SCHEDULES
Consolidated schedule of revenues and expenses by function(a)
for the year ended 30 June 2001
Note
REVENUES BY SOURCE
Taxation
Non-taxation
Total revenues
EXPENSE BY FUNCTION
2001
$m
2000 (b)
$m
150,299
47,934
198,233
150,749
57,362
208,111
713
4,873
2,077
1,617
866
7,086
11,293
1,574
11,373
27,115
68,329
2,029
2,012
2,781
2,145
2,716
23,446
2,440
655
4,510
1,979
1,485
668
7,215
9,823
1,116
11,010
25,316
57,028
2,330
1,480
1,829
2,130
1,354
21,209
3,998
9,548
5,809
92
36
189,970
7,561
19,195
100
2,072
184,063
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 welfare
Housing and community amenities
Recreation and culture
Fuel and energy
Agriculture, forestry and fishing
Mining, manufacturing and construction
Transport and communication
Other economic affairs
3(a)
3(b)
3(c)
3(d)
Other purposes:
Public debt interest
General purpose inter-government transactions
Natural disaster relief
Asset sales
Total expenses
3(e)
Share of net profit /(loss) from associates and joint
ventures accounted for using the equity method
(171)
n/a
Net operating result from ordinary activities
8,092
24,048
Net profit (loss) from extraordinary items
Net operating result
37
Operating result attributable to outside equity interests
37
-
-
8,092
24,048
2,028
2,475
Operating result attributable to the Commonwealth
6,064
21,573
Net credit (debit) to asset revaluation reserve
2,376
2,947
Net exchange difference on translation of financial report of
self-sustaining foreign operations
16
2
Other non-owner related movements in equity
2,760
(2,053)
Total revenues, expenses and valuation adjustments
recognised directly in equity
5,152
896
11,216
22,469
Total changes in equity other than those resulting
from transactions with owners as owners
The above schedule should be read in conjunction with the accompanying notes.
(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. The Consolidated Statement of Financial Performance is provided
at page 30. This schedule is also not comparable to the Statement of Expenses by Function as detailed in the Budget Strategy and
Outlook 2001-02 as it is presents expenses on a AAS 31 basis inclusive of all Commonwealth sectors.
(b) The comparatives differ from the 1999-2000 Consolidated Schedule of Revenues and Expenses by Function due to a change in the
disclosure of asset sales and items previously considered ‘abnormal’ in line with amendments to the Australian Accounting
Standards.
35
Schedule of commitments
as at 30 June 2001
2001
$m
2000
$m
427
570
6,887
1
893
8,778
680
873
5,522
40
1,251
8,366
Other commitments
Operating leases (non-cancellable)
Project commitments
Research and development
Goods and services contracts
Grant commitments
Other commitments
Total other commitments
8,844
6,518
423
8,748
45,766
5,947
76,246
8,772
3,518
31
9,580
40,297
4,410
66,608
Total commitments
less Commitments receivable
Net commitments
85,024
2,615
82,409
74,974
2,372
72,602
2,281
5,711
786
8,778
3,202
4,537
627
8,366
1,938
4,595
2,311
8,844
1,959
4,843
1,970
8,772
26,335
36,708
1,744
64,787
82,409
22,839
29,672
2,953
55,464
72,602
2001
$m
2000
$m
2,710
1,543
10,697
185
94
15,229
2,079
52
8,944
240
226
11,541
47
19
15,182
11,522
BY TYPE
Capital commitments
Land and buildings
Infrastructure, plant and equipment
Specialist military equipment
Investments
Other capital commitments
Total capital commitments
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 commitments by maturity
Commitments do not incorporate the effects of GST.
The above schedule should be read in conjunction with the accompanying notes.
Schedule of contingencies
as at 30 June 2001
Quantifiable contingent losses
Guarantees
Indemnities
Uncalled shares/Capital subscriptions
Claims for damages/costs
Other contingencies
Total quantifiable contingent losses
less Quantifiable contingent gains
Net quantifiable contingencies
36
Non-quantifiable contingent losses
Communications, Information Technology and the Arts
Telstra is contingently liable to the extent that News Corporation or Sky Cable fail to
meet any of their obligations in relation to minimum subscriber payments for
pay-television programming.
The P.T. Mitra Global Telekomunikasi Indonesia (MGTI) joint venture agreement (JVA)
including Telstra was renegotiated during the financial year ending 30 June 2000
reducing the amount of base equity to be contributed by shareholders (which has now
been contributed).
However, Telstra Global Limited (TGL), a subsidiary of Telstra, may be severally liable
under the JVA for calls against standby equity that would be made by MGTI if certain
conditions are met. TGL has a limited recourse pledge over its shares in MGTI in
support of MGTI's obligations under a $945 million Loan Agreement dated
23 September 1996 between MGTI and various lenders. As a result of new agreements
with lenders reached in September 1999 the facility is now limited to the debt drawn
and outstanding. The outstanding debt under this facility is currently $214 million.
Repayments are being made on schedule. The lenders have no recourse under the
pledge to the assets of Telstra Global Limited other than to its share in MGTI (except in
the case of a breach of representation, warranty or covenant by TGL).
Defence
One hundred and thirty eight claims for damages have been made by former members
of the crew (of approximately 954) of the HMAS Melbourne arising out of the
HMAS Voyager/HMAS Melbourne collision of 10 February 1964. It is unclear whether
any further claims for damages will be made by any of the remaining former members
of crew of the HMAS Melbourne. A number of claims for damages by dependents of
deceased former members of the crew of the HMAS Voyager have also been
foreshadowed but are not currently the subject of any legal proceedings.
One claim for damages has been made by a former member of the crew (and
complement of about 1,300) 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.
During 2000-01 the RAAF established a Board of Inquiry (BOI) into the desealing and
resealing of F-111 fuel tanks at Amberley, in particular focusing on health issues. The
BOI met with a number of witnesses and participants of the activities and have
prepared a report. The report has been sent to the Chief of Air Force for review and will
be released in the near future following consideration by the Government. To
complement the BOI report, the Department of Veteran's Affairs (DVA) has
commenced a comprehensive health study. Participation in the health study is on a
voluntary basis and is expected to take two years to complete. The outcome of the
health study may result in claims for compensation.
37
Non-quantifiable contingent losses (continued)
In April 2001, the Federal Court of Australia dismissed an action brought by Kockums
to seek an injunction to prevent the Commonwealth of Australia (represented by the
Department of Defence) delivering a submarine propeller to the United States for
modification. In broad terms, Kockums argued that the proposed action by the
Commonwealth of Australia would infringe intellectual property rights (copyright and
confidential information) in the design of the propellers. Kockums has appealed the
decision to the full Federal Court of Australia. The appeal is yet to be heard and
accordingly cannot be quantified.
Environment and Heritage
The Government has indicated its intention to incorporate certain areas into a National
Park and to address the question of compensation for acquisitions. The amount of
compensation to be paid has not been determined.
Finance and Administration
The Commonwealth has indemnified the Reserve Bank of Australia against loss and
damage arising from the acceptance of Commonwealth cheques bearing a facsimile
signature having been impressed thereon without the authority of the Commonwealth
and other aspects of banking services provided by the Bank.
Under contractual arrangements for transactional banking services entered into by
agencies covered by the Financial Management and Accountability Act 1997, the
Commonwealth has indemnified the RBA and private sector banks against loss and
damage arising out of acts or omissions by the Commonwealth, including by error,
fraud, negligence or transactions made without the authority of the Commonwealth.
No provision is made for Senators and Members who have acquired the right to post
retirement benefits. There is no mandatory retirement age for Senators and Members
and as such, no reliable measurement is possible. A provision is made for
superannuation benefits for Senators and Members.
Health and Aged Care
Under certain conditions the Commonwealth and the State/Territories jointly provide
an indemnity for the Australian Red Cross Blood Service through a cost sharing
arrangement for claims, both current and potential, regarding personal injury and loss
or damages suffered by a recipient of certain blood products.
The ACCC has commenced an action against Medibank Private in the Federal Court of
Australia alleging breaches of the Australian Securities and Investment Commission
Act arising from two advertising campaigns.
38
Non-quantifiable contingent losses (continued)
Industry, Science and Resources
Preliminary investigation by the Commonwealth Scientific and Industrial Research
Organisation (CSIRO) Environmental Management Committee identifies 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
asbestos or other hazardous substances.
The Snowy Mountain Hydro Electric Authority has been named as a defendant in
litigation in connection with the matters arising from the landslide tragedy which
occurred at the Thredbo Alpine Resort in 1997. The Authority has not accepted any
liability arising from that event and intends to defend this matter should it proceed to
court.
Transport and Regional Services
The Stevedoring Industry Finance Committee faces an uncertain number of claims for
asbestos related damage. These claims were inherited from the Australian Stevedoring
Industry Authority. Costs that may arise from these claims can not be determined and
are therefore unquantifiable. The number of claims likely to be made in the future is
also unknown.
The Commonwealth is party to ongoing funding agreements with the ACT (assistance
for water and sewerage, and compensation for national capital influences). The future
liabilities of these agreements cannot be reliably measured.
The Commonwealth is contingently liable to debtors of the Federal Airports
Corporation who are challenging the validity of network charges made under the
Federal Airports Corporation Act 1986. If the network charging approach is found to be
invalid, this raises the prospect of further claims from other airport users who have
previously paid network-based charges to the Corporation. There is no basis for
quantifying potential claims.
As a result of the wind-up of the Australian National Railways Commission, all
associated contracts, assets and liabilities become the responsibility of the
Commonwealth. At this stage, it is not possible to quantify liabilities as they include
uncertain processes and ex-employee claims (including asbestos-related claims).
In the normal course of operations, the Commonwealth is responsible for the provision
of funds necessary to meet the clean up costs arising from ship sourced marine
pollution. In all circumstances, the Commonwealth, through the Australian Maritime
Safety Authority, would make appropriate efforts to recover the costs of any such
incidents.
39
Non-quantifiable contingent losses (continued)
Reconciliation and Aboriginal and Torres Strait Islander Affairs
A substantial damages claim was brought by the developers of a marina associated
with the proposed Hindmarsh Island Bridge against the Commonwealth and other
parties who were involved in the decision to ban construction of the bridge. The
plaintiffs claimed damages of approximately $18 million. This claim was rejected by the
Federal Court on 21 August 2001. The judgement has been appealed to the Full Bench
of the Federal Court.
Earlier laws, policies and practices in relation to the Commonwealth's administration of
the Northern Territory led to the separation of certain indigenous children from their
families. There are currently over 2,100 plaintiffs with claims pending against the
Commonwealth for (largely unspecified) damages in relation to alleged forcible and
wrongful separations (mostly by the children of those allegedly forcibly and
wrongfully removed). Only two of these claims have so far proceeded to hearing.
These were dismissed by the Federal Court in Darwin in August 2000. An appeal to the
Full Bench of the Federal Court was dismissed in August 2001. There may be a further
appeal to the High Court.
Various
At any time various Commonwealth entities are subject to claims and legal actions
which are pending court or other processes.
A range of guarantees, indemnities and undertakings have been provided by
Commonwealth entities in relation to various matters.
Non-quantifiable contingent gains
Treasury
As the Beneficiary of the HIH Claims Support Trust, the Commonwealth will be
entitled to the residual balance of the Trust, after the collection of recoveries and
making 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.
Various
At any time various Commonwealth entities are pursuing claims and legal actions
which are pending court or other processes.
40
Quantifiable contingent losses considered remote
2001
$m
2000
$m
142
300
2,716
3,158
153
300
7,292
7,745
CONTINGENCIES EXCLUDED FROM THE
SCHEDULE OF CONTINGENCIES ON THE BASIS
OF REMOTENESS
Remote contingent losses
Northern Territory Government
Indemnity over Optus Communications
Other
Total remote contingent losses
Non-quantifiable contingent losses considered remote
Finance and Administration
In the course of selling various public assets, the Commonwealth issues certain
warranties, undertakings and indemnities to facilitate the execution of sales.
Indemnities have been issued to specified parties in relation to:

Sale of Australian Industry Development Corporation (AIDC) Limited;

Commonwealth Funds Management (CFM) and Total Risk Management (TRM);

Housing Loan Insurance Corporation (HLIC) and HLIC Ltd;

Sale of Australian National Rail Commission and National Rail Corporation Ltd;

Sale of Australian River Co. Ltd (formerly ANL Limited);

Sale of lease of Federal Airport Corporation (FAC) Airports;

Commonwealth Bank Public Share Offer;

Partial Sale of Telstra Corporation — 1st Tranche;

Partial Sale of Telstra Corporation — 2nd Tranche;

Essendon Airport Privatisation Process (EAL);

Sale of Sydney Airport Corporation Limited (SACL);

Australian Multimedia Enterprise;

National Transmission Network;

Privatisation of Wool International;
41
Non-quantifiable contingent losses considered remote (continued)

Commonwealth shareholding in the Australian Submarine Corporation Pty Ltd;

Sale of Catering Services; and

Sale of Australian Airlines.
These indemnities are considered to be remote.
Payments are made to State Governments under specific criteria relating to costs
incurred by the State Governments following natural disasters. The actual level of
payments under this scheme would depend on the incidence and severity of natural
disasters and thus may not be quantified at this stage.
Payments are made by the Commonwealth Government to State Governments under
specific criteria relating to the building of Disaster Memorials. The expenditure is
contingent upon any commitment the Commonwealth Government may make in
response to a disaster.
Indemnities by the Commonwealth have been provided to Employment National (EN)
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.
A Commonwealth letter of comfort has been provided to EN to protect the
Government’s investment in EN during the company’s restructuring. The letter of
comfort indicates continuing financial support for the company. The Commonwealth’s
exposure under these arrangements is unquantifiable.
Health and Aged Care
Under existing agreements, the Commonwealth has indemnified Commonwealth
Serum Laboratories (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.
The Commonwealth has indemnified CSL for damages made against it by one of its
employees prior to its public float on 1 January 1994, in respect of an asbestos related
work injury.
Industry, Science and Resources
The Commonwealth has indemnified contractors, employees and agents arising as a
result of ionising radiation from clean up work undertaken at the Maralinga site.
The Commonwealth has agreed to indemnify ANSTO and its officers for claims against
them for injury or damage caused by ionising radiation.
42
Non-quantifiable contingent losses considered remote (continued)
The Commonwealth is defending common law actions in connection with the British
Nuclear Tests Program.
The Commonwealth is liable under the United Nations (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 a liability up to a prescribed
amount, with the Department bearing any liability above this amount.
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 Commonwealth airport
lessees and lessees’ financiers provide for the Commonwealth to usurp control as
airport operator in defined circumstances. The deeds also provide protection to secured
financiers where a lease termination event occurs.
The potential liability of the Commonwealth would vary considerably with the specific
factors leading to a lease termination. If the Commonwealth entered into possession of
an airport site it could seek to recover its costs from a number of sources including
airport revenues, the Airport lessee company and potentially, from the financiers
themselves.
Where the Commonwealth takes action to terminate the Airport lease, secured
financiers can recover their loans from funds obtained by the Commonwealth from
reselling the airport lease. If not resold, the Commonwealth and the financiers are to
obtain a valuation of the airport lease that will set the basis for a repayment of
financier’s loans by the Commonwealth.
Indemnities for Maritime Industry Finance Committee (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. The Commonwealth has also provided a guarantee to cover borrowings made by
the Maritime Industry Finance Committee to finance redundancy related payments in
the stevedoring and maritime industries.
Under an Inter-Governmental Agreement on Rail Operational Uniformity, an advisory
committee has been formed to provide advice to the Australian Rail Operations Unit on
all aspects of the development and implementation of uniform operational codes for the
defined interstate rail network. The Commonwealth indemnifies members of the
Advisory Committee as if they were Commonwealth employees. It is not possible to
quantify the liability risk.
43
Non-quantifiable contingent losses considered remote (continued)
Treasury
In relation to the Commonwealth Bank of Australia, the Commonwealth Bank of
Australia Officers' Superannuation Fund and the Commonwealth Development Bank,
the Commonwealth guarantees all moneys that are, or may at any time become,
payable to a person other than the Commonwealth. Such guarantee will be
progressively phased out following the government sell-down on 19 July 1996. At the
finalisation of the statements this figure was not reliably measurable.
The HLIC was sold by the Commonwealth on 12 December 1997 and all residual
contingencies have been assumed by the Commonwealth. The principal amount
covered by the guarantee and the balances outstanding are unable to be reliably
measured. The guarantee relates essentially to the Housing Loans Insurance
Corporation's (HLIC) contracts of mortgage insurance and any borrowings approved
by the Treasurer up to the time of sale. At the finalisation of the statements this figure
was not reliably measurable.
Various
At any time various Commonwealth entities are subject to, or are pursuing claims and
legal actions which are pending court or other processes.
A range of guarantees, indemnities and undertakings have been provided by
Commonwealth entities in relation to various matters.
44