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2002-03 Financial Statements

Department of Defence
Notes To And Forming Part Of The Financial Statements
for the year ended 30 June 2003
Note 29: Reporting of Outcomes
As per Note 1, Defence had only one outcome: The defence of Australia and its national interests.
The Department of Defence uses several different methods of attributing shared items. These methods are based upon the type of 'general business activity' undertaken by the respective Group. This distribution approach incorporates the use of staff numbers, task lists (specifically Defence Science & Technology Organisation), operational support and asset utilisation. The basis of the attribution in the following tables is consistent with the basis used for the 2002-03 Budget.

Note 29A: Net cost of outcome delivery

Outcome 1 Total Outcomes
2002-03
$'000
2001-02
$'000
2002-03
$'000
2001-02
$'000
Expenses
Administered expenses 2,594,657 2,289,635 2,594,657 2,289,635
Departmental expenses 16,009,781 14,580,610 16,009,781 14,580,610
Total Expenses 18,604,438 16,870,245 18,604,438 16,870,245
Costs recovered from provision of goods and services to the non-government sector
Departmental1 15,112 - 15,112 -
Total costs recovered 15,112 - 15,112 -
Other external revenues
Administered
Interest 1,114 8,604 1,114 8,604
Dividends from Defence Housing Authority 373,525 88,636 373,525 88,636
Other sources of non taxation revenues 668,052 753,009 668,052 753,009
Total Administered 1,042,691 850,249 1,042,691 850,249
Departmental
Goods and Services Revenue from Related Entities 4,198 5,177 4,198 5,177
Goods and Services Revenue from External Entities1 211,235 227,701 211,235 227,701
Interest 19,332 15,246 19,332 15,246
Revenue from sale of assets 685,537 - 685,537 -
Gain on sale of assets - 17,930 - 17,930
Net foreign exchange gain 17,101 3,529 17,101 3,529
Assets now recognised 866,295 694,050 866,295 694,050
Other revenues 118,390 186,462 118,390 186,462
Total Departmental 1,922,088 1,145,095 1,922,088 1,145,095
Total other external revenues 2,964,779 1,995,344 2,694,779 1,995,344
Net costs (contribution) of outcomes 2 15,624,547 14,874,901 15,624,547 14,874,901
Notes
  1. In accordance with the Finance Minister's Orders 2002-03 Defence has disclosed above those cost recoveries as required by Finance Circular No 2002/02 Cost Recovery by Government Agencies. The specific elements that constitute the cost recoveries disclosed are; the sale of Navy Hydrographic maps and charts, and the provision of specific training provided to foreign forces. The cost recoveries identified are in accordance with the 'Commonwealth Cost Recovery Guidelines for Information Agencies' and therefore exclude intra and inter government services. The cost recoveries shown are Departmental in nature and are included as part of the Sale of Goods and Service total in the Statement of Financial Performance.
  2. The amounts shown for financial year 's 2002 are as published in that year's annual report (note 47). It is impractical to represent or reclassify comparative amounts due to a major restructure of the chart of accounts.
  2002-03 2001-02
  $'000 $'000
Intra-entity transactions with related parties:    
Auditor-General 1,950 1,850
National Archives of Australia 163 207
Total related party transactions 2,113 2,057

Note 29B: Major classes of departmental revenues and expenses by Outputs

Output 1 Output 2 Output 3 Output 4 Output 5 Output 6 Total
2002-03 2001-02 2002-03 2001-02 2002-03 2001-02 2002-03 2001-02 2002-03 2001-02 2002-03 2001-02 2002-03 2001-02
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Departmental expenses
Employees 378,307 410,129 1,365,621 1,332,045 2,755,824 2,452,465 1,447,159 1,312,030 80,563 87,067 167,098 151,194 6,194,572 5,744,930
Suppliers 520,142 369,828 1,405,202 1,282,910 1,692,004 1,450,178 1,535,003 1,371,017 96,536 101,548 100,987 107,429 5,349,874 4,682,910
Grants 295 188 443 493 886 1,041 635 672 119 20,135 166 58 2,544 22,587
Depreciation & amortisation 66,251 23,564 888,766 914,160 533,631 571,046 1,330,872 948,584 3,719 5,167 40,177 63,676 2,863,416 2,526,197
Value of assets sold 2 18,275 - 138,335 - 273,043 - 203,024 - 2,023 - 5,849 - 640,549 -
Write down of assets 36,702 21,273 212,738 574,127 257,601 392,087 67,945 577,175 2,873 1,785 8,616 7,188 586,475 1,573,635
Other 21,118 227 75,578 261 154,698 454 80,150 238 4,645 537 9,407 53 345,596 1770
Borrowing costs expense 1,260 1,329 4,529 4,868 15,534 16,553 4,923 5,279 214 227 295 325 26,755 28,581
Total departmental expenses 1,042,350 826,538 4,091,212 4,108,864 5,683,221 4,883,824 4,669,711 4,214,995 190,692 216,465 332,595 329,923 16,009,781 14,580,610
Funded by:
Revenues from Government 1 699,969 1,150,485 5,740,792 5,678,971 5,568,606 5,068,165 5,664,544 5,358,014 212,837 192,235 345,690 397,664 18,232,438 17,845,534
Sale of goods and services 49,785 57,727 32,271 33,071 94,716 89,865 44,117 40,780 6,291 4,381 3,365 2,054 230,545 227,878
Interest 709 686 5,283 4,423 7,604 5,252 5,164 4,576 176 77 396 232 19,332 15,246
Revenue from sale of assets 2 22,096 - 165,334 - 310,775 - 179,240 - 2,267 - 5,825 - 685,537 -
Gains on sale of assets 2 - 733 - 3,878 - 8,657 - 4,371 - 97 - 194 - 17,930
Net foreign exchange gains 773 101 5,362 1,510 2,128 291 8,841 1,616 (49) - 46 11 17,101 3,529
Assets now recognised 45,141 48,603 284,977 149,144 264,138 246,758 265,927 241,506 1,933 507 4,179 7,532 866,295 694,050
Other 54,733 28,581 29,814 32,977 22,492 68,841 8,300 46,736 1,251 3,618 1,800 5,709 118,390 186,462
Total departmental revenues 873,206 1,286,916 6,263,833 5,903,975 6,270,459 5,487,829 6,176,133 5,697,599 224,706 200,915 361,301 413,396 20,169,638 18,900,629
Note
  1. Total operating revenues by output include the allocation of the Capital Use Charge. However, in accordance with the disclosure arrangements for the financial statements, the operating expenses for outputs does not include the Capital Use Charge as it is not an operating expense in the end of year financial reports. The Capital Use Charge for financial year 2001-02 is $4,633,854 and for financial year 2002-03 is $5,056,094.
  2. In accordance with the Finance Minister's Orders 2002-03, Defence is required to separately disclose the 'Value of assets sold' and 'Revenue from sale of assets'. In previous years, these items were reported as a net result, either as gain/loss. The amounts shown for 2001-02 are as published in that year's Annual Report (note 47). It is impractical to represent or reclassify comparative amendments due to a major restructure of the chart of accounts.

Table D: Major Classes of Administered Revenues and Expenses by Outcome

Outcome 1
2002-03
$'000
2001-02
$'000
Administered Revenues
Interest 1,114 8,604
Dividends from Defence Housing Authority 373,525 88,636
Other sources of non taxation revenues 668,052 753,009
Total administered revenues 1,042,691 850,249
Administered Expenses
Employees 2,498,659 2,270,955
Subsidies 7,394 6,411
Net foreign exchange losses 2,045 12,269
Write-down of assets 84,239 -
Other 2,320 -
Total administered expenses 2,594,657 2,289,635