Department of Defence
as at 30 June  2009

Commitments receivable
Lease rental income1 (27,929) (28,295)
GST recoverable on commitments2 (2,616,751) (2,628,851)
Total commitments receivable (2,644,680) (2,657,146)
Capital commitments payable
Land and buildings3 1,371,085 2,125,079
Infrastructure, plant and equipment4 272,440 90,371
Specialist military equipment5 17,218,048 17,488,587
Other capital commitments6 51,372 61,907
Total capital commitments payable 18,912,945 19,765,944
Other commitments payable
Operating leases7 5,066,414 4,304,564
Research and development8 181,861 107,090
Other non-capital commitments9 12,707,508 12,903,248
Total other commitments payable 17,955,783 17,314,902
Net commitments by type 34,224,048 34,423,700
Commitments receivable
Lease rental revenue
One year or less (14,673) (14,349)
From one to five years (5,029) (5,306)
Over five years (8,227) (8,640)
Total lease rental revenue (27,929) (28,295)
Other commitments receivable
One year or less (857,458) (300,455)
From one to five years (1,379,439) (1,801,457)
Over five years (379,854) (526,939)
Total other commitments receivable (2,616,751) (2,628,851)
Commitments payable
Capital commitments
One year or less 5,786,856 1,424,983
From one to five years 10,642,710 13,827,475
Over five years 2,483,379 4,513,486
Total capital commitments 18,912,945 19,765,944
Operating lease commitments
One year or less 648,739 394,513
From one to five years 2,176,121 1,785,419
Over five years 2,241,554 2,124,632
Total operating lease commitments 5,066,414 4,304,564
Other commitments
One year or less 4,082,180 2,529,938
From one to five years 6,054,456 7,541,847
Over five years 2,752,733 2,938,553
Total other commitments 12,889,369 13,010,338
Net commitments by maturity 34,224,048 34,423,700


Commitments are GST inclusive where relevant.  Commitments managed by the Defence Materiel Organisation (DMO) on behalf of Defence total $21.085m, comprising:

The 2007-08 comparative commitment balances have been amended to include GST in respect of commitments managed by the DMO on behalf of Defence.

  1. The lease rental income includes rental contributions from Defence service members for residences sub-leased by Defence. The lease term is normally 3 to 5 years. The lease rental receivable is calculated for 28 days which is the minimum period of notice Defence members are required to provide before terminating the lease.  
  2. GST recoverable on commitments payable.
  3. Outstanding contractual payments for buildings under construction.
  4. Infrastructure, plant and equipment capital commitments include outstanding contractual payments for such items of plant and equipment as the maintenance of hardware and software.
  5. Outstanding contractual payments for specialist military equipment under construction.  The majority of these commitments relate to Materiel Acquisition Agreements with the DMO.
  6. Other capital commitments include contractual payments for software licence agreements.
  7. Operating leases included are effectively non-cancellable and are described in the table below.
  8. Outstanding commitments on research and development projects including Through Life Support agreements.
  9. Outstanding commitments on supplier type expenditure including general goods and services, communications, domestic, overseas travel, removal costs, and Materiel Sustainment expenditure payable to the DMO.
Nature of leases General description of leasing arrangement
DHA property leases Defence leases residences under a service agreement with Defence Housing Australia (DHA) to provide accommodation to eligible service members. The total commitment has been calculated based on an initial forecast of housing demand for the period of the agreement, which is 12 years. Lease payments are subject to the terms and conditions of the lease and are payable to DHA.
Other property leases Defence leases both residential and commercial properties in Australia and overseas in support of its activities. Lease payments are subject to the terms and conditions of the lease. Generally the leases are subject to market reviews, reviews in accordance with agreed indexation or a combination of both. The terms range between 1 and 101 years.
Aircraft leases Defence leases aircraft in support of scientific and military operations and in support of parliamentary services. Lease terms range between 2 and 12 years.
Equipment leases Defence has leases for items of equipment including computer hardware, photocopiers and communication equipment. General lease terms are 2 to 5 years.
Property revenue leases Defence receives revenue from the lease of property and office space.  Office space is generally let to contractors in support of Defence activities and to other government agencies or to local civic authorities.  The terms of these leases range between 1 and 99 years.

The above statement should be read in conjunction with the accompanying notes.