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Chapter 6

Financial Overview

This chapter describes the DMO business and accounting model, and provides an assessment of the DMO financial performance in 2005–06 against budget projections.

Financial Overview

2005–06 Summary

Including all supplementary funding, the projected level of resourcing available to the DMO in 2005–06 was $7,430.7m, comprising direct appropriation of $44.3m. At the time of its establishment it received an equity contribution of $308.1m.

The DMO's total resourcing for 2005–06 was $170.2m higher than the projected result comprising $205.2m in additional departmental funding provided by Defence. Table 6.1 summarises the total DMO resourcing in 2005–06 compared to the revised additional estimate.

Table 6.1 Total DMO Revenue Recognised 2005–06
  2005–06
  Budget(1) Estimate
$'000		 Revised Estimate
$'000		 Actual Result
$'000		 Variance
$'000
Revenue
Revenue from Government 44,211 44,257 44,257 –
Revenue from Defence 6,887,680 7,223,227 7,428,433 205,206
Funds from Foreign Government(3) – 125,910 76,585 –49,325
Own-Source Revenue(2) 192,018 35,777 9,222 –26,555
Total Revenue 7,123,909 7,429,171 7,558,497 129,326-
Other gains 1,500 1,500 42,383 40,883
Total gains 1,500 1,500 42,383 40,883
Purchase of Assets—Capital from Defence 121,197 122,043 - –122,043
Total DMO Resourcing 7,246,606 7,552,714 7,600,880 48,166

Notes:

  1. The Budget Estimate shows the full year budget in the Portfolio Budget Statements 2005–06. The Revised Estimate is the revised budget published in the Portfolio Additional Estimates Statements 2005–06.
  2. Own-source Revenue includes sales of goods and services, interest, net foreign exchange gains, other revenues and resources received free of charge.
  3. Funds from foreign Governments are funds for goods and services provided to them.

Explanation of Major Variations

The main variations in the DMO's total revenue were:

  • Revenue from Defence (+$205.2m)—the variation was due to the early progression of the purchase of the C-17 heavy airlift project (+$271.0m), a net decrease in spending for other Approved Major Capital Equipment Projects (-$97.7m) due to timing issues; and an increase in commissioned work required by Defence (+$31.9m).
  • Funds from Foreign Governments (–$49.3m)—a decrease of anticipated funding from foreign governments for collaborative projects.
  • Own-Source Revenue (-$26.6m )— is due predominantly to the return of revenue to Defence from the sale of commercial vehicles (-$33.6m) and $7m more than the anticipated revenue from other sources.

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