Chapter One - Overview > Financial Overview > page 16 of 16
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Financial Overview

Defence's Cash Position

Administered Items

Administered Revenue (+$19m)

The revenues administered on behalf of the Government include dividend payments by the Defence Housing Authority, military employee superannuation contributions and other non-taxation revenues (including reimbursement from the United Nations for costs associated with Timor-Leste). Once collected by Defence, all of these revenues were returned to the Government through the Official Public Account. Total revenues were some $19m higher than the revised additional estimate of $727m. The variation related primarily to an increase in housing dividends, but was offset by military superannuation contributions reflecting the lower than planned military personnel numbers and higher contributions by members reflecting the outcome of the ADF Workplace Remuneration Arrangement.

Administered Expenses (+$355m)

These expenses, administered on behalf of the Government, comprise:

  • administered superannuation expenses representing members' accrual expenses and interest expenses for the two military superannuation schemes (Defence Force Retirement and Death Benefits and Military Superannuation and Benefits Schemes). The cash payments of benefits paid under these schemes are subject to biannual indexation of benefits, similar to the Australian Public Service superannuation schemes;
  • the Defence Home Owner Scheme, which provides assistance to current and retired Defence personnel. This scheme provides a subsidy on the interest payable on a home loan for members of the ADF under the Defence Force (Home Loans Assistance) Act 1990; and
  • the retention benefit is a lump sum of one times salary paid directly to military personnel who, on completion of 15 years service, undertake to complete a further five years service. It is not a superannuation benefit, but is an incentive payment made via the administered accounts.
Financial Results

Administered expenses were some $355m higher than the projected result of $2,438m with $328m relating to an increase in value of military superannuation benefits. The increase reflects the most recent Australian Government Actuary's assessment of superannuation liability, compared with the information available at the time of the revised additional estimates. The revised actuarial assessment reflects higher consumer price index and wage growth than was anticipated in the previous actuarial report, and takes into account the inclusion of certain allowances for superannuation expenses.

Summary

A summary of the administered appropriation covering actuals over a four year period, including details for 2004 05 is shown in Table 1.11.

Table 1.11 Revenues and Expenses Administered on Behalf of the Government
2001-02 2002-03 2003-04 2004-05
Actual
Result

$m
Actual
Result

$m
Actual
Result

$m
Revised
Estimate

$m
Revised
Additional
Estimate

$m
Actual
Result

$m
Variation


$m
Revenues Administered on behalf of Government
Interest 8,604 1,114 2,273 - - 3,044 3044
Housing Dividends 88,636 373,525 230,698 52,600 52,600 70,672 18,072
Military superannuation contributions 607,195 551,849 604,885 672,405 672,405 661,607 -10,798
Foreign government and UN reimbursements for Timor-Leste 123,364 59,285 20,336 2,000 2,000 7,822 5,822
Assets now recognised - retention benefit prepayment - 56,918 - - - - -
Other 22,450 - 3,929 - - 2,793 2,793
Total Revenues Administered on behalf of Government 850,249 1,042,691 862,121 727,005 727,005 745,938 18,933
 
Expenses Administered on Behalf of Government
Military superannuation benefits 2,240,395 2,477,497 2,261,210 2,400,000 2,400,000 2,727,850 327,850
Retention benefits 30,560 21,162 27,297 29,100 29,100 44,718 15,618
Housing subsidies 6,411 7,394 8,202 9,250 9,250 9,177 -73
Other 12,269 88,604 22,792 - - 11,708 11,708
Total expenses from ordinary activities 2,289,635 2,594,657 2,319,500 2,438,350 2,438,350 2,793,453 355,103
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