SCHEDULES
Consolidated Schedule of Revenues and Expenses by function (a)
for the year ended 30 June 2003
Note
REVENUES BY SOURCE
Taxation
Non-taxation
Total revenues
EXPENSE BY FUNCTION
General public services:
Legislative and executive affairs
Financial and fiscal affairs
Foreign economic aid
General research
General services
Government Superannuation Benefit
Defence
Public order and safety
Education
Health
Social security and w elfare
Housing and community amenities
Recreation and culture
Fuel and energy
Agriculture, forestry and fishing
Mining, manufacturing and construction
Transport and communication
Other economic affairs
Other purposes:
Public debt interest
General purpose inter-government transactions
Natural disaster relief
Asset sales
Total expenses
3(a)
3(b)
3(c)
3(d)
3(e)
Share of net profit /(loss) from associates and
joint ventures accounted for using the equity method
2003
$m
2002
$m
161,972
48,000
209,972
147,770
51,918
199,688
753
4,976
2,597
1,880
1,272
12,331
14,327
1,966
13,012
31,799
73,049
2,177
2,044
3,395
1,859
3,026
22,109
4,369
798
5,180
2,173
1,771
630
7,096
13,036
1,875
12,574
30,686
69,880
2,531
2,025
3,360
2,161
3,413
22,989
4,503
5,694
3,598
95
14
206,342
6,488
8,504
87
1,238
202,998
(946)
(65)
Net result
37
2,684
(3,375)
Net result attributable to outside equity interests
37
1,675
1,838
1,009
(5,213)
Net result attributable to the Australian Governm ent
49
Consolidated Schedule of Revenues and Expenses by function (a)
for the year ended 30 June 2003 (continued)
Note
Net credit (debit) to asset revaluation reserve
37
2003
$m
1,671
Net exchange difference on translation of financial report of
self-sustaining foreign operations
37
(93)
(13)
Other non-ow ner related movements in equity
37
(1,724)
175
(146)
1,792
Total revenues, expenses and valuation adjustm ents
attributable to the Australian Governm ent and recognised
directly in equity
2002
$m
1,630
Total changes in equity other than those resulting
from transactions w ith ow ners as ow ners
863
(3,421)
(a) The Consolidated Schedule of Revenues and Expenses by Function presents revenues and expenses
classified according to the International Monetary Fund’s (IMF’s) Government Finance Statistics (GFS)
framework. This schedule does not represent a Statement of Financial Performance in accordance with
AAS 1. This schedule is also not comparable to the Statement of Expenses by Function as detailed in
the Budget Strategy and Outlook 2003-04, Budget Paper No. 1 as it presents expenses on a AAS 31
basis inclusive of all Australian Government sectors.
The above schedule should be read in conjunction with the accompanying notes.
50
Schedule of Commitments
as at 30 June 2003
2003
$m
2002
$m
548
678
7,623
13
1,797
10,659
816
590
6,892
16
1,139
9,453
Other com m itm ents
Operating leases (non-cancellable)(a)
Project commitments
Research and development
Goods and services contracts
Grant commitments
Other commitments
Total other com m itm ents
10,936
3,084
790
10,594
69,637
9,458
104,499
9,142
3,801
745
8,635
38,928
10,670
71,921
Total com m itm ents
less Commitments receivable
Net com m itm ents
115,158
5,136
110,022
81,374
4,590
76,784
4,160
4,844
779
9,783
4,026
4,418
1,009
9,453
2,316
5,280
2,873
10,469
2,112
4,439
2,591
9,142
29,368
56,973
3,429
89,770
29,665
24,114
4,410
58,189
BY TYPE
Capital com m itm ents
Land and buildings
Infrastructure, plant and equipment
Specialist military equipment
Investments
Other capital commitments
Total capital com m itm ents
BY MATURITY
Capital
One year or less
From one to five years
Over five years
Operating leases (non-cancellable)
One year or less
From one to five years
Over five years
Other
One year or less
From one to five years
Over five years
Net com m itm ents by m aturity
110,022
76,784
Commitments are GST inclusive where relevant. The maturity schedules for capital commitments and
operating lease commitments are presented net of GST receivable. In the 2001-02 comparatives, GST
receivable on capital and operating lease commitments were netted against other commitments in the
maturity schedule.
The above schedule should be read in conjunction with the accompanying notes.
51
Commitments (continued)
(a)
Operating leases comprise
Nature of lease
General description of leasing arrangement
Leases for computer
equipment
Several agencies lease computer equipment and software.
Computer leases are generally for three to five years with an option to renew for
one to two further periods of two to three years each. In some cases there are no
renewal or purchase options available to the Agencies.
Leases are effectively non-cancellable.
No contingent rentals exist.
The equipment has on average a useful life of three years.
Leases for office
accommodation
Several agencies lease office accommodation from parties outside the Australian
Government.
Leases for office accommodation generally range from one to 15 years. They
may be extended for up to three to five years from the originally specified expiry
date. In some cases there are no renewal or purchase options available to the
Agencies.
Leases are effectively non-cancellable.
In most cases lease payments are subject to increases in accordance with terms
as negotiated under the lease (generally subject to annual increase in
accordance with upwards movements in the Consumer Price Index, a set annual
increase agreed to in the lease or an annual/ bi-annual review).
Agreements for the
provision of motor
vehicles
Several agencies lease motor vehicles as part of the senior executive officers
remuneration packages and also for general office use.
Vehicle leases are generally for a minimum period of three months and typically
extend two to four years. They may be extended for up to three months from the
originally specified expiry date. In some cases there are no renewal or purchase
options available to the Agencies.
Leases are effectively non-cancellable.
No contingent rentals exist.
Lease payments are fixed for the term of the lease.
Leases for office
equipment
Several agencies lease office equipment.
Office equipment leases are generally for three to five years. In some cases there
are no renewal or purchase options available to the Agencies.
Leases are effectively non-cancellable.
No contingent rentals exist.
In some cases there are additional costs based on usage of the equipment.
Leases for
transportation and
support facilities for
Antarctic operations
Lease payments are subject to increases in accordance with terms as negotiated
under the lease.
The transportation leases generally have options for renewal. Future options not
yet exercised are not included as commitments.
Leases are effectively non-cancellable and no contingent rentals exist.
52
Schedule of contingencies
as at 30 June 2003
Quantifiable contingent liabilities
Guarantees
Indemnities
Uncalled shares/Capital subscriptions
Claims for damages/costs
Other contingencies
Total quantifiable contingent liabilities
less Quantifiable contingent assets
Net quantifiable contingencies
2003
$m
2002
$m
2,241
493
8,184
292
11,210
2,640
479
9,652
271
48
13,090
434
296
10,776
12,794
NON-QUANTIFIABLE CONTINGENT LIABILITIES
Attorney General’s
The Australian Government has offered to assist the States and Territories in meeting
compensation costs associated with native title. The amounts that might be paid by the
Australian Government will be subject to the terms of financial assistance agreements
being negotiated with the States and Territories and liabilities arising from the 1998
amendments to the Native Title Act 1993. The Australian Government’s liability cannot
be quantified due to uncertainty about the number and effect of compensable acts,
both in the past and in the future, and the value of native title affected by those acts.
Similarly, it is not possible to quantify the liability for compensable acts for which the
Australian Government may be directly liable.
Communications, Information Technology and the Arts
Telstra is contingently liable to the extent that News Corporation or Sky Cable fails to
meet any of their obligations in relation to minimum subscriber payments for pay
television programming.
The PT Mitra Global Telekomunikasi Indonesia (MGTI) joint venture agreement (JVA)
was renegotiated during the financial year ending 30 June 2000. The revised JVA
reduced the amount of base equity to be contributed by shareholders, which has now
been contributed.
However, Telstra Global Limited (TGL), under the JVA, may be severally liable for
calls against standby equity that would be made by MGTI if certain conditions are met.
TGL has granted a limited recourse pledge over its shares in MGTI in support of
MGTI's obligations under at $716 million Loan Agreement dated 23 September 1996
between MGTI and various lenders. As a result of agreements with lenders reached in
September 1999 the facility is now limited to the debt drawn and outstanding.
53
NON-QUANTIFIABLE CONTINGENT LIABILITIES (CONTINUED)
The outstanding debt under this facility is currently $106 million. Repayments are
being made on schedule. The lenders have no recourse under the pledge to the assets
of TGL other than to its shares in MGTI (except in the case of a breach of
representation, warranty or covenant by TGL).
Defence
There have been 200 claims for damages made by former members of the crew
(of approximately 974) of the HMAS Melbourne arising out of the HMAS
Voyager/HMAS Melbourne collision of 10 February 1964. Further claims for damages
will probably continue to be made by former members of the crew of HMAS
Melbourne. It is not clear how many claims will be made. To date 80 claims have been
settled.
A number of claims for damages by dependents of deceased former members of the
HMAS Voyager have been foreshadowed in respect of the HMAS Voyager/ HMAS
Melbourne collision of 10 February 1964, but are not currently the subject of any legal
proceedings. It remains unclear how many further dependency claims may be made in
the future. These additional but currently unidentified dependency claims are
unquantifiable at this time.
One claim has also been made by a former member of the crew (complement of about
1300) of the HMAS Melbourne arising out of the HMAS Melbourne/USS Frank
E Evans collision of 3 June 1969. It remains unclear to what extent further claims might
be made in respect of that collision.
The RAAF Board of Inquiry, covering the desealing and resealing of the F-111 fuel
tanks at Amberley has identified health issues that may be the subject of future claims.
To complement the inquiry, a comprehensive health study is currently being
undertaken by the Department of Veterans' Affairs.
Education, Science and Training
Preliminary investigations by CSIRO Environmental Management Committee
identified a range of potential environmental risks associated with storage of low-level
radioactive waste at Woomera, South Australia, and low-level contamination of a
number of sites with hazardous waste substances. The costs associated with the clean
up of these sites have not been quantified.
54
NON-QUANTIFIABLE CONTINGENT LIABILITIES (CONTINUED)
Finance and Administration
Under contractual arrangements for transactional banking services entered into by
agencies covered by the Financial Management and Accountability Act 1997, the
Australian Government has indemnified private sector banks against loss and damage
arising out of acts or omissions by the Australian Government, including by error,
fraud, negligence or transactions made with the authority of the Australian
Government.
Foreign Affairs and Trade
The Australian Government has provided certain indemnities to Export Finance and
Insurance Corporation (EFIC) board members and senior management to protect
against civil claims relating to the implementation of EFIC's alliance/divestment of its
short-term export credit business.
Health and Ageing
A contingent liability exists in relation to the indemnity provided by the Australian
Government to the provisional liquidator of United Medical Protection Limited and
Australasian Medical Insurance Limited (UMP/AMIL). Details of the Indemnity are at
Note 1.78 to the financial statements.
Under certain conditions the Australian Government and the State and Territory
Governments jointly provide indemnity for the Australian Red Cross Blood Service
through a sharing arrangement for claims, both current and potential, regarding
personal injury and loss or damages suffered by a recipient of certain blood products.
Under existing arrangements, the Australian Government has indemnified the
Commonwealth Serum Laboratories Limited (CSL) for certain existing and potential
claims made for personal injury, loss or damage suffered through therapeutic and
diagnostic use of certain products manufactured by CSL.
Under certain conditions, the Australian Government has provided an indemnity for
the supply of smallpox vaccine by Aventis Pasteur Pty Limited and Aventis Pasteur
SA.
The Australian Government has provided an indemnity to a review of certain matters
in relation to the Australian Human Pituitary Hormone Program. The indemnity
provides certain specified members of the review the same level of indemnity as
Australian Government officers, for the purposes of the review.
55
NON-QUANTIFIABLE CONTINGENT LIABILITIES (CONTINUED)
Immigration and Multicultural and Indigenous Affairs
Earlier laws, policies and practices in relation to the Australian Government's
administration of the Northern Territory led to the separation of some indigenous
children from their families. There are currently over 2,000 plaintiffs with claims
pending against the Australian Government seeking unspecified damages for alleged
forcible and wrongful separation. One individual has chosen to progress their claim,
which is currently being prepared for trial.
Industry, Tourism and Resources
The Australian Government is liable under the UN Convention on International
Liability for Damage Caused by Space Objects for injury or damage to foreign
nationals arising from space launches from Australia. The Space Activities Act 1998
requires the launch operator to insure against liability up to a prescribed amount, with
the Department bearing any liability above this amount.
Transport and Regional Services
The Australian Government is party to ongoing funding agreements with the
Australian Capital Territory (assistance for water and sewerage, and compensation for
national capital influences). The future liabilities of these agreements cannot be reliably
measured.
In the normal course of operations, the Australian Government is responsible for the
provision of funds necessary to meet the clean up costs arising from ship sourced
marine pollution. In all circumstances, the Australian Government, through the
Australian Maritime Safety Authority, would make appropriate efforts to recover the
costs of any such incidents.
The Civil Aviation Safety Authority (CASA) and the Australian Government have
been named in a number of writs, which allege that CASA was negligent in not
making air travellers aware of the risks of deep vein thrombosis during long periods of
immobility.
56
NON-QUANTIFIABLE CONTINGENT LIABILITIES (CONTINUED)
Treasury
On 1 July 2003, the Australian Reinsurance Pool Corporation (ARPC) was created
under the Terrorism Insurance Act 2003. The ARPC was established to operate the
Government's terrorism risk insurance scheme. Payouts by the ARPC will come from
three sources. The Scheme provides for a pool of funds (initially planned to
accumulate to about $300 million) funded by reinsurance premiums. The pool will be
supplemented by a back-up bank line of credit of $1 billion, underwritten by the
Australian Government, as well as an Australian Government indemnity of $9 billion,
giving aggregate cover of up to $10.3 billion when the pool is fully funded. The ARPC
may recoup payouts under the scheme by increasing premiums for terrorism
insurance, and pass these funds onto the Australian Government. However, such
repayments to the Australian Government may take some years.
Various
The Australian Government is continuing its processing of claims for asbestos related
injuries for military and civilian personnel, including former waterside workers. After
obtaining independent actuarial advice, the Government has recognised a liability for
asbestos related disease (ARD) claims which was calculated net of apportionment and
cross-claims with other defendants. An additional amount of $0.1 billion has been
recognised to reflect the Australian Government’s potential liability for the third-party
share of ARD claims where the Australian Government is joint and severally liable as
required by AASB 1044, Provisions, Contingent Liabilities and Contingent Assets. This
amount is an estimate based on the information currently available on ARD claims,
however, the Australian Government liability in relation to other defendants’ share of
ARD claim costs may be less than or greater than this amount. As detailed below
under Non-quantifiable Contingent Assets, the Australian Government has not
recognised amounts recoverable from third parties as an asset as these amounts cannot
be reliably measured.
At any time various Australian Government entities are subject to, or are pursuing
claims and legal actions that are pending court or other processes.
A range of guarantees, indemnities and undertakings have been provided by
Australian Government entities in relation to various matters. Some of these
guarantees, indemnities and undertakings are unlimited.
57
NON-QUANTIFIABLE CONTINGENT LIABILITIES (CONTINUED)
From time to time, the Australian Government may have ownership of properties that
have a potential or possible environmental and associated concern. Where this is the
case further reviews may be undertaken to determine the extent, nature and estimated
costs of remediation, if required.
Various Australian Government entities have entered into finance and/or operating
leases for goods and/or services. On termination or expiry of the lease term these
entities may have an obligation to acquire assets from the lessor or comply with ‘make
good' provisions. It is not possible to estimate the amount of any eventual payment or
receipt in relation to these obligations.
In relation to the sale of Australian Government entities, the Australian Government
has indemnified the boards and/or acquirers of certain entities against certain claims
and costs arising from the sales of the entities.
NON-QUANTIFIABLE CONTINGENT ASSETS
Health and Ageing
If the provisional liquidator of UMP/AMIL enters UMP/AMIL into liquidation, the
enhanced UMP indemnity contribution applies. Levy revenue is enhanced under the
Medical Indemnity legislation, because the levy will recover the net asset deficiency of
UMP/AMIL at the time it entered provisional liquidation, not just the unfunded IBNR
liability. Details of the enhanced UMP indemnity contribution are provided at Note
1.78 of the financial statements.
Treasury
Under the Terrorism Insurance Act 2003, the Australian Government guarantees the
payment of liabilities incurred by the ARPC. The ARPC may recoup payouts under the
scheme by increasing premiums for terrorism insurance, and pass these funds on to
the Australian Government. However, such repayments to the Australian Government
may take some years and are unable to be quantified at this stage.
As beneficiary of the HIH Claims Support Trust, the Australian Government will be
entitled to the residual balance of the Trust, after the collection of recoveries and
making of payments to claimants. Due to the inherent uncertainty regarding the
measurement of the recoveries, it is not possible to quantify these amounts at this time.
58
NON-QUANTIFIABLE CONTINGENT ASSETS (CONTINUED)
Various
In relation to certain asbestos related disease claims, the Australian Government may
be required to seek recovery for the co-defendants share of the costs associated with
these future claims. As detailed under non-quantifiable contingent liabilities, the
Australian Government has recognised a liability of $0.1 billion for the co-defendant’s
share of these claims but the potential liability in relation to third-parties may be less
than or greater than this amount. The Australian Government has not recognised as an
asset the amounts that would be recoverable from the co-defendants as the asset
cannot be measured reliability, both in terms of the total amounts that would be
receivable and the extent to which these amounts could be successfully recovered.
At any time various Australian Government entities are subject to, or are pursuing
claims and legal actions that are pending court or other processes.
QUANTIFIABLE CONTINGENT LIABILITIES CONSIDERED REMOTE
Contingent liabilities/assets excluded from the schedule of contingencies on the
basis of remoteness
2003
$m
2002
$m
Rem ote contingent liabilities
Aviation War Risk Insurance(a):
1,500
27,236
Other
3,083
2,733
Total rem ote contingent liabilities
4,583
29,969
(a) Following terrorist attacks in the United States on 11 September 2001, regular insurance cover for claims
arising out of war and terrorism was withdrawn or significantly limited, placing global aviation operations
at risk. In common with other countries, the Australian Government has been providing temporary third
party war and terrorist risk indemnity cover to air operations, airports and other aviation service provides.
With the return of insurance coverage to the aviation sector, only one carrier remains indemnified under
the scheme and is indemnified for $US 1 billion. The value of this indemnity has been converted into
Australian dollars using the exchange rate at 30 Jun 2003.
59
NON-QUANTIFIABLE CONTINGENT LIABILITIES CONSIDERED REMOTE
Finance and Administration
In the course of selling various public assets, the Australian Government issues certain
warranties, undertakings and indemnities to facilitate the execution of the sales.
Indemnities have been issued to specific parties in relation to:

Sale of Catering Services;

Sale of Australian Airlines;

Australian Government shareholding in the Australian Submarine Corporation Pty
Limited;

Commonwealth Funds Management and Total Risk Management;

Sale of Australian Industry Development Corporation (AIDC) Limited;

Housing Loans Insurance Corporation (HLIC) and HLIC Limited;

Sale of the Australian National Rail Commission and National Rail Corporation
Limited;

Sale of Lease of Federal Airports Corporation (FAC) Airports;

Commonwealth Bank of Australia Public Share Offers;

Partial Sale of Telstra Corporation – 1st Tranche;

Partial Sale of Telstra Corporation – 2nd Tranche;

Australian Multimedia Enterprise;

National Transmission Network;

Privatisation of Wool International;

Essendon Airport Limited Privatisation Process; and

Sale of Sydney Airport Corporation Limited.
Indemnities by the Australian Government have been provided to Employment
National board members to protect against civil claims relating to their employment
and conduct as directors. These indemnities are unquantifiable and no expiry date has
been set.
60
NON-QUANTIFIABLE CONTINGENT LIABILITIES CONSIDERED REMOTE
(CONTINUED)
An Australian Government letter of comfort has been provided to Employment
National to protect the Government's investment in Employment National during the
company's restructuring. The letter of comfort indicates continuing financial support
for the company. The Australian Government's exposure under these arrangements is
unquantifiable
The Australian Government has indemnified the ComLand Group in the event that the
Group incurs certain land remediation expenses where the need for such remediation
expenses was not identified when the land was transferred to ComLand.
On 20 October 2000, the Australian Government entered into a Deed of Confidentiality
with the NSW Government in relation to the sale of NRC and Freight Rail Corporation
(FreightCorp). Under this Deed, the Australian Government indemnified the NSW
Government and FreightCorp in relation to any damages sustained by NRC and/or
FreightCorp arising as a result of a breach of the Deed by the Australian Government.
The Australian Government has indemnified the members of the Board of the
Australian Submarine Corporation Pty Limited for any claim associated with the
provision of information to the Electric Boat Corporation of the United States. Certain
information is to be provided to the Electric Boat Corporation under a process
agreement between it, the Australian Government and the Australian Submarine
Corporation.
The Australian Government has indemnified the members of the board and
management of the Australian River Co Limited (ARCo), in the event of ARCo ceasing
to exist, against civil claims relating to employment and conduct as directors and
management of ARCo and its subsidiary companies.
Indemnities have been issued to Commissioners of the Health Insurance Commission
(HIC) against claims made in connection with HIC's participation in the
IT Outsourcing Initiative.
On 6 June 2003 proceedings were commenced against the Australian Government in
the Federal Court by the Phoenix Aero club and others, relating to the intended sale of
the Australian Government's shareholding in Bankstown Airport Limited, Camden
Airport Limited and Hoxton Park Airport Limited and the freehold title to the Hoxton
Park Airport site.
The Lucas Heights (NSW) industrial waste collection site was operated independently
and used as a solid and liquid waste repository for the Sydney region from 1969 to
1980. The NSW Environment Protection Authority is currently in discussions with an
identified polluter to address contamination issues. There may be a risk to the
Australian Government by virtue of the site being Australian Government owned.
61
NON-QUANTIFIABLE CONTINGENT LIABILITIES CONSIDERED REMOTE
(CONTINUED)
Defence
The Australian Government, through the Department of Defence, carries an extensive
range of guarantees, indemnities and undertakings, normally of a short-term nature,
relating to business, training activities and other arrangements involving contracts,
agreements and other Defence activities. Indemnities issued cover potential losses or
damages for which the Australian Government would not be liable without the
indemnity. There are many uncapped indemnities that are incorporated into major
acquisition projects.
Health and Ageing
The Australian Competition and Consumer Commission (ACCC) commenced an
action in October 2000 against Medibank Private in the Federal Court of Australia
alleging breaches of the Australian Securities and Investments Commission Act arising
from two advertising campaigns. Medibank Private is also defending an action
alleging defamation and a breach of the Trade Practices Act in relation to a publication
on Medibank Private's website. These actions are still in progress and it is currently not
possible to predict an outcome in these matters. Consequently, no liability has been
recognised in the financial statements in relation to these actions.
Industry, Tourism and Resources
The Australian Government has agreed to indemnify the non-Government
representatives on the Australian Buildings Codes Boards (ABCB) against any claims
arising out of their activities, including past activities, conducted by them on behalf of
the ABCB in accordance with an agreement between the Australian Government and
the States.
The Australian Government has agreed to a deed whereby the Australian
Government's right to recover loans totalling $39 million to Australian Leather
Holdings Limited and Howe and Co Pty Limited takes second priority to a first
mortgage lender.
The Australian Government has, together with the co-shareholder Governments of
New South Wales and Victoria, indemnified the members of the Board of Snowy
Hydro Limited (SHL) for liabilities arising from entering into agreements to implement
corporatisation of the Snowy Mountains Hydro-Electric Scheme, and from liabilities to
SHL at corporatisation. The indemnity will apply to liabilities arising within five years
of corporatisation, and for which a claim is notified to the Governments within
11 years of the corporatisation date of 28 June 2002.
62
NON-QUANTIFIABLE CONTINGENT LIABILITIES CONSIDERED REMOTE
(CONTINUED)
The Australian, New South Wales and Victorian Governments have indemnified SHL
for liabilities arising from water releases in the Snowy River below Jindabyne Dam,
where these releases are in accordance with the water licence and related regulatory
arrangements agreed between the three Governments. The indemnity will apply to
liabilities for which a claim is notified within 20 years from 28 June 2002.
The Australian, New South Wales and Victorian Governments will provide financial
support to SHL, if this is necessary, to avoid the company breaching its loan covenants
to fund the cost of civil works required to address a cold water pollution offence.
The undertaking applies for seven years from 28 June 2002.
Transport and Regional Services
Tripartite Deeds apply to the 12 Core Regulated Airports (Sydney, Melbourne,
Brisbane, Perth, Canberra, Coolangatta, Townsville, Adelaide, Hobart, Launceston,
Darwin and Alice Springs). The Tripartite Deeds between the Australian Government
airport lessees and lessees' financiers provide for limited step-in rights for the
financiers in circumstances where the airport lease is terminated. Assuming the
financiers' step in rights are not triggered, the potential liability of the Australian
Government can vary under the Tripartite Deed, depending on whether the airport
lease is able to be sold on to a third party or not.
The Australian Government's potential liability to the lessee's financiers is limited to
the value received for the affected airport lease or the valuation of the airport site.
Where the Australian Government is able to sell on the airport lease, secured financiers
have a limited ability to recover their loans from funds obtained by the Australian
Government from selling on the airport lease, subject to higher ranking claims being
met first. Where the airport lease is not sold on, the Australian Government is required
to obtain a valuation of the airport site that will determine the limit for a repayment (or
partial repayment) of financiers' loans, again subject to higher ranking claims being
met. If the Australian Government enters into possession of an airport site, it would
seek to recover its costs from a number of sources, including airport revenues and the
airport lessee company, in addition to funds obtained from selling on the airport lease.
Indemnities for Maritime Industry Finance Company (MIFCo) board members have
been provided to protect against civil claims relating to employment and conduct as
directors of MIFCo. These indemnities are unquantifiable and no expiry date has been
set. As at 30 June 2003, no claims have been made.
63
NON-QUANTIFIABLE CONTINGENT LIABILITIES CONSIDERED REMOTE
(CONTINUED)
Indemnities for Stevedoring Industry Finance Committee (SIFC) members have been
provided to protect against civil claims relating to employment and conduct as
committee members of SIFC. These indemnities are unquantifiable and no expiry date
has been set. As at 30 June 2003, no claims have been made.
The Australian Government jointly indemnifies, with other shareholders of the
corporation, the directors of the National Rail Corporation (NRC) Limited against
claims and legal costs as a consequence of actions that relate to the sale of NRC.
Various
At any time various Australian Government entities are subject to, or are pursuing,
claims and legal actions that are pending court or other processes.
A range of guarantees, indemnities and undertakings have been provided by
Australian Government entities in relation to various matters other than those
described above. Some of these guarantees, indemnities and undertakings are
unlimited.
64