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Part 4: Financial statements (continued)

Note 3: Operating Expenses
  2010
$’000
2009
$’000
Note 3A: Employee Benefits    
Wages and salaries 87,672 79,743
Superannuation:    
Defined contribution plans 12,065 12,905 
Defined benefit plans 3,604 2,643
Leave and other entitlements 12,381 9,540
Other 2,891 2,744
Total employee benefits 118,613 107,575
     
Note 3B: Suppliers    
Goods and services    
Communications 1,536 1,453
Computers 3,055 2,443
Conferences and training 2,675 3,378
Consultants and contractors 11,779 10,987
Fees – Audit, Accounting, Bank and Other 987 1,193
Insurance 1,086 698
Legal 4,310 631
Property operating expenses 11,316 11,162
Publications and Subscriptions 1,325 1,193
Travel 5,576 6,083 
Other 4,470 4,762 
Total goods and services 48,315 47,046 
     
Goods and services are made up of:    
Provision of goods from:    
related entities 103 83 
external entities 3,199 1,798 
Rendering of services from:    
related entities 11,091 7,013
external entities 24,883 29,285 
Operating lease rentals:1 8,145  8,403
Workers compensation premiums 894 464
Total supplier expenses 48,315 47,146
     
Note 3C: Grants    
Grants paid    
Public sector:    
Australian Government entities 475 18
Private sector:    
Non-profit organisations 2,509 3,230
For-profit organisations 2
Total grants 2,986 3,248

1. Operating lease rentals comprise minimum lease payments only.

Note 3: Operating Expenses (continued)
  2010
$’000
2009
$’000
Note 3D: Depreciation and amortisation    
Depreciation    
Other plant and equipment 1,656 1,472
Buildings – leasehold improvements 1,751 1,460
Total depreciation 3,407 2,932
Amortisation    
Intangibles – computer software 840 551
Total amortisation 961 1,259
Total depreciation and amortisation 4,368 4,191
     
Note 3E: Finance costs    
Leases 35 94
Total finance costs 35 94
     
Note 3F: Write-down and impairment of assets    
Non-financial assets    
Plant and equipment 28 7
Intangibles 26
Total write-down and impairment of assets 28 33
     
Note 3G: Losses from asset sales    
Property, plant and equipment    
Proceeds from sale (9) (12)
Carrying value of asset sold 46 21
Total losses from asset sales 37 9
Note 4: Income
  2010
$’000
2009
$’000
Note 4A: Sale of goods and rendering of services    
Provision of goods to:    
external entities 1
Rendering of services to:    
related entities 11,611 7,853
external entities 907 878
Operating lease rental 88 92
Total sale of goods and rendering of services 12,607 8,823
     
Note 4B: Other revenue    
Other 742 290
Total other revenues 742 290
     
Note 4C: Other gains    
Resources received free of charge 546 534
Total other revenue 546 534
     
Note 4D: Revenue from Government    
Appropriations    
Departmental outputs 162,941 145,931
Other 2,998 2,749
Total revenue from Government 165,939 148,680
Note 5: Other Comprehensive Income
  2010
$’000
2009
$’000
Changes in asset revaluation reserves (30)
Total (30)
Note 6: Financial Assets
  2010
$’000
2009
$’000
Note 6A: Cash and cash equivalents    
Cash    
Special Accounts 264 586
Departmental (other than special accounts) 932 781
Total cash 1,2196 1,367
     
Note 6B: Trade and other receivables    
Goods and Services:    
related entities 1,467 2,475
external parties 1,134 539
Total goods and services 2,601 3,014
Net GST receivable from the ATO 416 732
Appropriations Receivable:    
for existing outputs 74,237 73,047
Total trade and other receivables (net) 77,254 76,793
All receivables are current assets    
     
Receivables (gross) are aged as follows:    
Not overdue 76,470 76,275
Overdue by:    
0 to 30 days 688 398
31 to 60 days 87 69
61 to 90 days 34
More than 90 days 9 17
Total receivables (gross) 77,254 76,793

Note 7: Non-financial assets

Note 7: Non-Financial Assets
  2010
 $’000 
2009
 $’000 
 Note 7A: Land and buildings 
 Leasehold improvements – fair value 
 Under construction     206    137
 At fair value  18,394 18,312
 Accumulated depreciation  (9,886) (8,135)
 Total leasehold improvements – fair value  8,714 10,314
 Total land and buildings   8,714 10,314

No indicators of impairment were found for land and buildings. No land and buildings are expected to be sold or disposed of within the next 12 months. All revaluations are independent and are conducted in accordance with the revaluation policy stated at Note 1.17.

  2010
 $’000 
2009
 $’000 
Note 7: Non-Financial Assets (continued)
 Note 7B: Plant and equipment     
 Plant and equipment – fair value 
 Under construction  169
 At fair value  11,212 9,791
 Accumulated depreciation  (3,626) (2,131)
 Total plant and equipment – fair value  7,586 7,829
 Plant and equipment under finance lease 
 Under finance lease  260 2,347
 Accumulated amortisation  (226) (2,191)
 Total plant and equipment under finance lease  34 156
 Total plant and equipment   7,620 7,985

No indicators of impairment were found for plant and equipment. Other than those items in held for sale for 2009, no other plant and equipment is expected to be sold or disposed of within the next 12 months. There are a number of finance leases due to expire within the next 12 months. The assets associated with these leases will be returned. All revaluations are independent and are conducted in accordance with the revaluation policy stated at Note 1.17.

  2010
 $’000 
2009
 $’000 
Note 7: Non-Financial Assets (continued)
 Note 7C: Intangibles     
 Computer software – at cost 
 Under construction  32,716 17,970
 At cost  7,197 4,429
 Accumulated amortisation  (3,202) (2,749)
 Total computer software – at cost  36,711 19,650
 Total intangibles   36,711 19,650

No indicators of impairment were found for Intangibles. The development of software for the SBR project is the majority of asset under construction. The SBR software is expected to be finalised and available for use on 1 July 2010.

Note 7: Non-Financial Assets (continued)
  2010
 $’000 
2009
 $’000 
 Assets held for sale – fair value 
 At fair value  39
 Accumulated amortisation     (15)
 Total assets held for sale – fair value  24
 Total assets held for sale  24
Note 7: Non-financial assets (continued)
Table A: Reconciliation of the opening and closing balances of property, plant and
equipment (2009-10)
  Buildings – leasehold  improvements
  $’000 
 Other  plant and  equipment 
 $’000 
 Computer  software
  $’000 
 Assets held  for sale
  $’000 
 Total 
 $’000 
 As at 1 July 2009:           
 Gross book value  18,449 12,292 22,399 39 53,179
 Accumulated depreciation amortisation    (8,135) (4,307) (2,749) (15) (15,206)
 Net book value 1 July 2009  10,314   7,985 19,650 24 37,973
 Additions           
 By purchase     2,306 226 17,336    – 19,868
 By finance lease     –    –    –    –
 Net revaluation increment/(decrement)     –    –    –    –
 Depreciation/amortisation expense    (1,751) (1,777)    (840)    – (4,368)
 Recoverable amount write-downs     –    –    –    –
 Disposals 
 Other disposals  (28)    – (16) (44)
 Transfers    (2,155)   1,214 565 (8)    (384)
 As at 30 June 2010: 
 Gross book value  18,600 11,473 39,913    – 69,986
 Accumulated depreciation/amortisation    (9,886) (3,853) (3,202)    – (16,941)
 Net book value 30 June 2010     8,714   7,620 36,711    – 53,045
Note 7: Non-financial assets (continued)
Table A: Reconciliation of the opening and closing balances of property, plant and equipment (2008-09)
   Buildings –  leasehold  improvements 
 $’000 
 Other  plant and  equipment 
 $’000 
 Computer  software 
 $’000 
 Assets held  for sale 
 $’000 
 Total 
 $’000 
As at 1 July 2008:           
 Gross book value  17,117   9,274   2,997 12 29,400
 Accumulated depreciation/amortisation    (6,675) (2,210) (2,209) (9) (11,103)
Opening net book value  10,442   7,064 788    3 18,297
Additions           
 By purchase     2,910   1,941 19,060    – 23,911
 By finance lease  53    –    – 53
Net revaluation increment/(decrement)  (30)    –    – (30)
Depreciation/amortisation expense    (1,460) (2,180)    (551)    – (4,191)
Recoverable amount write-downs  (7) (26)    – (33)
Disposals           
 Other disposals  (6)    – (2) (8)
Transfers    (1,578)   1,150 379 23 (26)
As at 30 June 2009:           
 Gross book value  18,449 12,292 22,399 39 53,179
 Accumulated depreciation/amortisation    (8,135) (4,307) (2,749) (15) (15,206)
Closing net book value  10,314   7,985 19,650 24 37,973
Note 7: Non-Financial Assets (continued)
Table B: Property, plant and equipment and intangibles held under finance lease (2009-10)
   Buildings –  leasehold  improvements
  $’000 
 Other  plant and  equipment
  $’000 
 Computer  software
  $’000 
 Total 
 $’000 
 As at 30 June 2010:         
 Gross book value    –   260    260
 Accumulated depreciation/amortisation    –   (226)   (226)
 Closing net book value    – 34 34
 As at 30 June 2009: 
 Gross book value    – 2,347   2,347
 Accumulated depreciation/amortisation    –    (2,191) (2,191)
 Closing net book value    –   156    156
Note 7: Non-Financial Assets (continued)
Table C: Property, plant and equipment and intangibles under construction (2009-10)
   Buildings –  leasehold  improvements
  $’000 
 Other  plant and  equipment
  $’000 
 Computer  software
  $’000 
 Total 
 $’000 
 As at 30 June 2010:         
 Gross book value     206 32,716 32,922
 As at 30 June 2009: 
 Gross book value     137   169 17,970 18,276
  2010
 $’000 
2009
 $’000 
Note 7E: Other non-financial assets
 Prepayments  1,799 1,042
Other non-financial assets are represented by:
No more than 12 months 1,670    955
More than 12 months    129 87
Total other non-financial assets 1,799 1,042
Note 8: Payables
  2010
 $’000 
2009
 $’000 
Note 8A: Suppliers
Trade creditors
  – related entities 408 1,316
  – external entities    1,254 2,537
Total trade creditors    1,662 3,853
Total supplier payables    1,662 3,853
All supplier payables are expected to be settled within 12 months
Note 8B: Other payables
Salaries and wages    1,773 1,374
Superannuation 311 256
Other creditors    7,602 3,753
Prepayments received/unearned revenue    2,412 1,238
Total other payables 12,098 6,621
Other payables are represented by:
No more than 12 months 12,091 6,609
More than 12 months 7    12
Total other payables 12,098 6,621

Note: Settlement is usually made net 30 days.

Note 9: Interest bearing liabilities
  2010  
$’000 
2009
 $’000 
Note 9: Leases    
Finance leases:   40 233
Payable:
Within one year
Minimum lease payments   41 201
Deduct: future finance charges   (1) (8)
Total leases payable within one year   40 193
In one to five years
Minimum lease payments    41
Deduct: future finance charges (1)
Total leases payable within one year to five years    40
Finance leases recognised on the balance sheet   40 233

Note: Finance leases exist in relation to certain major office equipment assets. The leases are noncancellable and for fixed terms averaging 2.75 years, with a maximum of 3.25 years.
The interest rate implicit in the leases averaged 5.92 per cent (2009: 6.24 per cent).
The lease assets secure the lease liabilities. The Treasury guarantees the residual values of all assets leased. There are no contingent rentals.

Note 10: Provisions
  2010  
$’000 
2009  
$’000 
Note 10: Employee provisions
Leave 38,920   35,976
Aggregate employee benefit liability 38,920   35,976
Other employee entitlements 190    81
Total employee provisions 39,110   36,057
Employee provisions are expected to be settled in
No more than 12 months 10,937 9,955
More than 12 months 28,173   26,102
Total employee provisions 39,110   36,057
Note 11: Cash flow reconciliation
  2010
 $’000 
2009
 $’000 
Reconciliation of cash and cash equivalents as per
balance sheet to cash flow statement
   
Cash and cash equivalents as per
Cash flow statement 1,196 1,367
Balance sheet 1,196 1,367
Reconciliation of net cost of services to net cash
from operating activities
Net cost of services 5,452 (3,869)
Adjustments for non-cash items
Depreciation/amortisation 4,368 4,191
Loss on disposal of non-current assets 37 9
Net write down of non-financial assets 28 33
Changes in assets/liabilities
(Increase)/decrease in net receivables (461) (3,323)
(Increase)/decrease in other non financial assets (757)    401
Increase/(decrease) in provisions 3,053 2,424
Increase/(decrease) in other payables 5,477 1,461
Increase/(decrease) in supplier payables (2,191) 1,064
Net cash from/(used by) operating activities 15,006 2,391

Note: Figures for the comparative year differ from what was published in the 2008-09 annual report due to reclassification of certain employee entitlements from provisions to payables.

Note 12: Contingent liabilities and assets

Note 12: Contingent Assets and Liabilities
  Other Total
  2010
 $’000 
  2009
 $’000 
  2010
 $’000 
  2009
 $’000 
Contingent liabilities
Balance from previous period   248   255   248   255
New   255   224   255   224
Obligations expired/crystallised (231) (231) (231) (231)
Total contingent liabilities   272   248   272   248
NET CONTINGENT LIABILITIES   272   248     272   248
Quantifiable contingencies

The schedule of contingencies reports ‘other’ liabilities of $271,856 (2009: $248,224). This amount represents an estimate of the Treasury’s liability in respect of studies assistance.

Unquantifiable contingencies

As at 30 June 2010, the Treasury had a number of legal claims against it. The Treasury has denied liability and is defending the claims. It is not possible to estimate the amounts of any eventual payments that may be required in relation to these claims.

The courts may award legal costs against the Treasury in the event it is unsuccessful in an action before the courts. As there is uncertainty over the outcome of outstanding and pending court cases, duration of court cases and the legal costs of the opposing party, these costs cannot be reliably measured.

Remote contingencies

The Treasury’s lease on its current premises contains a make good clause which has been estimated by an independent valuer at $2.7 million. The Treasury has assessed the likelihood of the make good provision being required and has deemed it as remote.

As at 30 June 2010, the Treasury has a number of contracts which may give rise to contingent liabilities based on certain events occurring. The Treasury has assessed the likelihood of such events occurring as being remote and unquantifiable.

Note 13: Executive Remuneration
Note 13A: Actual remuneration paid to senior executives
  2010 2009
The number of executives who received or were due:    
less than $145,000* 2 3
$145,000 to $159,999 4 2
$160,000 to $174,999

1 2
$175,000 to $189,999 2 2
$190,000 to $204,999 5 11
$205,000 to $219,999 20 13
$220,000 to $234,999 16 18
$235,000 to $249,999 12 6
$250,000 to $264,999 5 8
$265,000 to $279,999 4 3
$295,000 to $309,999 1 1
$310,000 to $324,999 1 3
$325,000 to $339,999 1 1
$340,000 to $354,999 2
$355,000 to $369,999 1
$370,000 to $384,999 1 2
$385,000 to $399,999 1
$430,000 to $444,999 1 1
$535,000 to $549,999 1
$625,000 to $639,999 1
Total 81 77
* Excluding acting arrangements and part-year service.
Total expense recognised in relation to Senior Executive employment
Short-term employee benefits:
Salary (including annual leave taken) $15,851,649 $14,215,420
Changes in annual leave provisions $158,435 $194,648
Performance bonus $0 $57,525
Other1 $248,640 $261,749
Total Short-term employee benefits $16,258,724 $14,729,342
Superannuation (post-employment benefits) $2,482,755 $2,745,183
Other long-term benefits $478,804 $669,255
Total $19,220,283 $18,143,780

The comparative aggregate total amount has been revised and does not match what was published in the 2008-09 annual report due to new disclosure requirements.

1 ‘Other’ includes motor vehicle allowances and other allowances

Note 13B: Salary packages for senior executives as at 30 June
     As at 30 June 2010     As at 30 June 2009 
 No. SES   Base salary  (including  annual leave)   Total  remuneration package  No. SES   Base salary  (including  annual leave)   Total  remuneration package
 Total remuneration*: 
$160,000 to $174,999   2 163,698 171,374
$175,000 to $189,999 3   173,064 185,563   5 166,293 181,564
$190,000 to $204,999 8   169,758 196,704   19 174,451 200,217
$205,000 to $219,999 30   181,170 209,929   22 178,775 215,944
$220,000 to $234,999 16   194,877 225,967   8 189,811 227,632
$235,000 to $249,999 4   206,652 226,076   7 205,408 246,155
$250,000 to $264,999 6   218,147 242,382   2 220,672 255,338
$265,000 to $279,999 2   225,990 275,665   4 214,407 271,327
$280,000 to $294,999 2   241,878 284,014   3 251,616 287,683
$310,000 to $324,999 2   273,160 319,164   4 268,043 317,567
$325,000 to $339,999 3   290,208 336,666   1 281,755 325,149
$340,000 to $354,999   2 281,755 346,064
$355,000 to $369,999 1   313,645 368,253   –   –
$370,000 to $384,999 1   327,184 383,371   1 304,510 375,589
$385,000 to $399,999   1 317,654 393,021
$445,000 to $459,999 1   402,670 452,407   –   –
$505,000 to $519,999   1 390,940 505,175
$520,000 to $534,999 1   402,670 521,148   –   –
Total 80   82
*Excludes executive level staff acting in senior executive positions.          

Note: Nonsalary elements available to Senior Executives include:
a) Agreed base salary (including annual leave).
b) Motor vehicle allowance.
c) Superannuation.
Total number of SES shown in the above table is as at 30 June of the respective year and does not match the total represented in Table 13A which reflects SES numbers over the year as opposed to as at 30 June. Long service leave values have been excluded in the table above. No performance bonuses were paid by the Treasury in 2009-10. Performance bonuses paid in 2008-09 have been excluded.

Note 14: Remuneration of Auditors
  2010  
$’000 
2009
 $’000 
Financial statement audit services are provided free of
charge to the Treasury
The fair value of the services provided was:
The Treasury    436    395
Total    436    395

Note: The above amounts are exclusive of GST. No other services were provided by the AuditorGeneral.

Note 15: Average staffing levels
  2010 2009
The Treasury 1,007    936
Total 1,007    936