A Brief Summary on the Real Deal When Getting Started

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1 Portfolio Budget Statements Budget Related Paper No. 1.3 Communications Portfolio Budget Initiatives and Explanations of Appropriations Specified by Outcomes and Programmes by Entity

2 Commonwealth of Australia 2015 ISBN (hard copy) (online) This publication is available for your use under a Creative Commons BY Attribution 3.0 Australia licence, with the exception of the Commonwealth Coat of Arms, the Department of Communications (the Department) logo, photographs, images, signatures and where otherwise stated. The full licence terms are available from Use of the Department s material under a Creative Commons BY Attribution 3.0 Australia licence requires you to attribute the work (but not in any way that suggests that the Department endorses you or your use of the work). The Department of Communications material used 'as supplied' Provided you have not modified or transformed the Department s material in any way including, for example, by changing the Department s text; calculating percentage changes; graphing or charting data; or deriving new statistics from published Department statistics then the Department prefers the following attribution: Source: The Australian Government Department of Communications Derivative material If you have modified or transformed the Department s material, or derived new material from those of the Department in any way, then the Department prefers the following attribution: Based on The Australian Government Department of Communications data Use of the Coat of Arms The terms under which the Coat of Arms can be used are set out on the It s an Honour website (see Other uses Inquiries regarding this licence and any other use of this document are welcome at: Assistant Secretary, Finance and Risk Management Branch, Corporate Division Telephone: (02) (international ) finance@communications.gov.au ii

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4 Abbreviations and conventions The following notation may be used: NEC/nec not elsewhere classified - nil.. not zero, but rounded to zero na not applicable (unless otherwise specified) nfp not for publication $m $ million $b $ billion Figures in tables and in the text may be rounded. Figures in text are generally rounded to one decimal place, whereas figures in tables are generally rounded to the nearest thousand. Discrepancies in tables between totals and sums of components are due to rounding. Enquiries Should you have any enquiries regarding this publication please contact the Assistant Secretary, Finance and Risk Management Branch, Corporate Division in the Department of Communications on (02) A copy of this document can be located on the Australian Government Budget website at: iv

5 USER GUIDE TO THE PORTFOLIO BUDGET STATEMENTS v

6 USER GUIDE The purpose of the Portfolio Budget Statements (PB Statements) is to inform Senators and Members of Parliament of the proposed allocation of resources to government outcomes by entities within the portfolio. Entities receive resources from the annual appropriations acts, special appropriations (including standing appropriations and special accounts), and revenue from other sources. A key role of the PB Statements is to facilitate the understanding of proposed annual appropriations in Appropriation Bills (No. 1 and No. 2) (or Appropriation (Parliamentary Departments) Bill (No. 1) for the parliamentary departments). In this sense, the PB Statements are Budget related papers and are declared by the Appropriation Acts to be relevant documents to the interpretation of the Acts according to section 15AB of the Acts Interpretation Act The PB Statements provide information, explanation and justification to enable Parliament to understand the purpose of each outcome proposed in the Bills. As required under section 12 of the Charter of Budget Honesty Act 1998, non-general government sector entities are not consolidated into the Commonwealth general government sector fiscal estimates and accordingly, these entities are not reported in the PB Statements. vi

7 CONTENTS Portfolio Overview... 1 Communications portfolio overview... 3 Entity resources and planned performance... 7 Department of Communications... 9 Australian Broadcasting Corporation Australian Communications and Media Authority Digital Transformation Office Special Broadcasting Service Corporation Glossary Acronyms vii

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9 PORTFOLIO OVERVIEW

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11 Portfolio overview COMMUNICATIONS PORTFOLIO OVERVIEW Minister and portfolio responsibilities The Communications Portfolio includes the following agencies: Department of Communications The Department of Communications aims to promote an innovative and competitive communications sector, through policy development, advice and program delivery, so all Australians can realise the full potential of digital technologies and communications services. Australia Post Australia Post is a Government Business Enterprise, wholly owned by the Australian Government. It provides a high-quality mail and delivery service to all Australians and a range of parcel and logistics services. Australian Broadcasting Corporation (ABC) The ABC is a national broadcaster. It contributes to, and reflects, Australia s national identity, fosters creativity and the arts and encourages cultural diversity. The ABC is an integral part of the radio, television and online production industries and the news and information media. Australian Communications and Media Authority (ACMA) The ACMA is responsible for regulating in accordance with legislation related to broadcasting, radiocommunications, telecommunications and online content. The ACMA works with all stakeholders to maximise the public benefit, including the extent to which the regulatory framework addresses the broad concerns of the community, meets the needs of industry, and maintains community and national interest safeguards. Digital Transformation Office (DTO) The DTO aims to improve the user experience for all Australian accessing government information and services by leading the design, development and continual enhancement of whole-ofgovernment service delivery policies and standards, platforms and joined-up services. nbn co limited (nbn) nbn is a Government Business Enterprise, wholly owned by the Australian Government. It is planning, rolling out and operating Australia s new broadband network/infrastructure, which will provide access to high speed broadband to all Australians. Special Broadcasting Service Corporation (SBS) The SBS is a national broadcaster. It provides multicultural and multilingual services that inform, educate and entertain all Australians. Its mission is to contribute to a more cohesive, equitable and harmonious Australia through its television, radio and online services. Australia Post and nbn do not appear in the Portfolio Budget Statements as they are not part of the general government sector. The following three changes will occur to the Portfolio s structure: The functions of the Telecommunications Universal Service Management Agency (TUSMA), which was formerly a separate agency within the Portfolio, will be 3

12 Portfolio overview transferred to the Department of Communications from 1 July Further information regarding TUSMA is available in the Communications Portfolio Budget Statements and TUSMA Annual Reports. Resources to support TUSMA functions will continue to be held in a Special Account. The Digital Transformation Office will be established as a separate agency within the Portfolio with effect from 1 July The Children s e-safety Commissioner will formally commence the role by 1 July The Commissioner will be an independent statutory office within the ACMA. Resources for the e-safety Commissioner function will be held within a Special Account. The Hon Malcolm Turnbull MP is the Minister for Communications and The Hon Paul Fletcher MP is the Parliamentary Secretary to the Minister for Communications. A summary of the Portfolio structure is at Figure 1. Further detail about the responsibilities of each agency appears in individual agency chapters. 4

13 Portfolio overview Figure 1: Communications portfolio structure and outcomes Minister for Communications The Hon Malcolm Turnbull MP Parliamentary Secretary to the Minister for Communications The Hon Paul Fletcher MP Department of Communications Portfolio Secretary: Drew Clarke Outcome 1: Promote an innovative and competitive communications sector, through policy development, advice and program delivery, so all Australians can realise the full potential of digital technologies and communications services Australian Broadcasting Corporation Managing Director: Mark Scott Outcome 1: Informed, educated and entertained audiences throughout Australia and overseas - through innovative and comprehensive media and related services Australian Communications and Media Authority Chair and Chief Executive Officer: Chris Chapman Outcome 1: A communications and media environment that balances the needs of the industry and the Australian community through regulation, education and advice Digital Transformation Office Chief Executive Officer (A/g): David Hazlehurst Outcome 1: To improve the user experience for all Australians accessing government information and services by leading the design, development and continual enhancement of whole-of-government service delivery policies and standards, platforms and joined-up services Special Broadcasting Service Corporation Managing Director: Michael Ebeid Outcome 1: Provide multilingual and multicultural services that inform, educate and entertain all Australians and in so doing reflect Australia's multicultural society 5

14 Portfolio overview PORTFOLIO RESOURCES Table 1 shows the total new resources provided to the portfolio in the budget year by entity. Table 1: Portfolio resources Appropriation Appropriation Special Receipts Total Bill No. 1 Bill No. 2 ($m) ($m) ($m) ($m) ($m) Department of Communications Administered appropriations , ,778.0 Departmental appropriations Total: , ,866.7 Payments to Corporate Entities: Australian Broadcasting 1, ,227.1 Corporation Special Broadcasting Service Corporation Australian Communications and Media Authority Administered appropriations Departmental appropriations Total: Digital Transformation Office Departmental appropriations Portfolio total 1, , ,593.7 Resources available within portfolio 9,

15 ENTITY RESOURCES AND PLANNED PERFORMANCE Department of Communications... 9 Australian Broadcasting Corporation Australian Communications and Media Authority Digital Transformation Office Special Broadcasting Service Corporation

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17 Department of Communications Entity resources and planned performance 9

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19 DEPARTMENT OF COMMUNICATIONS Section 1: Entity overview and resources Strategic direction statement Entity resource statement Budget measures Section 2: Outcomes and planned performance Outcomes and performance information Section 3: Explanatory tables and budgeted financial statements Explanatory tables Budgeted financial statements

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21 Communications Budget Statements DEPARTMENT OF COMMUNICATIONS Section 1: Entity overview and resources 1.1 STRATEGIC DIRECTION STATEMENT Digital technologies and communications services are increasingly pervasive and are driving rapid transformation. The effective and innovative use of these technologies and services offers significant benefits for individuals, communities, businesses, industry and governments. Realising their full potential underpins Australia s future economic prosperity. The purpose of the Department of Communications is to promote an innovative and competitive communications sector, through policy development, advice and programme delivery, so all Australians can realise the full potential of digital technologies and communications services. The Department achieves its outcome by delivering a range of initiatives. Significant ongoing functions include: providing strategic advice on developments in digital technologies, networks and services advising and collaborating on the use of technologies to boost government productivity and enhance government online capabilities improving the quality and number of government systems, products, services and data sets that Australians can access online providing strategic advice and policy leadership to achieve a fast and affordable new broadband network collaborating to develop policies that deliver more efficient, trusted and secure enabling digital infrastructure reforming spectrum policy arrangements to ease the compliance burden on users and improve accessibility for new technologies assessing regulatory frameworks and advising on regulatory reform and deregulation options to promote competition, consumer safeguards, efficient and responsive portfolio agencies, and reduced regulatory burden supporting the Ministerial Advisory Council on Communications in its role of providing advice on deregulation options across the Portfolio analysing community expectations of quality, standard and availability of content and communications services Undertaking research through the Bureau of Communications Research and advising on sectoral developments to inform strategic policy directions 13

22 Communications Budget Statements delivering the Mobile Black Spot Programme to further expand reliable mobile phone coverage and competition in outer metropolitan, regional and remote communities entering into contracts, and making grants, to support the provision of public interest telecommunications services for all Australians including: standard telephone services; payphones; emergency call services; and the National Relay Service (NRS), which assists people who are deaf or have a hearing and/or speech impairment to access telephone services. 14

23 Communications Budget Statements 1.2 ENTITY RESOURCE STATEMENT Table 1.1 shows the total resources from all sources. The table summarises how resources will be applied by outcome and by administered and departmental classification. Table 1.1: Department of Communications resource statement Budget estimates for as at Budget May 2015 Actual Estimate of Proposed at Total Available prior year Appropriation amounts Budget estimate available in $'000 $'000 $'000 $'000 Ordinary annual services (a) Departmental appropriation Prior year departmental Appropriation (b) 25,324 9,695 9,695 Departmental appropriation (c)(d) 95,472 88,663 88,663 s74 Retained revenue receipts (e) 615 Total 121,411 9,695 88,663 98,358 Administered expenses Prior year administered appropriation 39,481 Outcome 1 130, , ,891 Payments to corporate entities (f) 1,349,074 1,347,683 1,347,683 Total 1,519,346 1,547,574 1,547,574 Total ordinary annual services A 1,640,757 9,695 1,636,237 1,645,932 Departmental non-operating Total Administered non-operating Prior year administered Appropriation 2,160, , ,000 Administered assets and liabilities 3,229,445 7,365,908 7,365,908 Payments to corporate entities - non-operating 50,000 20,000 20,000 Total 5,440, ,000 7,385,908 8,141,908 Total other services B 5,440, ,000 7,385,908 8,141,908 Total available annual appropriations 7,080, ,695 9,022,145 9,787,840 Total appropriations excluding special accounts 7,080, ,695 9,022,145 9,787,840 15

24 Communications Budget Statements Table 1.1: Department of Communications resource statement Budget estimates for as at Budget May 2015 (continued) Special accounts Actual Estimate Proposed at Total Available prior year Appropriation amounts Budget estimate available in $'000 $'000 $'000 $'000 Opening balance (g) ,663 32,663 Appropriation receipts 312, ,207 Total special accounts C , , ,870 Total resourcing A+B+C 7,080, ,358 9,334,352 10,132,710 Less appropriations drawn from annual or special appropriations above and credited to special accounts and/or payments to corporate entities through annual appropriations (1,399,074) (1,467,683) (1,467,683) Total net resourcing for Communications 5,681, ,358 7,866,669 8,665,027 (a) Appropriation Bill (No. 1) (b) Estimated adjusted balance carried forward from previous year. (c) Includes an amount of $4.2m in for the Departmental Capital Budget (refer to Table for further details). For accounting purposes this amount has been designated as contributions by owners. (d) figure includes funding provided through Appropriation Bill (No.5) (e) Estimated Retained revenue receipts under section 74 of the Public Governance, Performance and (f) Accountability (PGPA) Act Corporate entities are corporate Commonwealth entities and Commonwealth companies as defined under the PGPA Act (g) Estimated opening balance for special accounts (less Special Public Money held in accounts like Other Trust Monies accounts (OTM), Services for other Government and Non-agency Bodies accounts (SOG), or Services for Other Entities and Trust Moneys accounts (SOETM)). For further information on special accounts, see Table Note: All figures are GST exclusive. Third party payments from and on behalf of other entities $'000 $'000 Payments made to corporate entities within the Portfolio: Australian Broadcasting Corporation 1,113,215 1,084,413 Special Broadcasting Service Corporation 285, ,270 16

25 Communications Budget Statements 1.3 BUDGET MEASURES Budget measures in Part 1 relating to the Department of Communications are detailed in Budget Paper No. 2 and are summarised below. Table 1.2: Department of Communications Budget measures Part 1: Measures announced since the Mid-Year Economic and Fiscal Outlook (MYEFO) (a) Programme $'000 $'000 $'000 $'000 $'000 Expense measures Digital Transformation Agenda - Portfolio Contributions Departmental expenses 1.1 (635) (631) (635) (641) Administered expenses (2,654) Total (2,654) (635) (631) (635) (641) Administered Programme Indexation Pause two year extension Administered expenses 1.1 (386) (755) Total (386) (755) Total expense measures Departmental (635) (631) (635) (641) Administered (2,654) (386) (755) Total (2,654) (635) (631) (1,021) (1,396) Prepared on a Government Finance Statistics (fiscal) basis. (a) A minus sign before an estimate indicates a reduction. No sign before an estimate indicates an increase. 17

26 Communications Budget Statements Section 2: Outcomes and planned performance 2.1 OUTCOMES AND PERFORMANCE INFORMATION Government outcomes are the intended results, impacts or consequences of actions by the Government on the Australian community. Commonwealth programmes are the primary vehicle by which government entities achieve the intended results of their outcome statements. Entities are required to identify the programmes which contribute to government outcomes over the Budget and forward years. Each outcome is described below together with its related programmes, specifying the performance indicators and targets used to assess and monitor the performance of the Department of Communications in achieving government outcomes. Outcome 1: Promote an innovative and competitive communications sector, through policy development, advice and program delivery, so all Australians can realise the full potential of digital technologies and communications services Outcome 1 strategy The Department will deliver its outcome through a single programme: Digital Technologies and Communications Services. The Department s strategy for delivering its outcome is to provide strategic advice on, and administer projects and initiatives, to: enhance digital productivity advising Government on the opportunities arising from the innovative adoption and use of digital technologies, and supporting government, business and the community to maximise these opportunities expand digital infrastructure advising Government on the necessary market settings to deliver competitive and efficient digital infrastructure to drive growth in the broader economy promote efficient communications markets advising Government on the necessary market settings to promote competition, while ensuring access to basic services, making available socially valuable content, and safeguarding consumers from inappropriate content and unfair dealing. This is supported through research to identify, assess and explain developments in digital technologies and communications networks and services. 18

27 Communications Budget Statements Outcome expense statement Table 2.1 provides an overview of the total expenses for Outcome 1, by programme. Table 2.1: Budgeted expenses for Outcome 1 Outcome 1: Promote an innovative and competitive communications sector, Estimated Estimated through policy development, advice and program delivery, so all actual Expenses Australians can realise the full potential of digital technologies and expenses communications services. $'000 $'000 Programme 1.1: Digital Technologies and Communications Services Administered expenses Ordinary annual services (Appropriation Bill No. 1) 128, ,114 Expenses not requiring appropriation in the Budget year (a) 14, ,352 Departmental expenses Departmental appropriation (b) 91,992 84,426 Expenses not requiring appropriation in the Budget year (a) 6,105 5,941 Total for Programme , ,833 Outcome 1 Totals by appropriation type Administered Expenses Ordinary annual services (Appropriation Bill No. 1) 128, ,114 Expenses not requiring appropriation in the Budget year (a) 14, ,352 Departmental expenses Departmental appropriation (b) 91,992 84,426 Expenses not requiring appropriation in the Budget year (a) 6,105 5,941 Total expenses for Outcome 1 240, , Average Staffing Level (number) (a) Expenses not requiring appropriation in the Budget year is made up of issuing of indefeasible rights of use, depreciation expense, amortisation expense, exchange rate movements, inventory expense and audit fees. (b) Departmental Appropriation combines "Ordinary Annual services (Appropriation Act No. 1, Bill (No. 3) and Bill (no. 5)" and Revenue from independent sources (s74). Note: Departmental appropriation splits and totals are indicative estimates and may change in the course of the budget year as government priorities change. 19

28 Communications Budget Statements Contributions to Outcome 1 Programme 1.1: Digital Technologies and Communications Services Programme objective The Department provides strategic advice on and effectively administers programmes and initiatives that promote an innovative and competitive communications sector so all Australians can realise the full potential of digital technologies and communications services. This includes advising on and facilitating: opportunities arising from the innovative adoption and use of digital technologies the delivery of competitive and efficient digital infrastructure to drive growth in the broader economy promotion of competition, while ensuring access to basic services, making available socially valuable content, and safeguarding consumers from inappropriate content and unfair dealing. Linked to: Elements of the following administered items in the programme are delivered by other agencies: Australia s new broadband network is being rolled out by nbn co limited (nbn), which is planning, building and operating the network. The Australian Government s online safety measures are also delivered through the Australian Communications and Media Authority (ACMA), the Australian Federal Police, the Attorney-General s Department and the Office of the Commonwealth Director of Public Prosecutions. From 1 July 2015, the ACMA s and most of the Department s online safety functions will be subsumed by the Children s e-safety Commissioner, which will be an independent statutory office within the ACMA. The Australian Government s Cybersecurity programmes are also delivered through the Attorney-General s Department, the ACMA, the Australian Federal Police, the Australian Government Information Management Office and the Defence Signals Directorate. The ICT Centre of Excellence programme is also delivered through the Australian Research Council and provides funding to National ICT Australia Ltd (NICTA). The ACMA recoups the cost of the Consumer Representation Grants Program allocated to the Australian Communications Consumer Action Network (ACCAN), under section 593 of the Telecommunications Act 1997, from licensed carriers, under the Telecommunications (Carrier Licence Charges) Act The ACMA is responsible for determining and collecting telecommunication carriers contributions to the Telecommunications Industry Levy, and for 20

29 Communications Budget Statements enforcing compliance with the USO and emergency call service requirements. The Department works closely with the ACMA on a range of matters and provides advice in relation to the national broadcasters. Programme expenses Overall programme expenses significantly increase from , reflecting the special account expenses relating to the Telecommunications Universal Service Special Account, which will be transferred from TUSMA to the Department. Apart from these special account expenses, other programme expenses decrease in and across the forward years. This reflects the conclusion of funding for a number of programmes including: ICT Centre of Excellence; Digital Television Switchover Spectrum Restacking Assistance; elements of the Digital Productivity programme; and the Regional Equalisation Plan. The phasing of the Government s commitment to the Mobile Black Spot Programme also impacts on the forward estimates profile. 21

30 Communications Budget Statements Programme Expenses Estimated Budget Forward Forward Forward actual estimate estimate estimate $'000 $'000 $'000 $'000 $'000 Annual administered expenses: Community Broadcasting Program 17,359 16,880 15,491 15,492 15,492 Consumer Representation Grants Program 2,164 2,163 2,165 2,164 2,164 Cybersafety 331 Digital Productivity 13,852 3,754 2,396 1,500 1,500 Digital Television Switchover 11,719 11,997 10,790 11,016 11,183 Digital Television Switchover - Spectrum Restacking Assistance 46,983 ICT Centre of Excellence 21,435 21,000 International Organisation Contributions 3,665 3,827 3,827 3,844 3,849 Mobile Black Spot Programme 40,000 30,000 30,000 Regional Equalisation Plan 1,000 1,000 1,000 Spectrum - Assistance to Broadcasters for Electronic News Gathering 9,103 Stay Smart Online Expenses not requiring appropriation in the Budget year (a) International Organisation Contributions 2,583 2,660 2,777 2,777 2,790 Regional Backbone Blackspots Program (b) 12,009 11,085 9,353 7,990 7,990 Special Account Expenses: Public Interest Telecommunications Services Special Account (c) 327, , , ,600 National Relay Service (c) 20,000 20,000 20,000 20,000 Universal Service Obligation (c) 270, , , ,000 Other Public Interest Services (c) 37,600 72,200 47,600 37,600 Annual departmental expenses: Programme support 91,992 84,426 83,689 84,524 85,362 Expenses not requiring appropriation in the Budget year 6,105 5,941 5,650 5,158 4,502 Total programme expenses (d) 240, , , , ,932 (a) Expenses not requiring appropriation in the Budget year is made up of issuing of indefeasible rights of use, depreciation expense, amortisation expense, exchange rate movements, inventory expense and audit fees. (b) This programme was previously called National Broadband Network Regional Backbone Blackspots Program. (c) The special account expenses commence from reflecting the transfer of TUSMA functions to the Department. (d) The expenses above do not include the equity funding to be provided to nbn over the period to , which is as follows: Estimated Budget Forward Forward Forward actual $b $b Estimate $b Estimate $b Estimate $b Total

31 Communications Budget Statements Programme 1.1 Deliverables ENHANCING DIGITAL PRODUCTIVITY Research, analysis and advice on digital technologies, including how developments can enhance productivity, competition and innovation across the economy, and implications and recommendations for government policy. Leadership, strategic policy advice and coordination, and support to maximise the productivity benefits across the economy from digital services and technologies, including: advising on necessary settings to maximise the benefits from use of open data producing independent research on developments across the communications and digital technologies sectors to inform policy advice and development funding NICTA through the ICT Centre of Excellence programme to support ICT research to advance the development of the digital economy developing national policies, standards and coordinated approaches to spatial data sets, including geocoded national address data, to support initiatives such as the rollout of Australia s new broadband network and the commitment to open Data principles working with other government agencies to implement technologies that boost productivity and improve government online systems, products, services and data sets. EXPANDING DIGITAL INFRASTRUCTURE Strategic advice and policy leadership to achieve the Government s plan for Australia s new broadband network, including advice on implementation of the initiative and support for the Minister for Communications in his role as Shareholder Minister of nbn. Working with nbn and industry to ensure consumers and small business receive useful information about the rollout of Australia s new broadband network. Advice on investment in, and access to, communications infrastructure and on infrastructure resilience and security. Development and implementation of the Mobile Black Spot Programme to expand reliable mobile phone coverage and competition in outer metropolitan, regional and remote communities. Reforming spectrum policy arrangements to ease the compliance burden on users and improve accessibility for new technologies. Collaboration across government, industry, research institutions and the community to develop policies that deliver more efficient, trusted and secure enabling digital infrastructure. 23

32 Communications Budget Statements PROMOTING EFFICIENT COMMUNICATIONS MARKETS Implementation and monitoring of, and improvements to, the regulatory framework for Australia s new broadband network, including regulations applying to nbn operations and Telstra s Structural Separation and Migration Plan. Support the Minister on ABC and SBS policy and funding matters, the transmission of ABC and SBS services and on ABC and SBS board appointments. Provision of Community Broadcasting Program funding to assist community broadcasters, including with the delivery of community radio services. Advice to the Minister on appropriate consumer safeguards relating to the provision of content and communications services. Advice to the Minister on the production and provision of content, including media diversity and ownership. In consultation with stakeholders, assess the extent to which the current regulatory frameworks operating in the communications, broadcasting and media sectors remain appropriate, particularly given technological changes. Supporting consumer interests and protection against harm through policy advice and: funding for the Australian Communications Consumer Action Network through the Consumer Representation Grants Program advice on cybersecurity initiatives to inform and educate Australian consumers and small businesses about managing the risk of financial fraud and loss of personal information online. Establishment of the Office of the Children s e-safety Commissioner by 1 July Support for, the Ministerial Advisory Council on Communications, which is tasked with providing advice on deregulation options across the Portfolio. Advice on the postal sector and protection of the Australian Government s interest as a shareholder of Australia Post. Implement and manage contractual arrangements for the delivery of telecommunications universal services. Deliverables Estimated actual Budget Forward estimate Forward estimate Forward estimate Mobile Black Spot Programme Mobile base stations

33 Communications Budget Statements Programme 1.1 Key performance indicators The Department s key performance indicators reflect its strategic direction and priorities as outlined in the Corporate Plan ENHANCING DIGITAL PRODUCTIVITY Policy advice on maximising the productivity benefits across the economy arising from use and application of digital services and technology. Timely, effective and evidence-based policy advice on e-government capabilities and readiness. Progress on the increased number of Government data sets accessible online. Take-up of, and feedback on, initiatives and projects to maximise productivity benefits from digital services and technologies, including Digital Enterprises, Digital Business Kits and Digital Careers. Quality and contribution of research produced by the Department to identify, assess and explain developments in technologies and communications networks and services. NICTA s contribution to the commercialisation of ICT and online innovation and the development of ICT and online research and commercialisation skills. EXPANDING DIGITAL INFRASTRUCTURE High-quality, strategic and timely policy advice on: investment in, and access to, communications infrastructure deployment of communications infrastructure including the implementation of Australia s new broadband network. Successful policy leadership and advice on monitoring of, and information about, expanding digital infrastructure including Australia s new broadband network rollout and improved mobile coverage in regional Australia. The Mobile Black Spot Programme will receive significant co-contributions from industry, state and territory governments, local councils and third parties and facilitate competition in the provision of mobile services in outer metropolitan, regional and remote communities. Successful leadership and collaboration across government, industry, research institutions and the community to develop policies that deliver more efficient, trusted and secure enabling digital infrastructure. Advice on further opportunities for making spectrum available for new services. PROMOTING EFFICIENT COMMUNICATIONS MARKETS High-quality, strategic and timely advice on necessary market settings to promote competition, while ensuring access to basic services, making available socially valuable content, and safeguarding consumers from inappropriate content and unfair dealing. Effective regulatory frameworks for, and information about open, competitive and efficient communications markets, consumer interests, and online safety 25

34 Communications Budget Statements and security. Contribution to the broad objective that all Australians have access to a range of free-to-air and subscription television and radio services, through effective policy and effectively administered funding. Regular, timely collaboration and engagement on portfolio deregulation options, through the effective establishment and support for the Ministerial Advisory Council on Communications. Office of the Children s e-safety Commissioner is established to promote a coordinated approach to online safety of children. Delivery of public interest services within standards, rules and benchmarks outlined in contracts Key Performance Indicators Estimated Budget Forward Forward Forward actual estimate estimate estimate National Innovation Level of commercial revenue generated by the ICT Centre of Excellence ($m) PhD candidates sponsored by the ICT Centre of Excellence Number of Australian jobs in ICT Centre of Excellence spin outs

35 Communications Budget Statements Section 3: Explanatory tables and budgeted financial statements Section 3 presents explanatory tables and budgeted financial statements which provide a comprehensive snapshot of entity finances for the budget year. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations and programme expenses, movements in administered funds, special accounts and government indigenous expenditure. 3.1 EXPLANATORY TABLES Movement of administered funds between years Administered funds can be provided for a specified period, for example under annual Appropriation Acts. Funds not used in the specified period with the agreement of the Finance Minister may be moved to a future year. Table shows the movement of administered funds approved between years. Table 3.1.1: Movement of administered funds between years $'000 $'000 $'000 $'000 $'000 Outcome 1: Other Public Interest Services - (20,000) 10,000 10,000 - Mobile Black Spot Programme (10,000) 10, Total Movement of Administered Funds (10,000) (10,000) 10,000 10,000 - Figures displayed as a negative (-) represent a decrease in funds and a positive reflect an increase in funds. 27

36 Communications Budget Statements Special accounts Special accounts provide a means to set aside and record amounts used for specified purposes. Special accounts can be created by a Finance Minister s determination under section 78 of the PGPA Act or under separate enabling legislation (section 80 of the PGPA Act refers). Table shows the expected additions (receipts) and reductions (payments) for each account used by the Department of Communications. Table 3.1.2: Estimates of special account flows and balances Outcome Opening Receipts Payments Adjustments Closing balance balance $'000 $'000 $'000 $'000 $'000 Public Interest Telecommunications Services Special Account s80 PGPA (a) Act (A) and (D) (b) 1 32, , ,907 15,860 Public Interest Telecommunications Services Special Account s80 PGPA (a) Act (A) and (D) (b) 32,560 32,560 Australia New Zealand Land Information - s80 PGPA (a) Act (A) Australia New Zealand Land Information - s80 PGPA (a) Act (A) Total special accounts Budget estimate 32, , ,50 15,920 Total special accounts estimated actual ,560 32,663 (A) = Administered (D) = Departmental (a) Public Governance, Performance and Accountability Act 2013 (b) The operation of this account will transfer to the Department of Communications from Telecommunications Universal Service Management Agency (TUSMA) from 1 July 2015 following the passage of the Telecommunications Legislation Amendment (Deregulation) Act Australian Government Indigenous expenditure (AGIE) The AGIE table consolidates Indigenous specific spending to provide an overview of the spending commitment for the Department of Communications. Table 3.1.3: Australian Government Indigenous expenditure Approp Approp Special Total Other Total Programme Bill Bill approp approp No. 1 No. 2 $'000 $'000 $'000 $'000 $'000 $'000 Department of Communications Outcome 1 Administered , ,198-1, Administered , ,200-1, Total outcome , ,198-1,198 Total outcome , ,200-1,200 Total AGIE , ,198-1,198 Total AGIE , ,200-1,200 28

37 Communications Budget Statements 3.2 BUDGETED FINANCIAL STATEMENTS Differences in entity resourcing and financial statements There are no significant differences between the resource information presented in the Budget Papers and Portfolio Budget Statements as a result of differences between Australian Accounting Standards (AAS) and Government Finance Statistics (GFS) Analysis of budgeted financial statements Departmental Financial Statements Comprehensive Income Statement (showing net cost of services) Revenue from Government in has decreased from the Portfolio Additional Estimates Statements, mainly reflecting the transfer of Communications functions to the Digital Transformation Office. Schedule of Administered Activity Schedule of income and expenses administered on behalf of Government Administered expenses in have decreased from the Portfolio Additional Estimates Statements predominantly due to the movement of funds. Twenty million was moved from into the forward years for the Telecommunications Universal Service Special Account for Other Public Interest Services and $10 million was moved from to for the Mobile Black Spot Programme. Additionally, savings of $8.5 million were returned to budget from the Digital Television Switchover - Spectrum Restacking Assistance programme in

38 Communications Budget Statements Budgeted financial statements tables Table 3.2.1: Comprehensive income statement (showing net cost of services) for the period ended 30 June Estimated Budget Forward Forward Forward actual estimate estimate estimate $'000 $'000 $'000 $'000 $'000 EXPENSES Employee benefits 65,015 57,815 58,849 59,968 61,341 Suppliers 27,304 26,938 25,168 24,884 24,345 Depreciation and amortisation 5,715 5,551 5,260 4,768 4,112 Finance costs Total expenses 98,097 90,367 89,339 89,682 89,864 LESS: OWN-SOURCE INCOME Own-source revenue Sale of goods and rendering of services 615 Total own-source revenue 615 Gains Other gains Total gains Total own-source income 1, Net cost of (contribution by) Services 97,092 89,977 88,949 89,292 89,474 Revenue from Government 91,377 84,426 83,689 84,524 85,362 Surplus (Deficit) (a) (5,715) (5,551) (5,260) (4,768) (4,112) OTHER COMPREHENSIVE INCOME Total other comprehensive income (loss) Total comprehensive income (loss) (5,715) (5,551) (5,260) (4,768) (4,112) Total comprehensive income (loss) attributable to the Australian Government (5,715) (5,551) (5,260) (4,768) (4,112) Note: Impact of Net Cash Appropriation Arrangements Total Comprehensive Income (loss) excluding depreciation/amortisation expenses previously funded through revenue appropriations. less depreciation/amortisation Expenses previously funded through revenue Appropriations 5,715 5,551 5,260 4,768 4,112 Total Comprehensive Income (loss) - as per the Statement of Comprehensive Income (5,715) (5,551) (5,260) (4,768) (4,112) Prepared on Australian Accounting Standards basis. (a) This operating loss relates to depreciation expenses, for which agencies receive no funding. 30

39 Communications Budget Statements Table 3.2.2: Budgeted departmental balance sheet (as at 30 June) Estimated Budget Forward Forward Forward actual estimate estimate Estimate $'000 $'000 $'000 $'000 $'000 ASSETS Financial assets Cash and cash equivalents Trade and other receivables 9,732 8,990 8,912 9,001 9,090 Total financial assets 10,482 9,740 9,662 9,751 9,840 Non-financial assets Land and buildings 5,623 4,689 3,721 3,619 3,668 Property, plant and equipment 4,579 5,416 6,485 6,308 6,392 Intangibles 9,309 8,092 6,972 6,781 6,872 Other non-financial assets 1,311 1,292 1,207 1,194 1,168 Total non-financial assets 20,822 19,489 18,385 17,902 18,100 Total assets 31,304 29,229 28,047 27,653 27,940 LIABILITIES Payables Suppliers 3,047 3,015 2,848 2,820 2,775 Lease Incentives Other payables 2,386 2,345 2,381 2,399 2,423 Total payables 5,898 5,990 6,012 5,955 5,750 Provisions Employee provisions 18,274 16,291 16,576 16,884 17,262 Other 3,967 1,745 1,809 1,874 1,939 Total provisions 22,241 18,036 18,385 18,758 19,201 Total liabilities 28,139 24,026 24,397 24,713 24,951 Net assets 3,165 5,203 3,650 2,940 2,989 EQUITY (a) Parent entity interest Contributed equity 16,080 20,317 24,558 28,856 33,192 Reserves 9,834 9,834 9,834 9,834 9,834 Retained surplus (accumulated deficit) (22,749) (24,948) (30,742) (35,750) (40,037) Total parent entity interest 3,165 5,203 3,650 2,940 2,989 Total Equity 3,165 5,203 3,650 2,940 2,989 Prepared on Australian Accounting Standards basis. (a) Equity is the residual interest in assets after deduction of liabilities. 31

40 Communications Budget Statements Table 3.2.3: Departmental statement of changes in equity summary of movement (Budget year ) Retained Asset Contributed Total earnings revaluation equity/ equity reserve capital $'000 $'000 $'000 $'000 Opening balance as at 1 July 2015 Balance carried forward from previous period (22,749) 9,834 16,080 3,165 Adjusted opening balance (22,749) 9,834 16,080 3,165 Comprehensive income Surplus (deficit) for the period (5,551) (5,551) Total comprehensive income Of which: Attributable to the Australian Government (5,551) (5,551) Transactions with owners Contributions by owners Departmental Capital Budget (DCBs) 4,237 4,237 Other 3,352 3,352 Sub-total transactions with owners 3,352 4,237 7,589 Estimated closing balance as at 30 June 2016 (24,948) 9,834 20,317 5,203 Closing balance attributable to the Australian Government (24,948) 9,834 20,317 5,203 Prepared on Australian Accounting Standards basis. 32

41 Communications Budget Statements Table 3.2.4: Budgeted departmental statement of cash flows (for the period ended 30 June) Estimated Budget Forward Forward Forward actual estimate estimate estimate $'000 $'000 $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Appropriations 100,713 84,426 83,689 84,524 85,362 Goods and services 615 Other 30 Total cash received 101,358 84,426 83,689 84,524 85,362 Cash used Employees 74,005 56,039 59,378 59,729 62,096 Suppliers 27,179 28,387 24,311 24,795 23,266 Total cash used 101,184 84,426 83,689 84,524 85,362 Net cash from (used by) operating activities 174 INVESTING ACTIVITIES Cash used Purchase of property, plant, equipment and intangibles 6,458 4,237 4,241 4,298 4,336 Total cash used 6,458 4,237 4,241 4,298 4,336 Net cash from (used by) investing activities (6,458) (4,237) (4,241) (4,298) (4,336) FINANCING ACTIVITIES Cash received Contributed equity 6,458 4,237 4,241 4,298 4,336 Total cash received 6,458 4,237 4,241 4,298 4,336 Net cash from (used by) financing activities 6,458 4,237 4,241 4,298 4,336 Net increase (decrease) in cash held 174 Cash and cash equivalents at the beginning of the reporting period Cash and cash equivalents at the end of the reporting period Prepared on Australian Accounting Standards basis. 33

42 Communications Budget Statements Table 3.2.5: Departmental capital budget statement (for the period ended 30 June) Estimated Budget Forward Forward Forward actual estimate estimate estimate $'000 $'000 $'000 $'000 $'000 NEW CAPITAL APPROPRIATIONS Capital budget Bill 1 (DCB) 4,095 4,237 4,241 4,298 4,336 Equity injections Bill 2 6,400 Total new capital appropriations 10,495 4,237 4,241 4,298 4,336 Provided for: Purchase of non-financial assets 4,495 4,237 4,241 4,298 4,336 Other Items 6,000 Total Items 10,495 4,237 4,241 4,298 4,336 PURCHASE OF NON-FINANCIAL ASSETS Funded by capital appropriations 400 Funded by capital appropriation - DCB 6,058 4,237 4,241 4,298 4,336 TOTAL 6,458 4,237 4,241 4,298 4,336 RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE Total purchases 6,458 4,237 4,241 4,298 4,336 Total cash used to acquire assets 6,458 4,237 4,241 4,298 4,336 Prepared on Australian Accounting Standards basis. 34

43 Communications Budget Statements Table 3.2.6: Statement of asset movements (Budget year ) Land and Property, plant Computer Total Buildings and equipment software and intangibles $'000 $'000 $'000 $'000 As at 1 July 2015 Gross book value 10,110 8,641 23,360 42,111 Accumulated depreciation/amortisation and impairment (4,487) (4,062) (14,051) (22,600) Opening net book balance 5,623 4,579 9,309 19,511 CAPITAL ASSET ADDITIONS Estimated expenditure on new or replacement assets By purchase appropriation ordinary annual services 808 2,052 1,377 4,237 Total additions 808 2,052 1,377 4,237 Other movements Depreciation/amortisation expense (1,742) (1,215) (2,594) (5,551) Total other movements (1,742) (1,215) (2,594) (5,551) As at 30 June 2016 Gross book value 10,918 10,693 24,737 46,348 Accumulated depreciation/amortisation and impairment (6,229) (5,277) (16,645) (28,151) Closing net book balance 4,689 5,416 8,092 18,197 Prepared on Australian Accounting Standards basis. 35

44 Communications Budget Statements Table 3.2.7: Schedule of budgeted income and expenses administered on behalf of Government (for the period ended 30 June) EXPENSES ADMINISTERED ON BEHALF OF GOVERNMENT Estimated Budget Forward Forward Forward actual estimate Estimate estimate $'000 $'000 $'000 $'000 $'000 Suppliers (a) 13, , , , ,100 Grants 115,217 96,794 61,842 60,172 30,339 Depreciation and amortisation 7,990 7,990 7,990 7,990 7,990 Payments to Corporate Entities 1,349,074 1,347,683 1,292,754 1,302,941 1,313,477 Other expenses 6,248 6,487 6,604 6,621 6,639 Total expenses administered on behalf of Government 1,491,797 1,790,149 1,733,253 1,715,824 1,686,545 LESS: OWN-SOURCE INCOME Own-source revenue Non-taxation revenue Interest 808 1,634 1,946 1,400 1,049 Rental income 1,529 1,529 1,529 1,529 1,529 Total non-taxation revenue 2,337 3,163 3,475 2,929 2,578 Total own-source revenues administered on behalf of Government 2,337 3,163 3,475 2,929 2,578 Total own-sourced income administered on behalf of Government 2,337 3,163 3,475 2,929 2,578 Net Cost of (contribution by) services 1,489,460 1,786,986 1,729,778 1,712,895 1,683,967 Surplus (Deficit) (1,489,460) (1,786,986) (1,729,778) (1,712,895) (1,683,967) Total comprehensive income (loss) (1,489,460) (1,786,986) (1,729,778) (1,712,895) (1,683,967) Prepared on Australian Accounting Standards basis. (a) Increase from reflects the Department of Communications taking over responsibility for the National Relay Service, Universal Service Obligation and Other Public Interest initiatives from the Telecommunications Universal Service Management Agency (TUSMA). 36