DIMIA Annual Report 2004-05
Outcome 4-Administered items
ABORIGINALS BENEFIT ACCOUNT (ABA)
Figure 86: Performance information-ABA (March-June 2005)
Figure 86: continued
Objective
The Aboriginals Benefit Account (ABA) is established by Part VI of the Aboriginal Land Rights (Northern Territory) Act 1976 (ALR Act). Its major functions are:
- to receive the equivalent of mining royalty moneys derived from mining operations on Aboriginal land in the Northern Territory, and such other income as outlined in section 63 of the ALR Act
- to make payments under section 64 of the ALR Act
- to Aboriginal land councils in the Northern Territory in the proportions determined by the Minister for Immigration and Multicultural and Indigenous Affairs (the Minister) to meet their administrative costs
- to Aboriginal land councils for distribution to incorporated Aboriginal associations, communities or groups in order to benefit those Aboriginal people who are affected by mining operations
- for the benefit of Aboriginals living in the Northern Territory. In this regard, the Minister is advised by an Advisory Committee
- as directed by the Minister, in accordance with the provisions of section 64 of the ALR Act.
Description
The ABA is a Special Account of the Commonwealth administered for the purposes of the Financial Management and Accountability Act 1997 (FMA Act).
During the year under review, the ABA was administered by ATSIC until its abolition on 24 March 2005, when the account transferred to the OIPC within the department. The ABA Secretariat is located within OIPC's Northern Territory State Office. As required by section 64B of the ALR Act, the ABA tables in Parliament a separate annual report for 2004-05 together with audited financial statements. This report will contain performance information for all measures for the full financial year. Following is a summary report for the period of the department's administration: 24 March 2005 to 30 June 2005.
The ABA maintains an output costing system that aligns with the measures listed in the performance figure above (first column). The price of administering each output/ measure is derived from an activity-based costing system where the apportionment of subsection 64(6) of the ALR Act direct and indirect costs across ABA outputs/ measures is based on various cost drivers, including the time officers spend on activities under each output/measure.
Analysis of performance
ABA income
Royalty equivalent income during the period was $3 261 784 derived from non-uranium mining operations on Aboriginal land in the Northern Territory.
Resources received free of charge by the ABA Secretariat were as follows:
| OIPC/DIMIA: | $ |
|---|---|
| Office rent/office services | 14 505 |
| Information technology | 7 302 |
| Staff salaries and related costs | 139 519 |
| Superannuation | 26 259 |
| ANAO: | |
| Audit fees | 1 500 |
| Total resources free of charge | 189 085 |
Interest earned on ABA investments was:
| $ | |
|---|---|
| Bills of exchange | 423 584 |
| Interest bearing deposits | 1 279 062 |
| Floating rate notes | 11 900 |
| Fixed bonds | 20 959 |
| 11 am call | 73 557 |
| Total interest | 1 809 062 |
ABA expenditure
Statutory payments
Statutory expenditure disaggregated by land council was:
| Subsection 64(1) | Subsection 64(3) | |
|---|---|---|
| Northern Land Council | 720 202 | 550 665 |
| Mining Withholding Tax (MWT) | 30 008 | 22 944 |
| Sub-total Northern Land Council | 750 210 | 573 609 |
| Central Land Council | 438 384 | 388 729 |
| MWT | 18 267 | 16 198 |
| Sub-total Central Land Council | 456 651 | 404 927 |
| Tiwi Land Council | 62 626 | - |
| MWT | 2 609 | - |
| Sub-total Tiwi Land Council | 65 235 | - |
| Anindilyakwa Land Council | 31 313 | - |
| MWT | 1 305 | - |
| Sub-total Anindilyakwa Land Council | 32 618 | - |
| Total subsection 64(1) and 64(3) | 1 304 714 | 978 536 |
Discretionary payments: Subsection 64(4)
In late 2004, the government committed to making up to $50 million available from the ABA, under subsection 64(4) of the ALR Act, for a Regional Economic Development Strategy designed to improve the economic situation of Indigenous people in the Northern Territory. Implementation of the strategy has advanced, with a number of funding proposals received. The necessary viability assessments and due diligence reviews of these proposals were progressed during the year, as a precursor to Ministerial consideration.
Subsection 64(4) expenditure for 24 March to 30 June 2005 shows a negative figure of ($92 307) which is attributed to the write back of surplus grant funds and a change in the calculation of Mining Withholding Tax obligations on grant liabilities as at 30 June 2005.
Subsection 64(6) expenditure was:
| Staff: | $ |
|---|---|
| -Salaries and related expenses | 133 820 |
| -Superannuation | 26 259 |
| -Workers compensation premiums | 5 699 |
| 165 778 | |
| ABA Advisory Committee members: | |
| -Sitting fees | 3 297 |
| -Superannuation | 296 |
| Total employee expenses | 169 371 |
| Total supplier expenses | 195 692 |
The supplier expenses figure of $195 692 includes expenditure of $115 222 for consultancies. Of this, $65 492 relates to viability assessments and due diligence reviews on funding proposals received and $49 300 on evaluations of land council estimates of expenditure and related administration matters.
Advocacy: ABA Advisory Committee
Twenty-two funding proposals (totalling $74 147 673) were tabled at the ABA Advisory Committee meeting on 19 May 2005. Of these, 12 applications totalling $25 314 250 were supported by the ABA Advisory Committee. The remaining ten were deferred for consideration at a future meeting.
At the time of this report, the above applications had not been considered by the Minister.
Ministerial services
A significant proportion of the costs allocated for administering this measure relate to various reviews by consultants on land council estimates of expenditure and administration matters. Fifty per cent of such costs (totalling $24 606) are allocated to this measure as the outcomes of the reviews are required for Ministerial briefings.
ABA equity level and investment
Equity level
The ABA's equity level grew by $2 710 027 mainly due to the receipt of royalty equivalents of $3 261 784 and interest income of $1 809 062. Significant expenditure during the period related to statutory expenditure of $2 283 250 under subsections 64(1) and 64(3) of the ALR Act.
Investments
An audit conducted by the Australian National Audit Office (ANAO) of the Investment of Public Monies in 2003-04 identified that the ABA held, at 30 June 2004, investments that did not meet the definition of an 'authorised investment' under section 39 of the FMA Act. As a consequence, the ABA sold its floating rate note and fixed bond investments. A decision was also made to sell a capital indexed bond. A net loss of $36 650 was realised for the period covered in this report; however, over the entire 2004-05 year, a gain of $564 486 was realised on investments sold.
At 30 June 2005, the ABA Investment Portfolio comprised:
| Liquid Fund | $ |
|---|---|
| 11 am call account | 1 275 000 |
| Interest bearing deposits | 34 300 846 |
| Bills of exchange | 6 700 000 |
| Subtotal | 42 275 846 |
| Growth Fund | |
| Bills of exchange | 22 970 000 |
| Interest bearing deposits | 50 855 198 |
| Subtotal | 73 825 198 |
| Balance of Invested Funds at 30 June | 116 101 044 |
Liquid Fund investments are utilised for cash-flow purposes, whereas the Growth Fund comprises longer term investments. Independent professional advice is sought on the portfolio's return and performance for each financial year against appropriate benchmarks. This performance information is provided in the ABA 2004-05 annual report.
Outcome 4-Administered items
ABORIGINAL AND TORRES STRAIT ISLANDER LAND FUND
Figure 87: Performance information-Aboriginal and Torres Strait Islander Land Fund
A full report, as required by section 193I of the Aboriginal and Torres Strait Islander Act 2005, follow on the next page. This report is accompanied by audited financial statements.