Summary of financial performance

The department’s budget remained steady during 2008–09 despite the impacts of the global economic crisis. Falls in activity levels for border security (airport arrivals) and some visa processes were offset by increased numbers of irregular maritime arrivals.

A new funding model was approved by government and took effect from 1 July 2008. The new funding model is price based. The new model has a fixed and variable component, with variable funding adjusted to reflect actual movements in workload in line with movements in the department’s key workload drivers (that is, visa finalisations, citizenship decisions and border movements).

The variable component comprises fixed unit prices and estimated activity levels that are adjusted, within the financial year, through the Additional Estimates process and reconciled with the Department of Finance and Deregulation at the end of the financial year. The fixed funding element and unit prices are adjusted each year by the Wage Cost Index less the Efficiency Dividend.

The funding model also includes funding for some prescribed activities under a no-win no-loss arrangement (such as status resolution and irregular people movements). The cost of these items are fully reconciled as part of the end of year reconciliation process.

The increase in irregular maritime arrivals late in the year had a significant impact on expenditure as did the government’s New Directions in Detention policy which caused a large increase in the amount of reviews conducted in relation to the status resolution of persons without immigration status.

Other business factors that impacted on the department’s financial outcome are as follows:

  • The increased expenditure in Output group 1.1 Migration and temporary entry was caused by preparations for expected activity levels which did not eventuate due to the global economic crisis. The reduced activity level consequentially lowered the revenue received by the department.
  • Activity levels for Output group 2.3 Australian citizenship were above expectation resulting in increased revenue. Notwithstanding this increase in activity, efficiencies in processing were made causing a decrease in expenditure.

The financial statements show an operating loss of $47.6 million for the 2008–09 financial year, compared to a real operating loss of $5.2 million ($34.4 million less handback of $39.6 million) in 2007–08.

The main factors contributing to the 2008–09 operating loss were:

  • foreign exchange losses due to the weakening Australian dollar
  • increase in the provision of employee entitlements as a result of the fall in interest rates
  • provision for voluntary redundancies and surplus lease space as a result of the department’s planned downsizing exercise
  • the write down of some assets.

From 1 July 2008, the following programs were transferred from departmental to administered items: Integrated Humanitarian Settlement Strategy contracts (Output 2.1.2), Detention (Output group 1.5), and Offshore asylum seeker payments (Output group 1.6). Costs and appropriation for these programs that relate to staffing and day-to-day administration have continued as departmental items.

The department’s balance sheet as at 30 June 2009 shows current assets of $296 million ($355 million in 2007–08) against current liabilities of $267 million ($279 million in 2007–08). The current assets figure includes $282 million in cash, appropriation and other receivables, while the current liabilities include $136 million accounts payable and the balance relates to leave provisions.

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Table 2: Summary of financial performance 2008–09
Budget ($’000s) Actual ($’000s)
Outcome 1: Contributing to Australia’s society and its economic advancement through the lawful and orderly entry and stay of people
Total administered expenses (including third party outputs) $177 283 $190 581
Price of departmental outputs
Output group 1.1 Migration and temporary entry $492 404 $534 830
Output group 1.2 Refugee and humanitarian entry and stay $75 337 $87 806
Output group 1.3 Border security $200 866 $186 573
Output group 1.4 Compliance $122 283 $123 267
Output group 1.5 Detention $37 826 $46 228
Output group 1.6 Offshore asylum seeker management $59 644 $58 856
Output group 1.7 Systems for People $80 687 $82 956
Total Outcome 1 $1 069 047 $1 120 516
Revenue from government (appropriation) for departmental outputs $1 036 537 $1 036 537
Revenue from other sources $32 510 $27 890
Total price from outputs $1 069 047 $1 064 427
Total for Outcome 1 (total price from outputs and administered expenses) $1 246 330 $1 255 008
Outcome 1 2008–09 average staffing levels (including overseas locally engaged staff) 6 702
The differences between the budget and actual columns above are largely due to a different method used in attributing overhead costs to the different outputs. The actual column better reflects actual expenses where they have been incurred. In particular, Output group 1.1 overheads are higher than budget, and Output group 1.3 overheads are lower. The department will seek to align overhead budget attributions with expenses at Additional Estimates 2009–10.
Outcome 2: A society which values Australian citizenship and social cohesion, and enables migrants and refugees to participate equitably
Total administered expenses(including third party outputs) $309 737 $275 925
Price of departmental outputs
Output group 2.1 Settlement services $65 237 $65 808
Output group 2.2 Translating and interpreting services $19 655 $19 861
Output group 2.3 Australian citizenship $77 782 $70 216
Output group 2.4 Promoting the benefits of a united
and diverse society		 $16 217 $16 682
Output group 2.5 Systems for People $14 498 $13 608
Total Outcome 2 $193 389 $186 175
Revenue from government (appropriation) for departmental outputs $172 083 $172 083
Revenue from other sources $21 306 $22 593
Total price from outputs $193 389 $194 676
Total for Outcome 2 (total price from outputs and administered expenses) $503 126 $470 601
Outcome 2 2008–09 average staffing levels (including overseas locally engaged staff) 1 078