Output Five: Strategic Policy
Price to Government
| Adjusted Budget Estimate | Revised Estimate | Projected Result | Actual Result | Variation | |
|---|---|---|---|---|---|
| 2002-03 | 2002-03 | 2002-03 | 2002-03 | ||
| $'000 | $'000 | $'000 | $'000 | $'000 | |
| Operating Expenses | |||||
| Employees - Military | 67,253 | 68,370 | 57,388 | 48,967 | -8,421 |
| Employees - Civilian | 38,406 | 35,428 | 37,496 | 31,596 | -5,900 |
| Sub-total Employees | 105,659 | 103,799 | 94,884 | 80,563 | -14,321 |
| Suppliers - Non-inventory | 110,236 | 106,920 | 106,662 | 93,248 | -13,414 |
| Suppliers - Inventory | 686 | 321 | 276 | 3,288 | 3,012 |
| Sub-total Suppliers | 110,922 | 107,242 | 106,938 | 96,536 | -10,402 |
| Depreciation and amortisation | 14,554 | 3,454 | 5,946 | 3,719 | -2,227 |
| Value of assets sold | - | - | - | 2,023 | 2,023 |
| Write down of assets (includes net losses on sale of assets and net foreign exchange losses) | -237 | 405 | 531 | 2,873 | 2,342 |
| Other expenses (includes borrowing cost expense and grants) | 111 | 133 | 121 | 4,978 | 4,857 |
| Total Operating Expenses From Ordinary Activities | 231,009 | 215,033 | 208,419 | 190,692 | -17,727 |
| Revenues | |||||
| Assets now recognised | 3 | -227 | -543 | -1,933 | -1,390 |
| Revenue from sale of assets | - | -106 | - | -2,267 | -2,267 |
| Other revenues | -4,232 | -4,436 | -11,240 | -7,669 | 3,571 |
| Total Own Source Revenues | -4,228 | -4,768 | -11,783 | -11,869 | -86 |
| Price to Government for Output Five | 226,781 | 210,265 | 196,636 | 178,823 | -17,813 |
Explanation Of Significant Variation
The overall price of Output Five was $18m lower than the 2002-03 projected result, representing a decrease of nine per cent. The variations were due to:
- a decrease in military employee expenses (-$8m) as a result of a refinement of the attribution rules;
- a decrease in the costs of civilian employees (-$6m) attributed to Output Five from Defence Groups;
- a decrease in suppliers non-inventory expenses (-$13m) due mainly to a refinement of the attribution rules and an underachievement in the Defence Cooperation Program as a result of unexpected world events, such as the Severe Acute Respiratory Syndrome (SARS) outbreak, and an increased operational tempo, which restricted ADF participation in Defence Cooperation activities;
- an increase in suppliers inventory expenses (+$3m) reflecting the purchases of additional inventory items to meet logistic and operational requirements, part of which was funded out of Defence's cash reserves; and
- an increase in other expenses (+$5m) due to recognition of Defence's potential liability for compensation claims arising from asbestos exposure that was identified in a recent whole-of-government actuarial report.