PART D: CENTRELINK. Budget Statement

Transcription

1 PART D: CENTRELINK Budget Statement 273

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3 SECTION 1: AGENCY OVERVIEW OVERVIEW Centrelink s mission as the human face of the Australian Government is to provide easy and convenient access to high quality government and community services that improve the lives of Australians, their families and communities. Centrelink delivers information, payments and services detailed in Business Partnership Agreements or other agreements on behalf of the following client agencies: Australian Government Department of Family and Community Services (FaCS); Australian Government Department of Employment and Workplace Relations (DEWR); Australian Government Department of Education, Science and Training (DEST); Australian Government Department of Agriculture, Fisheries and Forestry (DAFF); Australian Government Department of Communications, Information Technology and the Arts (DoCITA); Australian Government Department of Finance and Administration (Finance); Australian Government Department of Foreign Affairs and Trade (DFAT); Australian Government Department of Health and Ageing (DoHA), including the Office of Hearing Services; Australian Government Department of Immigration and Multicultural and Indigenous Affairs (DIMIA); Australian Government Department of Transport and Regional Services (DoTARS); Australian Government Department of Veterans Affairs (DVA); Australian Government Attorney General s Department (AGD); Australian Taxation Office (ATO); Child Support Agency; Australian Dairy Corporation; Dairy Adjustment Authority; Australian Electoral Commission; New South Wales State Government; and all state and territory housing authorities. Centrelink acts in partnership with other levels of government and the broader Australian community and distributes payments to Australian families, communities and individuals. These payments include income support and family assistance payments and payments under a range of rural assistance measures. The outcomes relate to government welfare priorities. 275

4 APPROPRIATIONS Centrelink is a service provider operating under purchaser provider arrangements. The majority of Centrelink s funding is appropriated to its client departments and then paid to Centrelink according to either Business Partnership Agreements or Service Level Agreements (refer to Table 2.2). Centrelink receives direct appropriations for funding relating to equity injections and departmental loans. In , Centrelink has $23.7 million appropriated as an equity injection (refer to Tables 1.2 and 3.4) and $0.25 million for Compensation for Detriment caused by Defective Administration (CDDA) (refer to Tables 1.1 and 2.1). Table 1.1, on the following page, shows the total revenue for Centrelink for by government outcome. 276

5 Table 1.1: Centrelink Appropriations OUTCOMES DEPARTMENTAL (PRICE OF OUTPUTS) ADMINISTERED TOTAL APPROPRIATIONS Revenue from Government Revenue Price of Annual Special Total (Appropriations) from Other Outputs Appropriations Approps Administered Sources Appropriations Bill No. 1 Special Total Bill No. 1 Bill No. 2 Approp (C = A+B) (E = C+D) (I = F+G+H) (J=C+I) (A) (B) (C) (D) (E) (F) (G) (H) (I) (J) Outcome 1: ,208,848 2,209, Effective delivery of Commonwealth services to eligible customers Total ,208,848 2,209, (K1) (K1) (K1) Amounts in shading are included in annual appropriation bills Departmental Capital (Equity Injections and Loans) (K2) 23,730 Administered Capital - TOTAL APPROPRIATIONS 23, Figures in columns A to I are provided in the resourcing table (Table 2.1). Figures marked K1 are found in the Budgeted Statement of Financial Performance (Table 3.1). K2 is found in the Capital Budget Statement (Table 3.4).

6 BUDGET MEASURES OVERVIEW Budget measures that affect Centrelink are listed below. For a complete statement of Budget and Non-Budget measures and Other Portfolio Budget measures affecting FaCS, refer to Part C Section 1 of these budget statements Budget Measures Carer Allowance Expand Eligibility Criteria Impact on Centrelink s revenue: $3.2 million in Family Assistance Additional Outside School Hours Care Places Impact on Centrelink s revenue: $1.1 million in Family Assistance Additional Family Day Care Places Impact on Centrelink s revenue: $0.1 million in Household Organisational Management Expenses Advice Program Impact on Centrelink s revenue: $0.8 million in Compliance Parenting Payment (Single) Relationship Status Reviews Impact on Centrelink s revenue: $1.1 million in Compliance Keeping the System Fair Education Campaign Impact on Centrelink s revenue: $11.8 million in Compliance Continuation of Data-Matching Measures to Improve the Control of Incorrect Payment and Fraud Impact on Centrelink s revenue: -$1.9 million in Compliance Reviews Improved Service Profiling Impact on Centrelink s revenue: $7.7 million in Compliance Reviews Expand Data-Matching Impact on Centrelink s revenue: $3.2 million in

7 Centrelink Implementation of Funding Model There is a nil impact on Centrelink s revenue in Centrelink Call Centre Supplementation Impact on Centrelink s revenue: $25.9 million in Centrelink Assessment of Income and Assets Held in Trusts and Private Companies Impact on Centrelink s revenue: $9.3 million in Social Security Agreement with Ireland Revised Agreement There is a nil impact on Centrelink s revenue in Non-Budget Measures A More Flexible and Adaptable Retirement Income System Assets Test Exemption for Income Streams Impact on Centrelink s revenue: $6.8 million in Our Universities Exempt Commonwealth Learning Scholarships from the Social Security Income Tests Impact on Centrelink s revenue: $0.05 million in Youth Allowance Waiver of Certain Debts Impact on Centrelink s revenue: $0.2 million in Bushfires Ex-Gratia Assistance to Certain Income Support Recipients Impact on Centrelink s revenue: $0.03 million in Other Portfolio Measures Affecting FaCS Regional Migration Initiatives Impact on Centrelink s revenue: -$0.1 million in Humanitarian Program Impact on Centrelink s revenue: $0.7 million in

8 Our Universities Exempt Fee-Waiver and Fee-Pay Scholarships from Social Security Income Tests Impact on Centrelink s revenue: $0.3 million in Clark Review - Defence Force Income Support Allowance Impact on Centrelink s revenue: $6.0 million in Clarke Review Indexation of the Above General Rate Component of Disability Pension Impact on Centrelink s revenue: $0.002 million in Sugar Industry Reform Programme 2004 Intergenerational Transfer Impact on Centrelink s revenue: $1.3 million in Other Resource Variations For a complete statement of other resource variations listed here, see Part C Section 2 of these budget statements. Four New International Social Security Agreements Impact on Centrelink s revenue: $0.8 million in Further Simplification of International Payments Impact on Centrelink s revenue: $1.3 million in Recognising and Improving the Work Capacity of People with a Disability Impact on Centrelink s Revenue: -$9.7 million in Comcover Adjustments The Government has agreed to fully maintain supplementation for Comcover premium increases in and this amounts to $1.8 million in

9 Other Portfolio Measures Department of Employment and Workplace Relations Centrelink Implementation of Funding Model The Government has endorsed a revised funding model for Centrelink. While the implementation of the model provides no additional funding to Centrelink, it will provide detailed knowledge of workload levels and program delivery costs. This information will provide greater transparency and accountability of Centrelink s funding. The revised model will be introduced for services delivered on behalf of the Department of Family and Community Services (FaCS), Department of Employment and Workplace Relations (DEWR) and the Department of Education, Science and Training (DEST). Under the model, Centrelink s infrastructure costs will be appropriated to FaCS and a single payment made to Centrelink. This will involve a decrease in resourcing for DEWR of $26.1 million in and $26.3 million in and a corresponding increase in resourcing for FaCS. There is a nil impact on Centrelink s revenue in Department of Health and Ageing Completing Asset Assessments for Aged Care Residents The Government will provide funding for asset verification or assessment on behalf of the Department of Health and Ageing for the purposes of means testing proposed entrants to Residential Aged Care. Impact on Centrelink s revenue: $0.4 million in Department of Education, Science and Training Additional Language, Literacy and Numeracy Referrals The Government will provide funding for additional places in the Language, Literacy and Numeracy Program. This funding will provide around 1,300 new places in to jobseekers whose language, literacy and numeracy skills are below the level considered necessary to secure sustainable employment or additional training. This measure is part of the Government s response to the Report on the Review of Settlement Services for Migrants and Humanitarian Entrants. There is a nil impact on Centrelink s revenue in

10 Department of Agriculture, Fisheries and Forestry Farm Help - Case Management, Income Support, Professional Advice/Training Scheme and Re-Establishment Grant The Government will provide $136.9 million over five years (including $2 million in ) to continue the Farm Help program. The program assists eligible primary producers experiencing financial hardship by providing income support for up to one year, financial assistance to obtain professional advice and training and re-establishment grant: the income support is provided to farm families in need; and farm families examine their options for the future and take steps to improve their future prospects either on or off the farm. Impact on Centrelink s revenue: $5.9 million in Sugar Industry Reform Programme 2004 Income Support The Government will provide up to $20.6 million over four years for income support to eligible cane growers and harvesters. Income support will be available for twelve months, at a rate equivalent to the Newstart Allowance, and will be subject to an income and assets test with farm assets excluded. Recipients of income support are required to undertake financial viability assessments, which will be administered by Centrelink. Business Planning Assistance The Government will provide up to $12.8 million over three years to assist growers and harvesters with business planning assistance. Funding will include provision of $5.6 million for recipients of income support. Sugar growers and harvesters not in receipt of income support will be able to access business planning assistance at a cost of $7.2 million. Restructuring Grants The Government will provide up to $40.5 million over three years for grants to encourage farmers electing to remain in the industry to improve farm productivity. The grants will be provided to farmers according to the land area they use to grow sugar cane and will be capped at $15,000 per grower. Re-establishment Grants for Cane Growers and Cane Harvesters The Government will provide up to $96.2 million over three years for one-off re-establishment grants to encourage and support unviable growers and harvesters who wish to leave the sugar industry. Growers will be eligible for one-off grants of up to $100,000 if they exit the industry or agriculture in , up to $75,000 in , and up to $50,000 in These are tax free if exiting agriculture. 282

11 Harvesters, for whom sugar cane harvesting is the major source of income, will be eligible to access a one-off tax-free re-establishment grant of up to $50,000 in any of the three years. Grants will be conditional on the harvester undertaking to leave the sugar industry, including the harvesting sector. All growers and harvesters who access the re-establishment grant will be eligible to undertake retraining assistance under current Government programs. Impact on Centrelink s revenue: $4.7 million in Ex Gratia Ashy Downs QLD The Government will provide interim income support to farmers in the drought-affected shires of Ashy Downs, Queensland. Access to interim income support is available for up to six months while the Exceptional Circumstances application is assessed by the National Rural Advisory Council. Impact on Centrelink s revenue: $0.02 million in ADMINISTERED CAPITAL, DEPARTMENTAL EQUITY INJECTIONS AND LOANS The departmental equity injection of $23.7 million is provided in the Budget, as indicated in Table 1.1 and as accounted for in the Capital Budget (see Tables 3.4 and 3.5), and Appropriation Bill No 2, $23.4 million was agreed in the Budget and is for the implementation of the IT Refresh and Identity Fraud initiatives. The additional equity injection of $0.32 million will be used for the following measure A More Flexible and Adaptable Retirement Income System Assets Test Exemption for Income Streams. Table 1.2: Centrelink Summary of Equity Injections ($'000) Previous Budget measures 23, Budget initiatives 322 Total 23,

12 Special Accounts Revenues from appropriations and other sources are specified in the Total Resources for Outcome Table 2.1. Table 1.3: Centrelink Estimates Special Account Flows and Balances Estimated Special Account Flows Estimate Heavy Figures Actual Light figures Item Opening Receipts Payments Closing Balance Balance $'000 $'000 $'000 $'000 Other Trust Monies - CSDA - s20 FMA Act A 648 1,400-1, ,080-1, Centrelink Special Account - s20 FMA Act 1 2 D 22,296 2,379,889-2,372,065 30,120 83,459 2,306,190-2,367,353 22,296 Total Special Accounts 22,944 2,381,289-2,373,565 30,668 84,127 2,307,270-2,368,453 22,944 A = Administered D = Departmental Acts Glossary: FMA Act = Financial Management and Accountability Act, Revenues from appropriations and other sources are specified in Table 2.1: Total Resources for Outcome. 2. Opening & closing balances reflect cash at bank only. It does not include cash receivables from the Official Public Account. 284

13 SECTION 2: OUTCOMES AND OUTPUTS OUTCOMES AND OUTPUT GROUPS Centrelink has one government outcome: Effective delivery of Australian Government services to eligible customers. The outcome is supported by the output: Efficient delivery of Australian Government services to eligible customers. Centrelink s output consists of a range of business outcomes aligned to its strategic goals and contributes to the outcomes of all its client agencies. Chart 2.1 shows the relationship between the one government outcome and the contributing output for Centrelink. Financial details for outcome by output appear in Table 2.1 while performance information appears in Table 2.4. Chart 2.1: Centrelink Outcome and Output Group Centrelink Chief Executive Officer: Ms Sue Vardon Total Resources $2,209m Outcome 1 Effective delivery of Australian Government services to eligible customers Total Resources $2,209m Output Group 1.1 Efficient delivery of Australian Government services to eligible customers Total Resources $2,209m 285

14 TRENDS IN RESOURCING ACROSS OUTCOMES Table 2.1: Centrelink Total Resources for Outcome 1 Final Budget estimates estimates $'000 $'000 ADMINISTERED APPROPRIATIONS Total Administered Resourcing (A) 0 0 DEPARTMENTAL APPROPRIATIONS Output Group Efficient Delivery of Commonwealth Services to Eligible Customers Subtotal Output Group 1.1 Total Revenue from Government (Appropriations) (B) Revenue from Other Sources Family and Community Services 1,965,742 2,073,675 Employment and Workplace Relations 119,038 79,892 Education, Science and Training 13,374 13,443 Health and Ageing 10,603 7,036 Agriculture, Fisheries and Forestry 22,352 17,364 Other 21,673 17,438 Total Revenue from Other Sources (C) 2,152,782 2,208,848 Total Price of Departmental Outputs (B+C) (Total revenue from Government and from other sources) Total Estimated Resourcing for Outcome 1 (A+B+C) (Total price of outputs and admin expenses) 2,153,032 2,209,098 2,153,032 2,209,098 Average Staffing Level (units) 24,418 23,992 Estimated payments from Departmental Special Account balances Centrelink Special Account - s20 FMA Act 1 2,367,353 2,372,065 Total Departmental Special Account outflows 2,367,353 2,372,065 Estimated payments from Administered Special Account balances Other Trust Monies - s20 FMA Act 2 1,100 1,500 Total Administered Special Account outflows 1,100 1, The Centrelink Special Account has been established as the appropriation mechanism for Centrelink. The purpose of the account is for the receipt of all monies and the payment of all expenditure related to the operation of the Commonwealth Service Delivery Agency (operating as Centrelink). Monies related to the Comcare Trust Account are also recorded in this account. Details of the estimated cash transactions of this account can be found at Table 1.3: Estimated Special Account Flows and Balances and Table 3.3: Centrelink Departmental Statement of Cash Flows. 2. The purpose of the Other Trust Monies Special Account is for the receipt of unidentified or other public monies temporarily held on trust by the Commonwealth Service Delivery Agency. Details of the estimated flows and balances of this account can be found at Table

15 Table 2.2: Centrelink Summary of Future Revenue $'000 $'000 $'000 $'000 FaCS 1 2,073,675 2,060,604 2,023,405 2,062,750 DEWR 1 79,892 79, , ,000 DEST 13,443 13,558 13,709 13,862 DoHA 7,036 11,900 10,864 11,002 DAFF 17,364 7,163 5,751 4,443 Subtotal Service Delivery 2,191,411 2,172,882 2,159,729 2,198,057 Revenue from other sources 2 17,687 17,544 17,285 17,350 Total 2,209,098 2,190,426 2,177,014 2,215, DEWR revenue decreases by $26.1 million in and $26.3 million in with a corresponding increase to FaCS for the new Centrelink Funding Model. 2. Revenue from other sources includes amounts directly appropriated to Centrelink and anticipated revenue from new business outside existing Business Partnership Agreements or Service Level Agreements with client agencies. Chart 2.2: Centrelink Summary of Revenue (Total $2,209 million) FaCS 91.3% Other 1.0% DAFF 1.0% DoHA 0.5% DEST 0.6% DEWR 5.5% 287

16 Chart 2.3: Trends in Centrelink Service Delivery Revenue 2,500 2,000 $ millions 1,500 1,000 2,153 2,209 2,190 2,177 2, Financial Years 288

17 CONTRIBUTION OF OUTPUTS TO OUTCOME 1 Centrelink s mission, as the face of the Australian Government, is to provide easy and convenient access to high quality government and community services that improve the lives of Australian families, communities and individuals. Centrelink s output of efficient delivery of Australian Government services is about delivering this mission by supporting participation, protecting the integrity of the outlays we administer, providing better service for customers, business and the community, using business intelligence to support customer focused service delivery and evidence based decision making and providing value for money for government. GOALS AND STRATEGIES Centrelink s Future Directions is the key document that engages Centrelink s people in a common purpose and approach. The document explains Centrelink s mission, vision and values and the underlying goals, strategies and targets that will assist us in achieving positive outcomes for Australians, their families and the community. The Centrelink Business Plan provides a one-year operational plan to implement the Future Directions, while progress in meeting Centrelink s strategic objectives is regularly measured through Centrelink s Balanced Scorecard. Our goals are: Accountability to Government and Client Agencies: To contribute to achieving government policy objectives through consistent high quality services, and working with client agencies and government; Business and Community: To work closely with the government, business and community sectors to achieve positive outcomes for Australians; Customer: To provide access to high quality services recognising the diverse needs, preferences and expectations of our customers, consistent with government policy; Developing and Supporting our People to achieve business outcomes: To meet the challenges of current and future business by supporting our people with knowledge, skills, tools and opportunities; and Efficiency and Effectiveness of our operations and process: To ensure our internal processes support efficient and effective services and provide value for money. 289

18 GOAL: ACCOUNTABILITY TO GOVERNMENT AND CLIENT AGENCIES To contribute to achieving government policy objectives through consistent high quality services and working with client agencies and Government. Key strategies to meet this goal will be to: Protect the integrity of outlays Support economic and social participation Maintain Service Standards Provide transparent pricing options Support the policy development process In conjunction with client agencies, Centrelink will continue its focus on protecting the integrity of government outlays through the Business Assurance Framework and its Getting it Right strategy, which are based around the four pillars of payment correctness - right program, right person, right rate and right date. Centrelink will continue to enhance its transparency and accountability through implementation of systems and models around funding. A key priority will continue to be the implementation of Australians Working Together measures, with an increasing proportion of Centrelink customers becoming subject to voluntary or compulsory participation requirements. Centrelink will provide business information and feedback on implementation of policy as an input to monitoring of outcomes and to policy development and review. Implementation of these strategies will ensure that Centrelink continues to meet client agency performance standards and contribute to achieving government policy objectives. 290

19 GOAL: BUSINESS & COMMUNITY To work closely with the business and community sectors to achieve positive outcomes for Australians. Key strategies to meet this goal will be to: Manage assessment and referral processes effectively Actively engage with the business and community sectors Improve the effectiveness of our interactions with business Improve our image in the community Enable transactions involving third parties to be carried out effectively Through the e-business strategy, Centrelink will continue to expand its ability to exchange information with third parties such as businesses and educational institutions to make it easier for community and other organisations to assist Centrelink customers. Centrelink will operate as part of the social coalition between government, business and the community through providing opportunities to share knowledge, data, experience and resources, including co-location strategies and its new Community Connect Project. Centrelink will work to make it easier for businesses to interact with it, including action to reduce the compliance costs imposed on business through greater use of electronic data exchange. Centrelink recognises that achieving the desired outcomes for its customers requires effective relationships with other service providers, including referral processes. Creating effective relationships requires clear protocols, shared understandings of eligibility requirements and effective communication. Centrelink is conscious of the importance of community perceptions about its operations and role within government and society. A positive image, consistent with government policy objectives, will ensure that all citizens are aware of the services Centrelink provides, and are willing to access Centrelink services when they need them. 291

20 GOAL: CUSTOMER To provide access to high quality services recognising the diverse needs, preferences and expectations of our customers, consistent with government policy. Key strategies to meet this goal will be to: Ensure that our service delivery model puts the customer at the centre of the business Promote engagement of our customers to encourage participation Improve the consistency of the customer experience Value our relationships with customers through more effective management of contacts Improve access for customers Centrelink aims to be a customer-centric organisation. Developing a service model with this objective is therefore critical. Centrelink is conscious that an increasing proportion of its customers are subject to participation requirements. It is important Centrelink works to actively engage customers, ensure they are aware of their obligations, and receive the right assistance. Processes that make it easier to do business with Centrelink, including minimising the number of separate visits to Centrelink, are required. Centrelink will focus on improving the consistency of service levels across the network, including improving the satisfaction levels of key customer groups through appropriate, targeted customer experience strategies. Centrelink will continue work towards making it easier for customers to interact with it through the development of self-service options such as internet access, SMS and voice recognition technologies. 292

21 GOAL: DEVELOPING AND SUPPORTING OUR PEOPLE TO ACHIEVE BUSINESS OUTCOMES To meet the challenges of current and future business by supporting our people with knowledge, skills, tools and opportunities. Key strategies to meet this goal will be to: Add value to business Ensure Centrelink has a skilled workforce Create a rewarding, safe and healthy work environment Enhance Centrelink's leadership capabilities and succession planning Provide the means, knowledge and business intelligence to support our staff Centrelink will focus on defining the future workforce capabilities to deliver on emerging business requirements. Centrelink will place emphasis on the implementation of accredited learning programs that provide technical and other skills to deliver business outcomes to nationally recognised standards. Centrelink will work towards providing better business information for staff and their managers to make informed decisions. Centrelink will roll out a succession management strategy that helps manage employee growth and development to ensure individual and organisational success as well as leadership continuity. Workplace health and injury prevention and management is also a priority for Centrelink. 293

22 GOAL: EFFICIENCY AND EFFECTIVENESS OF OUR OPERATIONS AND PROCESSES To ensure our internal processes support efficient and effective services and provide value for money. Key strategies to meet this goal will be to: Manage our business effectively Deliver on mandated better practice Effectively implement Refresh Manage our channels to maximise policy outcomes to improve customer experience and achieve efficiencies Simplify, streamline and re-engineer processes Centrelink will focus on improving the effectiveness and efficiency of the way in which it delivers services. This will include looking for process, rule and/or system efficiency improvements including directing available funding to areas of greatest impact. Centrelink will actively manage resources to ensure that customers are directed to the most cost-effective channel available for any particular transaction type. Centrelink has a substantial information and technology (IT) base and continued improvement in Centrelink s IT services and support are a key priority. Managing the government s investment in this capability will be a high priority in order to ensure that the benefits to the government, community and customers of IT Refresh are realised, and savings achieved. 294

23 PERFORMANCE INFORMATION FOR OUTCOME 1 Table 2.4 below lists the performance information that Centrelink will use to assess the achievement of its Outcome during Achievement against planned performance will be reported in the Centrelink Annual Report. Table 2.4: Centrelink Performance Information for Outcome 1 CENTRELINK BALANCED SCORECARD Contribution of Strategic Goals to Output 1 Efficient delivery of Commonwealth Services to eligible customers. Goal Top Level Key Performance Indicator Accountability to Government and client agencies Business and Community Customer Developing and supporting our people to achieve business outcomes Efficiency and effectiveness of our operations and processes 1. KPI currently under review. EVALUATIONS FOR OUTCOME 1 The extent to which we achieve client agency Key Performance Indicators Community sector satisfaction with Centrelink Customer satisfaction with their most recent Centrelink contact Staff satisfaction with work Operational expenses as a proportion of program outlays 1 Proposed evaluations within Centrelink form part of an annual evaluation strategy, which is approved by the Centrelink Executive. The strategy is developed on the basis of a risk assessment based upon consultation with key stakeholders, including client agencies. COMPETITIVE TENDERING AND CONTRACTING Centrelink's competitive tendering and contracting activities for the acquisition of supplies and services are undertaken in accordance with Chief Executive Instructions (CEIs) which are based directly on the Commonwealth Procurement Guidelines (CPGs). The CEIs are supported by a comprehensive Procurement and Contracts Manual, a Contracts Management Manual, specialist national procurement teams and a network of procurement officers across Australia who are collectively known as the Centrelink Procurement Network (CPN). Details of all contracts Centrelink has with its suppliers are recorded on the Centrelink Contracts Register (CCR). 295

24 SECTION 3: BUDGETED FINANCIAL STATEMENTS Budgeted Statement of Financial Performance The statement provides a picture of the expected financial results for Centrelink by identifying full accrual expenses and revenues, which highlights whether Centrelink is operating at a sustainable level. Budgeted Statement Financial Position The statement shows the financial position of Centrelink. It helps decision-makers to track the management of Centrelink s assets and liabilities. Budgeted Statement of Cash Flows Budgeted cash flows, as reflected in the statement of cash flows, provides information on the extent and nature of cash flows by categorising them into expected cash flows from operating activities, investing activities and financing activities. Capital Budget Statement The statement shows all planned Centrelink capital expenditure (expenditure on non-financial assets), whether funded through capital appropriations as additional equity or borrowings, or from internal sources. Non-Financial Assets Summary of Movement The summary shows budgeted acquisitions and disposals of non-financial assets during the budget year. 296

25 Table 3.1: Centrelink Budgeted Statement of Financial Performance for the period ended 30 June Estimated Budget Forward Forward Forward actual estimates estimates estimates estimates $'000 $'000 $'000 $'000 $'000 Revenues from ordinary activities Revenues from government Sales of goods and services 2,147,794 2,203,798 2,185,063 2,171,587 2,209,915 Interest Dividends Proceeds from sales of assets Net foreign exchange gains Other 4,988 5,050 5,113 5,177 5,242 Total revenues from ordinary activities 2,153,032 2,209,098 2,190,426 2,177,014 2,215,407 Expenses from ordinary activities (excluding borrowing costs expense) Employees 1,400,864 1,427,598 1,415,693 1,400,543 1,429,750 Suppliers 667, , , , ,728 Grants Depreciation and amortisation 87,700 95, , , ,859 Write-down of assets 15, Value of assets sold Net foreign exchange losses Other Total expenses from ordinary activities (exluding borrowing costs expense) 2,171,646 2,208,618 2,190,000 2,176,531 2,214,937 Borrowing costs expense Net surplus or deficit from ordinary acitivities -18, Gain or loss on extraordinary items Net surplus or deficit -18, Capital use charge Net surplus or defecit after capital use charge -18,

26 Table 3.2: Centrelink Budgeted Statement of Financial Position as at 30 June Estimated Budget Forward Forward Forward actual estimates estimates estimates estimates $'000 $'000 $'000 $'000 $'000 ASSETS Financial assets Cash 22,296 30,120 30,822 30,643 29,818 Receivables 101,084 67, , , ,434 Investments Accrued revenues Other Total financial assets 123,380 97, , , ,252 Non-financial assets Land and buildings 89,884 91,081 92,829 93,248 90,292 Infrastructure, plant and equipment 90, , , , ,743 Inventories Intangibles 185, , , , ,920 Other 50,453 50,679 50,909 50,910 50,909 Total non-financial assets 416, , , , ,864 Total assets 540, , , , ,116 LIABILITIES Debt Loans Leases Deposits Overdrafts Other 2,467 1,829 1, Total debt 2,467 1,829 1, Provisions and payables Employees 353, , , , ,551 Suppliers 63,867 65,793 66,337 66,427 66,427 Grants Other 23, Total provisions and payables 439, , , , ,978 Total liabilities 442, , , , ,448 EQUITY Capital 126, , , , ,201 Reserves 3,154 3,154 3,154 3,154 3,154 Accumulated surpluses or deficits -31,546-31,066-30,640-30,157-29,687 Total equity 97, , , , ,668 Current assets 173, , , , ,161 Non-current assets 366, , , , ,955 Current liabilities 212, , , , ,838 Non-current liabilities 229, , , , ,

27 Table 3.3: Centrelink Budgeted Statement of Cash Flows for the period ended 30 June Estimated Budget Forward Forward Forward actual estimates estimates estimates estimates $'000 $'000 $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Appropriations for outputs Sales of goods and services 2,161,798 2,202,432 2,185,564 2,172,290 2,212,991 Interest Other 98, , , , ,561 Total cash received 2,260,061 2,356,159 2,308,848 2,367,013 2,439,802 Cash used Employees 1,433,960 1,401,235 1,393,559 1,383,971 1,408,326 Suppliers 718, , , , ,357 Grants Interest Other 113,393 73, , , ,911 Total cash used 2,265,744 2,221,711 2,250,339 2,280,783 2,355,594 Net cash from operating activities -5, ,448 58,509 86,230 84,208 INVESTING ACTIVITIES Cash received Proceeds from sales of property, plant and equipment Repayments of loans made Other Total cash received Cash used Purchase of property, plant and equipment 76, ,701 65,011 80,715 47,471 Loans made Other 25,279 40,653 26,328 30,554 52,564 Total cash used 101, ,354 91, , ,035 Net cash used by investing activities -101, ,354-91, , ,035 FINANCIAL ACTIVITIES Cash received Proceeds from issuing equity instruments 46,129 23,730 33,532 24,860 15,002 Proceeds from debt Other Total cash received 46,129 23,730 33,532 24,860 15,002 Cash used Repayments of debt Capital use and dividends paid Other Total cash used Net cash from financing activities 46,129 23,730 33,532 24,860 15,002 Net (decrease) increase in cash held -61,163 7, Cash at the beginning of the reporting period 83,459 22,296 30,120 30,822 30,643 Cash at the end of the reporting period 22,296 30,120 30,822 30,643 29,

28 Table 3.4: Centrelink Capital Budget Statement Estimated Budget Forward Forward Forward actual estimates estimates estimates estimates $'000 $'000 $'000 $'000 $'000 CAPITAL APPROPRIATIONS Total equity injections 40,676 23,730 33,532 24,860 15,002 Total loans Represented by: Purchase of non-current assets 40,676 23,730 33,532 24,860 15,002 Other Total 40,676 23,730 33,532 24,860 15,002 PURCHASE OF NON-CURRENT ASSETS Funded by capital appropriation 40,676 23,730 33,532 24,860 15,002 Funded internally by 60, ,624 57,807 86,409 85,033 departmental resources 300

29 Table 3.5: Centrelink Non-Financial Assets Summary of Movement ( ) 301 Land Buildings Total land Specialist Other Total Intangibles Total and buildings military Infrastructure Infrastructure equipment plant and plant and equipment equipment $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Carrying amount at the start of year 1,456 88,428 89,884-90,730 90, , ,247 Additions - 21,687 21,687-88,014 88,014 40, ,354 Disposals Revaluation increments Recoverable amount wirte-downs Net transfers free of charge Depreciation/amortisation expense - 20,290 20,290-38,313 38,313 36,586 95,189 Write-off of assets Carrying amount at the end of year 1,456 89,625 91, , , , ,812 Total additions Self funded - 21,687 21,687-71,594 71,594 33, ,624 Appropriations ,420 16,420 7,310 23,730 Total - 21,687 21,687-88,014 88,014 40, ,354

30 NOTES TO THE FINANCIAL STATEMENTS The financial statements reflect the entries to the Accrual Information Management System (AIMS) as at April Basis of Accounting The statements have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets which are at valuation. Assets and liabilities are recognised in the Statement of Financial Position when and only when it is probable that future economic benefits will flow and the amounts of the assets or liabilities can be reliably measured. Revenues and expenses are recognised in the Statement of Financial Performance when and only when the flow or consumption or loss of economic benefits can be reliably measured. The continued existence of Centrelink in its present form and functions is dependent on government policy and ongoing business. Budgeted Statement of Financial Performance Centrelink estimates a $18.6 million operating loss for This loss is largely due to Centrelink's limited capacity to reduce customer driven workloads to align with available revenue. The forecast loss represents 0.9 per cent of total revenue for The loss has been minimised due to various strategies that were implemented to control expenditure, from early in the financial year, when revenue constraints were identified. The final operating result will depend on: the level of unearned revenue for work completed as at 30 June 2004; end of year review of valuation of internally developed software assets; and reconciliation outcomes under business partnership agreements with client agencies. Budgeted Statement of Financial Position Centrelink is continuing to forecast a negative net equity position for and the forward years due to the accumulated deficit from Centrelink s capital acquisitions for are expected to be higher than by more than $48.7 million. This is mainly due to the deferral of acquisitions required to support the IT Refresh initiative agreed in the Budget. 302

31 Budgeted Statement of Cash Flows Positive cash positions have been forecast for and each of the forward years. It is anticipated that Centrelink will have a cash holding of approximately $22.3 million as at 30 June 2004, with $84 million cash receivable from the Official Public Account. 303

32 SECTION 4: PURCHASER-PROVIDER ARRANGEMENTS CROSS AGENCY OVERVIEW Responsibility The responsibilities of Centrelink regarding the Department of Family and Community Services are set out in Part C of these Portfolio Budget Statements. Responsibilities regarding other purchasing departments are set out in their respective Portfolio Budget Statements. Control Arrangements Centrelink is a statutory authority responsible, through its Board of Management, to the Minister for Family and Community Services. It came into existence on 1 July 1997, and provides a number of customer services formerly delivered by a number of separate Government agencies. The Centrelink Board comprises: Mr John Pascoe AO (Chairman and Non-Executive Director); Ms Sue Vardon AO (CEO, Centrelink); Mr Don Fraser (Non-Executive Director); Ms Christina Gillies (Non-Executive Director); Ms Elizabeth Montano (Non-Executive Director); Ms Susan Rapley (Non-Executive Director); Mr David Deans (Non-Executive Director); and Mr Mark Sullivan (Secretary, Department of Family and Community Services). Centrelink operates within the boundaries of the Commonwealth Service Delivery Agency Act Legislation applying to agencies within the Australian Government Budget sector, such as the Financial Management and Accountability Act 1996 and the Privacy Act 1998, also apply to Centrelink. Centrelink s revenue is provided through Business Partnership Agreements (BPAs) or similar arrangements with client agencies. Funds are appropriated to the policy agencies and paid to Centrelink in return for specified services. Regular reporting arrangements include: statements on Centrelink s delivery performance in terms of agreed measures and standards for each program and service delivered; and an explanation of performance variances and future performance outlooks. In addition, Centrelink provides reports on specific programs and activities where appropriate. 304

33 Resourcing Refer to Part D, Table 2.2 for summary of revenue from client agencies. Performance against Outcomes and Outputs Centrelink s performance is measured by a Balanced Scorecard outlined in Part D, Table

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