Part 4: Financial statements (continued)

Date
Note 26. Administered Financial Instruments
  2013
$'000
2012
$'000
Note 26A: Categories of Financial Instruments    
Financial Assets    
Loans and receivables:    
Cash and cash equivalents 3,719 1,735
IMF related monies owing 166 277
Guarantee Scheme for Large Deposits and Wholesale
Funding contractual fee receivable
337,070 1,064,144
Guarantee Scheme for Large Deposits and Wholesale
Funding fee receivable
30,833 60,882
Guarantee of State and Territory Borrowing contractual
fee receivable
198,864 265,960
Guarantee of State and Territory Borrowing fee receivable 3,840 4,738
IMF new arrangements to borrow loan 895,785 661,133
Loans to States and Territories 15,794 15,101
Dividends receivable 225,000 900,000
Other receivables 22,813 17,577
Total loans and receivables 1,733,884 2,991,547
Available for sale:    
International financial institutions 758,184 649,581
Australian Government entities 10,451,180 6,718,394
IMF Quota 5,247,082 4,797,510
Total available for sale 16,456,446 12,165,485
     
Carrying amount of financial assets 18,190,330 15,157,032
     
Financial Liabilities    
At amortised cost:    
Promissory notes 3,167,335 3,259,907
Grant liabilities 768,391 473,356
IMF SDR allocation liability 4,998,656 4,570,369
Other payables 554 974
Guarantee Scheme for Large Deposits and Wholesale
funding contractual guarantee service obligation
337,070 1,064,144
Guarantee of State and Territory Borrowing contractual
guarantee service obligation
198,864 265,960
Other liabilities 6,415 18,162
Total financial liabilities at amortised cost 9,477,285 9,652,872
     
Carrying amount of financial liabilities 9,477,285 9,652,872
     
Note 26B: Net income and expense from financial assets    
Loans and receivables    
Guarantee Scheme for Large Deposits and Wholesale
Funding fee
528,740 847,780
Guarantee of State and Territory Borrowing 52,172 63,373
Interest revenue 1,307 973
Net gain/(loss) from loans and receivables 582,219 912,126
     
Available for sale    
Interest revenue 1,034 3,066
Exchange gains/(loss) 671,260 1,071
Net gain/(loss) from available for sale 672,294 4,137
     
Net gain/(loss) from financial assets 1,254,513 916,263
     
Note 26C: Net income and expense from financial liabilities    
Financial liabilities - at amortised cost    
IMF Charges 3,489 11,289
Exchange gains/(loss) (432,590) 12,730
Net gain/(loss) financial liabilities - at amortised cost (429,101) 24,019
     
Net gain/(loss) from financial liabilities (429,101) 24,019
Note 26: Administered financial instruments (continued)
Note 26D: Fair value of financial instruments
The net fair values of Treasury’s administered financial instruments are equal to the carrying amount.
 
Fair value measurements categorised by fair value hierarchy
The following table provides an analysis of financial instruments that are measured at fair value, by valuation method. The different levels are defined below:
Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 — inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and
Level 3 — inputs for the asset or liability that are not based on observable market data (unobservable inputs).
 
Fair value hierarchy for financial assets
  Level 1 Level 2 Level 3 Total
  2013
$'000
2012
$'000
2013
$'000
2012
$'000
2013
$'000
2012
$'000
2013
$'000
2012
$'000
Loans and receivables                
IMF related monies owing  -  - 166 277  -  - 166 277
Guarantee Scheme for Large Deposits and Wholesale Funding contractual fee receivable  -  -  -  - 337,070 1,064,144 337,070 1,064,144
Guarantee Scheme for Large Deposits and Wholesale Funding fee receivable  -  - 30,833 60,882  -  - 30,833 60,882
Guarantee of State and Territory Borrowing contractual fee receivable  -  -  -  - 198,864 265,960 198,864 265,960
Guarantee of State and Territory Borrowing fee receivable     3,840 4,738     3,840 4,738
IMF new arrangements to borrow loan  -  - 895,785 661,133  -  - 895,785 661,133
Loans to States and Territories  -  - 15,794 15,101  -  - 15,794 15,101
Dividend receivables  -  - 225,000 900,000  -  - 225,000 900,000
Other receivables  -  - 22,813 17,577  -  - 22,813 17,577
Total - - 1,194,231 1,659,708 535,934 1,330,104 1,730,165 2,989,812
                 
Available for sale                
International financial institutions  -  - 758,184 649,581  -  - 758,184 649,581
Australian Government entities  -  - 10,451,180 6,718,394  -  - 10,451,180 6,718,394
IMF Quota  -  - 5,247,082 4,797,510  -  - 5,247,082 4,797,510
Total - - 16,456,446 12,165,485 - - 16,456,446 12,165,485
                 
Fair value hierarchy for financial liabilities
  Level 1 Level 2 Level 3 Total
  2013
$'000
2012
$'000
2013
$'000
2012
$'000
2013
$'000
2012
$'000
2013
$'000
2012
$'000
Amortised cost                
Promissory notes  -  - 3,167,335 3,259,907  -  - 3,167,335 3,259,907
Grant liabilities  -  - 768,391 461,211  - &n
bsp;-
768,391 461,211
IMF SDR allocation liability  -  - 4,998,656 4,570,369  -  - 4,998,656 4,570,369
Other payables  -  - 554 974  -  - 554 974
Other liabilities  -  -  -  - 6,415 18,162 6,415 18,162
Guarantee Scheme for Large Deposits and Wholesale funding contractual guarantee service obligation  -  -  -  - 337,070 1,064,144 337,070 1,064,144
Guarantee of State and Territory  Borrowing contractual guarantee  service obligation  -  -  -  - 198,864 265,960 198,864 265,960
Total - - 8,934,936 8,292,461 542,349 1,348,266 9,477,285 9,640,727
Note 26: Administered financial instruments (continued)
Fair value measurements categorised by fair value hierarchy
 
  Loans and receivables
  2013
$'000
2012
$'000
Financial assets at fair value — Level 3    
Opening balance 1,330,104 2,127,855
Settlement (794,170) (797,751)
Closing balance 535,934 1,330,104
 
  Available for sale financial assets
  2013
$'000
2012
$'000
Financial assets at fair value — level 3    
Opening balance  - 6,570,427
Total gains or losses for the period recognised in profit or loss1  - 10,439
Total gains or losses recognised in other comprehensive income2  - 713,548
Purchases  - 73,561
Transfers out of Level 33  - (7,367,975)
Closing balance - -
 
1. These gains and losses are presented in the schedule of administered comprehensive income under other gains, net foreign exchange gains exchange losses.
 
2. These gains and losses are presented in the Administered Reconciliation Schedule
 
3. Investments in International Financial Institutions are based on paid in capital, and in Australian Government entities are based on the Net asset position of the entity. Both are recorded at fair value using observable prices and should be recorded as Level 2 financial assets.
 
  At amortised cost
  2013
$'000
2012
$'000
Financial liabilities at fair value — Level 3    
Opening balance 1,348,266 2,149,628
Total gains or losses recognised in
other comprehensive income
 -  -
Issues (794,170) (797,751)
Settlements (11,747) (3,611)
Closing balance 542,349 1,348,266

Note 26: Administered financial instruments (continued)
Note 26E: Credit risk

The maximum exposure to credit risk of the Treasury's administered financial assets is the carrying amount of 'loans and receivables' (2013: $1,730,167,000 and 2012: $2,989,864,000) and the carrying amount of 'available for sale financial assets' (2013: $16,456,446,000 and 2012: $12,165,485,000).

However, the international financial institutions that the Treasury holds its financial assets with, hold a minimum of AAA credit ratings. The contractual fee receivable arising from the Guarantee Scheme for Large Deposits and Wholesale Funding and Guarantee of State and Territory Borrowing that the Treasury holds relates only to prudentially regulated Authorised Deposit-taking Institutions (ADIs) and State and Territory Governments. These entities hold a minimum of AA credit ratings, therefore the Treasury does not consider any of its financial assets to be at risk of default.

Note 26: Administered financial instruments (continued)
Note 26F: Liquidity risk
The Treasury's administered financial liabilities are: promissory notes, grant liabilities, the IMF SDR allocation and the HIH provision. The contractual guarantee service obligation arising from the guarantee scheme for large deposits and wholesale funding and State and Territory borrowing are not included as there are no liquidity risks associated wit
h these items. They are contingent on the value of the associated contractual fee receivable. The exposure to liquidity risk is based on the notion that the Treasury will encounter difficulty in meeting its obligations associated with administered financial liabilities. This is highly unlikely due to appropriation funding through special appropriations and nonlapsing capital appropriations as well as internal policies and procedures put in place to ensure there are appropriate resources for the Treasury to meet its financial obligations.
The following tables illustrate the maturities for financial liabilities:
             
2013 On
demand
$'000
Within 1
year
$'000
1 to 2
years
$'000
2 to 5
years
$'000
> 5
years
$'000
Total
$'000
Promissory notes  -  -  - 74,606 3,092,729 3,167,335
Grant liabilities  - 768,391  -  -  - 768,391
IMF SDR allocation liabilities  -  -  -  - 4,998,656 4,998,656
Other payables 554  -  -  -  - 554
Other liabilities 6,415  -  -  -  - 6,415
Total 6,969 768,391 - 74,606 8,091,385 8,941,351
             
2012 On
demand
$'000
Within 1
year
$'000
1 to 2
years
$'000
2 to 5
years
$'000
> 5
years
$'000
Total
$'000
Promissory notes  -  -  - 50,247 3,209,660 3,259,907
Grant liabilities  - 473,356  -  -  - 473,356
IMF SDR allocation liabilities  -  -  -  - 4,570,369 4,570,369
Other payables 974  -  -  -  - 974
Other liabilities 18,162  -  -  -  - 18,162
Total 19,136 473,356 - 50,247 7,780,029 8,322,768
Note 26: Administered financial instruments (continued)
Note 26G: Market risk

Foreign currency risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Treasury is exposed to foreign exchange currency risk primarily through undertaking certain transactions denominated in foreign currency. The Treasury is exposed to foreign currency denominated in USD, EUR and SDR.

The following table details the effect on profit and equity as at 30 June 2013 from a 15.7 per cent (30 June 2012 from a 15 per cent) favourable/unfavourable change in AUD against the Treasury with all other variables held constant.

Sensitivity analysis of the risk that the entity is exposed to for 2013
    Effect on
Risk Variable Change in risk
variable
%
Profit and loss
2013
$'000
Equity
2013
$'000
IFI Investments 15 (102,882) (102,882)
IFI investments (15) 141,204 141,204
IMF related moneys owing 15 (22) (22)
IMF related moneys owing (15) 31 31
IMF NAB loan 15 (121,554) (121,554)
IMFNAB loan (15) 166,831 166,831
Quota 15 (712,007) (712,007)
Quota (15) 977,215 977,215
Promissory notes 15 6,497 6,497
Promissory notes (15) (8,917) (8,917)
IMF allocation liability 15 678,296 678,296
IMF allocation liability (15) (930,948) (930,948)
Other liabilities 15 74 74
Other liabilities (15) (101) (101)
 
Sensitivity analysis of the risk that the entity is exposed to for 2012
    Effect on
Risk Variable Change in risk
variable
%
Profit and loss
2012
$'000
Equity
2012
$'000
IFI Investments 15 (84,728) (84,728)
IFI investments (15) 114,632 114,632
IMF related moneys owing 15 (36) (36)
IMF related moneys owing (15) 49 49
IMF NAB loan 15 (86,235) (86,235)
IMF NAB loan (15) 116,670 116,670
Quota 15 (625,762) (625,762)
Quota (15) 846,619 846,619
Promissory notes 15 5,684 5,684
Promissory notes (15) (7,690) (7,690)
IMF allocation liability 15 596,135 596,135
IMF allocation liability (15) (806,536) (806,536)
Other liabilities 15 127 127
Other liabilities (15) (172) (172)
Note 27. Administered Financial Assets Reconciliation
  Notes 2013
$'000
2012
$'000
Financial assets      
       
Total financial assets per administered  schedule of assets and liabilities   18,190,332 15,157,084
Less: non-financial instrument components      
GST receivable   (2) (52)
Total non-financial instrument components   (2) (52)
Total financial assets as per financial instruments note 26A 18,190,330 15,157,032
Note 28. Appropriations
Note 28A: Annual Appropriations ('Recoverable GST exclusive')
  2013 Appropriations Appropriation applied in 2013 (current and prior years)
$'000
Variance
$'000
Appropriation Act FMA Act Total appropriation
$'000
Annual Appropriation
$'000
Appropriations reduced1
$'000
AFM2
$'000
Section 30
$'000
Section 31
$'000
Section 32
$'000
DEPARTMENTAL                  
Ordinary annual services 179,014  -  -  - 10,351  - 189,365 (184,883) 4,482
Other services            
Equity 1,839  -  -  -  -  - 1,839 (1,631) 208
Loans  -  -  -  -  -  -  -  -  -
Total departmental 180,853  -  -  - 10,351  - 191,204 (186,514) 4,690
ADMINISTERED                  
Ordinary annual services                  
Administered items 20,103 (1,458) - - - -   18,645 (20,740) (2,095)
Payments to CAC Act bodies - - - - - - - - -
Other services                  
States, ACT, NT and Local government - - - - - - - - -
New administered outcomes - - - - - - - - -
Administered assets and liabilities1 57,000 - - - - - 57,000 (13,691) 43,309
Payments to CAC bodies - - - - - - - - -
Total administered 77,103 (1,458) - - - - 75,645 (34,431) 41,214

1. Appropriation Acts (Nos. 1, 3) 2012-13: sections 10, 11, 12 and 15. Appropriation Acts (Nos. 2, 4) 2012-13: sections 13 and 14. Departmental appropriations do not lapse at financial year-end. However, the responsible Minister may decide that part or all of a departmental appropriation is not required and request that the Finance Minister reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister's determination and is disallowable by Parliament.
As with departmental appropriations, the responsible Minister may decide that part or all of an administered appropriation is not required and request that the Finance Minister reduce that appropriation. For administered appropriations reduced under section 11 of Appropriation Acts (Nos, 1, 3) 2012-13 and section 12 of Appropriation Acts (Nos. 2, 4) 2012-13, the appropriation is taken to be reduced to the required amount specified in Note 28E once the annual report is tabled in Parliament. All administered appropriations may be adjusted by a Finance Minister's determination, which is disallowable by Parliament.
2. Advance to the Finance Minister (AFM) – Appropriation Acts (No. 1, 3) 2012-13: section 13 and Appropriation Acts (No. 2, 4) 201: section 15.
3. Variance relates to undrawn appropriations payable to NSW as a loan to support the James Hardie Asbestos Compensation Fund. The loan funding was not required by NSW in 2012-13.

Note 28. Appropriations (continued)
  2012 Appropriations Appropriation applied in 2012 (current and prior years)
$'000
Variance
$'000
Appropriation Act FMA Act Total appropriation
$'000
Annual Appropriation
$'000
Appropriations reduced1
$'000
AFM2
$'000
Section 30
$'000
Section 31
$'000
Section 32
$'000
DEPARTMENTAL                  
Ordinary annual services 161,230 (5,730)  -  - 11,317 1,115 167,932 (191,500) (23,568)
Other services                  
Equity 583  -  -  -  -  - 583 (583)  -
Loans  -  -  -  -  -  -  -  -  -
Total departmental 161,813 (5,730)  -  - 11,317 1,115 168,515 (192,083) (23,568)
ADMINISTERED                  
Ordinary annual services                  
Administered items 18,687 (4,886) - - - - 13,801 (12,741) 1,060
Payments to CAC Act bodies - - - - - - - - -
Other services                  
States, ACT, NT and Local government - - - - - - - - -
New administered outcomes - - - - - - - - -
Aministered assets and liabilities 62,708 (60,571) - - - - 2,137 (15,561) (13,424)
Payments to CAC bodies - - - - - - - - -
Total administered 81,395 (65,457) - - - - 15,938 (28,302) (12,364)

1. Appropriations reduced under Appropriation Acts (Nos. 1,3) 2011-12: sections 10, 11, 12 and 15. Appropriation Acts (Nos. 2,4) 2011-12: sections 13 and 14. Departmental appropriations do not lapse at financial year-end. However, the responsible Minister may decide that part or all of a departmental appropriation is not required and request the Finance Minister to reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister's determination and is disallowable by Parliament. On 26 June 2012, the Finance Minister issued a determination to reduce departmental appropriation following a request by the Minister. The amount of reduction determined under Appropriation Act (No.1) was $5,729,267.00.
As with departmental appropriations, the responsible Minister may decide that part or all of an administered appropriation is not required and request that the Finance Minister reduce that appropriation. For administered appropriations reduced under section 11 of Appropriation Acts (Nos, 1, 3) 2012-13 and section 12 of Appropriation Acts (Nos. 2, 4) 2011-12, the appropriation is taken to be reduced to the required amount specified in Note 28G once the annual report is tabled in Parliament. All administered appropriations may be adjusted by a Finance Minister's determination, which is disallowable by Parliament. On 26 June 2012, the Finance Minister issued a determination to reduce administered appropriations following a request by the Minister. The amount of the reduction under the Appropriation Acts (nos. 2, 4) was $60,571,841.29.
2. Advance to the Finance Minister (AFM) – Appropriation Acts (No. 1, 3) 2011-12: section 13 and Appropriation Acts (No. 2, 4) 201: section 15.
Note: the variance associated with the Departmental ordinary annual services was the result of voluntary redundancies paid during 2011-12 and higher than expected capital purchases.

Note 28: Appropriations (continued)
Note 28B: Departmental and Administered Capital Budgets ('Recoverable GST exclusive')
  2012-13 Capital Budget Appropriations Capital Budget Appropriations applied in
2012-13 (current and prior years)
Variance
$'000
Appropriation Act FMA Act Total Capital
Budget
Appropriations
$'000
Payments for
non-financial
assets3
$'000
Payments for
other
purposes
$'000
Total payments
$'000
Annual Capital Budget
$'000
Appropriations reduced2
$'000
Section 32
$'000
DEPARTMENTAL                
Ordinary annual services                
Capital Budget1 5,218 - - 5,218 5,218 - 5,218 -
ADMINISTERED                
Ordinary annual services                
Capital Budget1 - - - - - - - -

1. Departmental and Administered Capital Budgets are appropriated through Appropriation Acts (No.1,3,5). They form part of ordinary annual services and are not separately identified in the Appropriation Acts. For more information on ordinary annual services appropriation, please see Table A: Annual appropriations
2
. Appropriations reduced under Appropriation Acts (No. 1,3,5) 2012-13: sections 10,11,12 and 15 or via a determination by the Finance Minister
3. Payments made on non-financial assets include purchase of assets, expenditure on assets which have been capitalised, costs incurred to make good an asset to its original condition, and the capital repayment component of finance leases.

Note 28: Appropriations (continued)
  2011-12 Capital Budget Appropriations Capital Budget Appropriations applied in
2011-12 (current and prior years)
Variance
$'000
Appropriation Act FMA Act Total Capital
Budget
Appropriations
$'000
Payments for
non-financial
assets3
$'000
Payments for
other
purposes
$'000
Total payments
$'000
Annual Capital Budget
$'000
Appropriations reduced2
$'000
Section 32
$'000
DEPARTMENTAL                
Ordinary annual services                
Capital Budget1 6,485 - - 6,485 6,724 - 6,724 (239)
ADMINISTERED                
Ordinary annual services                
Capital Budget1 - - - - - - - -

1. Departmental and Administered Capital Budgets are appropriated through Appropriation Acts (No.1,3,5). They form part of ordinary annual services and are no separately identified in the Appropriation Acts. For more information on ordinary annual services appropriation, please see Table A: Annual appropriations
2. Appropriations reduced under Appropriation Acts (No. 1,3,5) 2011-12: sections 10,11,12 and 15 or via a determination by the Finance Minister
3. Payments made on non-financial assets include purchase of assets, expenditure on assets which has been capitalised, costs incurred to make good an asset to its original condition, and the capital repayment component of finance leases.

Note 28: Appropriations (continued)
Note 28C: Unspent Annual Appropriations ('Recoverable GST exclusive')
Authority 2013
$'000
2012
$'000
Appropriation Act (No. 1) 2008-09  - 578
Appropriation Act (No. 1) 2011-121  - 44,062
Appropriation Act (No. 3) 2011-12 4,158 4,158
Appropriation Act (No. 1) 2012-131 34,681  -
Appropriation Act (No. 3) 2012-13 3,666  -
Total unspent departmental annual appropriations2 42,505 48,798
     
Authority 2013
$'000
2012
$'000
Appropriation Act (No. 2) 2009-10  - 18,508
Appropriation Act (No. 2) 2010-11 161,844 143,336
Appropriation Act (No. 2) 2011-12 61,997 61,997
Appropriation Act (No. 3) 2011-12  - 3,281
Appropriation Act (No. 1) 2012-13 466  -
Appropriation Act (No. 3) 2012-13 1,000  -
Total unspent administered annual appropriations 225,307 227,122

1. Cash held amounts are included in Appropriation Act (No. 1) for the relevant year.
2. Adjustment to 2012 total due to summing error in the 2011-12 Financial Statements

Note 28:Appropriations (continued)
Note 28D: Special appropriations ('Recoverable GST exclusive')

The following table lists current special appropriations contained in legislation that the Treasury is responsible for administering.

The Treasury process to complete the 2012-13 financial statements identified no payments (2012: 8 payments) made from the COAG Reform Fund special account that resulted in technical breaches of Section 83 of the Constitution (refer to Note 29 for more information).

After reviewing the circumstances of Section 83 breaches in relation to the COAG Reform Fund special account, the Treasury considers that there is a risk of non-compliance with Section 83 of the Constitution where payments are made from special appropriations and special accounts in circumstances where the payments do not accord with conditions included in the relevant legislation.

The Treasury will investigate these circumstances and any impact on its special appropriations and special accounts shown below, seeking legal advice as appropriate.

Authority Type Purpose Appropriation applied
2013
$'000
2012
$'000
Asian Development Bank (Additional Subscription) Act 2009 (Administered) Limited To provide an appropriation for subscription Act 2009 payments to the ADB. The balance available (Administered) is USD$4,742,173,913.5 in callable shares and USD$181,781,020.18 in paid-in shares. (16,239) (14,812)
         
Federal Financial Relations Act 2009 (Administered) Unlimited Amount To provide an appropriation for payments of financial assistance to the States, the ACT and the NT. (68,375,596) (65,685,936)
         
International Monetary Agreements Act 1947 (Administered) Unlimited Amount To provide an appropriation for redemption of securities by the IMF. (37,279) (291,567)
         
International Monetary Agreements Act 1947 (Administered) Unlimited Amount To provide appropriation for Australia's obligations as a participant in the IMF's New Arrangements to Borrow. (185,428) (444,619)
         
International Monetary Agreements Act 1947 (Administered) Unlimited Amount To provide an appropriation for the payment of charges on Special Drawing Rights issued to Australia by the IMF. (3,954) (14,274)
         
International Monetary Agreements Act 1947 (Administered) Limited Amount To provide an appropriation for Australia's purchase of additional shares in the International Bank for Reconstruction and Development. Balance available is USD$859,886,280. (9,643) (12,171)
         
Commonwealth Places (Mirror Taxes) Act 1998 (Administered) Unlimited Amount To provide an appropriation for the purpose of paying compensation to the States in respect of constitutionally invalid States levied on Commonwealth Places. (484,379) (466,870)
         
Superannuation Industry (Supervision) Act 1993 (Administered) Unlimited Amount To provide an appropriation for financial assistance to superannuation funds that have suffered an eligible loss as a result of fraudulent conduct or theft. (16,763)  -
         
Clean Energy Act 2011 (Administered) Unlimited Amount Provides a mechanism to deal with climate change by encouraging the use of clean energy.  -  -
         
International Monetary Agreements Act 1947 (Administered) Unlimited Amount To provide an appropriation for Special Drawing Rights sold by the RBA to the Commonwealth.  -  -
         
International Monetary Agreements Act 1947 (Administered) Unlimited Amount To provide an appropriation for Australia's obligations as a participant in the IMF's Special Drawing Rights Department.  -  -
         
International Monetary Agreements Act 1947 (Administered) Unlimited Amount To provide an appropriation for Australia's support of the IMF's programs.  -  -
         
International Monetary Agreements Act 1947 (Administered) Unlimited Amount To provide an appropriation for Australia's support of the World Bank and Asian Development Banks Programs.  -  -
         
A New Tax System (Managing the GST Rate and Base) Act 1999 (Administered)1 Unlimited Amount To provide an appropriation for payments to States if a State was under paid (Administered) GST revenue in the 2008-09 financial year.  -  -
         
Asian Development Bank Act 1996 (Administered) Limited Amount To provide an appropriation for payments to establish the Bank. Balance available is USD$42,500,000 in callable shares.  -  -
         
Asian Development Bank Act (Additional Subscription) Act 1972 (Administered) Limited Amount To provide an appropriation for the additional subscription to the ADB. Balance available USD$102,000,000 in callable shares.  -  -
         
Asian Development Bank Act (Additional Subscription) Act 1977 (Administered) Limited Amount To provide an appropriation for the additional subscription to the ADB. Balance available USD$258,180,000 in callable shares.  -  -
         
Asian Development Bank Act (Additional Subscription) Act 1983 (Administered) Limited Amount To provide an appropriation for the additional subscription to the ADB. Balance available USD$498,110,000 in callable shares.  -  -
         
Asian Development Bank Act (Additional Subscription) Act 1995 (Administered) Limited Amount To provide an appropriation for the additional subscription to the ADB. Balance available USD$1,210,246,511 in callable shares.  -  -
         
European Bank for Reconstruction and Development Act 1990 (Administered) Limited Amount To provide an appropriation for payments to establish the Bank. Balance available is USD$81,690,700 in callable shares.  -  -
         
Financial Agreements (Commonwealth Liability) Act 1932 (Administered) Unlimited Amount To provide an appropriation for payment of principal and interest on bonds issued under the Financial Agreement Validation Act 1929, consolidating State debts.  -  -
         
Financial Services Reform Act 2001 (Administered) Unlimited Amount To provide an appropriation for payment of compensation in respect to levies payable by participants in particular financial markets.  -  -
         
Financial Services Reform Act 2001 (Administered) Unlimited Amount To provide an appropriation for payment of compensation in respect of a loss that is connected with a financial market.  -  -
         
Guarantee Scheme for Large Deposits and Wholesale Funding Appropriation Act 2008 (Administered) Unlimited Amount To provide an appropriation for payment of claims under the Deed of Guarantee in accordance with the Guarantee Scheme for Large Deposits and Wholesale Funding.  -  -
         
Guarantee of State and Territory Borrowing Appropriation Act 2008 (Administered) Unlimited Amount To provide an appropriation for payment of claims under the Deed of Guarantee in accordance with the Guarantee of State and Territory Borrowing.  -  -
         
International Bank for Reconstruction and Development (Share Increase) Act 1988 (Administered) Limited Amount To provide an appropriation for the purchase of additional shares in the IBRD.  -  -
         
International Bank for Reconstruction and Development (General Capital Increase) Act 1989 (Administered) Limited Amount To provide an appropriation for the purchase of additional shares in the IBRD.  -  -
         
International Finance Corporation Act 1955 (Administered) Limited Amount To provide an appropriation for the subscription to the capital stock of the IFC.  -  -
         
International Finance Institutions (Share Increase) Act 1982 (Administered) Limited Amount To provide an appropriation for the purchase of additional shares in the IFC and the IBRD. Balance available is USD$692,927,440 in callable shares.  -  -
         
International Finance Institutions (Share Increase) Act 1986 (Administered) Limited Amount To provide an appropriation for the purchase of additional shares in The IFC and the IBRD.  -  -
         
International Monetary Agreements Act 1959 (Administered) Limited Amount To provide an appropriation for the increase in Australia's quota in the IMF and increase in Australia's capital stock in the IBRD.  -  -
         
International Monetary Agreements Act 1960 (Administered) Limited Amount To provide an appropriation for the increase in Australia's quota in the IMF and increase in Australia's capital stock in the IBRD.  -  -
         
International Monetary Agreements Act 1965 (Administered) Limited Amount To provide an appropriation for the increase in Australia's quota in the IMF.  -  -
         
International Monetary Agreements Act 1970 (Administered) Limited Amount To provide an appropriation for the increase in Australia's quota in the IMF.  -  -
         
International Monetary Agreements Act 1974 (Administered) Limited Amount To provide an appropriation for payments to the IBRD. Balance available is USD$37,368,120 in callable shares.  -  -
         
International Monetary Fund (Quota Increase) Act 1983 (Administered) Limited Amount To provide an appropriation for the increase in Australia's quota in the IMF.  -  -
         
International Monetary Fund (Quota Increase and Agreements Amendments) Act 1991 (Administered) Unlimited Amount To provide an appropriation for the increase in Australia's quota in the IMF.  -  -
         
Multilateral Investment Guarantee Agency Act 1997 (Administered) Limited Amount To provide an appropriation for payments to establish the Agency. Balance available is USD$14,827,728 in callable shares.  -  -
         
Papua New Guinea Loans Guarantee Act 1975 (Administered) Limited Amount To provide an appropriation for Australia's guarantee of certain public loans raised by Papua New Guinea. Balance available is AUD$3,530,000.  -  -
         
Papua New Guinea Loan (International Bank) Act 1970 (Administered) Limited Amount To provide an appropriation for Australia's guarantee of the loan to Papua New Guinea by the IBRD. Balance available is $1,365,000.  -  -
         
Papua New Guinea Loan (International Bank) Act 1970 (Administered) Limited Amount To provide an appropriation for Australia's guarantee of the loan to Papua New Guinea by the IBRD.  -  -
         
Payment of Tax Receipts (Victoria) Act 1996 (Administered) Unlimited Amount To provide an appropriation for payments to Victoria for certain taxes collected by the Australian Government of Victoria's behalf.  -  -
         
State Grants Act 1927 (Administered) Unlimited Amount To provide an appropriation for the distribution of surplus revenue to the States.  -  -
         
States (Work and Housing) Assistance Act 1984 (Administered) Unlimited Amount To provide an appropriation for financial assistance to the States in connection with expenditure on Public Housing.  -  -
         
States (Work and Housing) Assistance Act 1988 (Administered) Unlimited Amount To provide an appropriation for financial assistance to the States in connection with expenditure on Public Housing.  -  -
         
Terrorism Insurance Act 2003 (Administered) Unlimited Amount To provide an appropriation for payments to the Australian Reinsurance Pool Corporation.  -  -
         
Terrorism Insurance Act 2003 (Administered) Unlimited Amount To provide an appropriation for payments of compensation in the acquisition of land.  -  -
         
Total     (69,129,281) (66,930,249)

1. A New Tax System (Commonwealth-State Financial Arrangements) Act 1999 was superseded by this legislation in 2009.

Note 28: Appropriations (continued)
Note 28E: Disclosure by agent in relation to Annual and Special Appropriations ('Recoverable GST exclusive')
  Department of Education, Employment and Workplace Relations Inspector General of Taxation
2013 National Partnership Payments and Assistance to States
and Territories for Non-Government Schools
$'000
Transaction service provider

$'000

Total receipts 8,906,423 2,654
Total payments 8,906,423 2,594
     
  Department of Education, Employment and Workplace Relations Inspector General of Taxation
2012 National Partnership Payments and Assistance to States
and Territories for Non-Government Schools
$'000
Transaction service provider

$'000

Total receipts 8,569,820 2,361
Total payments 8,569,820 2,344
Note 28: Appropriations (continued)
Note 28F: Reduction in Administered Items ('Recoverable GST exclusive')
2012-13 Amount required3 ‑ by Appropriation Act Total amount required3 Total amount appropriated4 Total reduction5
Ordinary Annual Services Act (No.1) Act (No.3) Act (No. 5)      
Outcome 1 4,716,947.49 13,927,931.49  - 18,644,878.98 20,103,000.00 1,458,121.02
 
2011-12 Amount required3 ‑ by Appropriation Act Total amount required3 Total amount appropriated4 Total reduction5
Ordinary Annual Services Act (No.1) Act (No.3) Act (No. 5)      
Outcome 1 13,800,581.04 - - 13,800,581.04 18,687,000.00 4,886,418.96

1. Numbers in this section of the table must be disclosed to the cent.
2. Administered items for 2012-13 were reduced to these amounts when these financial statements were tabled in Parliament as part of the department's 2012-13 annual report. This reduction is effective in 2013-14, but the amounts are reflected in Table A in the 2012-13 financial statements in the column 'Appropriations reduced' as they are adjustments to 2012-13 appropriations.
3. Amount required as per Appropriation Act (Act 1 s. 11; Act 2 s. 12).
4. Total amount appropriated in 2012-13.
5. Total reduction effective in 2013-14.

Note 29: 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. The Department of Finance and Deregulation provided information to all agencies in 2011 regarding the need for risk assessments in relation to compliance with statutory conditions on payments from special appropriations, including special accounts.

In 2011-12, Treasury reported three groups of payments (totalling $4,320,123, total payments for all special accounts and appropriations in 2011-12 was $87,938,199,311) as potential breaches of Section 83. Based on legal advice Treasury has confirmed the payments are breaches of Section 83. Details of these breaches were published in the 2011-12 Financial Statements (Note  29). During 2012-13, Treasury developed a plan to review exposure to risks of not complying with statutory conditions on payments from appropriations. The plan involved:

  • ƒidentifying each special appropriation and special account;
  • ƒdetermining the risk of non-compliance by assessing the difficulty of administering the statutory conditions and assessing the extent to which existing payment systems and processes satisfy those conditions;
  • ƒdetermining procedures to confirm risk assessments in medium risk cases and to quantify the extent of non-compliance, if any, in higher risk situations;
  • ƒobtaining legal advice as appropriate to resolve questions of potential non-compliance; and
  • ƒconsidering legislative or procedural changes to reduce the risk of non-compliance in the future to an acceptably low level.

Treasury identified 7 appropriations involving statutory conditions for payment, comprising:

  • ƒ6 special appropriations; and
  • ƒ1 special account.

As at 30 June 2013 this work had been completed and identified:

  • ƒno payments were made in 2012-13 without legal authority in contravention of section 83 of the Constitution; and
  • ƒamounts for which recovery or offset against a later payment has occurred is nil.

While no issues were identified, recent ANAO performance audits have included discussions of agencies' monitoring arrangements relating to the achievement of milestones or performance benchmarks specified in individual national partnership agreements (NPA). In a number of instances the audits identified that greater attention should be given to strengthening these arrangements, including mechanisms for assuring information provided by the States and Territories. As a result, there is the risk that payments made by the Treasury based on the portfolio department directions may be in contravention of the terms and conditions of the specific NPA. The legal advice received by the Treasury indicates that only payments made through the COAG Reform Fund Act 2008 may result in a breach of section 83 of the Constitution if the payments were in contravention of the terms and conditions of the NPA. Since many of the NPA's do not contain specific terms and conditions, payments would not be in breach of Section 83 of the Constitution. Nevertheless, before making payments from the COAG Reform Fund Special Account, the Treasury obtains certification from the Portfolio Departments that the requirements for payments have been met. Details about the COAG Reform Fund Special Account, including the amount paid out of the Special Account, can be found at Note 30A.

In order to address this risk, Treasury will continue to review verification procedures in consultation with Portfolio Departments in 2013-14, at the same time clarifying the risk of breach and, if necessary, investigating legal remedies to ensure that NPA payments made in good faith do not result in breaches of section 83.

During 2012-13, the Department of Finance and Deregulation received additional legal advice that indicated there could be
breaches of s83 under certain circumstances with payments for long service leave, goods and services tax (GST) and payments under determinations of the Remuneration Tribunal.

Treasury has determined that there is a low risk to the certain circumstances mentioned in this legal advice applying to the department, and is not aware of any specific breaches of s83 in respect of these items.

Treasury has processes and procedures in place to ensure that payments made under determinations of the Remuneration Tribunal are made in accordance with the specific requirements under the determination. Payments made to employees under long service leave entitlements are processed in accordance with entitlement conditions. The Treasury will conduct further testing of entitlement payments in 2013-14 to verify that entitlements are not breached. GST payments to suppliers are made according to the invoices provided by suppliers, with regular reviews undertaken to ensure that the GST invoiced is calculated correctly for payment. Treasury will continue to review its current processes and controls over GST payments for these items to minimise the possibility of future breaches as a result of these payments.

Note 29: Compliance with Statutory Conditions for Payments from the Consolidated Revenue Fund (continued)
Appropriations Payment amount 2012-13 $'000 Review complete? Breaches identified Potential breaches to date yet to be resolved Remedial action taken or proposed
 
Special appropriations     Number Total $'000 Incorrect $'000 Recovered /offset as at 30 June 2013 Yes/No Indicative extent  
International Monetary Agreements Act 1947 s7 37,279 Yes  -  -  -  - N/A N/A N/A
International Monetary Agreements Act 1947 s8 3,954 Yes  -  -  -  - N/A N/A N/A
International Monetary Agreements Act 1947 s8B 185,428 Yes  -  -  -  - N/A N/A N/A
International Monetary Agreements Act 1947 s9 9,623 Yes  -  -  -  - N/A N/A N/A
Asian Development Bank (Additional Subscription) Act 2009 16,239 Yes  -  -  -  - N/A N/A N/A
Federal Financial Relations Act 2009 68,375,596 Yes  -  -  -  - N/A N/A N/A
Superannuation Industry (Supervision) Act 1993 16,762,971 Yes  -  -  -  - N/A N/A N/A
Special accounts                  
COAG Reform Fund Act 2008 10,259,370 Yes  -  -  -  - N/A N/A N/A
Note 30: Special Accounts and FMA Act Section 39
Note 30A: Special Accounts ('Recoverable GST exclusive')
  Actuarial Services Special Account1 COAG Reform Fund Special Account2
  2013 2012 2013 2012
$'000 $'000 $'000 $'000
Balance brought forward from previous period 2,282 2,149  - -
Appropriation for reporting period  - - 8,735,541 18,247,153
Other receipts from rendering of services 1,993 1,842  - -
Receipts from other agencies  - - 1,523,829 3,227,667
Total increase 4,275 3,991 10,259,370 21,474,820
Available for payments 4,275 3,991 - -
Decreases:        
Departmental        
Payments made to employees (1,379) (1,316)  - -
Payments made to suppliers (77) (393)  - -
Total Departmental decreases (1,456) (1,709) - -
         
Administered        
Payments made to suppliers - - (10 259 370) (21,474 820)
Repayments debited from the Special Account - - - -
Repayments debited from the Special Account (FMA Act section 39) - - - -
Total Administered decreases - - (10 259 370) (21,474 820)
Total decrease (1,456) (1,709) (10,259,370) (21,474,820)
Total balance carried to the next period 2,819 2,282 - -

1. Legal authority: Financial Management and Accountability Act 1997; s20
Purpose: providing actuarial services and advice
Note: Actuarial Services Special Account was established on 1 October 2006.

2. Legal authority: COAG Reform Fund Act 2008
Appropriations: Financial Management and Accountability Act 1997; section 21
Purpose: For the making of grants of financial assistance to the States and Territories.

Note: The Treasury makes payments to the States and Territories from the COAG Reform Fund special account based on information provided by other Government departments that have policy and program implementation responsibility. Some payments have been found to have breached s83 of the Constitution. See note 29 for more details.

Note 30:Special Accounts and FMA Act Section 39 (continued)

Financial System Stability Special Account (Administered)

The Treasury's 'Financial System Stability' special account established under section 70E of the Banking Act 1959 for the making of payments authorised under specified sections of the Banking Act 1959, the Insurance Act 1973 and the Life Insurance Act 1995 and to meet expenses of administering the special account. For the years ended 30 June 2012 and 30 June 2013 this special account had nil balances and no transactions were credited or debited to the account.

Other trust moneys account (Departmental — Special Public Money)

The Treasury has an 'Other trust monies' special account established under section 20 of the FMA Act. The purpose of this special account is for expenditure of monies temporarily held on trust or otherwise for the benefit of a person other than the Australian Government. Any money held is thus special public money under section 16 of the FMA Act. This account was abolished on 26 June 2012. For the years ended 30 June 2012 and 30 June 2013 this special account had nil balances and no transactions were credited or debited to the account.

Other trust moneys account (Administered — Special Public Money)

The Treasury has an 'Other trust monies' special account established under section 20 of the FMA Act. The purpose of this special account is for expenditure of monies temporarily held on trust or otherwise for the benefit of a person other than the Australian Government. Any money held is thus special public money under section 16 of the FMA Act. This account was abolished on 26 June 2012. For the years ended 30 June 2012 and 30 June 2013 this special account had nil balances and no transactions were credited or debited to the account.

Special Accounts investment of public money

For the periods 2011-12 and 2012-13, the Treasury has not used section 28 or 39 of the FMA Act in respect of all special accounts.

Services for Other Entities and Trust Money Special Account

On 26 June 2012 the Services for Other Entities and Trust Money Special Account was established under the section 20 of the FMA Act. The purpose of the account is to hold and expend amounts on behalf of persons or entities other than the Commonwealth. There were no transactions on the account during the 2012-13 financial year, the balance of the account is nil.

Clean Energy Finance Corporation Special Account

On 3 August 2012 the Clean Energy Finance Corporation Special Account was established under the section 45 of the Clean Energy Finance Corporation Act 2012. The purpose of the account is to make payments to the Clean Energy Finance Corporation, or the Australian Renewable Energy Agency as approved by the relevant Minister. There were no transactions on the account during the 2012-13 financial year, the balance of the account is nil.

Note 31: Compensation and Debt Relief
  2013
$
2012
$
Departmental    
No 'Act of Grace' expenses were incurred during the reporting period (2012: No expenses).  -  -
     
No waivers of amounts owing to the Australian Government were made pursuant to subsection 34(1) of the Financial Management and Accountability Act 1997.(2012: No waiver)  -  -
     
No payments were provided under the Compensation for Detriment caused by Defective Administration (CDDA) Scheme during the reporting period. (2012: No payments)  -  -
     
No ex-gratia payments were provided for during the reporting period. (2012: No payments).  -  -
     
No payments were provided in special circumstances relating to APS employment pursuant to section 73 of the Public Service Act 1999 (PS Act) during the reporting period. (2012: No payments).  -  -
     
Administered    
No 'Act of Grace' expenses were incurred during the reporting period (2012: No expenses).  -  -
     
No waivers of amounts owing to the Australian Government were made pursuant to subsection 34(1) of the Financial Management and Accountability Act 1997.(2012: No waivers)  -  -
     
No payments were provided under the Compensation for Detriment caused by Defective Administration (CDDA) Scheme during the reporting period. (2012: No payments)  -  -
     
No ex-gratia payments were provided for during the reporting period. (2012: No payments).  -  -
     
No payments were provided in special circumstances relating to APS employment pursuant to section 73 of the Public Service Act 1999 (PS Act) during the reporting period. (2012: No payments).  -  -
Note 32: Reporting of Outcomes
Note 32A: Net Cost of Outcome Delivery
  Outcome 1
  2013
$'000
2012
$'000
Departmental    
Expenses 198,199 192,838
Own-source income 12,931 9,731
Administered    
Expenses 81,436,555 86,868,463
Own-source income 2,850,554 5,252,242
Net cost/(contribution) of outcome delivery 78,771,269 81,799,328
Note 33: Net Cash Appropriation Arrangements
  2013
$'000
2012
$'000
Total comprehensive income (loss) less depreciation/amortisation expenses previously funded through revenue appropriations and other comprehensive income1 3,034 (11,570)
Plus: depreciation/amortisation expenses previously funded through revenue appropriation (13,733) (13,418)
Plus: other comprehensive income/(loss)  - (60)
Total comprehensive income (loss) — as per the Statement of Comprehensive Income (10,699) (25,048)

1. From 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.