OVERVIEW

Administered Items

Administered Revenue (+$27.8m)

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 East Timor). Once collected by Defence, all of these revenues were returned to the Government through the Official Public Account. Total revenues were some $27.8m higher than the projected result of $701.7m, with the variation relating to additional dividends paid by the Defence Housing Authority, being partially offset by a decrease in military superannuation contributions.

Administered Expenses—Special Appropriation (+$152.1m)

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 HomeOwner 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 payment made 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 $152.1m higher than the projected result of $2,602.1m, with $142.0m relating to an increase in military superannuation benefit payments. The increase reflects the most recent Australian Government Actuary's assessment of superannuation liability, compared with the information available when the projected result was calculated. The revised actuarial assessment reflects higher consumer price index and wage growth than anticipated in the previous actuarial report. The remaining $10.1m variance relates primarily to retention benefits paid during the year due to higher than anticipated take up rates. Table 1.17 provides details.

Table 1.17 Revenues and Expenses Administered on Behalf of the Government

	2002–03	2003–04	2004–05	2005–06	2005–06
	Actual Result $'000	Actual Result $'000	Actual Result $'000	Additional estimate $'000	Actual Result $'000	Variation $'000
Revenues Administered on behalf of Government
Interest	1,114	2,273	3,044	2,500	5,265	2,765
Housing Dividends	373,525	230,698	70,672	15,276	68,000	52,724
Military superannuation contributions	551,849	604,885	661,607	682,475	651,158	–31,317
Foreign government and UN reimbursements for Timor-Leste	59,285	20,336	7,822	1,500	983	–517
Assets now recognised—retention benefit prepayment	56,918	–	–	–	–	–
Other	–	3,929	2,793	–	4,156	4,156
Total Revenues Administered on behalf of Government	1,042,691	862,121	745,938	701,751	729,562	27,811
Expenses Administered on behalf of Government
Military superannuation benefits	2,477,497	2,261,210	2,727,850	2,562,000	2,704,000	142,000
Retention benefits	21,162	27,297	44,718	30,100	40,427	10,327
Housing subsidies	7,394	8,202	9,177	10,000	9,781	–219
Other	88,604	22,792	11,705	–	–	–
Total expenses from ordinary activities	2,594,657	2,319,501	2,793,450	2,602,100	2,754,208	152,108
Net operating result	–1,551,966	–1,457,380	–2,047,512	–1,900,349	–2,024,646	–124,297

 

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