1.1
Australian Government
Environment
1.2
Department of the Environment
INTERIM COST RECOVERY IMPLEMENTATION STATEMENT
Ozone Protection and Synthetic Greenhouse Gas Program
2015-16
Cost recovery involves government entities charging individuals or non-government
organisations some or all of the efficient costs of a specific government activity. This may
include goods, services or regulation, or a combination of them. The Australian Government
Cost Recovery Guidelines (the CRGs)1 set out the overarching framework under which
government entities design, implement and review cost recovered activities.
1
The CRGs are available on the Department of Finance website (www.finance.gov.au).
Page 1 of 22
1.
INTRODUCTION
1.1
Purpose of the CRIS
This CRIS is an interim update pending the finalisation of the review of the Ozone
Protection and Synthetic Greenhouse Gas Management Act 1989 (the Act) and
consideration of the review recommendations by Government, scheduled for the second
half of 2015. Following consideration by Government, a new CRIS will be developed to
reflect the outcomes of the Review.
This interim CRIS provides information on how the Department of the Environment (the
Department) implements cost recovery for the Ozone Protection and Synthetic
Greenhouse Gas Program. It also reports financial and non-financial performance
information for the Ozone Protection and Synthetic Greenhouse Gas Program and contains
financial forecasts for 2015-16 and three forward years. The Department will maintain the
CRIS until the activity or cost recovery for the activity has been discontinued.
1.2
Description of the activity
This CRIS documents the cost recovery arrangement for the service the Department of the
Environment uses to implement the Act. The Act is the legislative mechanism under which
Australia meets its obligations to phase-out ozone depleting substances (ODSs) under the
Montreal Protocol on Substances that deplete the Ozone Layer (Montreal Protocol), and its
obligations under the Kyoto Protocol, to limit greenhouse gas emissions by controlling the
use of synthetic greenhouse gases (SGGs).
The purpose of the Act is to:

implement the provisions of the 1985 Vienna Convention for the Protection of the
Ozone Layer (Vienna Convention) and the 1987 Montreal Protocol;

institute specific controls on the manufacture, import, export, distribution and the
use of ODSs;

encourage Australian industry to replace ODSs and achieve a faster and greater
reduction in their use than provided for in the Vienna Convention and the Montreal
Protocol to the extent that such replacements and achievements are reasonably
possible within the limits imposed by the availability of suitable alternate
substances and appropriate technology and devices;

control the manufacture, import, export and use of SGGs that are used to replace
ODSs to give effect to Australia’s obligations under the United Nations Framework
Convention on Climate Change (UNFCCC); and

promote the responsible use of ODSs and SGGs to minimise their effect on the
atmosphere.
Those activities where the costs are able to be linked to individuals and companies are
funded through licence (and permit) fees. Costs associated with activities providing
broader benefits to licensee industries and the community in genereal are funded through
levies as it is not possible to link these benefits to specific individuals and companies.
Page 2 of 22
The activities undertaken which are funded through licence and permit fees are:
Licensing
The Act applies consistent controls on the use of ODSs and the SGGs used to replace them
to meet Australia’s legally binding requirements under the Montreal Protocol and Kyoto
Protocol, including to minimise the emission of these substances to the atmosphere. The
Act:

prohibits the import, export or manufacture of chlorofluorocarbons, halons, carbon
tetrachloride, methyl chloroform, bromochloromethane and
hydrobromofluorocarbons, without either an essential use licence or a used
substance licence;

establishes a system of controlled substance licences and reporting requirements
for the import, export or manufacture of hydrochlorofluorocarbons (HCFCs), methyl
bromide, hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs), consistent with
Australia’s obligations under the Montreal Protocol and the UNFCCC; and

establishes a licensing system for the import of refrigeration and air conditioning
equipment that contains a HFC or HCFC refrigerant (pre-charged equipment),
thereby applying the same conditions and responsibilities for these substances
when imported in equipment, as applying to the importation in bulk form.
End-use Regulations
The Act creates regulation-making powers to allow the Australian Government to develop
end-use regulations on: acquisition; purchase; sale; handling; use; storage; and disposal of
ODSs and SGGs.
End-use regulations under the Ozone Protection and Synthetic Greenhouse Gas
Regulations 1995 (the Regulations) have been implemented for the use of ODSs and SGGs
in refrigeration and air conditioning and fire protection industries. These Regulations assist
Australia to meet its phase-out obligations under the Montreal Protocol. They also lead to
reduced emissions of ODSs and SGGs through the establishment of minimum industry
standards.
The Australian Refrigeration Council (ARC) and the Fire Protection Association of Australia
(FPAA) were appointed to administer the permit schemes in the refrigeration and air
conditioning industry, and the fire protection industry, respectively.
The Regulations establish a competency based permit scheme for the refrigeration and air
conditioning, and fire protection industries and limit access to ODSs and SGGs to
authorised businesses and handling to licensed technicians.
The activities undertaken which are funded through import and manufacturing levies are:
International engagement

Participation in international negotiations, monitoring of and reporting under the
Montreal and Kyoto Protocols.
Ozone science

Research into ODSs and SGGs, research scholarships, servicing the Ozone Science
Group and methyl bromide quarantine and pre-shipment study.
Page 3 of 22
Phase outs and emission reduction programs

Phase out programs for all ODSs and emission reduction programs for ODSs and
SGGs
Halon management

Storage and management of the Australia’s halon stock
National halon stock

Administrative costs associated with the management of the national halon stock
including the leasing and manageing an appropriate facility for holding the stock
and the management of the stock
Other



Storing and destruction of seized and forfeited goods
General policy related to ODSs and SGGs
Awareness raising directly related to regulatory activity
Importers, exporters and manufacturers of ODSs and SGGs are subject to licensing fees and
import and manufacturing levies.
Businesses and technicians in the refrigeration, air conditioning and fire protection
industries are subject to licence and permit fees.
Key stakeholders consulted in the development of the current cost recovery arrangements
included:

Motor Trades Association of Australia (MTAA)


Refrigeration and Air Conditioning Association (RACA)


ARWA unanimously agreed with the proposed fee increases
Automotive Air Conditioning, Electrical and Cooling Technicians of Australasia
(VASA)


RACCA noted that whilst it would generally oppose fee increases, they did
understand that fees must inevitably increase and that linking the fees to
CPI was a fair method
Air Conditioning and Refrigeration Wholesalers Association (ARWA)


MTAA acknowledged and supported the ARC’s proposal to increase its fees
in order to meet increased costs it faces
VASA supported in principle the proposed permit fee increase on the
proviso that there was no reduction, or preferably, an increase in the ARC
audit regime
National Electrical and Communications Association (NECA)

NECA supported the proposed fee increase on the basis that fees had not
increased since the scheme’s inception and the need for the ARC to
maintain their service levels
Page 4 of 22
2.
POLICY AND STATUTORY AUTHORITY TO COST RECOVER
2.1
Government policy approval to cost recover the activity
In 2003, the Australian Government authorised the Department to charge for licensing
applications and an activity fee relating to ODSs and SGGs import or manufacture on a cost
recovery basis. In 2004, the Australian Government authorised the Department to charge
for permit activities relating to the refrigeration and air conditioning, and fire protection
industries on a cost recovery basis (these authorisations were provided by the then Prime
Minister, Treasurer and Minister for Finance).
2.2

Statutory authority to charge
The legal authority for the charging of:

licence application fees for the import, export and manufacturing of ODSs and
SGGs, is provided under section 14 of the Ozone Protection and Synthetic
Greenhouse Gas Management Act 1989
(http://www.comlaw.gov.au/Series/C2004A03755)

permit fees for handling of refrigerants, extinguishing agents and halon is provided
under Regulations 121 and 31 of the Ozone Protection and Synthetic Greenhouse
Gas Management Regulations 1995
(http://www.comlaw.gov.au/Series/F1996B02085)

import and manufacturing levies for ODSs and SGGs is provided under section 4 of
the Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Act 1995
(http://www.comlaw.gov.au/Series/C2004A04976) and section 4 of the Ozone
Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995
(http://www.comlaw.gov.au/Series/C2004A04976), respectively.
Subsection 65D(a) of the Ozone Protection and Synthetic Greenhouse Gas Management
Act provides that it is a purpose of the Ozone Account set up in section 65B to receive
money for reimbursing the Commonwealth’s costs associated with the administration of
the Act and the Regulations. Subsection 65D(b-ca) provides that is it a purpose of the
Ozone Account to pay or reimburse the Commonwealth’s costs associated with furthering
programs (or information about programs) that address the phase out of ODSs, and
emission minimisation programs for ODSs and SGGs; the Commonwealth’s costs associated
with management of the National Halon Bank (NHB); and the Commonwealth’s costs
associated with research relating to substances that deplete the ozone in the atmosphere
or synthetic greenhouse gases.
3.
COST RECOVERY MODEL
The cost recovery model has several components.
The licence and permit schemes are administered both within the Department (import,
export and manufacture licences) and by two Industry Boards contracted by the
Page 5 of 22
Department, the ARC and FPAA (end-use permits). Application fees collected on and on
behalf of the Department are paid into the Ozone Protection and Synthetic Greenhouse Gas
Special Account where they are used to pay or reimburse the Department’s costs of
administering the licence and permit schemes (including through the ARC and FPAA).
3.1
Outputs and business processes of the activity
Outputs delivered under the OPSGGs program are:
1. Issue and management of import, export and manufacturing licences
2. Issue and management of End Use permits and licences
3. Administration of the Export Refund Scheme
4. Administration of OPSGGs policy and legislation, ensuring Australia’s active participation
and influence in the international arena, and ensuring Australia meets its international
commitments
5. Implementation and management of phase-out programs as appropriate
6. Implementation and management of emission minimisation programs as appropriate
7. Conduct of research relating to ozone depleting substance and synthetic greenhouse
gases
8. Management of the national halon stock through the National Halon Bank
Key business processes used to deliver the outputs are:
1. Issue and management of import, export and manufacturing licences

Licence application assessment and issue (new licences, licence transfers,
and licence surrenders). A process map for the licence application
assessment, review and issue is provided at Attachment A.












Maintain licence enquiry hotline, and respond to enquiries
Maintain licence enquiry email, and respond to enquiries
Manage manual licence applications
Ensure licence application fees have been paid before a licence
assessment commences
Review and action, as appropriate, licence fee waiver requests
Validate legal status of applicant
Check proof identity for applicant who are individuals
Conduct ‘fit and proper person’ review
Confirm goods/substances to be imported/manufactured are allowed
under the Act and Regulations
Delegate consideration and decision on application
Issue, transfer and surrender advice to applicant
Redlines (the management of imports containing a schedule substance
arriving in Australia without an appropriate licence, identified and held by
the Australian Customs and Border Protection Service)
Page 6 of 22

Assessment of the documentation to determine if the held items do
hold a scheduled substance, including inspection and testing if
necessary, that requires a licence or licence exemption, is a
temporary import or is a prohibited item

Notification of assessment and appropriate follow-up action which
could include:






Quarterly reporting assessment. A process map for the quarterly reporting
assessment is provided at Attachment B.











Maintain program revenue enquiry hotline, and respond to enquiries
Maintain program revenue enquiry email account, and respond to
enquiries
Allocate licence application fees to a licence application
Receipt and record application fee in financial and licence databases
Notify licence application assessment officers that fee has been paid
Quarterly levy management (including debt management)







Maintain licence enquiry hotline, and respond to enquiries
Maintain licence enquiry email, and respond to enquiries
Provide notification to licensees of reporting deadline
Review, assess and accept quarterly reports submitted
Follow-up with licensees where submitted reports fail acceptance
criteria
Review, assess and accept resubmitted reports
Undertake monitoring and take compliance action as appropriate
Licence application fee



Clearance and release of the item
A licence application
Seizure of the item
Degassing and then destruction of the item
Management of seized or forfeited goods
Maintain program revenue enquiry hotline, and respond to enquiries
Maintain program revenue enquiry email account, and respond to
enquiries
Issue invoices to licensees for quarterly import or manufacturing levy
amounts payable
Provide monthly account statements to licensees
Manage overdue debts
Issue penalty invoices to late quarterly levy payment debtors
Licence compliance program



Liaise with Australian Customs and Border Protection Service for
import data associated with import licensees
Conduct an initial documentation review of licensees where import
reporting varies from customs import data
Refer any serious or suspected non-compliance issues to the
Page 7 of 22
Enforcement and Compliance team for action (including court
actions) as appropriate

Export refunds. A process map for the export refund assessment process is
provided at Attachment C.







Maintain export refund enquiry hotline, and respond to enquiries
Maintain export refund enquiry email account, and respond to
enquiries
Assess (and document) export refund application
Follow-up queries with applicant
Brief export refund delegate on the application assessment
Advise applicant of delegate decision
Make export refund payment to applicant if approved by delegate
2. Granting and administration of End Use permits and licences (undertaken on behalf of
the Minister by the ARC and FPAA):

receive applications and application fees for RAC industry permits;


Manage manual licence applications
Manage online licence applications

process applications within 30 day timeframe specified in the Regulations;

issue RAC industry permits in accordance with the Regulations;







Ensure permit application fees paid before licence assessment
Validate legal status of applicant
Check proof of identity for applicant who areindividuals
Conduct ‘fit and proper person’ review
Undertake a detailed assessment of the qualifications or
competencies of the individual to carry out RAC work
Assess that the individual or company has the equipment detailed by
the Regulations
provide customer service support to members of the RAC industry and the
general public


Maintain licence enquiry hotline, and respond to enquiries
Maintain licence enquiry email, and respond to enquiries

provide a program of communications and awareness activities aimed at
encouraging compliance with the RAC industry permit scheme

conduct eduation visits to check and assist permit holders with compliance
with the regulations, including newsletters, media and website material to
explain the requirements and any changes for the scheme.
3. Development of policy guidance and procedures to support the effective administration
of the end-use licensing schemes over time, taking account of changing market and
technological circumstances for the regulated industries.
4. Administration of OPSGGs policy and legislation
5. Implementation and management of phase-out programs as appropriate
Page 8 of 22
6. Implementation and management of emission minimisation programs
7. Conduct of research relating to ozone depleting substance and synthetic greenhouse
gases
8. Management of the national halon stock through the National Halon Bank
3.2
Costs of the activity
The costs incurred in delivering the OPSGG program include:

Direct costs – these are directly attributable to the implementation and
administration of Act and related policy, including:




Departmental employee expenses – including base salary, superannuation, leave
entitlements, training
Travel
Outsourced management of end use permit and licence scheme
Indirect costs, including:





Accommodation costs (for example, rent, maintenance, utilities)
Information technology costs
Human resources support
Other departmental support (for example, finance and legal support)
These costs are currently funded through direct appropriation by Government.

Outsourced costs, including management of end use permit and licence scheme,
through RAC and FPAA

Capital costs relate to the import, export and manufacturing licence database,
including:




Depreciation
Operation and maintenance
Capital investment
These costs are currently funded through direct appropriation by Government.
The levels of activity are demand driven to a large extent, depending on the number of
importers or manufacturings, the frequency of import or manufacture, exporters and
businesses and technicians on the domestic scene. These can and do vary from year to year
and within years. Costs are based on historical levels of activity and a general assumption
of activities continuing at similar levels . Sensitivity of the cost estimates is influenced
largely by economic and climatic conditions, with in more prosperous (and affluent)
economic times and hotter seasons, increases in imports (and licensees) and growth in
domestic suppliers and technicians to provide and maintain this growing volume of
equipment.
Assumptions:

Import, export and manufacturing licences. There will on average, be approximately
600 new licences annually, 10 licence transfers annually, and 10 licence surrenders
Page 9 of 22
annually



Four types of licence can be issued under the Act:

Controlled Substance Licence, which allows the holder to
manufacture, import or export HCFCs, methyl bromide or SGGss;

Essential Use Licence, which allows the holder to manufacture,
import or export scheduled substances, which have been phased out,
for essential uses approved through the Montreal Protocol;

Used Substance Licence, which allows the holder to import or export
recycled or used scheduled ODSs substances; and

Equipment Licence, which allows the holder to import refrigeration
and air conditioning equipment containing HCFCs or HFC refrigerants.
There will be approximately 1,200 import licences valid annually
End-use licences and permits. There are approximatelty 42,500 licences and permits
expected to be issued in 2015-16.

Licences and permits issued under the Regulations are:

Refrigerant Handling Licence, which allows the holder to handle
controlled refrigerants in the refrigeration and air conditioning
industry;

Refrigeration and Air Conditioning Trainee Licence, which allows the
holder to handle a refrigerant while undertaking training and/or
assessment in a classroom setting and at the work place under
supervision

Restricted Refrigeration and Air Conditioning Licence, which allows
the holder to recover and handle refrigerant while decommissioning
equipment;

Refrigerant Trading Authorisation, which allows the holder to
acquire, possess and dispose of controlled refrigerants;

Restricted Refrigerant Trading Authorisation, which allows the
holder to recover, store and dispose of controlled refrigerants;

RAC Equipment Manufacturing Authorisation, which allows the
holder to acquire controlled refrigerants (other than Halon) for the
use in manufacture of RAC equipment;

Extinguishing Agent Handling Licence, which allows the holder to
handle controlled extinguishing agents in the fire protection industry;

Trainee Extinguishing Agent Handling Licence, which allows the
holder to handle controlled extinguishing agents while undertaking
training and/or assessment in a classroom setting and at the work
place under supervision;

Extinguishing Agent Trading Authorisation, which allows the holder
to acquire, store or dispose of controlled extinguishing agents that
Page 10 of 22
are for use, or has been used, in fire protection equipment; and



Quarterly import reporting numbers will be approximately 4,800 annually
Manufacturing


There will be approximatelty 80,000 valid licences and permits annually
Importing


Halon Special Permit, which allows the holder to possess halon that is
for use in fire protection equipment.
There will be no domestic manufacture of ODSs and SGGs
Policy and international interactions and commitments

Will continue at current levels of activity
Table 1: Cost breakdown for 2015-16 is provided in the following table.
Direct costs
Output 1
Import, Export and Manufacture
Licences - Administration
Output 2
End use licencing and permits Refrigeration and Air Conditioning
and Fire Protection
Outputs 3 - 8
Policy, international interactions and
commitments, phase out and
emission mininisation programs,
research, administration and NHB
management
TOTAL
3.3
Indirect
costs
1,935,023
563,363
7,310,127
381,430
2,301,475
11,546,625
670,051
1,614,844
Capital costs
195,000
195,000
Design of cost recovery charges
Both licence (and permit) fees and levies are used to recover costs based on whether the
benefits of particular services (costs) are able to be linked directly to individuals or are
provided to industry and the community more generally.
Costs associated with the provision of services under this program are recorded under
discrete cost centres within the Department’s financial management system and are readily
identifiable.
Import and manufacture licence application fees are set under the Ozone Protection and
Synthetic Greenhouse Gas Management Regulations 1995, with these also available on the
Department’s web site.
Maximum levy rates are set within the respective levy acts (Ozone Protection and Synthetic
Greenhouse Gas (Import Levy) Act 1995 and Ozone Protection and Synthetic Greenhouse
Gas (Manufacture Levy) Act 1995), with the rates applicable under the legislation available
Page 11 of 22
on the Department’s web site.
Table 2: Charge rates and revenue estimates for 2015-16 are set out in the following table
Charge title
Type
Rate
$
Estimated
volume
Estimated
total
revenue
$
Import, Export &
Manufacture Licences
Equipment
Controlled substances SGGs
Controlled substances HCFC
Controlled substances MB
Used
S 40
Sub-total
Output 1: Import,
Export and
Manufacture Licences
- Administration
Fee
3,000
725
Fee
15,000
23
Fee
15,000
6
Fee
15,000
6
Fee
Fee
15,000
3,000
2
12
774
2,175,000
345,000
90,000
90,000
30,000
36,000
2,766,000
Output 2: End-use
Licence Administration
End-use Licences#
Refrigerant Trading
Authorisation (1 year)
Refrigerant Trading
Authorisation (2 years)
Extinguishing Agent
Trading Authorisation
Refrigerant Handling
Licence(1 year)
Refrigerant Handling
Licence(2 years)
Extinguishing Agent
Handling Licence (1 & 2
year)
Trainee Refrigerant
Handling Licence
Trainee Extinguishing
Agent Handling Licence
Halon Special Permit
Sub-total
Import & Manufacture
Levy
Business process
Fee
221
222
49,062
442
8,672
3,833,024
442
71
31,382
69
1,555
107,295
137
22,099
3,027,563
Fee
131 263
1,110
193,416
Fee
28
8,702
243,656
Fee
131
82
10,742
Fee
263
42
42,555
11,046
7,507,186
Fee
Fee
Fee
Fee
Levy
Various*
NA
Outputs 3 – 8: Policy,
international
interactions and
742,991 commitments, phase
out and emission
mininisation
programs, research,
Page 12 of 22
administration and
NHB management
TOTAL
11,016,177
# End-use licence fees will be indexed annually
*For:
 ODSs the levy is $3,000 per ozone depleting tonne
 Methyl bromide the levy is $135 per tonne
 SGGs the levy is $165 per metric tonne
4.
RISK ASSESSMENT
The overall risk associated with the cost recovery of the Ozone Protection and Synthetic
Greenhouse Gas Program is Medium
Revenues (and the associated level of activity) under this cost recovery arrangement are
essentially driven by demand:



The demand for licences by importers
The volume of ODS and SGG imports
The demand for end-use licences and permits
The risks to this cost recovery arrangement are that there is a significant and unexpected
increase or decrease in the demand.
The department manages the risks by monitoring and reviewing both revenue and activity
(and associated resource) levels on a monthly basis. This allows the department to identify
any such issues in a timely manner and allow reallocation of resources as required, within
the resourcing constraints of the Department. Further, the availability of the special
account which receipts revenues and funds expenditures, and retains cash balances for the
program, provides some scope and flexibility to manage fluctuations in revenue and
expenditure both within and from year to year.
5.
STAKEHOLDER ENGAGEMENT
Key stakeholders consulted in the development of the current cost recovery arrangements
included:



Motor Trades Association of Australia (MTAA)
o MTAA acknowledged and supported the ARC’s proposal to increase its fees in
order to meet increased costs it faces
Refrigeration and Air Conditioning Association (RACA)
o RACCA noted that whilst it would generally oppose fee increases, they did
understand that fees must inevitably increase and that linking the fees to CPI
was a fair method
Air Conditioning and Regrigeration Wholesalers Association (ARWA)
o ARWA unanimously agreed with the proposed fee increases
Page 13 of 22


Automotive Air Conditioning, Electrical and Cooling Technicians of Australasia
(VASA)
o VASA supported in principle the proposed permit fee increase on the proviso
that there was no reduction, or preferably, an increase in the ARC audit
regime
National Electrical and Communications Association (NECA)
o NECA supported the proposed fee increase on teh basis that fees had not
increased since the scheme’s inception and the need for the ARC to maintain
their service levels
The Department in its conduct of the Ozone Act Review has consulted broadly with
stakeholders, including:




Calling for submissions to the Review
Holding Technical Working Group meetings with industry represented by relevant
peak bodies to discuss issues raised by stakeholders, the Department or the peak
bodies themselves
A draft interim Act Review report will be issued for public comment prior to the
finalisation of the report
Industry (through peak bodies) will be consulted on any changes to the cost recovery
arrangements resulting from the Review that will impact on level of Departmental
resource levels dedicated to the OPSGG cost recovery activities and the impact on
fees and levies. Peak bodies included:
o Victorian Automobile Chamber of Commerce
o Australian Industry Group
o Fire Protection Association of Australia
o Plastics and Chemicals Industry Association of Australia
o Refrigerant Reclaim Australia
o Automotive Airconditioning, Electrical and Cooling Technicians of Australia
o Australian Institute of Refrigeration, Air Conditioning and Heating
o Air conditioning and Mechanical Contractors Association
o Air conditioning and Refrigeration Equipment Manufacturers Association
o Refrigerants Australia
o Methyl Bromide Users
o Australian Refrigeration Association
Page 14 of 22
6.
FINANCIAL ESTIMATES
Table 3: Financial estimates to 2018-19
Budget year
2015-16
$
Forward estimates
2016-17
2017-18
2018-19
13,356,469
$
13,356,469
$
13,356,469
$
13,356,469
11,016,177
9,150,550
11,016,177
9,150,550
Balance = Y – X
-2,340,292
-4,205,919
-2,340,292
-4,205,919
Cumulative balance
-2,180,637
-6,386,556
-8,726,848
-12,932,767
Expenses = X
Revenue = Y
Explain materiala
variance
Explain balance
management strategy
A number of factors contribute to the budgeted financial results:
 Departmental overheads were not factored into the cost recovery
arrangements
 Shortcomings in the administration of the activities conducted
under the Act have been strengthened considerably
 The National Halon Bank currently operates at a considerable loss
The majority of licences and permits issued are of two year duration
which can skew the revenues and therefore accentuate annual balances
from year to year
Overheads are currently funded by the Department from annual
appropriations, with the balance of annual shortfalls (negative
balances) funded from special account balances pending the finalisation
and consideration by the Government of the OPSGGM Act review.
Following the current (2015) OPSGGM Act review, which is canvassing a
range of issues that will impact on both revenues and expenses, an
updated CRIS will be prepared to reflect the outcome of the review
with a view to achieving a balance between revenues and expenses.
Page 15 of 22
7A.
FINANCIAL PERFORMANCE
Table 4: Financial results 2010-11 to 2014-15
2010-11
$
2011-12
$
2012-13
$
2013-14
$
2014-15
(estimated
actual)
$
Expenses = X
3,799,248
8,208,385
13,781,939
9,977,237
11,214,997
Revenue = Y
2,469,141
11,387,360
9,554,550
12,837,902
10,892,508
-1,330,107
3,178,975
-4,227,389
2,860,665
-322,489
Balance = Y – X
Cumulative balance
Explain materiala
variance
Explain impact on
balance management
strategy
-1,330,107
1,848,868 -2,378,521
482,144
159,655
A number of factors have contributed to the financial results over the
five year period:
 Expenses have increased with increases in demand for cost
recovered servces
 Administration of the legislation was strengthened over the period,
particularly to manage the introduction and repeal of the
equivalent carbon price
 The majority of licences and permits issued are of two year
duration which can skewthe revenues and therefore accentuate
annual balances from year to year
The cumulative balance presented is for the reported financial years
only. Any deficit has and will be met from the balance of the Ozone
Protection and Synthetic Greenhouse Gas Special Account
a
As defined by AASB1031 and Division 12 – Materiality and Disclosure of the Finance Minister’s
Orders.
Page 16 of 22
7B.
NON-FINANCIAL PERFORMANCE
Outcome measures:
The import, export and manufacture licensing system has enabled Australian to comply with
its Montreal Protocol obligations to phase out ozone depleting substances and to have in
place a licensing and quota system. Australia’s obligations and outcomes are reported
annually to the United Nations Environment Program.
The end use permit scheme in the refrigeration and air conditioning and fire protection
industries has contributed to Australia meeting its Kyoto Protocol obligations by reducing
direct emissions of synthetic greenhouse gases and reduced indirect emissions from
electricity consumption by improving the energy performance of refrigeration and air
conditioning equipment. The Department of the Environment has commissioned a study to
calculate the emission reduction achieved through the end use schemes. This study will be
available in the second half of 2015.
Output Measures:
Outputs under this activity are generally not targets, rather a reflection of “demand” in
accordance with the requirements of the ozone legislation, for example:

Import licences required for the import of ozone depleting substances or synthetic
greenhouse gases

Quarterly reporting – compulsory reporting of imports 4 times per annum for all holders
of a current licence

Levy payments based on volumes of gases imported

Domestic licences required for handling or trading in ozone depleting substances or
synthetic greenhouse gases

Export refund are valid in relation to export of synthetic greenhouse gases which meet
the requirements of the Act and for which a licensee applies
Input Measures:
The Department is implementing a number of efficiencies related to import licensing
including the automation of assessment of the majority of quarterly reports and related
invoicing which will impact on resource level requirements. The department has also
included a number of other administrative and operational efficiency options in the for the
interim Act review report which will be released for public consultation in September 2015,
and these and the implications of other Act amendments will be taken into account in
determining resource reqirements when developing a new CRIS following consideration of
the Act review recommendations by Government.
Page 17 of 22
8.
KEY FORWARD DATES AND EVENTS
The key forward dates and events for the cost recovered activity are:

Forward estimates are next scheduled to be updated in December 2015

The Act Review Interim Report is due to be released for public consultation in
September 2015

The Act review report and recommendations are due to be provided to the Minister
for the Environment in November 2015, with consideration of the recommendations
and financial implications by the Government in early 2016. An updated CRIS will be
developed in response to the Government consideration.
Page 18 of 22
9.
CRIS APPROVAL AND CHANGE REGISTER
Date of CRIS
change
CRIS change
Approver
30/06/2015
Certification of the
CRIS
Department of the
Environment
30/06/2015
Agreement to the CRIS
Department of the
Environment
December 2015
Update of financial
estimates
Department of the
Environment
Basis for change
Implementation of new
cost recovery
implementation
statement template
Implementation of new
cost recovery
implementation
statement template
Changes in assumptions
(e.g. at Additional
Estimates)
Page 19 of 22
Attachment A
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Attachment B
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Attachment C
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