34,672 34,903
LESS:          
OWN-SOURCE INCOME          
Revenue          
Sale of goods and rendering of services 10 10 10 10 10
Total revenue 10 10 10 10 10
Gains          
Other 33 33 33 33 33
Total gains 33 33 33 33 33
Total own-source income 43 43 43 43 43
Net cost of (contribution by) services 38,409 38,934 38,899 34,629 34,860
Appropriation revenue 37,429 37,954 38,019 33,654 33,930
Surplus (deficit) attributable to the Australian Government (980) (980) (880) (975) (930)
Note: Impact of Net Cash Appropriation Arrangements
  2012-13
$'000
2013-14
$'000
2014-15
$'000
2015-16
$'000
2016-17
$'000
Total Comprehensive Income (loss) less depreciation/amortisation expenses previously funded through revenue appropriations - - - - -
plus depreciation/amortisation expenses previously funded through revenue appropriations (980) (980) (880) (975) (930)
Total Comprehensive Income (loss) - as per the Statement of Comprehensive Income (980) (980) (880) (975) (930)

Prepared on Australian Accounting Standards basis.

Table 3.2.2: Budgeted departmental balance sheet
(as at 30 June)
Estimated
actual
2012‑13
$'000
Budget
estimate
2013‑14
$'000
Forward
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
ASSETS          
Financial assets          
Cash and equivalents 357 357 357 357 357
Trade and other receivables 20,022 20,009 20,331 20,437 18,412
Total financial assets 20,379 20,366 20,688 20,794 18,769
Non-financial assets          
Land and buildings 4,321 3,654 2,989 2,259 4,407
Infrastructure, plant and equipment 849 683 753 913 776
Intangibles 160 139 134 129 124
Other 628 628 628 628 628
Total non-financial assets 5,958 5,104 4,504 3,929 5,935
Total assets 26,337 25,470 25,192 24,723 24,704
LIABILITIES          
Provisions          
Employees 12,582 12,582 12,582 12,582 12,582
Other 428 451 475 500 526
Total provisions 13,010 13,033 13,057 13,082 13,108
Payables          
Suppliers 295 295 295 295 295
Other 2,830 2,641 2,352 1,958 1,958
Total payables 3,125 2,936 2,647 2,253 2,253
Total liabilities 16,135 15,969 15,704 15,335 15,361
Net assets 10,202 9,501 9,488 9,388 9,343
EQUITY          
Contributed equity 2,435 2,714 3,581 4,456 5,341
Reserves 2,154 2,154 2,154 2,154 2,154
Retained surpluses or accumulated deficits 5,613 4,633 3,753 2,778 1,848
Total equity 10,202 9,501 9,488 9,388 9,343
Current assets 21,007 20,994 21,316 21,422 19,397
Non-current assets 5,330 4,476 3,876 3,301 5,307
Current liabilities 11,929 12,029 12,134 12,199 12,033
Non-current liabilities 4,206 3,940 3,570 3,136 3,328

Prepared on Australian Accounting Standards basis.

 

Table 3.2.3: Budgeted departmental statement of cash flows
(for the period ended 30 June)
Estimated
actual
2012‑13
$'000
Budget
estimate
2013‑14
$'000
Forward
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
OPERATING ACTIVITIES          
Cash received          
Goods and services 10 10 10 10 10
Appropriations 37,546 37,967 37,697 33,548 35,955
Total cash received 37,556 37,977 37,707 33,558 35,965
Cash used          
Employees 28,624 29,224 29,275 25,915 26,129
Suppliers 8,735 8,906 9,019 8,118 7,785
Total cash used 37,359 38,130 38,294 34,033 33,914
Net cash from or (used by) operating activities 197 (153) (587) (475) 2,051
INVESTING ACTIVITIES          
Cash used        
Purchase of property, plant and equipment 477 126 280 400 2,936
Total cash used 477 126 280 400 2,936
Net cash from or (used by) investing activities (477) (126) (280) (400) (2,936)
FINANCING ACTIVITIES          
Cash received          
Contributed equity 280 279 867 875 885
Total cash received 280 279 867 875 885
Net cash from (used by) financing activities 280 279 867 875 885
Net increase or (decrease) in cash held - - - - -
Cash at the beginning of the reporting period 357 357 357 357 357
Cash at the end of the reporting period 357 357 357 357 357

Prepared on Australian Accounting Standards basis.

Table 3.2.4: Departmental statement of changes in equity — summary of movement (Budget year 2013‑14)
Retained
surpluses
$'000
Asset
revaluation
reserve
$'000
Other
reserves
$'000
Contributed
equity/
capital
$'000
Total
equity
$'000
Opening balance as at 1 July 2013          
Balance carried forward from previous period 5,613 2,154 - 2,435 10,202
Adjusted opening balance 5,613 2,154 - 2,435 10,202
Comprehensive income          
Surplus (deficit) for the period (980) - - - (980)
Total comprehensive income recognised directly in equity (980) - - - (980)
Transactions with owners          
Contributions by owners          
Appropriation - DCB - - - 279 279
Total transactions with owners - - - 279 279
Estimated closing balance as at 30 June 2014 4,633 2,154 - 2,714 9,501

Prepared on Australian Accounting Standards basis.

Table 3.2.5: Departmental capital budget (DCB) statement
Estimated
actual
2012‑13
$'000
Budget
estimate
2013‑14
$'000
Forward
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
NEW CAPITAL APPROPRIATIONS          
Capital budget - Bill 1 - DCB 280 279 867 875 885
Total new capital appropriations 280 279 867 875 885
Provided for:          
Purchase of non-financial assets 280 126 280 400 885
Other - 153 587 475 -
Total Items 280 279 867 875 885
PURCHASE OF NON-FINANCIAL ASSETS          
Funded by capital appropriation - DCB 477 126 280 400 2,734
Funded internally from departmental resources - - - - 202
TOTAL 477 126 280 400 2,936
RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE          
Total purchases 477 126 280 400 2,936
Total cash used to acquire assets 477 126 280 400 2,936

Prepared on Australian Accounting Standards basis.

Table 3.2.6: Statement of asset movements — departmental
Buildings
$'000
Other
infrastructure,
plant and
equipment
$'000
Intangibles
$'000
Total
$'000
As at 1 July 2013        
Gross book value 6,077 1,485 690 8,252
Accumulated depreciation/amortisation and impairment 1,756 636 530 2,922
Opening net book balance 4,321 849 160 5,330
Capital asset additions        
By purchase - appropriation ordinary annual services - 121 5 126
Total asset additions - 121 5 126
Other movements        
Depreciation/amortisation expense 667 287 26 980
Total other movements 667 287 26 980
As at 30 June 2014        
Gross book value 6,077 1,606 695 8,378
Accumulated depreciation/amortisation and impairment 2,423 923 556 3,902
Closing net book balance 3,654 683 139 4,476

Prepared on Australian Accounting Standards basis.