portfolio additional estimates statements 2017-18 · user guide ix user guide the purpose of the...

Portfolio Additional Estimates Statements 2017-18

Defence Portfolio

Explanations of Additional Estimates 2017-18

Defence Portfolio Additional Estimates Statements 2017–18

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© Commonwealth of Australia 2018

ISBN 978-0-6480977-2-3

This publication is available for your use under a Creative Commons BY Attribution 3.0 Australia, with the exception of the Commonwealth Coat of Arms, the Department of Defence and Defence Housing Australia logo, photographs, images, signatures and where otherwise stated. The full licence terms are available from http://creativecommons.org/licenses/by/3.0/au/legalcode.

Use of the Department of Defence’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 of Defence endorses you or your use of the work).

Department of Defence material used 'as supplied'

Provided you have not modified or transformed the Department of Defence material in any way including, for example, by changing the Department of Defence text; calculating percentage changes; graphing or charting data; or deriving new statistics from published Department of Defence statistics – then the Department of Defence prefers the following attribution:

Source: The Australian Government Department of Defence

Derivative material

If you have modified or transformed the Department of Defence ‘s material, or derived new material from those of the Department of Defence in any way, then the Department of Defence prefers the following attribution:

Based on The Australian Government Department of Defence’s data.

Defence Housing Australia material used 'as supplied'

Provided you have not modified or transformed the Defence Housing Australia material in any way including, for example, by changing the Defence Housing Australia text; calculating percentage changes; graphing or charting data; or deriving new statistics from published Defence Housing Australia statistics – then the Defence Housing Australia prefers the following attribution:

Source: The Australian Government Defence Housing Australia

Derivative material

If you have modified or transformed the Defence Housing Australia‘s material, or derived new material from those of the Defence Housing Australia in any way, then the Defence Housing Australia prefers the following attribution:

Based on The Australian Government Defence Housing Australia’s data.

http://creativecommons.org/licenses/by/3.0/au/deed.en


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iv

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 www.itsanhonour.gov.au)

Other Uses

Inquiries regarding this licence and any other use of this document are welcome at:

Assistant Secretary Financial Coordination R1-2-C027 Department of Defence PO Box 7900 Canberra BC ACT 2610 Telephone: (02) 6265 7341 Email: [email protected]

http://www.itsanhonour.gov.au/


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Abbreviations and Conventions

The following notations 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 Assistant Secretary Financial Coordination, Chief Finance Officer Group, Department of Defence on (02) 6265 7341. Links to Portfolio Budget Statements (including Portfolio Additional Estimates Statements and Portfolio Supplementary Additional Estimates Statements) can be located on the Australian Government Budget website at www.budget.gov.au.

User Guide

vii

USER GUIDE TO THE

PORTFOLIO ADDITIONAL ESTIMATES STATEMENTS


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User Guide

ix

USER GUIDE

The purpose of the 2017-18 Portfolio Additional Estimates Statements (PAES), like that 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. The focus of the PAES differs from the PB Statements in one important aspect. While the PAES include an Entity Resource Statement to inform Parliament of the revised estimate of the total resources available to an entity, the focus of the PAES is on explaining the changes in resourcing by outcome(s) since the Budget. As such, the PAES provides information on new measures and their impact on the financial and/or non-financial planned performance of programs supporting those outcomes.

The PAES facilitate understanding of the proposed appropriations in Appropriation Bills (Nos. 3 and 4) and Appropriation (Parliamentary Departments) Bill (No. 2) 2017-2018. In this sense, the PAES is declared by the Additional Estimates Appropriation Bills to be a ‘relevant document’ to the interpretation of the Bills according to section 15AB of the Acts Interpretation Act 1901.

Whereas the Mid-Year Economic and Fiscal Outlook (MYEFO) 2017-18 is a mid-year budget report which provides updated information to allow the assessment of the Government’s fiscal performance against its fiscal strategy, the PAES update the most recent budget appropriations for entities within the portfolio.


x

Structure of the Portfolio Additional Estimates Statements

The PAES are presented in three parts with subsections.

User guide

Provides a brief introduction explaining the purpose of the PAES.

Portfolio overview

Provides an overview of the portfolio, including a chart that outlines the outcomes for entities

in the portfolio.

Entity Additional Estimates Statements

A statement (under the name of the entity) for each entity affected by Additional Estimates.

Section 1: Entity

overview and resources

This section details the changes in total resources available to an

entity, the impact of any measures since Budget, and impact of

Appropriation Bills Nos. 3 and 4.

Section 2: Revisions to

outcomes and planned

performance

This section details changes to Government outcomes and/or

changes to the planned performance of entity programs.

Section 3: Special

account flows and

budgeted financial

statements

This section contains updated explanatory tables on special

account flows and staffing levels and revisions to the budgeted

financial statements.

Portfolio glossary

Explains key terms relevant to the Portfolio.

Table of Contents

1

CONTENTS

DEFENCE PORTFOLIO OVERVIEW ..................................................................................................... 5

Ministers and their Portfolio Responsibilities ...................................................................................... 6

Changes affecting the Portfolio .................................................................................................................. 6

Portfolio Structure and Outcomes ............................................................................................................. 7

DEPARTMENT OF DEFENCE ............................................................................................................... 13

Section 1: Defence Overview and Resources ....................................................................................... 13

1.1 Strategic Direction Statement ............................................................................................................. 13

1.2 Defence Resource Statement ............................................................................................................... 13

1.3 Budget Measures .................................................................................................................................. 16

1.4 Capital Investment Program .............................................................................................................. 18

1.5 People .................................................................................................................................................... 20

Section 2: Defence Outcomes and Planned Performance .................................................................. 26

2.1 Changes to Outcome and Program Structures ................................................................................ 26

2.2 Outcomes and Performance Information ......................................................................................... 27

Section 3: Defence Explanatory Tables and Budgeted Financial Statements ................................ 56

3.1 Explanatory Tables .............................................................................................................................. 56

3.2 Resource Summary .............................................................................................................................. 62

3.3 Budgeted Financial Statements .......................................................................................................... 66

APPENDICES ............................................................................................................................................ 83

Appendix A: Defence Cooperation Program ......................................................................................... 84

Appendix B: Integrated Investment Program ........................................................................................ 85

Appendix C: Top 30 Acquisition Projects by 2017–18 Forecast Expenditure .................................... 86

Appendix D: Top 30 Sustainment Products by 2017–18 Forecast Expenditure ................................ 94

Appendix E: Facilities and Infrastructure Program .............................................................................. 98

Appendix F: Status of Major Projects Foreshadowed for Government and Parliamentary Standing

Committee on Public Works Consideration (PWC) in 2017–18 ......................................................... 112

2

DEFENCE HOUSING AUSTRALIA ................................................................................................... 119

Section 1: DHA Overview and Resources .......................................................................................... 119

1.1 Strategic Direction Statement ........................................................................................................... 119

1.2 DHA Resource Statement.................................................................................................................. 122

1.3 Budget Measures ................................................................................................................................ 123

Section 2: DHA Outcomes and Planned Performance ..................................................................... 124

2.1 Outcome and Performance Information ......................................................................................... 124

Section 3: DHA Explanatory Tables and Budgeted Financial Statements ................................... 126

3.1 Explanatory Tables ............................................................................................................................. 126

3.2 Budgeted Financial Statements ........................................................................................................ 127

GLOSSARY .............................................................................................................................................. 132

ACRONYMS ............................................................................................................................................ 139

Portfolio Overview

3

PORTFOLIO OVERVIEW


4


Portfolio Overview

5

DEFENCE PORTFOLIO OVERVIEW The Defence Portfolio consists of component organisations that together are responsible for the defence of Australia and its national interests. The most significant bodies are:

• the Department of Defence: a department of state headed by the Secretary of the Department of Defence; and

• the Australian Defence Force (ADF): commanded by the Chief of the Defence Force and consisting of the three Services, which are commanded by Service Chiefs.

In practice, these bodies work together closely and are broadly regarded as one organisation known simply as Defence. The portfolio contains some smaller entities, including a number of statutory offices, trusts and companies created by the Public Governance, Performance and Accountability Act 2013, Defence Force Discipline Act 1982 and Defence Act 1903, which are independent but reside administratively within Defence. These include, amongst others, Defence Housing Australia (DHA) and the Australian Strategic Policy Institute (ASPI). The portfolio also contains the Department of Veterans’ Affairs and associated bodies, as designated in the Administrative Arrangements Order. The Department of Veterans’ Affairs is administered separately to Defence and information related to the Department can be found in the Department of Veterans’ Affairs portfolio budget and portfolio additional estimate statements.

The Naval Defence Act 1910 and Air Force Act 1923 were repealed on 1 July 2016.

A full outline of the Department of Defence’s Portfolio Overview can be found in the Portfolio

Budget Statements 2017–18 (PBS 2017–18).


6

Ministers and their Portfolio Responsibilities

CHANGES AFFECTING THE PORTFOLIO

On 20 December 2017, the new ministry was sworn in following the Prime Minister’s announcement of new ministerial arrangements. Senator the Hon Marise Payne and the Hon Christopher Pyne MP continue as the Minister for Defence and Minister for Defence Industry respectively. The Hon Michael McCormack MP was sworn in as the Minister for Defence Personnel, replacing the Hon Dan Tehan MP. The portfolio responsibilities have not changed since publication of the PBS 2017–18.

Portfolio Overview

7

PORTFOLIO STRUCTURE AND OUTCOMES

Figure 1: Defence Portfolio Structure and Outcomes

Department of Defence Secretary: Greg Moriarty

Chief of the Defence Force: Air Chief Marshal Mark Binskin, AC

Outcome 1: Defend Australia and its national interests through the conduct of operations and provision of

support for the Australian community and civilian authorities in accordance with Government direction.

Outcome 2: We protect and advance Australia’s strategic interests through the provision of strategic policy, the development, delivery and sustainment of military, intelligence and enabling capabilities, and the promotion of

regional and global security and stability as directed by Government.

Defence Housing Australia

Managing Director: Ms Jan Mason

Outcome 1: To contribute to Defence outcomes by providing total housing services that meet Defence

operational and client needs through a strong customer and business focus.

Minister for Defence Senator the Hon Marise Payne

Minister for Defence Industry The Hon Christopher Pyne MP

Minister for Defence Personnel The Hon Michael McCormack MP

Secretary Mr Greg Moriarty

Chief of the Defence Force Air Chief Marshal Mark Binskin AC

Department of Defence

Disciplinary appointments

(DFDA)


Various small trusts and companies

Australian Defence Force

Navy Army Air Force

Navy Reserves

Army Reserves

Navy Cadets

Army Cadets

Air Force Cadets

Air Force Reserves


8

Figure 2: Defence Organisational Chart

SecretaryMr Greg Moriarty

Deputy Secretary Defence People

Ms Roxanne Kelley PSM

Deputy Secretary Estate and Infrastructure

Mr Steve Grzeskowiak

Chief Information OfficerMr Stephen Pearson

Acting Associate SecretaryMs Rebecca Skinner

Minister for Veteran’s AffairsMinister for Defence PersonnelHon Michael McCormack MP

Minister for DefenceSenator the Hon Marise Payne

Chief of the Defence ForceAir Chief Marshal Mark Binskin AC

Minister for Defence IndustryHon Christopher Pyne MP

Acting Chief Finance OfficerMs Angela Diamond

Acting Deputy Secretary Strategic Policy and Intelligence

Mr Marc Ablong PSM

Deputy Secretary Capability Acquistion and Sustainment

Mr Kim Gillis

Chief Defence ScientistDr Alex Zelinsky AO

Vice Chief of the Defence ForceVice Admiral Ray Griggs AO, CSC

Chief of ArmyLieutenant General

Angus Campbell DSC, AM

Chief of NavyVice Admiral Tim Barrett AO, CSC

Chief of Air ForceAir Marshal Leo Davies AO, CSC

Chief of Joint CapabilitiesAir Vice Marshal

Warren McDonald AM, CSC

Chief of Joint OperationsVice Admiral

David Lance Johnston AM, CSC

Stars refer to ADF Star rank

Portfolio Overview

9

Senior Executive Changes

The following changes have taken place since the PBS 2017–18:

• On 01 July 2017, Air Vice-Marshal Warren McDonald, AM, CSC was appointed as the inaugural Chief of Joint Capabilities.

• On 22 August 2017, Dr Peter Lawrence, the previous Chief Information Officer, resigned.

• On 22 August 2017, Mr Aiyaswami Mohan commenced acting as the Chief Information Officer.

• On 28 October 2017, Ms Rebecca Skinner commenced acting as the Associate Secretary.

• On 28 October 2017, Mr Marc Ablong, PSM, commenced acting as the Deputy Secretary Strategic Policy and Intelligence.

• On 19 January 2018, Mr Phillip Prior, PSM, the previous Chief Finance Officer, retired from the Australian Public Service.

• On 19 January 2018, Ms Angela Diamond will continue to act as the Chief Finance Officer.

• On 1 February 2018, Mr Stephen Pearson commenced as the Chief Information Officer.

Organisational Structure


• An integrated Australian Defence Force Headquarters (ADFHQ) was established on 03 April 2017 with the appointment of VCDF as the Joint Force Authority on 01 July 2017.

• On 01 July 2017 the Joint Capabilities Group was established.

• On 18 July 2017, the Government announced the Australian Signals Directorate would become a statutory agency within the Defence Portfolio.

• On 28 October 2017, Contestability Division moved to the Associate Secretary Group from Strategic Policy & Intelligence Group.

Defence Portfolio Bodies


Australian Military Forces Relief Trust Fund

Chairman: Brigadier L. Wilton


10



11


Entity Resources and Planned Performance

Section 1: Defence Overview and Resources .......................................................................................... 13

1.1 Strategic Direction Statement ................................................................................................................ 13

1.2 Defence Resource Statement .................................................................................................................. 13

1.3 Budget Measures ..................................................................................................................................... 16

1.4 Capital Investment Program ................................................................................................................. 18

1.5 People ....................................................................................................................................................... 20

Section 2: Defence Outcomes and Planned Performance ..................................................................... 26

2.1 Changes to Outcome and Program Structures ................................................................................... 26

2.2 Outcomes and Performance Information ............................................................................................ 27

Section 3: Defence Explanatory Tables and Budgeted Financial Statements ................................... 56

3.1 Explanatory Tables ................................................................................................................................. 56

3.2 Resource Summary ................................................................................................................................. 62

3.3 Budgeted Financial Statements ............................................................................................................. 66


12



13

DEPARTMENT OF DEFENCE

Section 1: Defence Overview and Resources

1.1 STRATEGIC DIRECTION STATEMENT

No changes have been made to the Defence Strategic Direction Statement since the PBS 2017–18.

1.2 DEFENCE RESOURCE STATEMENT

Table 1: Total Defence Resourcing

Seri

al N

o.

2016-17

Actual

$'000

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

Variation

%

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Defence resourcing

1 30,837,008 Appropriation for departmental outcomes 32,205,226 32,224,574 19,348 0.1 32,042,395 33,176,081 35,423,790

2 1,064,704 Equity injection appropriation 2,365,307 2,299,567 -65,740 -2.8 3,570,643 4,936,690 5,908,843

3 97,000 Prior year appropriation - - - - - - -

4 31,998,712 Current year's appropriation (1 + 2 + 3) 34,570,533 34,524,141 -46,392 -0.1 35,613,038 38,112,771 41,332,632

5 - Draw dow n of appropriations carried forw ard - - - - - - -

6 - Other appropriation receivable movements - - - - - - -

7 -6,497 Return to the Official Public Account[1] -919 -919 - - -942 -966 -990

8 -6,497 Funding from / to the OPA (5 + 6 +7) -919 -919 - - -942 -966 -990

9 31,992,215 Funding from Government (4 + 8) 34,569,614 34,523,222 -46,392 -0.1 35,612,096 38,111,805 41,331,642

10 116,523 Capital receipts 117,282 93,423 -23,859 -20.3 106,051 84,477 71,466

11 623,828 Ow n source revenue (s74 receipts) [2] 503,986 505,543 1,557 0.3 511,738 527,486 551,258

12 - Prior year receipts - - - - - - -

13 740,351 Funding from other sources (10 + 11 + 12) 621,268 598,966 -22,302 -3.6 617,789 611,963 622,724

14 32,732,566 Total Defence funding (9 + 13) 35,190,882 35,122,188 -68,694 -0.2 36,229,885 38,723,768 41,954,366

Administered

15 7,968,613 Administered special appropriations 5,550,242 6,900,598 1,350,356 24.3 5,752,657 5,957,446 6,149,725

16 1,713,749 Ow n source revenue 1,470,206 1,349,960 -120,246 -8.2 1,300,373 1,236,555 1,181,496

17 -1,713,749 Returns to the Official Public Account -1,470,206 -1,349,960 120,246 -8.2 -1,300,373 -1,236,555 -1,181,496

18 7,968,613 Total Administered funding (15 + 16 + 17) 5,550,242 6,900,598 1,350,356 24.3 5,752,657 5,957,446 6,149,725

19 40,701,179 Total Defence resourcing (14 + 18) 40,741,124 42,022,786 1,281,662 3.1 41,982,542 44,681,214 48,104,091

Appropriation carried forward

20 425,991

Appropriation receivable including previous year's

outputs 687,345 425,991 -261,354 -38.0 425,991 425,991 425,991

21 88,823 Cash in bank 47,597 88,823 41,226 86.6 88,823 88,823 88,823

22 514,814 Total appropriations carried forward (20 + 21) 734,942 514,814 -220,128 -30.0 514,814 514,814 514,814

Notes

1. Represents net transfers to and from the Official Public Account.

2. All f igures are net of GST.


14

Annual Appropriations

Table 2: Appropriation Bill (No 3) 2017–18

2016-17

Available

$'000

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Increase in

Estimates

$'000

Decrease in

Estimates

$'000

Departmental Outputs

Outcome 1 30,020,611 1,010,331 944,489 - 65,842

Outcome 2 774,101 31,194,895 31,280,085 85,190 -

Outcome 3 22,462 - -

Total 30,817,174 32,205,226 32,224,574 85,190 65,842

Table 3: Appropriation Bill (No 4) 2017–18

2016-17

Available

$'000

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Increase in

Estimates

$'000

Decrease in

Estimates

$'000

Non-operating

Equity injections [1] 1,064,704 2,365,307 2,299,567 - 65,740

Total non-operating 1,064,704 2,365,307 2,299,567 - 65,740

Note

1. No additional appropriation is provided in Appropriation Bill (No. 4) as the net funding change is negative w i h $65.7m to be

extinguished against Appropriation Bill (No. 2).


15

Drawdown of Appropriations Carried Forward

Table 4: Revised Appropriation Receivable

2017-18

Revised

Estimate

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Portfolio Budget Statements 2017-18 Estimates 687,345 687,345 687,345 687,345

Net movement -261,354 -261,354 -261,354 -261,354

Closing balance appropriation receivable 425,991 425,991 425,991 425,991

Funding from Other Sources

Own Source Revenue

Table 5: Variation in Own Source Revenue

2017-18

Revised

Estimate

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Portfolio Budget Statements 2017-18 Estimates 503,986 515,381 531,229 555,538

Variation in ow n source revenue 1,557 -3,643 -3,743 -4,280

Own source revenue revised estimates 505,543 511,738 527,486 551,258

Prior year receipts - - - -

Total 505,543 511,738 527,486 551,258


16

1.3 BUDGET MEASURES

2017–18 Budget Measures and Other Budget Adjustments

Table 6: Variation to Defence Funding

Program

2017-18

$m

2018-19

$m

2019-20

$m

2020-21

$m

Departmental Budget Measures

Expenditure Measures

Na ional Security — Enhancing Australia's Regional Counter-Terrorism

Assistance[1] 1.1 nfp nfp nfp nfp

Management of Per- and Poly-Fluorinated Alkyl Substances —

community support package for RAAF Base Tindal2.10 -1.8 -2.1 -1.1 -0.7

Naval Shipbuilding College - establishment[2] 2.5 - - - -

Naval Shipbuilding Workforce[3] 2.5 - - - -

Total Departmental Budget Measures -1.8 -2.1 -1.1 -0.7

Other Budget Adjustments

Foreign Exchange Various -89.9 -141.5 -232.9 -312.5

School Pa hw ays Program 2.1 -1.2 -1.2 -1.2 -

Per-and Poly-Fluorinated Alkyl Substances National Health Research

Program2.10 -12.0 -0.1 -0.1 -0.1

Per-and Poly-Fluorinated Alkyl Substances - Australian Research

Council2.1 -13.0 - - -

Other Budget Adjustments [4] Various nfp nfp nfp nfp

Total Other Departmental Budget Adjustments -116.1 -142.8 -234.2 -312.6

Variation to Defence Departmental Funding -117.9 -144.9 -235.4 -313.3

Notes

1. The expenditure for this measure is not for publication (nfp) due to national security reasons.

2. Defence w ill be absorbing the cost of the specif ic initiatives relating to this measure. The expenditure for his measure is not for publication

(nfp) due to commercial-in-confidence considerations.

3. Defence w ill be absorbing the cost ($29.4m) of the specif ic initiatives relating to this measure, being $8.6m in 2017-18; $14.6m in 2018-19;

$6.2m in 2019-20.

4. The expenditure for this adjustment is not for publication (nfp) due to either national security or commercial-in-confidence considera ions.


17

Operations Summary

Table 7: Net Additional Cost of Operations to 2020-21[1]

Actual

Result to

2016-17

$m

2017-18

Revised

Estimate

$m

2018-19

Forward

Estimate

$m

2019-20

Forward

Estimate

$m

2020-21

Forward

Estimate

$m

Total

$m

Operation Slipper 7,312.0 - - - - 7,312.0

Operation Manitou[2] 117.9 54.2 10.0 .. - 182.1

Operation Accordion 463.2 222.2 27.7 23.1 - 736.2

Operation Highroad 357.3 83.5 2.7 1.8 - 445.3

Operation Resolute[3][4] 281.7 55.6 .. - - 337.3

Operation Okra 814.4 453.4 64.2 29.8 - 1,361.8

Operation Augury - Philippines [5] - nfp nfp nfp nfp nfp

Defence Support to the 2018 Commonw ealth Games [6] .. 33.9 0.3 - - 34.2

Total Net Additional Costs 9,346.5 902.8 104.9 54.7 - 10,408.9

Sources of Funding for Operations

Government Supplementation 9,346.5 902.8 104.9 54.7 - 10,408.9

Total Cost 9,346.5 902.8 104.9 54.7 - 10,408.9

Notes

1. This table reflects on-going and new Operations funded under No Win/No Loss arrangements.

2. The value of this Operation Manitou in 2019-20 is $0.001m.

3. Includes funding for expanded ac ivities under Operation Sovereign Borders.

4. The value of this Operation Resolute in 2018-19 is $0 047m.

6. The value of this Defence Support to the 2018 Commonw ealth Games 2016-17 actual result is $0.004m.

5. The expenditure for Operation Augury - Philippines is not for publication (nfp) due to national security reasons.


18

1.4 CAPITAL INVESTMENT PROGRAM

Table 8: Capital Investment Program[1]

Seri

al N

o. 2017-18

Budget

Estimate

$m

2017-18

Revised

Estimate

$m

Variation

$m

1 Major Capital Investment Program 7,426.4 7,288.7 -137.7

2 Capital Facilities Program 2,025.6 2,137.1 111.5

3 ICT Investment Plan 889.0 245.1 -643.9

4 Minors Program 75.0 61.7 -13.3

5 Other Investment[2] 1,185.7 1,057.6 -128.1

6 Total Capital Investment Program 11,601.7 10,790.2 -811.5

Notes

1. Since 2017-18 PBS, the Department has reclassif ied budget previously recorded w ithin the operating budget w hich relates to

capital investment activities to better reflect the nature of these cost.

2. Includes purchases of plant and equipment, and the capital component of repairable items w ithin the capability sustainment

program.

Table 9: Capability Sustainment Program[1]

Seri

al N

o. 2017-18

Budget

Estimate

$m

2017-18

Revised

Estimate

$m

Variation

$m

1 Navy Sustainment 2,092.4 2,400.4 308.0

2 Army Sustainment 1,523.6 1,581.5 57.9

3 Air Force Sustainment 2,396.1 2,645.4 249.3

4 Chief Information Officer Sustainment[2] 971.1 1,402.9 431.8

5 Vice Chief of the Defence Force Sustainment 85.9 278.9 193.0

6 Strategic Policy and Intelligence Sustainment 21.3 138.4 117.1

7 Australian Defence Force Headquarters Sustainment 7.2 13.7 6.5

8 Estate and Infrastructure Group Sustainment[3] 2,007.8 2,539.1 531.3

9 Other Minor Sustainment - 21.6 21.6

10Future Sustainment Costs associated w ith AMCIP, ICT and Facilities

(NPOC)369.0 38.6 -330.4

11 Total Sustainment 9,474.2 11,060.4 1,586.1

2. Chief Information Officer Sustainment includes all ICT sustainment for the Department.

Notes

3. Estate and Infrastructure Group Sustainment includes all estate maintenance, garrison support and associated costs for the

Department.

1. Since 2017-18 PBS, the Department has reclassif ied budget previously recorded w ithin the operating budget w hich relates to

sustainment activities to better reflect the nature of these cost.


19

Table 10: Retained Net Capital Receipts S

eri

al N

o. 2017-18

Budget

Estimate

$m

2017-18

Revised

Estimate

$m

2018-19

Forward

Estimate

$m

2019-20

Forward

Estimate

$m

2020-21

Forward

Estimate

$m

Variation

$m

Property Sales

Proceeds from the sale of land and buildings 71.7 47.8 64.0 40.2 28.2 -23.9

Proceeds from the sale of housing 14 5 14.5 15.2 15.9 16.6 -

Total proceeds from the sale of property 86.2 62.3 79.2 56.0 44.7 -23.9

Costs from the sale of property [1] -44 3 -11.6 -9.9 -6.2 -4.2 32.7

1 Net property proceeds retained by Defence 41.9 50.8 69.3 49.9 40.6 8.9

2 Proceeds from sale of specialist military equipment 7.5 7.5 7.5 7.5 7.5 -

3 Proceeds from sale of infrastructure, plant and equipment 23.3 23.6 19.3 20.9 19.2 0.3

4 Retained Capital Receipts (1+2+3) 72.6 81.7 96.0 78.1 67.1 9.1

Note

1. Costs from the sale of property include remediation w orks.

Table 11: Variation in Estimates of Net Capital Receipts

2017-18

Revised

Estimate

$m

2018-19

Forward

Estimate

$m

2019-20

Forward

Estimate

$m

2020-21

Forward

Estimate

$m

Portfolio Budget Statements 2017-18 Estimates 72.6 170.6 353.3 42.8

Movement in net proceeds from sales associated w ith he capital disposal program 9.1 -74.5 -275.1 24.4

Variation in Net Capital Receipts 9.1 -74.5 -275.1 24.4

Total Net Capital Receipts 81.7 96.0 78.1 67.1


20

1.5 PEOPLE

Workforce Overview

ADF Workforce

No significant change from PBS 2017–18.

Civilian Workforce

The Civilian Workforce has continued to reduce during 2017-18 due to ongoing reforms and the requirement to reshape the workforce associated with the First Principles Review. The civilian workforce is expected to stabilise by the end of 2017-18 and then grow during 2018-19 to reflect priorities outlined in the 2016 Defence White Paper. These include enhancements to intelligence, space and cyber security capabilities.

The table below estimates the APS workforce reaching 17,800 by the end of 2017-18 and increasing to 18,170 from 2018-19.

Table 12: End of Financial Year Full Time Equivalent (FTE) Estimates for 2017–18 and the Forward Estimates

2017-18 EOFY

FTE Budget

Estimate

FTE

Forecast

Outcome

Forecast

Annual

Change

2018-19

Forward

Estimate

2019-20

Forward

Estimate

2020-21

Forward

Estimate

Total APS 18,170 17,800 -370 18,170 18,170 18,170


21

Workforce Summary

The total full-time Defence workforce average is now forecast to be 76,185 in 2017-18, comprising:

• Permanent Forces (77 per cent) of:

– 13,807 Navy Personnel

– 30,568 Army Personnel

– 14,310 Air Force Personnel

• 17,500 APS staff (23 per cent)

Over the forward estimates period, the total full-time workforce will grow by 2,570 from the

forecast of 76,185 in 2017-18 to 78,755 in 2020-21.

The revised forecast for the Reserve Forces in 2017-18 is 989,000 days of service provided by

19,600 members. This represents a reduction of 25,000 days of service rendered and a decrease in

headcount of 100. The number of days served by the Reserve workforce will increase by 55,000

from 989,000 to 1,044,000 over the forward estimates.

The total planned strength of the Defence workforce is shown in Tables 13 and 14, while a

breakdown by Service and rank or level appears at Table 15.


22

Defence People

Pathway to Change continues as Defence’s strategic cultural reform program. Initially launched in

March 2012, the first iteration had an initial implementation period of five years. Although much

has been done since 2012 to strengthen the best in Defence culture, there is more work to be

done. With the initial five year implementation period of Pathway to Change now complete, the

next iteration, Pathway to Change: Evolving Defence Culture 2017-22 was launched internally by

Secretary, Mr Greg Moriarty and Chief of the Defence Force, Air Chief Marshal Mark Binskin AC

on 20 November 2017.

Pathway to Change: Evolving Defence Culture 2017-22 includes a refreshed Cultural Intent

Statement underpinned by specific priorities to take culture reform forward over the next five

years. The refreshed statement of cultural intent demonstrates a repositioning of Defence’s

cultural journey. This statement articulates what Defence represents as an organisation, and how

our Defence people behave and work. The six cultural reform priorities for 2017-22 are:

1. Leadership accountability

2. Capability through inclusion

3. Ethics and workplace behaviours

4. Health, wellness and safety

5. Workplace agility and flexibility

6. Leading and developing integrated teams.

A staggered series of in-depth reviews commenced in 2017-18 in support of the ongoing

evaluation of Defence’s cultural reform progress. The first of these in-depth reviews focuses on

Priority 3: Ethics and Workplace Behaviours, and will complement current and future efforts of

the First Principles Review Behaviours Stream, as well as the need for a continued attention on

addressing unacceptable behaviour.

Defence continues to work with the Department of Veterans’ Affairs, industry and ex-Service

organisations to support Australian Defence Force members through the transition process and

to ensure a successful transition to civilian life and employment where applicable. As part of the

ADF transition transformation program, Defence has improved the transition process through

implementation of a new coaching and mentoring business model. This includes the introduction

of the Job Search Preparation workshops for all members who have served a minimum of one

day full-time continuous service and ensuring all transitioning members have access to their

documentation before they leave.

Additionally, the reintroduction of post separation surveys assists Defence to stay connected

with transitioned members and identify those who may require further support, noting that

transition support is available for up to twelve months after a member has transitioned. Defence

has also begun a review of the Career Transition Assistance Scheme, which provides training and

financial support, to ensure it is flexible, equitable and accessible by all transitioning ADF

members.


23

Table 13: Planned Workforce Allocation for the 2017–18 Budget and Forward Estimates —Average Fulltime[1]

2017-18

Budget

Estimate

2017-18

Revised

Estimate [2] Variation

2018-19

Forward

Estimate [2]

2019-20

Forward

Estimate [2]

2020-21

Forward

Estimate [2]

ADF Permanent Force [3]

Navy 14,123 13,807 -316 14,690 14,726 14,772

Army 30,672 30,568 -104 30,809 30,871 31,050

Air Force 14,399 14,310 -89 14,295 14,493 14,763

1 Total Permanent Force 59,194 58,685 -509 59,794 60,090 60,585

Civilian Employees

APS 17,970 17,500 -470 18,170 18,170 18,170

2 Total Civilian Employees 17,970 17,500 -470 18,170 18,170 18,170

Total Workforce Strength (1 + 2) 77,164 76,185 -979 77,964 78,260 78,755

3. Numbers for ADF Permanent Force include full-time and part-time members and reservists undertaking Continuous Full Time

Service.

Notes

1. All numbers for the full-time w orkforce elements represent average full-time equivalents.

2. Revised Estimates f igures represent forecast 2017-18 achievement for each element of the full-time w orkforce, w hile

Forw ard Estimates f igures represent the Government approved strength for each year.


24

Table 14: Planned Workforce Allocation for the 2017–18 Budget and Forward Estimates —Reserve[1][4]

2017-18

Budget

Estimate:

days

served

(members

paid)

2017-18

Revised

Estimate:

days

served

(members

paid Variation

2018-19

Forward

Estimate:

days

served

(members

paid)

2019-20

Forward

Estimate:

days

served

(members

paid)

2020-21

Forward

Estimate:

days

served

(members

paid)

Active Reserve Force [2]

100,000 95,000 -5,000 100,000 100,000 100,000

(1,850) (1,750) (-100) (1,850) (1,850) (1,850)

690,000 670,000 -20,000 700,000 700,000 700,000

(14,750) (14,750) (0) (15,000) (15,000) (15,000)

210,000 213,800 3,800 220,000 225,000 230,000

(2,870) (2,930) (60) (2,870) (2,870) (2,870)

1,000,000 978,800 -21,200 1,020,000 1,025,000 1,030,000

(19,470) (19,430) (-40) (19,720) (19,720) (19,720)

High Readiness Reserve [3]

14,000 10,200 -3,800 14,000 14,000 14,000

(230) (170) (-60) (230) (230) (230)

14,000 10,200 -3,800 14,000 14,000 14,000

(230) (170) (-60) (230) (230) (230)

1,014,000 989,000 -25,000 1,034,000 1,039,000 1,044,000

(19,700) (19,600) (-100) (19,950) (19,950) (19,950)

2. The Active Reserve Force includes personnel available for voluntary service or rendering service and those w ho are

rendering a specif ied pattern of service.

Total Reserves (1 + 2)

Sub-total High Readiness

Reserve Force

2

1. As the number of days or hours w orked by Reserve members can vary greatly, f igures in Table 14 show the total number of

days rendered, w ith a headcount of members rendering paid service in brackets.

Navy

Army

Air Force

1

Notes

Air Force

Sub-total Active Reserve Force

3. The High Readiness Reserve includes personnel w ho are available for voluntary service at short notice w ith the level and

pattern applied at the Service’s discretion.

4. Reservists on full-time service in the Permanent Forces are not included in Table 14, only in Table 13.


25

Table 15: Breakdown of Average Personnel Numbers by Service and Rank

2017-18

Budget

Estimate

2017-18

Revised

Estimate

Navy[1]

One Star and above 53 53

Senior Officers [2] 601 597

Officers 2,870 2,853

Other Ranks 10,599 10,304

Total Navy 14,123 13,807

Army[1]





Total Army 30,672 30,568

Air Force [1]





Total Air Force 14,399 14,310

APS[1]

Senior Executives [3] 154 156

Senior Officers [2] 5,670 5,620

Other APS Staff 12,146 11,724

Total APS 17,970 17,500

Total Workforce 77,164 76,185

Notes

1. Permanent Forces and APS numbers are forecasts of the average strength for 2017-18.

2. Senior Officers are of Colonel or Lieutenant Colonel rank equivalent and APS Executive Level 1 and 2.

3. Revised Estimate f igure for the Senior Executive Service includes the Secretary of the Department of

Defence, 13 Chiefs of Division and 2 Medical Officers.


26

Section 2: Defence Outcomes and Planned Performance

2.1 CHANGES TO OUTCOME AND PROGRAM STRUCTURES

Table 16: Changes to Outcome and Program structures since the last portfolio statement

Program No. Program Title Description of Change

2.4 Joint Capabilities Group[1] Renamed from Vice Chief Defence Force

2.8 Australian Defence Force Headquarters[1] Renamed from Joint Operations Command

Note

1. Programs 2.4 and 2.8 have been changed since the PBS 2017–18 to reflect the establishment of the Joint Capabilities Group and the Australian Defence Force Headquarters, and the disestablishment of the Vice Chief of the Defence Force Group as part of the First Principles Review implementation. Some delivery elements have been transferred between Programs 2.4 and 2.8, with Program 2.8 including the budget for Joint Operations Command.


27

2.2 OUTCOMES AND PERFORMANCE INFORMATION

Outcome 1: Defend Australia and its national interests through the conduct of operations and provision of support for the Australian community and civilian authorities in accordance with Government direction

Outcome 1 Strategy

No changes have been made to the Defence Strategic Direction Statement since the PBS 2017–18, with the exception of the following inclusion of operations:

• ATLAS – Provide support to the whole of government assistance to the conduct of the Commonwealth Games 2018.

• AUGURY – PHILIPPINES – Conduct exercise and peer participation activities with the Armed Forces of the Philippines focused on regional counter-terrorism.

• SPATE – Provide support to the whole of government assistance to the conduct of the ASEAN – Australia Special Summit.

Linked Programs

No changes have been made to Linked Programs since the PBS 2017–18.


28

Outcome 1 Resources

Table 17: Total Budgeted Resources Available for Outcome 1

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Program 1.1 - Operations Contributing to the Security of the Immediate Neighbourhood

Revenues from other sources - - - - - -

Departmental outputs 792 39,754 38,962 - - -

Program 1.2 - Operations Supporting Wider Interests

Revenues from other sources 22,809 22,809 - - - -

Departmental outputs 919,986 815,182 -104,804 104,725 54,686 -

Program 1.3 - Defence Contribution to National Support Tasks in Australia


Departmental outputs 89,553 89,553 - 297 - -

Total resourcing

Total Departmental outputs 1,010,331 944,489 -65,842 105,022 54,686 -

Total Departmental revenue from other sources 22,809 22,809 - - - -

Total resources for Outcome 1 1,033,140 967,298 -65,842 105,022 54,686 -


29

Contributions to Outcome 1

Program 1.1: Operations Contributing to the Security of the Immediate Neighbourhood

Performance information is as reported in the PBS 2017–18 except for the following revisions.

Table 18: Cost Summary for Program 1.1 Operations Contributing to the Security of the Immediate Neighbourhood

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees - 1,943 1,943 - - -

Suppliers 792 37,811 37,019 - - -

Grants - - - - - -

Depreciation and amortisation - - - - - -

Finance cost - - - - - -

Write-dow n of assets and impairment of assets - - - - - -

Net losses from sale of assets - - - - - -

Other expenses - - - - - -

Total expenses 792 39,754 38,962 - - -

Income

Revenues

Goods and services - - - - - -

Other revenue - - - - - -

Total revenue - - - - - -

Gains

Reversal of previous asset w rite-dow ns - - - - - -

Net gains from sale of assets - - - - - -

Other gains - - - - - -

Total gains - - - - - -

Total income - - - - - -

Program 1.1 Operations Contributing to the

Security of the Immediate Neighbourhood 792 39,754 38,962 - - -


30

Program 1.2: Operations Supporting Wider Interests


Table 19: Cost Summary for Program 1.2 Operations Supporting Wider Interests

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 91,819 90,889 -930 - - -

Suppliers 746,328 747,097 769 104,725 54,686 -

Grants[1] 104,643 - -104,643 - - -





Other expenses 5 5 - - - -

Total expenses 942,795 837,991 -104,804 104,725 54,686 -

Income

Revenues

Goods and services 22,809 22,809 - - - -


Total revenue 22,809 22,809 - - - -

Gains





Total income 22,809 22,809 - - - -

Program 1.2 Operations Supporting Wider

Interests 919,986 815,182 -104,804 104,725 54,686 -

Note

1. Movements w ithin Grants is reflective of the reclassif ication of the Afghan National Army Trust funding from Program 1.2 Operations

Supporting Wider Interests to Program 2.1 Strategic Policy and Intelligence.


31

Program 1.3: Defence Contribution to National Support Tasks in Australia


Table 20: Cost Summary for Program 1.3 Defence Contribution to National Support Tasks in Australia

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 9,144 11,709 2,565 47 - -

Suppliers 80,409 77,844 -2,565 250 - -

Grants - - - - - -






Total expenses 89,553 89,553 - 297 - -

Income

Revenues




Gains






Program 1.3 Defence Contribution to National

Support Tasks in Australia 89,553 89,553 - 297 - -


32

Outcome 2: The advancement of Australia’s strategic interests through the conduct of military operations and other tasks as directed by Government

Outcome 2 Strategy

No changes have been made to the Defence Strategic Direction Statement since the PBS 2017–18.

Linked Programs

No changes have been made to Linked Programs since the PBS 2017–18.


33

Outcome 2 Resources

Table 21: Total Budgeted Resources Available for Outcome 2

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Program 2.1 Strategic Policy and Intelligence

Revenues from other sources 7,048 6,581 -467 7,085 7,527 7,871

Departmental outputs 1,031,349 1,204,116 172,767 1,243,510 1,294,955 1,326,444

Program 2.2 Defence Executive Support

Revenues from other sources 22,568 23,425 857 23,326 23,907 24,504

Departmental outputs 212,629 245,843 33,214 210,524 195,742 196,284

Program 2.3 Chief Finance Officer

Revenues from other sources 5,053 4,938 -115 5,061 5,188 5,318

Departmental outputs 244,128 207,949 -36,179 153,814 145,252 139,890

Program 2.4 Joint Capabilities Group

Revenues from other sources 217,724 175,724 -42,000 182,703 186,400 190,280


Program 2.5 Navy Capabilities


Departmental outputs 6,413,617 6,336,232 -77,385 6,457,335 6,478,468 7,246,770

Program 2.6 Army Capabilities



Program 2.7 Air Force Capabilities



Program 2.8 Australian Defence Force Headquarters

Revenues from other sources - - - 422 456 490


Program 2.9 Capability Acquisition and Sustainment

Revenues from other sources 963 963 - 2,727 1,011 2,864

Departmental outputs 653,823 644,983 -8,840 639,083 673,691 701,477

Program 2.10 Estate and Infrastructure



Program 2.11 Chief Information Officer



Program 2.12 Defence People



Program 2.13 Defence Science and Technology

Revenues from other sources 4,862 4,984 122 5,217 5,464 5,716



34

Table 21: Total Budgeted Resources Available for Outcome 2 (Continued)

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Program 2.14 Defence Force Superannuation Benefits

Defence Force Retirement Benefits Act, 1948 Part 1,

s.15D and VIC, s.82ZJ (1) - - - - - -

Defence Force Retirements and Death Benefits Act,

1973 Part XII, s.125 (3) 80,316 125,000 44,684 69,092 58,709 48,315

Military Superannuation and Benefits Act, 1991 Part

V, s.17 1,408,240 2,897,548 1,489,308 1,374,098 1,341,790 1,296,800

Australian Defence Force Cover Act 2015 116,675 52,300 -64,375 178,883 236,225 289,761

Total Administered expenses 1,605,231 3,074,848 1,469,617 1,622,073 1,636,724 1,634,876

Administered revenues from other sources 1,352,073 1,237,907 -114,166 1,165,712 1,102,275 1,045,995

Total Program 2.14 253,158 1,836,941 1,583,783 456,361 534,449 588,881

Program 2.15 Defence Force Superannuation Nominal Interest

Defence Force Retirement Benefits Act, 1948 Part 1,

s.15D and VIC, s.82ZJ (1) 21,611 13,300 -8,311 20,451 19,317 18,212

Defence Force Retirements and Death Benefits Act,

1973 Part XII, s.125 (3) 1,725,008 1,437,000 -288,008 1,735,660 1,743,630 1,748,891


V, s.17 2,074,992 2,258,000 183,008 2,234,237 2,396,085 2,560,423

Australian Defence Force Cover Act 2015 5,901 1,500 -4,401 14,843 27,698 44,357

Total Administered expenses 3,827,512 3,709,800 -117,712 4,005,191 4,186,730 4,371,883

Administered revenues from other sources - - - - - -

Total Program 2.15 3,827,512 3,709,800 -117,712 4,005,191 4,186,730 4,371,883

Program 2.16 Housing Assistance

Defence Force (Home Loan Assistance) Act , 1990

Part IV, s 38 484 478 -6 387 313 252

Defence Home Ownership Assistance Scheme Act

2008 Part VI, s.84 117,015 115,472 -1,543 125,006 133,679 142,714

Total Administered expenses 117,499 115,950 -1,549 125,393 133,992 142,966

Administered revenues from other sources 15,932 15,599 -333 16,237 16,852 17,444

Total Program 2.16 101,567 100,351 -1,216 109,156 117,140 125,522

Program 2.17 Other Administered

Administered revenues from other sources 91,274 110,119 18,845 117,244 117,585 99,681

Total Program 2.17 -91,274 -110,119 -18,845 -117,244 -117,585 -99,681

Total resourcing

Total Departmental outputs 31,194,895 31,280,085 85,190 31,937,373 33,121,395 35,423,790

Total Administered 4,090,963 5,536,973 1,446,010 4,453,464 4,720,734 4,986,605

Total Departmental revenue from other sources 808,395 697,065 -111,330 732,873 759,167 792,259

Total Administered revenue from other sources 1,459,279 1,363,625 -95,654 1,299,193 1,236,712 1,163,120

Equity injec ion 2,365,307 2,299,567 -65,740 3,570,643 4,936,690 5,908,843

Total resources for Outcome 2 39,918,839 41,177,315 1,258,476 41,993,546 44,774,698 48,274,616


35


Program 2.1: Strategic Policy and Intelligence


Table 22: Cost Summary for Program 2.1 Strategic Policy and Intelligence

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 357,314 367,021 9,707 385,278 407,754 428,892

Suppliers 609,425 674,408 64,983 678,797 697,328 800,976

Grants[1] 13,080 110,276 97,196 118,540 121,937 19,628

Depreciation and amor isation 57,023 53,758 -3,265 61,882 68,646 77,479


Write-dow n of assets and impairment of assets 1,555 5,234 3,679 6,098 6,817 7,340



Total expenses 1,038,397 1,210,697 172,300 1,250,595 1,302,482 1,334,315

Income

Revenues

Goods and services 4,786 4,366 -420 4,504 4,641 4,762


Total revenue 4,786 4,366 -420 4,504 4,641 4,762

Gains

Reversal of previous asset w rite-dow ns 2,261 2,221 -40 2,587 2,892 3,114

Net gains from sale of assets [2] 1 -6 -7 -6 -6 -5


Total gains 2,262 2,215 -47 2,581 2,886 3,109

Total income 7,048 6,581 -467 7,085 7,527 7,871

Program 2.1 Strategic Policy and Intelligence 1,031,349 1,204,116 172,767 1,243,510 1,294,955 1,326,444

Notes

1. Movements w ithin Grants is reflective of the reclassif ica ion of he Afghan National Army Trust funding from Program 1.2 Opera ions Supporting Wider

Interests to Program 2.1 Strategic Policy and Intelligence.

2. Whilst the amounts show n represent losses for this Program, at the Portfolio level, Defence has budgeted for a total net gain from the sale of assets.


36

Program 2.2: Defence Executive Support


Table 23: Cost Summary for Program 2.2 Defence Executive Support

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 97,981 101,648 3,667 95,105 95,039 96,338

Suppliers 134,550 167,468 32,918 138,601 124,473 124,322

Grants - - - - - -

Depreciation and amortisation 616 152 -464 144 137 128




Other expenses 2,050 - -2,050 - - -

Total expenses 235,197 269,268 34,071 233,850 219,649 220,788

Income

Revenues

Goods and services 22,558 23,415 857 23,202 23,780 24,374

Other revenue 10 10 - 124 127 130

Total revenue 22,568 23,425 857 23,326 23,907 24,504

Gains





Total income 22,568 23,425 857 23,326 23,907 24,504

Program 2.2 Defence Executive Support 212,629 245,843 33,214 210,524 195,742 196,284


37

Program 2.3: Chief Finance Officer


Table 24: Cost Summary for Program 2.3 Chief Finance Officer

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 171,867 130,300 -41,567 103,102 115,220 110,216

Suppliers 71,128 82,554 11,426 55,768 35,215 20,622

Grants - - - - - -

Depreciation and amortisation 6,107 33 -6,074 5 5 14,370


Write-dow n of assets and impairment of assets 79 - -79 - - -



Total expenses 249,181 212,887 -36,294 158,875 150,440 145,208

Income

Revenues




Gains

Reversal of previous asset w rite-dow ns 115 - -115 - - -


Other gains 4,938 4,938 - 5,061 5,188 5,318

Total gains 5,053 4,938 -115 5,061 5,188 5,318

Total income 5,053 4,938 -115 5,061 5,188 5,318

Program 2.3 Chief Finance Officer 244,128 207,949 -36,179 153,814 145,252 139,890


38

Program 2.4: Joint Capabilities Group[1][2]

Program 2.4 Objective

To develop and deliver joint capabilities to support the Australian Defence Force and to protect and advance Australia and its national interests.

Joint Capabilities Group develops and realises joint enabling projects, services and information warfare effects supporting implementation of the 2016 Defence White Paper. This is achieved through the acquisition and support of Joint Health Services, Joint Logistical Services, Defence Training and Education as well as the delivery of Joint Capabilities in the Information Warfare domain that support the Australian Defence Force.

Delivery This program will be achieved through:

• effective and efficient health support being provided to meet the requirements

of the Australian Defence Force

• effective and efficient logistics support and services being provided to meet

the requirements of the Australian Defence Force

• provision of joint training and education to meet the requirements of the

Australian Defence Force

• effective and efficient Information Warfare support that allows the Australian Defence Force to operate in contested and congested environments including the ability to undertake cyber related activities as required.

Performance information

Year Performance criteria Targets

2017–18 Chief of Defence Force preparedness levels meet Government requirements.

Quality of health services delivered to Australian Defence Force members and families.

Effective implementation of the 2016 Defence White Paper.

Chief of the Defence Force preparedness levels are achieved as agreed with Government.

Delivery meets standards.

The 2016 Defence White Paper implementation plan activities for 2017-21 are delivered as agreed with Government.

2018-19 and beyond

As per 2017-18 As per 2017-18

Purposes No change since the PBS 2017–18.

Notes

1. Programs 2.4 and 2.8 have been changed since the PBS 2017-18 to reflect the establishment of the Joint Capabilities Group and the Australian Defence Force Headquarters, and the disestablishment of the Vice Chief of the Defence Force Group as part of the First Principles Review implementation. Some delivery elements have been transferred between Programs 2.4 and 2.8, with Program 2.8 including the budget for Joint Operations Command.

2. New or modified performance criteria that reflect new or materially changed programs are shown in italics.


39

Table 25: Cost Summary for Program 2.4 Joint Capabilities Group[1]

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 600,388 593,556 -6,832 587,673 635,071 660,600

Suppliers 535,734 552,809 17,075 512,086 533,145 589,487

Grants 5,820 - -5,820 - - -

Depreciation and amortisation 52,924 4,255 -48,669 5,535 13,361 33,030





Total expenses 1,651,684 1,693,892 42,208 1,660,000 1,748,188 1,862,201

Income

Revenues

Goods and services 6,600 6,600 - 9,253 9,451 9,650

Other revenue 158 158 - 1,162 1,166 1,170

Total revenue 6,758 6,758 - 10,415 10,617 10,820

Gains

Reversal of previous asset w rite-dow ns 210,966 168,966 -42,000 172,288 175,783 179,460



Total gains 210,966 168,966 -42,000 172,288 175,783 179,460

Total income 217,724 175,724 -42,000 182,703 186,400 190,280

Program 2.4 Joint Capabilities Group 1,433,960 1,518,168 84,208 1,477,297 1,561,788 1,671,921

Note

1. Joint Capabilities Group has replaced the old Program 2.4 Vice Chief Defence Force, w ith some minor budget movements predominately to Program 2 8

Australian Defence Force Headquarters.


40

Program 2.5: Navy Capabilities


Table 26: Cost Summary for Program 2.5 Navy Capabilities

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 2,159,475 2,150,865 -8,610 2,178,385 2,256,485 2,348,502

Suppliers 2,475,860 2,503,055 27,195 2,614,845 2,772,063 3,281,971

Grants 180 1,380 1,200 150 - -

Depreciation and amortisa ion 1,804,351 1,693,698 -110,653 1,677,310 1,468,978 1,634,115

Finance cost 38,673 41,151 2,478 42,306 38,313 41,354

Write-dow n of assets and impairment of assets 7,352 5,448 -1,904 5,511 5,578 5,649



Total expenses 6,485,891 6,395,597 -90,294 6,518,507 6,541,417 7,311,591

Income

Revenues

Goods and services 21,464 21,464 - 22,119 22,807 23,518

Other revenue 32,777 32,777 - 33,699 34,541 35,404

Total revenue 54,241 54,241 - 55,818 57,348 58,922

Gains




Total gains 18,033 5,124 -12,909 5,354 5,601 5,899

Total income 72,274 59,365 -12,909 61,172 62,949 64,821

Program 2.5 Navy Capabilities 6,413,617 6,336,232 -77,385 6,457,335 6,478,468 7,246,770


41

Table 27: Navy Deliverables (Unit Availability Days)[1]

Deliverables 2017-18 Budget

Estimate 2017-18 Revised

Estimate

18 Major Combatants[2] 3,795 3,461

21 Minor Combatants[3] 4,542 3,880

5 Amphibious and Afloat Support[4] 1,315 1,179

7 Maritime Teams[5] 2,555 2,555

7 Hydrographic Force[6] 1,628 1,574

Notes

1. A Unit Availability Day (UAD) is a day when a unit is materielly ready and its personnel state and level of competence enables the unit to safely perform tasks in the unit’s normal operating environment, immediately.

2. Major Combatants comprises Adelaide Class Frigates (FFG), Anzac Class Frigates (FFH), Collins Class Submarines (CCSM) and Hobart Class Air Warfare Destroyers (DDG). UAD decrease due to amendments to planned maintenance schedules and HMAS Perth’s early entry into an upgrade program.

3. Minor Combatants comprises Armidale Class Patrol Boats (ACPB), Cape Class Patrol Boats (CCPB) and Coastal Minehunters (MHC). UAD decrease due to extensions to planned maintenance schedules for HMA Ships Armidale, Launceston, Glenelg and Bathurst from original planned dates (170 days), with usage upkeep cycles for the rest of the ships being re-scheduled for force flow requirements; changes to planned maintenance schedules (14 days); defects across platforms (40 days); workup overruns (21 days); and loss of HMAS Maryborough due to engine room fire 26 May 17 (total 160 days).

4. Amph bious and Afloat Support comprises the Oil Tanker (AO), Replenishment Ship (AOR), Landing Ship Dock (LSD) and Canberra Class Landing Helicopter Dock (LHD). UAD decrease due to defects across platforms, and amendments to planned maintenance schedules.

5. Maritime Teams comprises Clearance Diving, Deployable Geospatial Support and Mobile Meteorological and Oceanographic (METOC) teams.

6. Hydrographic Force comprises the hydrographic ships, survey motor launches, chart production office and meteorological and oceanographic centres. UAD decrease due to additional maintenance periods and HMAS Melville being re-tasked to search for USMC MV22 Osprey.

Table 28: Navy Deliverables (Flying Hours)

Deliverables 2017-18 Budget

Estimate 2017-18 Revised

Estimate

4 S-70B-2 (Seahawk) 190 190

24 MH-60R 6,050 6,050

6 AS350BA (Squirrel) 450 450

- MRH-90 - -

1 Laser airborne depth sounder aircraft (LADS)[1]

1,120 1,260

Note

1. Revised figures reflect increase to sorties (maximum available contract days) for the FY.


42

Program 2.6: Army Capabilities


Table 29: Cost Summary for Program 2.6 Army Capabilities

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 4,070,250 4,077,626 7,376 4,110,879 4,227,318 4,367,973

Suppliers 1,890,446 1,919,543 29,097 1,932,828 2,044,731 2,462,521

Grants 493 743 250 495 497 100

Depreciation and amortisation 1,388,356 1,359,617 -28,739 1,298,151 1,324,642 1,435,523

Finance cost 4,917 4,636 -281 4,919 5,768 6,564




Total expenses 7,364,024 7,367,328 3,304 7,352,203 7,607,665 8,277,110

Income

Revenues


Other revenue 633 633 - 649 665 682

Total revenue 16,490 17,440 950 17,905 18,350 18,807

Gains


Net gains from sale of assets 7,549 7,549 - 7,549 7,549 7,549


Total gains 21,736 11,686 -10,050 11,766 11,866 11,925

Total income 38,226 29,126 -9,100 29,671 30,216 30,732

Program 2.6 Army Capabilities 7,325,798 7,338,202 12,404 7,322,532 7,577,449 8,246,378

Table 30: Army Deliverables (Rate of Effort – Flying Hours)

Deliverables

2017-18 Budget

Estimate

2017-18 Revised

Estimate

2018-19 Forward

Year 1

2019-20 Forward

Year 2

2020-21 Forward

Year 3

7 CH-47F Chinook 2,000 2,000 2,400 2,600 2,600

34 S-70A-9 Black Hawk 4,550 4,550 4,225 3,800 2,175

41 B-206B-1 Kiowa 3,800 3,800 1,800

22 ARH Tiger[1] 5,050 5,050 5,300 5,300 5,300

47 MRH 90 Taipan 7,600 7,600 8,200 9,740 10,300

Note

1. Recent grounding of the ARH Tiger airframes; since re-cleared to fly on 08 Nov 17. Revised estimate remains unchanged as catchup training, qualifications and support occur.


43

Program 2.7: Air Force Capabilities


Table 31: Cost Summary for Program 2.7 Air Force Capabilities

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 2,054,522 2,054,919 397 2,084,407 2,176,000 2,265,444

Suppliers 2,931,276 2,848,019 -83,257 3,220,292 3,489,541 3,753,056

Grants 1,831 1,956 125 1,831 1,831 -

Depreciation and amor isation 1,842,785 1,792,977 -49,808 1,998,098 2,174,073 2,263,911

Finance cost 43,003 30,257 -12,746 32,104 37,642 42,835




Total expenses 6,887,179 6,744,161 -143,018 7,354,764 7,898,975 8,346,758

Income

Revenues

Goods and services 38,253 38,028 -225 39,184 40,187 41,217

Other revenue 5,465 5,465 - 5,602 5,743 5,886

Total revenue 43,718 43,493 -225 44,786 45,930 47,103

Gains




Total gains 21,637 8,502 -13,135 9,445 10,311 11,091

Total income 65,355 51,995 -13,360 54,231 56,241 58,194

Program 2.7 Air Force Capabilities 6,821,824 6,692,166 -129,658 7,300,533 7,842,734 8,288,564


44

Table 32: Air Force Deliverables (Flying Hours)

Deliverables

2017-18

Budget

Estimate

2017-18

Revised

Estimate

2018-19

Forward

Year 1

2019-20

Forward

Year 2

2020-21

Forward

Year 3

62 PC-9/A[1] 17,952 16,952 16,452 3,826 -

8 PC-21[2] 2,200 2,200 7,000 19,626 23,652

16 KA350 King Air 8,700 8,700 8,700 8,300 8,300

12 C-130J Hercules 7,350 7,350 7,350 7,350 7,350

8 C-17A Globemaster III[3] 6,200 7,000 6,200 6,200 6,200

10 C-27J Spartan 4,000 4,000 5,000 7,500 7,500

5 KC-30A MRTT[4] 3,700 6,000 3,900 4,700 4,700

2 737 BBJ 1,600 1,600 1,600 1,600 1,600

3 CL-604 Challenger 2,403 2,403 2,403 2,403 2,403

15 AP-3C Orion 4,660 4,660 1,600 600 300

8 P-8A Poseidon[5] 2,762 2,562 4,254 5,400 5,775

6 E-7A Wedgetail 3,600 3,600 3,600 3,600 3,600

71 F/A-18A/B Hornet 12,000 12,000 11,200 8,100 4,750

24 F/A-18F Super Hornet[6] 4,000 8,094 4,050 4,050 4,050

33 Hawk 127 6,500 6,500 6,500 6,500 6,500

12 E/A-18G Growler 1,600 1,600 1,900 2,400 2,800

2 F-35A Lightning II 752 752 2,538 4,564 8,204

2 Heron UAS[7] 500 0 - - -

Notes

1. PC-9/A hours reflect the phased withdrawal of the aircraft.

2. 8 PC-21 aircraft have been delivered to date.

3. C-17A Globemaster III hours for FY 17-18 include operational assignments.

4. KC-30A MRTT hours for FY 17-18 include operational assignments.

5. P-8A Poseidon, 200 hours were brought forward from FY17-18 to FY16-17.

6. F/A-18F Super Hornet hours for FY17-18 include operational assignments.

7. Heron flying operations ceased in June 2017.


45

Program 2.8: Australian Defence Force Headquarters[1][2]

Program 2.8 Objective

To design, integrate and prepare military capability that meets the current and future requirements of Government, and conduct joint, combined and interagency operations as directed by Government.

Delivery This program will be achieved by:

• Designing the future force through management of the capability lifecycle and the integrated investment program.

• Integrating and preparing capability elements, and planning for the effective conduct of joint, combined and interagency operations.

• Monitoring preparedness for Government-directed operations and national support tasks through the preparedness management system.

• Effective policy and oversight of the administration of Defence’s Reserve and Youth programs.

• Effective management of the operations of the Australian Civil-Military Centre.


Year Performance criteria Targets

2017–18 Chief of the Defence Force preparedness levels meet Government Requirements.

Effective implementation of the 2016 Defence White Paper

Effective implementation of the Integrated Investment Program

Operational outcomes meet the requirements of Government policy.

Chief of the Defence Force preparedness levels are achieved as agreed with Government.

The 2016 Defence White Paper implementation plan activities for 2017-21 are delivered as agreed with Government

The Integrated Investment Program is delivered as agreed with Government.

All operational requirements are met.

2018-19 and beyond

As per 2017-18 As per 2017-18

Purposes No change since the PBS 2017–18.

Material changes to Program 2.8 resulting from the following measures:

• No change since the PBS 2017–18.

Notes

1. Programs 2.4 and 2.8 have been changed since the PBS 2017-18 to reflect the establishment of the Joint Capabilities Group and the Australian Defence Force Headquarters, and the disestablishment of the Vice Chief of the Defence Force Group as part of the First Principles Review implementation. Some delivery elements have been transferred between Programs 2.4 and 2.8, with Program 2.8 including the budget for Joint Operations Command.

2. New or modified performance criteria that reflect new or materially changed programs are shown in italics.


46

Table 33: Cost Summary for Program 2.8 Australian Defence Force Headquarters[1]

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 7,153 25,720 18,567 31,104 30,897 32,211

Suppliers 41,289 76,794 35,505 65,884 162,522 279,293

Grants - 5,820 5,820 - - -

Depreciation and amor isation 2,888 2,589 -299 6,724 11,380 16,689





Total expenses 51,330 110,923 59,593 103,712 204,799 328,193

Income

Revenues

Goods and services - - - 422 456 490


Total revenue - - - 422 456 490

Gains





Total income - - - 422 456 490

Program 2.8 Australian Defence Force

Headquarters 51,330 110,923 59,593 103,290 204,343 327,703

Note

1. Australian Defence Force Headquarters has replaced the old Program 2.8 Joint Operations Command, w i h some minor budget movements

predominately from Program 2.4 Joint Capabilities Group.


47

Program 2.9: Capability Acquisition and Sustainment


Table 34: Cost Summary for Program 2.9 Capability Acquisition and Sustainment

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 433,740 437,151 3,411 426,175 412,947 417,948

Suppliers 221,045 208,795 -12,250 215,635 261,755 286,393

Grants - - - - - -





Other expenses 1 - -1 - - -

Total expenses 654,786 645,946 -8,840 641,810 674,702 704,341

Income

Revenues

Goods and services 963 963 - 2,727 1,011 2,864


Total revenue 963 963 - 2,727 1,011 2,864

Gains





Total income 963 963 - 2,727 1,011 2,864

Program 2.9 Capability Acquisiton and

Sustainment 653,823 644,983 -8,840 639,083 673,691 701,477


48

Program 2.10: Estate and Infrastructure Group


Table 35: Cost Summary for Program 2.10 Estate and Infrastructure Group

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 1,178,648 1,147,566 -31,082 1,195,386 1,245,234 1,297,549

Suppliers 2,480,619 2,611,901 131,282 2,835,859 2,836,449 2,572,854

Grants - - - - - -

Depreciation and amor isation 1,096,705 932,114 -164,591 908,201 882,391 865,131

Finance cost 96,395 98,939 2,544 98,468 97,754 100,901



Other expenses 31,600 41,500 9,900 10,800 - -

Total expenses 4,909,980 4,846,002 -63,978 5,063,054 5,076,475 4,851,340

Income

Revenues


Other revenue 5,445 4,920 -525 5,067 5,237 5,380

Total revenue 328,632 328,806 174 348,742 362,066 379,756

Gains

Reversal of previous asset w rite-dow ns 2,948 3,289 341 3,376 3,440 3,480

Net gains from sale of assets 31,626 126 -31,500 - - -


Total gains 34,574 3,415 -31,159 3,376 3,440 3,480

Total income 363,206 332,221 -30,985 352,118 365,506 383,236

Program 2.10 Estate and Infrastructure Group 4,546,774 4,513,781 -32,993 4,710,936 4,710,969 4,468,104


49

Program 2.11: Chief Information Officer


Table 36: Cost Summary for Program 2.11 Chief Information Officer

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 122,088 123,980 1,892 131,228 131,938 134,469

Suppliers 1,148,507 1,297,323 148,816 1,162,769 1,255,655 1,575,281

Grants - - - - - -

Depreciation and amortisation 233,132 11,007 -222,125 11,264 33,936 60,664





Total expenses 1,511,743 1,453,027 -58,716 1,337,796 1,466,588 1,825,104

Income

Revenues




Gains


Net gains from sale of assets [1] -1,182 -1,182 - -4,792 -4,935 -5,083


Total gains 11,116 7,743 -3,373 9,140 14,302 18,233

Total income 11,116 7,743 -3,373 9,140 14,302 18,233

Program 2.11 Chief Information Officer 1,500,627 1,445,284 -55,343 1,328,656 1,452,286 1,806,871

Note

1. Whilst the amounts show n represent losses for this Program, at the Portfolio level, Defence has budgeted for a total net gain from the sale of assets.


50

Program 2.12: Defence People


Table 37: Cost Summary for Program 2.12 Defence People

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 162,236 201,736 39,500 183,474 182,575 184,520

Suppliers 314,357 339,890 25,533 358,653 376,158 389,774

Grants 1,592 1,592 - 1,600 1,700 1,450

Depreciation and amor isation 7,854 27 -7,827 10 8 1





Total expenses 486,039 543,245 57,206 543,737 560,441 575,745

Income

Revenues




Gains






Program 2.12 Defence People 486,039 543,245 57,206 543,737 560,441 575,745


51

Program 2.13: Defence Science and Technology


Table 38: Cost Summary for Program 2.13 Defence Science and Technology

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Employees 296,238 297,332 1,094 298,835 300,522 308,104

Suppliers 152,307 152,395 88 118,518 95,073 93,416

Grants - - - - - -

Depreciation and amor isation 28,064 29,915 1,851 29,024 27,758 26,021





Total expenses 477,859 484,176 6,317 451,343 428,741 433,355

Income

Revenues


Other revenue 201 201 - 206 211 216

Total revenue 3,044 3,060 16 3,110 3,178 3,249

Gains

Reversal of previous asset w rite-dow ns 1,818 1,924 106 2,107 2,286 2,467



Total gains 1,818 1,924 106 2,107 2,286 2,467

Total income 4,862 4,984 122 5,217 5,464 5,716

Program 2.13 Defence Science and Technology 472,997 479,192 6,195 446,126 423,277 427,639


52

Administered Program 2.14: Defence Force Superannuation Benefits


Table 39: Cost Summary for Program 2.14 Defence Force Superannuation Benefits

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Net foreign exchange losses - - - - - -

Retention benefits 93,548 93,548 - 107,299 120,288 120,636

Military superannuation benefits 1,511,683 2,981,300 1,469,617 1,514,774 1,516,436 1,514,240

Total expenses 1,605,231 3,074,848 1,469,617 1,622,073 1,636,724 1,634,876

Income

Revenues

Interest - - - - - -

Net foreign exchange gains - - - - - -

Military superannuation contribu ions 1,352,073 1,237,907 -114,166 1,165,712 1,102,275 1,045,995

Total income 1,352,073 1,237,907 -114,166 1,165,712 1,102,275 1,045,995

Program 2.14 Defence Force Superannuation

Benefits 253,158 1,836,941 1,583,783 456,361 534,449 588,881


53

Administered Program 2.15: Defence Force Superannuation Nominal Interest


Delivery Notes about this program:

• The DFRDB was closed to new participants in 1991. Since 1 July 2016, DFRDB members who re-enter the ADF no longer re-join DFRDB as contributing members but instead join the ADF’s current superannuation arrangement and become either a member of the default scheme, ADF Super, or elect to become a member of another fund of their choice.

• The MSBS commenced in 1991 and is available to members who re-enter the ADF but only those with a preserved employer benefit. The MSBS closed to new participants on 1 July 2016.

• ADF Cover is the statutory death and invalidity scheme and applies to all members of the ADF’s current superannuation arrangement, regardless of whether they are a member of the default scheme, ADF Super, or have elected to become a member of another fund of their choice.

Table 40: Cost Summary for Administered Program 2.15 Defence Force Superannuation Nominal Interest

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses


Retention benefits - - - - - -

Military superannuation benefits 3,827,512 3,709,800 -117,712 4,005,191 4,186,730 4,371,883

Total expenses 3,827,512 3,709,800 -117,712 4,005,191 4,186,730 4,371,883

Income

Revenues



Military superannuation contributions - - - - - -


Program 2.15 Defence Force Superannuation

Nominal Interest 3,827,512 3,709,800 -117,712 4,005,191 4,186,730 4,371,883


54

Administered Program 2.16: Housing Assistance


Table 41: Cost Summary for Administered Program 2.16 Housing Assistance

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses


Housing subsidies 117,499 115,950 -1,549 125,393 133,992 142,966

Total expenses 117,499 115,950 -1,549 125,393 133,992 142,966

Income

Revenues



Dividends - - - - - -

License fees 15,932 15,599 -333 16,237 16,852 17,444

Other - - - - - -

Total income 15,932 15,599 -333 16,237 16,852 17,444

Program 2.16 Housing Assistance 101,567 100,351 -1,216 109,156 117,140 125,522


55

Administered Program 2.17: Other Administered


Table 42: Cost Summary for Administered Program 2.17 Other Administered

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

Expenses

Total expenses - - - - - -

Income

Revenues

Interest 25,887 25,887 - 25,887 25,887 25,887

Dividends 44,780 36,280 -8,500 55,494 55,449 36,865

Other 20,607 47,952 27,345 35,863 36,249 36,929

Total income 91,274 110,119 18,845 117,244 117,585 99,681

Program 2.17 Other Administered -91,274 -110,119 -18,845 -117,244 -117,585 -99,681


56

Section 3: Defence Explanatory Tables and Budgeted Financial Statements

3.1 EXPLANATORY TABLES

Section 3 presents explanatory tables and budgeted financial statements which provide a comprehensive snapshot of agency finances for the 2017–18 budget year. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations and program expenses, movements in administered funds, special accounts and government indigenous expenditure.

Table 43: Summary of Estimated Special Account Balances[1][2][3]

Outcome

Opening

2017-18

2016-17

$'000

Receipts

2017-18

2016-17

$'000

Payments

2017-18

2016-17

$'000

Adjustments

2017-18

2016-17

$'000

Closing

Balance

2017-18

2016-17

$'000

2 86,527 47,400 -42,760 - 91,167

70,953 53,771 -38,197 - 86,527

2 49 1 -1 - 49

48 1 - - 49

2 168 6 -6 - 168

169 3 -4 - 168

2 1,520 222 -174 - 1,568

1,491 65 -36 - 1,520

Total Special Accounts 2017-18 88,264 47,629 -42,941 - 92,952

2016-17 actual 72,661 53,840 -38,237 - 88,264

Notes

1. 2017-18 estimates in bold.

2. 2016-17 actuals in italics.

3. These are all Special Public Monies.

Services for Other Entities and Trust Moneys -

Defence Special Account– Public Governance,

Performance and Accountability Act 2013

Defence Endow ments Special Account – Public

Governance, Performance and Accountability

Act 2013

Fedorczenko Legacy Special Account – Public

Governance, Performance and Accountability

Act 2013

Young Endeavour Youth Program Special

Account – Public Governance, Performance and

Accountability Act 2013


57

3.1.1 Australian Government Indigenous Expenditure

Table 44: Australian Government Indigenous Expenditure

Program

Bill No. 1

$'000

Outcome 1

Defence Indigenous Employment Strategy[1][2] 2.12

Departmental 2017-18 Revised Estimate 5,097

Departmental 2017-18 Budget Estimate 5,662

Army Aboriginal Community Assistance Program [1][3] 2.6

Departmental 2017-18 Revised Estimate 6,700

Departmental 2017-18 Budget Estimate 6,700

Total 2017-18 Revised Estimate 11,797

Total 2017-18 Budget Estimate 12,362

Notes

1. All amounts are GST exclusive. Revised Estimate and Budget Estimate are direct costs.

2. The Defence Indigenous Development Program, as previously disclosed, has been subsumed into the Defence Indigenous Employment

Strategy.

3. The majority of costs are subsequently recovered from Department of Prime Minister and Cabinet under Outcome 2.5 Indigenous Housing

and Infrastructure Appropriation.

Defence Reconciliation Action Plan

No changes have been made to the Defence Indigenous Employment Strategy since the PBS 2017–18.

Defence Indigenous Development Program

No changes have been made to the Defence Indigenous Employment Strategy since the PBS 2017–18.

Army Aboriginal Community Assistance Program

No changes have been made to the Army Aboriginal Community Assistance Program (AACAP) since the PBS 2017–18.

Note that the PBS 2017–18 indicated in error that the 2017 AACAP Program was to finish in June

2017. It should have stated December 2017.


58

3.1.2 Grants

The following changes to the grants program since the PBS 2017–18 total $8,529,000 (GST Exclusive), with no new grant programs and 1,478 individual grants approved under existing programs.

Table 45: Grants approved since the 2017-18 Budget

Total

Approvals

$'000[1]

2017-18

Revised

Estimate

$'000[1]

Programs

Family Support Funding Program 800 800

Long Tan Aw ards 580 580

The School Pathw ays Program 929 929

Centre for Defence Industry Capability Program 1,011 1,011

Individual Grants

A.W. Bell Pty Ltd 159 159

ANU - School of Pacif ic & Asian Studies 300 300

Army History Unit 67 67

Australian Strategic Policy Institute 3,528 3,528

Australian Surf Row ers League Inc 180 180

Australian War Memorial 250 250

Australian Women Pilots' Association 14 14

Find AE1 Ltd 1,200 500

Kokatha Aboriginal Corporation RNTB 23 23

Lovitt Technologies Australia 11 11

Maralinga Tjarutja 9 9

PHM Technology 124 124

Salt Ash Public School Parents and Friends 44 44

Total additional grants 9,229 8,529

Note

1. Figures may vary due to rounding.


59

The following are grants that have been approved since the PBS 2017–18:

Family Support Funding Program

This is a multi-year grant that provides funding for the Family Support Funding Program. The program provides funds to support projects and services initiated by Defence families and are available to existing groups in the community composed of or benefitting Defence families.

Long Tan Awards

This is a multi-grant program which supports the ADF Long Tan Youth Leadership and Teamwork Grant Program (Long Tan Awards). These awards encourage leadership and teamwork among school age students as integral parts of their personal development and their contribution towards enhancing community spirit within their schools and the broader community.

The Long Tan Awards recognise secondary school student’s achievement in teamwork, leadership and community services. Approximately 200 schools are involved in the program, with awards being presented to chosen student in Year 10 and Year 12.

The School Pathways Program

The School Pathways Program aims to increase the pool of young people with the pre-requisite subjects and knowledge to undertake and complete vocational training and higher education in pursuit of careers in defence industry. The purpose of the program is to raise students' awareness of possible career opportunities and knowledge of Defence and defence industry pathways; provide support to the development or continuation of programs that encourage the uptake of STEM subjects (Science, Technology, Engineering and Mathematics); and increase the number of student undertaking STEM subjects in participating schools.

Centre for Defence Capability Improvement Program

This grant was awarded as part of the Capability Improvement Grants (CDIC) program. The program aims to provide assistance to transform the Defence and industry relationship, and to fund defence industry development, critical skilling and export initiatives. The CDIC also facilitates access to Defence’s new innovation programs in industry, academia and research. Current grants were awarded to Heat Treatment Pty Ltd, Ferra Engineering Pty Ltd, The University of Sydney and Lintek Pty Ltd.

A.W. Bell Pty Ltd

The grant provides funding and support to increase the capabilities of the Joint Strike Fighter Project supply chain A-10, including the Smart Factor.

ANU – School of Pacific & Asian Studies

The grant provides support and funding to the college, which plays a vital role in informing public policy and Australia's intellectual engagement with the societies, cultures and economies of Asia and the Pacific. The grant provides an Australian voice in the network of strategic policy institutions across Asia.


60

Army History Unit

Since the publication of the 2017-18 PBS, grants totalling $67,098.50 were approved for the Army Military History Research Grants Scheme. The scheme has been in operation since 1992. These grants promote the study and understanding of Army, its history and traditions, which contributes to the achievement of Government’s Defence policy objectives through the provision of capabilities for land and special operations

Australian Strategic Policy Institute

This grant is to support and funding in order to carry out activities that promote strategic policy discourse, debate and research, including by:

a) Providing fresh ideas on Australia’s defence and strategic policy choices, including the analyses of government proposals, through rigorous, accurate and well-informed research,

b) Promoting contestability in policy advice by being an independent and non-partisan source of information for the Government,

c) Informing and promoting discussion among the public service; academia and the wider

public,

d) Encouraging and fostering a new generation of strategic policy officers, including by developing policy skills and national security awareness across Government,

e) Promoting an international understanding of Australia’s strategic and defence policy

perspectives.

Australian Surf Rowers League Inc

The grant allows the Australian Surf Rowers League and community to continue to support the local Navy and wider water community. Funding allows the League to engage with local communities, as well as provide training, support and water coaching.

Australian War Memorial

The grant provides support and funding for the restoration of the MV Krait by the Australian War Memorial and the Australian National Maritime Museum, to ensure its long-term conservation.

Australian Women Pilots’ Association

The grant provides funding to the Australian Women’s Pilots’ Association to provide support and encourage women to become career pilots. The Association provides a range of scholarships and awards that create opportunities for all ages and levels of experience.

Find AE1 Ltd

A grant was awarded to support and assist in the ongoing search and investigation of the HMA Submarine AE1. On the 21 December 2017, the AE1 was located of the coast Duke of York island group, Papua New Guinea.


61

Kokatha Aboriginal Corporation RNTB

The grant provides support and funding is to enable participation by the Kokatha community in the development of a working level agreement that is intended to establish access and communication protocols between Defence and the Kokatha peoples.

Lovitt Technologies Australia

This grant was awarded as part of the New Air Combat Capability – Industry Support Program (NACC-ISP). The program provides funding to Australian companies and research organisation to support the development of new or improved capabilities that may enhance the ability to win work in the production, sustainment and modernisation phases of the Joint Strike Fighter Program.

Maralinga Tjarutja

Funding is to enable participation by the Maralinga Tjarutja in the development of a working level agreement that is intended to establish access and communication protocols between Defence and Maralinga Tjarutja when accessing the Woomera Prohibited Area (WPA).

PHM Technology

This grant provides funding in research and innovation in the Maintenance Aware Design environment (MADe) Diagnostics and Prognostics Health Manager (DPHM) Extension Projects (B-26).

Salt Ash Public School Parents and Friends

This grant provides support and assistance to the Salt Ash Public School, particularly to assist in the construction of a soft-fall playground and surrounding areas. This grant is part of Defence’s ongoing commitment and support to the local Salt Ash community.


62

3.2 RESOURCE SUMMARY

Table 46: Budgeted Departmental Net Cost of Service (Cash) (for the period ended 30 June)

2016-17

Actual

Result

$'000

2017-18

Revised

Estimate

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

NET COST OF SERVICE (CASH)

Cost of Service

Employee payments 11,312,760 11,703,664 11,743,345 12,152,307 12,565,407

Supplier payments 11,595,716 12,860,504 12,750,097 13,457,806 14,982,922

Purchase of specialist military equipment 5,992,262 6,144,044 7,435,314 8,710,452 9,611,077

Purchase of inventory 1,512,076 1,429,124 1,326,920 1,378,843 1,243,873

Purchase of other property, plant and equipment 1,954,448 2,666,046 2,680,361 2,748,775 3,382,742

Other cash used 1,975,960 2,018,894 2,104,912 2,240,382 2,314,918

Total cash used 34,343,222 36,822,277 38,040,949 40,688,565 44,100,938

Ow n source receipts 2,395,670 2,299,055 2,428,853 2,576,760 2,769,296

Total cash received 2,395,670 2,299,055 2,428,853 2,576,760 2,769,296

Net cost of service (cash) 31,947,552 34,523,222 35,612,096 38,111,805 41,331,642

FUNDED BY

Appropriation Bill 1/3/5 (price of outcomes) 30,837,008 32,224,574 32,042,395 33,176,081 35,423,790

Appropriation carried forw ard from previous year 97,000 - - - -

Appropriation Bill 2/4/6 (equity injection) 1,064,704 2,299,567 3,570,643 4,936,690 5,908,843

Net cash to the Official Public Account -6,497 -919 -942 -966 -990

Total funding source 31,992,215 34,523,222 35,612,096 38,111,805 41,331,642

Change in cash 44,663 - - - -


63

Portfolio Resource Statement

Table 47: Total Departmental and Administered Consolidated Cash Budget for the Department of Defence[1]

2017-18

Revised

Estimate

$m

APPROPRIATIONS AND CAPITAL

Appropriation (Bill 1) 32,205.2

Appropriation - Contributed Equity (Bill 2) 2,299.6

Appropriation (Bill 3) 19.3

Appropriation (Bill 4) -

Appropriations for military superannuation[2] 2,561.6

less Returns to the OPA -1,350.9

Total cash available 35,734.8

OPERATING ACTIVITIES

Cash received

Goods and services 461.2

Net GST received 1,700.1

Interest 25.9

Other cash 76.3

Fees 15.6

Total cash received 2,279.0

Cash used

Employees 10,465.8

Suppliers 12,860.5

Net GST paid 1,700.1

Grants 121.8

Other cash 41.5

Subsidies paid 116.0

Military benefits 2,445.6

Total cash used 27,751.2

Net cash from or (used by) operating activities -25,472.2

INVESTING ACTIVITIES

Cash received

Proceeds from sales of land and buildings 62.3

Proceeds from sales of infrastructure, plant and equipment 23.6

Proceeds from sales of specialist military equipment 7.5

Dividends 38.7

Other -

Total cash received 132.1

Cash used

Purchase of land and buildings 1,593.2

Purchase of infrastructure, plant and equipment 924.8

Purchase of specialist military equipment 6,144.0

Purchase of intangibles 148.1

Purchase of inventory 1,429.1

Selling costs on sale of assets 12.7

Finance costs 110.1

Total cash used 10,362.0

Net cash from or (used by) investing activities -10,229.8

FINANCING ACTIVITIES

Cash used

Repayment of debt 32.8

Total cash used 32.8

Net cash from or (used by) financing activities -32.8

Net increase or (decrease) in cash and cash equivalents held -

Cash and cash equivalents at the beginning of the reporting period 88.8

Effect of exchange rate movements on cash and cash equivalents -

Cash and cash equivalents at the end of the reporting period 88.8

Notes

2. Cross reference w ith Table 64 Budgeted Administered Statement of Cash Flow s for the Department of Defence

for the period ended 30 June.

1. Figures show n eliminate interagency transactions and transactions f low ing betw een Departmental and

Administered funding.


64

Table 48: Defence Resource Statement

Seri

al N

o.

Estimate

as at

Budget

2017-18

$'000

+

Proposed

Additional

Estimates

2017-18

$'000

=

Total

Estimate at

Additional

Estimates

2017-18

$'000

Total

Available

Appropriation

2016-17

$'000

ORDINARY ANNUAL SERVICES

Outcome 1 1,010,331 -65,842 944,489 30,020,611

Outcome 2 31,194,895 85,190 31,280,085 774,101

Outcome 3 - - - 22,462

1 Total Departmental outputs 32,205,226 19,348 32,224,574 30,817,174

2 Total ordinary annual services (1) 32,205,226 19,348 32,224,574 30,817,174

OTHER SERVICES

Departmental non-operating

Equity injections 2,365,307 -65,740 2,299,567 1,064,704

3 Total Departmental non-operating 2,365,307 -65,740 2,299,567 1,064,704

4 Total other services (3) 2,365,307 -65,740 2,299,567 1,064,704

5 Total available annual appropriation (2+4) 34,570,533 -46,392 34,524,141 31,881,878

SPECIAL APPROPRIATIONS

Special appropriations limited by

criteria/entitlement

Defence Forces Retirement Benefits Act, 1948 Part

1 s.15D and VIC, s.82ZJ

21,611 -8,311 13,300 14,122

Defence Force Retirement and Death Benefits Act,

1973 Part XII, s.125

1,805,324 -243,324 1,562,000 1,504,600


V, s.17

3,483,232 1,672,316 5,155,548 6,091,696

Australian Defence Force Cover Act 2015 122,576 -68,776 53,800 110,070

Defence Force (Home Loan Assistance) Act, 1990

Part IV, s.38

484 -6 478 618

Defence Home Ownership Assistance Scheme Act

2008 Part VI, s.84

117,015 -1,543 115,472 104,867

6 Total special appropriations 5,550,242 1,350,356 6,900,598 7,825,973

7 Total appropriations (5+6) 40,120,775 1,303,964 41,424,739 39,707,851

Funding from other sources 2,091,474 -142,548 1,948,926 2,158,128

Returns from the OPA (net) -1,471,125 120,246 -1,350,879 -1,560,915

Previous years' outputs (appropriation receivable) 687,345 -261,354 425,991 687,345

Cash available 47,597 41,226 88,823 47,597

8 Total other available resources 1,355,291 -242,430 1,112,861 1,332,155

9 Total resourcing (7+8) 41,476,066 1,061,533 42,537,599 41,040,006

Special Accounts

Opening Balance 77,718 10,546 88,264 72,661

Appropriation Receipts - - - -

Appropriation Receipts - other agencies - - - -

Non-Appropriation Receipts to Special Accounts 47,629 - 47,629 27,924

10 Total special accounts 125,347 10,546 135,893 100,585


65

Table 49: Third Party Payments to and from other Agencies[1]

Budget

Estimate

2017-18

$'000

Revised

Estimate

2017-18

$'000

Variation

$'000

Receipts from Defence Housing Australia for interest on loans, dividends and competitive

neutrality payments (Administered) 89,784 91,729 1,945

Payments made to Defence Housing Australia for the provision of services (Departmental) 771,795 683,369 -88,426

Payments made to Department of Foreign Affairs and Trade for the provision of services

(Departmental) 24,513 24,513 -

Payments made to the Commonw ealth Superannuation Corporation (CSC) for the provision of

services (Departmental) 38,714 38,294 -420

Payments made to the Department of Finance for the provision of services (Departmental) 67,645 67,645 -

Payments made to Comcare for w orkers compensa ion premiums (Departmental) 39,200 29,781 -9,419

Payments made to the Australian Federal Police for the provision of services (Departmental) 45,340 45,501 161

Payments made to the Department of Human Services for the provision of services

(Departmental) - - -

Note

1. Third party payments to and from other Agencies include:

- Inter-agency transactions in excess of $20m per annum; and

- Inter-agency transactions that w ere in excess of $20m in the previous year's annual statements.


66

3.3 BUDGETED FINANCIAL STATEMENTS

3.3.1 Departmental and Administered Budgeted Financial Statements

Table 50: Variation in Budgeted Departmental Comprehensive Income Statement (Showing Net Cost of Services) (for the period ended 30 June)

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

Variation

%

EXPENSES

Employee benefits 11,812,863 11,813,961 1,098 -

Supplier expenses 13,834,064 14,297,666 463,602 3.4

Grants 127,639 121,767 -5,872 -4.6

Depreciation and amortisation 6,520,805 5,880,142 -640,663 -9.8

Finance costs 182,988 174,983 -8,005 -4.4

Write-dow n of assets and impairment of assets 524,407 614,383 89,976 17.2

Losses from sale of assets - - - -

Other 33,656 41,505 7,849 23.3

Total expenses 33,036,422 32,944,408 -92,014 -0.3

LESS:

OWN-SOURCE INCOME

Own-source revenue

Sales of goods and rendering of services 459,315 461,159 1,844 0.4

Other revenue 44,686 44,162 -524 -1.2

Total own-source revenue 504,001 505,321 1,320 0.3

Gains

Reversals of previous asset w rite-dow ns 284,263 203,088 -81,175 -28.6

Sale of assets 37,994 6,487 -31,507 -82.9

Other gains 4,938 4,938 - -

Total gains 327,195 214,513 -112,682 -34.4

Total own-source income 831,196 719,834 -111,362 -13.4

Net cost of (contribution by) services 32,205,226 32,224,574 19,348 0.1

Revenue from Government 32,205,226 32,224,574 19,348 0.1

Surplus (Deficit) attributable to the Australian Government - - - -

Total comprehensive income attributable to the Australian Government - - - -


67

Table 51: Variation in Budgeted Departmental Balance Sheet (as at 30 June)

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

Variation

%

ASSETS

Financial assets

Cash and cash equivalents 47,597 88,823 41,226 86.6

Trade and other receivables 107,523 69,093 -38,430 -35.7

Tax assets 243,196 244,327 1,131 0.5

Appropriation receivable 687,345 425,991 -261,354 -38.0

Other receivables 304,075 243,765 -60,310 -19.8

Total financial assets 1,389,735 1,071,999 -317,736 -22.9

Non-financial assets

Land and buildings 17,551,132 18,469,850 918,718 5.2

Infrastructure, plant and equipment 9,340,951 8,490,065 -850,886 -9.1

Specialist military equipment 58,045,460 59,693,629 1,648,169 2.8

Intangibles 712,816 848,687 135,871 19.1

Heritage and cultural 564,590 607,240 42,650 7.6

Inventories 6,381,584 6,514,600 133,016 2.1

Prepayments 2,874,690 1,909,793 -964,897 -33.6

Total non-financial assets 95,471,223 96,533,864 1,062,641 1.1

Assets held for sale 63,538 62,436 -1,102 -1.7

Total assets 96,924,496 97,668,299 743,803 0.8

LIABILITIES

Payables

Suppliers 2,520,860 2,411,231 -109,629 -4.3

Other 233,015 339,449 106,434 45.7

Total payables 2,753,875 2,750,680 -3,195 -0.1

Interest bearing liabilities

Leases 1,469,184 1,516,412 47,228 3.2

Total interest bearing liabilities 1,469,184 1,516,412 47,228 3.2

Provisions

Employee provisions 2,844,517 2,748,634 -95,883 -3.4

Restoration, decontamination and decommissioning 1,427,537 1,230,988 -196,549 -13.8

Other 29,193 51,694 22,501 77.1

Total provisions 4,301,247 4,031,316 -269,931 -6.3

Total liabilities 8,524,306 8,298,408 -225,898 -2.7

NET ASSETS 88,400,190 89,369,891 969,701 1.1

EQUITY

Contributed equity 29,239,086 28,818,369 -420,718 -1.4

Reserves 24,303,326 24,943,519 640,193 2.6

Retained surplus (accumulated deficit) 34,857,777 35,608,003 750,226 2.2

Total equity 88,400,190 89,369,891 969,701 1.1


68

Table 52: Variation in Budgeted Departmental Statement of Cash Flows (for the period ended 30 June)

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

Variation

%


Cash received

Appropriations 32,205,226 32,224,574 19,348 0.1

Goods and services 459,303 461,159 1,856 0.4

Net GST received 1,642,976 1,700,089 57,113 3.5

Other cash received 44,683 44,384 -299 -0.7

Cash transfer from the Official Public Account (receivables) - - - -

Total cash received 34,352,188 34,430,206 78,018 0.2

Cash used

Employees 11,725,833 11,703,664 -22,169 -0.2

Suppliers 12,331,589 12,860,504 528,915 4.3

Net GST paid 1,642,976 1,700,089 57,113 3.5

Grants 127,639 121,767 -5,872 -4.6

Other cash used 33,656 41,505 7,849 23.3

Cash transfer to the Official Public Account (receivables) 919 919 - -

Total cash used 25,862,612 26,428,449 565,837 2.2

Net cash from (used by) operating activities 8,489,576 8,001,757 -487,819 -5.7


Cash received

Proceeds from sales of land and buildings 86,136 62,296 -23,840 -27.7

Proceeds from sales of infrastructure, plant and equipment 23,597 23,578 -19 -0.1

Proceeds from sales of specialist military equipment 7,549 7,549 - -

Other cash received - - - -

Total cash received 117,282 93,423 -23,859 -20.3

Cash used

Purchase of land and buildings 1,225,924 1,593,184 367,260 30.0

Purchase of infrastructure, plant and equipment 1,462,815 924,773 -538,042 -36.8

Purchase of specialist military equipment 6,578,914 6,144,044 -434,870 -6.6

Purchase of intangibles 89,272 148,089 58,817 65.9

Purchase of inventory 1,458,529 1,429,124 -29,405 -2.0

Selling costs on sale of assets 13,877 12,699 -1,178 -8.5

Finance costs 110,051 110,051 - -

Total cash used 10,939,382 10,361,964 -577,418 -5.3

Net cash from (used by) investing activities -10,822,100 -10,268,541 553,559 -5.1


Cash received

Appropriations - contributed equity 2,365,307 2,299,567 -65,740 -2.8

Total cash received 2,365,307 2,299,567 -65,740 -2.8

Cash used

Repayment of debt 32,783 32,783 - -

Cash to the Official Public Account - - - -

Total cash used 32,783 32,783 - -

Net cash from (used by) financing activities 2,332,524 2,266,784 -65,740 -2.8

Net increase (decrease) in cash and cash equivalents held - - - -

Cash and cash equivalents at the beginning of the reporting period 47,597 88,823 41,226 86.6

Effect of exchange rate movements on cash and cash equivalents

at the beginning of the reporting period - - - -

Cash and cash equivalents at the end of the reporting period 47,597 88,823 41,226 86.6


69

Table 53: Budgeted Departmental Comprehensive Income Statement (Showing Net Cost of Services) (for the period ended 30 June)

2016-17

Actual

Result

$'000

2017-18

Revised

Estimate

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

EXPENSES

Employee benefits 11,393,321 11,813,961 11,811,077 12,217,000 12,652,766

Supplier expenses 13,352,279 14,297,666 14,015,509 14,738,792 16,229,963

Grants 133,651 121,767 122,616 125,965 21,178

Depreciation and amortisation 5,462,402 5,880,142 5,996,348 6,005,315 6,427,062

Finance costs 124,430 174,983 177,797 179,477 191,654

Write-dow n of assets and impairment of assets 909,831 614,383 641,119 668,696 693,422

Foreign exchange losses 7,826 - - - -

Losses from sale of assets 15,007 - - - -

Other 163,187 41,505 10,800 - -

Total expenses 31,561,934 32,944,408 32,775,266 33,935,245 36,216,045

LESS:

OWN-SOURCE INCOME

Own-source revenue

Sales of goods and rendering of services 456,853 461,159 465,246 479,814 502,409

Other revenue 43,368 44,162 46,507 47,687 48,864

Total own-source revenue 500,221 505,321 511,753 527,501 551,273

Gains

Foreign exchange - - - - -

Reversals of previous asset w rite-dow ns 214,703 203,088 213,306 223,867 233,203

Sale of assets - 6,487 2,751 2,608 2,461

Other gains 146,598 4,938 5,061 5,188 5,318

Total gains 361,301 214,513 221,118 231,663 240,982

Total own-source income 861,522 719,834 732,871 759,164 792,255

Net cost of (contribution by) services 30,700,412 32,224,574 32,042,395 33,176,081 35,423,790

Revenue from Government 30,914,234 32,224,574 32,042,395 33,176,081 35,423,790

Surplus (Deficit) attributable to the Australian Government 213,822 - - - -

OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net

cost of services

Changes in asset revaluation reserves 492,703 - - - -

Total other comprehensive income/(loss) 492,703 - - - -

Total comprehensive income attributable to the Australian

Government 706,525 - - - -


70

Table 54: Budgeted Departmental Balance Sheet (as at 30 June)

2016-17

Actual

Result

$'000

2017-18

Revised

Estimate

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

ASSETS

Financial assets

Cash and cash equivalents 88,823 88,823 88,823 88,823 88,823

Trade and other receivables 69,070 69,093 69,093 69,093 69,093

Tax assets 234,527 244,327 244,327 244,327 244,327

Appropriation receivable 425,991 425,991 425,991 425,991 425,991

Other receivables 276,331 243,765 239,924 236,080 236,082

Total financial assets 1,094,742 1,071,999 1,068,158 1,064,314 1,064,316


Land and buildings 17,492,218 18,469,850 19,342,519 20,435,432 22,496,865

Infrastructure, plant and equipment 8,160,710 8,490,065 8,991,236 9,374,012 9,467,257

Specialist military equipment 58,572,944 59,693,629 61,936,393 65,373,982 69,261,164

Intangibles 749,190 848,687 911,019 1,006,143 1,071,899

Heritage and cultural 607,285 607,240 607,187 607,134 607,081

Inventories 6,775,387 6,514,600 6,240,379 5,956,229 5,631,238

Prepayments 1,909,787 1,909,793 1,909,793 1,909,793 1,909,793

Total non-financial assets 94,267,521 96,533,864 99,938,526 104,662,725 110,445,297

Assets held for sale 62,436 62,436 62,436 62,436 62,436

Total assets 95,424,699 97,668,299 101,069,120 105,789,475 111,572,049

LIABILITIES

Payables

Suppliers 2,304,285 2,411,231 2,465,680 2,484,466 2,574,278

Other 347,845 339,449 342,552 346,239 352,772

Total payables 2,652,130 2,750,680 2,808,232 2,830,705 2,927,050


Leases 1,549,237 1,516,412 1,479,358 1,438,849 1,395,547

Total interest bearing liabilities 1,549,237 1,516,412 1,479,358 1,438,849 1,395,547

Provisions

Employee provisions 2,627,662 2,748,634 2,813,263 2,874,269 2,955,095

Restoration, decontamination and decommissioning 1,166,051 1,230,988 1,298,479 1,377,168 1,471,324

Other 51,693 51,694 51,694 51,694 51,694

Total provisions 3,845,406 4,031,316 4,163,436 4,303,131 4,478,113

Total liabilities 8,046,773 8,298,408 8,451,026 8,572,685 8,800,710

NET ASSETS 87,377,926 89,369,891 92,618,094 97,216,790 102,771,339

EQUITY

Contributed equity 26,519,722 28,818,369 32,388,071 37,323,793 43,231,644

Reserves 25,250,201 24,943,519 24,622,020 24,284,994 23,931,692

Retained surplus (accumulated deficit) 35,608,003 35,608,003 35,608,003 35,608,003 35,608,003

Total equity 87,377,926 89,369,891 92,618,094 97,216,790 102,771,339


71

Table 55: Budgeted Departmental Statement of Cash Flows (for the period ended 30 June)

2016-17

Actual

Result

$'000

2017-18

Revised

Estimate

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000


Cash received

Appropriations 30,934,008 32,224,574 32,042,395 33,176,081 35,423,790

Goods and services 451,446 461,159 465,234 479,802 502,397

Net GST received 1,655,319 1,700,089 1,811,064 1,964,797 2,146,572

Interest 4,526 - - - -

Other cash received 167,856 44,384 46,504 47,684 48,861

Cash transfer from the Official Public Account (receivables) 438,036 - - - -


Cash used

Employees 11,312,760 11,703,664 11,743,345 12,152,307 12,565,407

Suppliers 11,595,716 12,860,504 12,750,097 13,457,806 14,982,922

Net GST paid 1,695,179 1,700,089 1,811,064 1,964,797 2,146,572

Grants 128,960 121,767 122,616 125,965 21,178

Other cash used 23,893 41,505 10,800 - -

Cash transfer to the Official Public Account (receivables) 444,533 919 942 966 990

Total cash used 25,201,041 26,428,449 26,438,864 27,701,841 29,717,069

Net cash from (used by) operating activities 8,450,150 8,001,757 7,926,333 7,966,523 8,404,551


Cash received

Proceeds from sales of land and buildings 73,670 62,296 79,176 56,046 44,746

Proceeds from sales of infrastructure, plant and equipment 22,142 23,578 19,326 20,882 19,171

Proceeds from sales of specialist military equipment 17,999 7,549 7,549 7,549 7,549

Proceeds from sales of heritage and cultural assets - - - - -

Other cash received 2,712 - - - -

Total cash received 116,523 93,423 106,051 84,477 71,466

Cash used

Purchase of land and buildings 1,107,404 1,593,184 1,494,153 1,680,838 2,628,401

Purchase of infrastructure, plant and equipment 797,301 924,773 1,087,364 966,784 664,584

Purchase of specialist military equipment 5,992,262 6,144,044 7,435,314 8,710,452 9,611,077

Purchase of heritage and cultural assets 343 - - - -

Purchase of intangibles 49,400 148,089 98,844 101,153 89,757

Purchase of inventory 1,512,076 1,429,124 1,326,920 1,378,843 1,243,873

Selling costs on sale of assets 6,276 12,699 14,721 11,177 9,307

Finance costs 90,952 110,051 110,306 100,788 97,498

Total cash used 9,556,014 10,361,964 11,567,622 12,950,035 14,344,497

Net cash from (used by) investing activities -9,439,491 -10,268,541 -11,461,571 -12,865,558 -14,273,031


Cash received

Appropriations - contributed equity 1,064,704 2,299,567 3,570,643 4,936,690 5,908,843


Cash used

Repayment of debt 30,700 32,783 35,405 37,655 40,363

Cash to the Official Public Account - - - - -

Total cash used 30,700 32,783 35,405 37,655 40,363

Net cash from (used by) financing activities 1,034,004 2,266,784 3,535,238 4,899,035 5,868,480

Net increase (decrease) in cash and cash equivalents held 44,663 - - - -

Cash and cash equivalents at the beginning of the reporting

period 47,597 88,823 88,823 88,823 88,823

Effect of exchange rate movements on cash and cash

equivalents at beginning of the reporting period -3,437 - - - -

Cash and cash equivalents at the end of the reporting

period 88,823 88,823 88,823 88,823 88,823


72

Table 56: Departmental Statement of Changes in Equity — Summary of Movement (Budget year 2017–18)

Retained

Earnings

$'000

Asset

Revaluation

Reserve

$'000

Contributed

Equity/

Capital

$'000

Total

Equity

$'000

Opening balance as at 1 July 2017

Balance carried forw ard from previous period 35,608,003 25,250,201 26,519,722 87,377,926

Adjustment for changes in accounting policies - - - -

Adjusted opening balance 35,608,003 25,250,201 26,519,722 87,377,926

Comprehensive income

Comprehensive income recognised directly in equity:

Gain/loss on revaluation of property - -306,682 - -306,682

Subtotal comprehensive income - -306,682 - -306,682

Surplus (Deficit) for the period - - - -

Total comprehensive income recognised

directly in equity - -306,682 - -306,682

Transactions with owners

Distribution to owners

Returns on capital:

Restructuring - - - -

Other - - -919 -919

Contributions by owners

Appropriation (equity injection) - - 2,299,567 2,299,567

Other -

Sub-total transaction with owners - - 2,298,647 2,298,647

Transfers betw een equity components - - - -

Estimated closing balance as at 30 June 2018 35,608,003 24,943,519 28,818,369 89,369,891


73

Table 57: Departmental Capital Budget Statement

2016-17

Actual

Result

$'000

2017-18

Revised

Estimate

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

CAPITAL APPROPRIATIONS

Equity injection 1,064,704 2,299,567 3,570,643 4,936,690 5,908,843

Total capital appropriations 1,064,704 2,299,567 3,570,643 4,936,690 5,908,843

Represented by:

Purchase of non-financial assets 1,034,004 2,266,784 3,535,238 4,899,035 5,868,480

Annual f inance lease costs 30,700 32,783 35,405 37,655 40,363

Other items - - - - -

Total Items 1,064,704 2,299,567 3,570,643 4,936,690 5,908,843

PURCHASE OF NON-FINANCIAL ASSETS

Funded by capital appropriations 1,064,704 2,299,567 3,570,643 4,936,690 5,908,843

Funded by f inance lease costs 46,267 - - - -

Funded internally from departmental resources [1] 6,835,739 6,510,523 6,545,032 6,522,537 7,084,976

Total 7,946,710 8,810,090 10,115,675 11,459,227 12,993,819

Reconciliation of cash used to acquire assets

to asset movement table

Total purchases 7,946,710 8,810,090 10,115,675 11,459,227 12,993,819

less additions by f inance lease 46,267 - - - -

less additions by creditors/borrow ings - - - - -

plus borrow ing/finance costs 90,952 110,051 110,306 100,788 97,498

plus annual f inance lease costs 30,700 32,783 35,405 37,655 40,363

less gifted assets - - - - -

less s75/restructuring - - - - -

Total cash used to acquire assets 8,022,095 8,952,924 10,261,386 11,597,670 13,131,680

Note

1. Includes the follow ing sources of funding:

- annual and prior year appropriations;

- donations and contributions;

- gifts;

- internally developed assets;

- s74 relevant agency receipts; and

- proceeds from the sale of assets.

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Table 58: Statement of Departmental Asset Movements (2017–18)

Land

$'000

Buildings

$'000

Specialist

Military

Equipment

$'000

Infrastructure,

Plant and

Equipment

$'000

Intangibles

$'000

Heritage and

Cultural

Assets

$'000

Assets

Held for

Sale

$'000

Total

$'000

As at 1 July 2017

Gross book value 5,335,942 12,565,388 59,274,566 8,619,696 1,869,582 672,641 62,436 88,400,251

Accumulated depreciation/amortisation and impairment - 409,112 701,622 458,986 1,120,392 65,356 - 2,755,468

Opening net book balance 5,335,942 12,156,276 58,572,944 8,160,710 749,190 607,285 62,436 85,644,783

CAPITAL ASSET ADDITIONS

Estimated expenditure on new or replacement assets

By purchase - appropriation equity - 1,593,190 6,151,498 921,264 148,093 - - 8,814,045

By transfer from another agency - - - - - - - -

By purchase - donated funds - - - - - - - -

By finance lease - - - - - - - -

Total additions - 1,593,190 6,151,498 921,264 148,093 - - 8,814,045

Other movements

Assets held for sale - - - - - - - -

Reclassif ications [1] - - 11,105 22,650 - - - 33,755

Depreciation and amortisation - 558,674 4,735,230 537,597 48,596 45 - 5,880,142Disposal of ent ties or other o ( g

restructuring) 36,529 14,124 - 23,584 - - - 74,237

Other disposals [2] - 6,231 306,688 53,378 - - - 366,297

Total other movements 36,529 579,029 5,030,813 591,909 48,596 45 - 6,286,921

As at 30 June 2018

Gross book value 5,299,413 14,138,223 65,130,481 9,486,648 2,017,675 672,641 62,436 96,807,517

Accumulated depreciation/amortisation and impairment - 967,786 5,436,852 996,583 1,168,988 65,401 - 8,635,610

Closing net book value 5,299,413 13,170,437 59,693,629 8,490,065 848,687 607,240 62,436 88,171,907

Notes

1. Reclassif ication include assets f irst found.

2. Other disposals includes w rite-offs.


75

Table 59: Variation in Schedule of Budgeted Income and Expenses Administered on Behalf of Government (for the period ended 30 June)

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

Variation

%

INCOME ADMINISTERED ON BEHALF OF GOVERNMENT

Revenue

Non-taxation

Interest 25,887 25,887 - -

Dividends 44,780 36,280 -8,500 -19.0

Military superannuation contr butions 1,352,073 1,237,907 -114,166 -8.4

License fees 15,932 15,599 -333 -2.1

Other 20,607 47,952 27,345 132.7

Total non-taxation 1,459,279 1,363,625 -95,654 -6.6

Total revenues administered on behalf of Government 1,459,279 1,363,625 -95,654 -6.6

EXPENSES ADMINISTERED ON BEHALF OF GOVERNMENT

Subsidies 117,499 115,950 -1,549 -1.3

Military retention benefits 93,548 93,548 - -

Military superannuation benefits 5,339,195 6,691,100 1,351,905 25.3

Total expenses administered on behalf of Government 5,550,242 6,900,598 1,350,356 24.3


76

Table 60: Variation in Schedule of Budgeted Assets and Liabilities Administered on Behalf of Government (as at 30 June)

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

Variation

%

ASSETS ADMINISTERED ON BEHALF OF GOVERNMENT

Financial assets

Cash and cash equivalents - - - -

Trade and other receivables 64,670 75,897 11,227 17.4

Investments accounted for using the equity method 2,554,363 2,563,222 8,859 0.3

Loans 509,580 509,580 - -

Total financial assets 3,128,613 3,148,699 20,086 0.6


Prepayments 299,608 299,608 - -

Total non-financial assets 299,608 299,608 - -

Total assets administered on behalf of Government 3,428,221 3,448,307 20,086 0.6

LIABILITIES ADMINISTERED ON BEHALF OF GOVERNMENT

Payables

Other 8,262 6,427 -1,835 -22.2

Total payables 8,262 6,427 -1,835 -22.2

Provisions

Superannuation - DFRB[1] 360,628 360,628 - -

Superannuation - DFRDB[2] 29,704,370 29,704,370 - -

Superannuation - MSBS[3] 36,979,906 36,979,906 - -

Superannuation - ADF Super[4] 162,049 162,049

Total provisions 67,206,953 67,206,953 - -

Total liabilities administered on behalf of Government 67,215,215 67,213,380 -1,835 ..

Notes

1. Defence Force Retirement Benefits.

2. Defence Force Retirement and Death Benefits.

3. Military Superannuation and Benefits Scheme.

4. Australian Defence Force Super.


77

Table 61: Variation in Schedule of Budgeted Administered Cash Flows (for the period ended 30 June)

2017-18

Budget

Estimate

$'000

2017-18

Revised

Estimate

$'000

Variation

$'000

Variation

%


Cash received

Interest 25,887 25,887 - -

Military superannuation contr butions 1,352,073 1,237,883 -114,190 -8.4

Fees 15,932 15,599 -333 -2.1

Other 37,405 31,888 -5,517 -14.7

Total cash received 1,431,297 1,311,257 -120,040 -8.4

Cash used

Subsidies paid 117,499 115,950 -1,549 -1.3

Military benefits 2,435,121 2,445,600 10,479 0.4

Total cash used 2,552,620 2,561,550 8,930 0.3

Net cash from or (used by) operating activities -1,121,323 -1,250,293 -128,970 11.5


Cash received

Dividends 38,909 38,703 -206 -0.5

Total cash received 38,909 38,703 -206 -0.5

Cash used

Loans - - - -

Total cash used - - - -

Net cash from or (used by) investing activities 38,909 38,703 -206 -0.5

Net increase (decrease) in cash held -1,082,414 -1,211,590 -129,176 11.9

Cash at the beginning of the reporting period - - - -

Cash from the Official Public Account for appropriations 2,552,620 2,561,550 8,930 0.3

Cash to the Official Public Account -1,470,206 -1,349,960 120,246 -8.2

Effect of exchange rate movements on cash and cash equivalents - - - -

Cash and cash equivalents at the end of the reporting period - - - -


78

Table 62: Schedule of Budgeted Income and Expenses Administered on Behalf of Government (for the period ended 30 June)

2016-17

Actual

Result

$'000

2017-18

Revised

Estimate

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

INCOME ADMINISTERED ON BEHALF OF GOVERNMENT

Revenue

Non-taxation

Interest 25,866 25,887 25,887 25,887 25,887

Dividends 39,585 36,280 55,494 55,449 36,865

Military superannuation contributions 1,462,077 1,237,907 1,165,712 1,102,275 1,045,995

Fees 16,871 15,599 16,237 16,852 17,444

Foreign exchange - - - - -

Other 48,655 47,952 35,863 36,249 36,929

Total non-taxation 1,593,054 1,363,625 1,299,193 1,236,712 1,163,120

Total revenues administered on behalf of Government 1,593,054 1,363,625 1,299,193 1,236,712 1,163,120

EXPENSES ADMINISTERED ON BEHALF OF GOVERNMENT

Write-dow n and impairment of assets 143 - - - -

Foreign exchange 154

Subsidies 98,403 115,950 125,393 133,992 142,966

Military retention benefits 78,217 93,548 107,299 120,288 120,636

Military superannuation benefits 7,791,655 6,691,100 5,519,965 5,703,166 5,886,123

Other 41 - - - -

Total expenses administered on behalf of Government 7,968,613 6,900,598 5,752,657 5,957,446 6,149,725


79

Table 63: Schedule of Budgeted Assets and Liabilities Administered on Behalf of Government (as at 30 June)

2016-17

Actual

Result

$'000

2017-18

Revised

Estimate

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000

ASSETS ADMINISTERED ON BEHALF OF GOVERNMENT

Financial assets

Cash and cash equivalents - - - - -

Trade and other receivables 62,805 75,897 74,717 74,874 56,498

Investments accounted for using the equity me hod 2,662,673 2,563,222 2,612,451 2,685,619 2,726,848

Loans 509,580 509,580 509,580 509,580 509,580

Total financial assets 3,235,058 3,148,699 3,196,748 3,270,073 3,292,926


Prepayments 240,452 299,608 328,609 342,221 266,285

Total non-financial assets 240,452 299,608 328,609 342,221 266,285

Total assets administered on behalf of Government 3,475,510 3,448,307 3,525,357 3,612,294 3,559,211

LIABILITIES ADMINISTERED ON BEHALF OF GOVERNMENT

Payables

Other 6,427 6,427 6,427 6,427 6,427

Total payables 6,427 6,427 6,427 6,427 6,427

Provisions

Superannuation - DFRB[1] - 360,628 340,933 321,724 303,033

Superannuation - DFRDB[2] 43,502,800 29,704,370 29,863,678 29,977,222 30,043,531

Superannuation - MSBS[3] 63,451,000 36,979,906 39,736,498 42,534,950 45,376,992

Superannuation - ADF Super[4] 18,501 162,049 350,092 604,158 922,773

Total provisions 106,972,301 67,206,953 70,291,201 73,438,054 76,646,329

Total liabilities administered on behalf of Government 106,978,728 67,213,380 70,297,628 73,444,481 76,652,756

Notes

1. Defence Force Retirement Benefits.

2. Defence Force Retirement and Death Benefits.

3. Military Superannuation and Benefits Scheme.

4. Australian Defence Force Super.


80

Table 64: Schedule of Budgeted Administered Cash Flows (for the period ended 30 June)

2016-17

Actual

Result

$'000

2017-18

Revised

Estimate

$'000

2018-19

Forward

Estimate

$'000

2019-20

Forward

Estimate

$'000

2020-21

Forward

Estimate

$'000


Cash received

Interest 19,418 25,887 25,887 25,887 25,887

Military superannuation contributions 1,566,878 1,237,883 1,165,712 1,102,275 1,045,995

Fees 14,731 15,599 16,237 16,852 17,444

Other 50,003 31,888 56,257 36,047 36,721


Cash used

Subsidies paid 100,238 115,950 125,393 133,992 142,966

Military benefits 2,371,235 2,445,600 2,562,354 2,682,004 2,715,719

Other 41 - - - -

Total cash used 2,471,514 2,561,550 2,687,747 2,815,996 2,858,685

Net cash from or (used by) operating activities -820,484 -1,250,293 -1,423,654 -1,634,935 -1,732,638


Cash received

Dividends 62,719 38,703 36,280 55,494 55,449


Cash used

Loans - - - - -

Total cash used - - - - -

Net cash from (used by) investing activities 62,719 38,703 36,280 55,494 55,449

Net increase (decrease) in cash held -757,765 -1,211,590 -1,387,374 -1,579,441 -1,677,189

Cash at the beginning of reporting period - - - - -

Cash from the Official Public Account for appropriations 2,471,514 2,561,550 2,687,747 2,815,996 2,858,685

Cash to the Official Public Account -1,713,749 -1,349,960 -1,300,373 -1,236,555 -1,181,496

Effect of exchange rate movements on cash and cash

equivalents - - - - -

Cash and cash equivalents at the end of the reporting

period - - - - -


81

3.3.2 Notes to the Financial Statements

The financial statements have been prepared in accordance with the Australian Accounting Standards and the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR).


82



83

APPENDICES

Appendix A: Defence Cooperation Program ......................................................................................... 84

Appendix B: Integrated Investment Program ....................................................................................... 85

Appendix C: Top 30 Acquisition Projects by 2017–18 Forecast Expenditure ................................... 86

Appendix D: Top 30 Sustainment Products by 2017–18 Forecast Expenditure ............................... 94

Appendix E: Facilities and Infrastructure Program ............................................................................. 98

Appendix F: Status of Major Projects Foreshadowed for Government and Parliamentary Standing Committee on Public Works Consideration (PWC) in 2017–18 ......................................................... 112


84

APPENDIX A: DEFENCE COOPERATION PROGRAM

No changes have been made to the Defence Cooperation Program since the PBS 2017–18.


85

APPENDIX B: INTEGRATED INVESTMENT PROGRAM

Table 65: Integrated Investment Program projects that have achieved First Pass approval since the publication of the PBS 2017–18

No First Pass approvals from the PBS 2017–18 have been announced by Government since its publication.

Table 66: Integrated Investment Program projects that have achieved Second Pass approval and been announced by Government since the publication of PBS 2017–18

Project Number Project Title

SEA 1397 Phase 5B Nulka Missile Decoy Enhancements

SEA 1180 Phase 1 Offshore Patrol Vessel

LAND 200 Phase 2[1] Battlefield Command Systems (Tranche 2)

Note

1. Project was added to the 2017-18 work plan following publication of the 2017-18 PBS

Table 67: Integrated Investment Program projects that have achieved Other approvals and been announced by Government since publication of the PBS 2017–18.

Project Number Project Title

INV 1 Phase 2016 Defence Single Innovation Fund

SEA 5000 Phase 1 Future Frigate (Combat Management System Selection)

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APPENDIX C: TOP 30 ACQUISITION PROJECTS BY 2017–18 FORECAST EXPENDITURE

Table 68: Top 30 Projects by 2017–18 Forecast Expenditure[1]

Domain/ Project Name Project Number/

Phase

Approved Project

Expenditure $m

Estimated Cumulative

Expenditure to 30 June

2017 $m

Budget Estimate 2017-18

$m

Revised Estimate 2017-18

$m

Variation $m

Project Performance Update and Explanation of Variation

Air Domain

New Air Combat Capability AIR 6000 Phase 2A/B

15,386 1,600 1,148 1,113 -35

The acquisition of the project is as forecast in the Defence PBS 2017–18.

The variation is due to the foreign currency exchange price basis adjustment down from PBS 2017–18.

Maritime Patrol and Response Aircraft System

AIR 7000 Phase 2

5,165 2,719 853 704 -148

Planned spares procurement will now be in future years. This does not impact on capability delivery. The project has sufficient spares supplies to sustain the current aircraft. The reprogrammed deliveries in future years are in-line with the future delivery of the aircraft.

The budget variation is due to:

1) Reprogramming to future financial years of retail spares ($75m) and engine spares ($57m) procurements;

2) Reduction due to Training System Contingency Training no longer required ($10m), with an increase to Training Systems ($19m) due to a deferred payment from 2016-17; and

3) The foreign currency exchange price basis adjustment down from PBS 2017-18 to MYEFO 2017-18 ($25m).

Future Naval Aviation Combat System (FNACS)

AIR 9000 Phase 8

3,419 1,963 294 242 -53

The acquisition of the project is as forecast in the Defence PBS 2017–18. The Seahawk Romeo capability is operated from HMAS Albatross in Nowra and is currently supporting six embarked flights on Navy ships and the capability will continue to grow to a mature state of eight embarked flights over the next two years.

The variation is due to the refinement of additional spares purchases as well as revised facilities, ship integration and Foreign Military Sales programmed activities.

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Table 68: Top 30 Projects by 2017–18 Forecast Expenditure (Continued)


Phase

Approved Project

Expenditure $m



2017 $m


$m


$m

Variation $m


Air Domain (Continued)

Pilot Training System AIR 5428 Phase 1

1,191 135 239 205 -34

The changes to forecast relate to deferral of delivery of two aircraft from May to June 2018, and an anticipated delay to completion of Hardware/Software Integration for Flight Training Device number 4 which is now expected July 2018.


1) The timing of invoice payments in 2016-17 did not occur as planned; and

2) Delay in payments associated with integration of Flight Training Device number 4 ($9m).

AEW&C Interoperability Compliance Upgrade

AIR 5077 Phase 5A

1,121 292 226 151 -75


1) Reprogramming budget to future financial years reflecting the expected aircraft delivery ($38m). This was developed in conjunction with the Prime Contractor, Boeing Defence Australia;

2) The timing of invoice payments in 2016-17 did not occur as originally planned; and


Growler Airborne Electronic Attack Capability

AIR 5349 Phase 3

3,413 2,095 225 214 -12

The changes relate to minor delays in delivery of the Mission Threat Training Emitter System (MTTES) and other systems.


1) Cost savings and minor delays against a range of FMS and non-FMS procurement requirements which has resulted in some reprogramming to future financial years (net $4m); and


Additional Multi-Role Tanker Transport Aircraft

AIR 7403 Phase 3

874 447 132 150 18


1) Enhanced Prime contractor effort, the delivery of additional spares/ inventory, additional support equipment and project management activities to meet the capability and project mandates ($10m); and

2) The foreign currency exchange price basis adjustment up from PBS 2017-18 to MYEFO 2017-18 ($7m).

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Phase

Approved Project

Expenditure $m



2017 $m


$m


$m

Variation $m



Multi-Role Helicopter (MRH) AIR 9000 Phase 2

3,756 3,009 119 102 -17

The acquisition of the project is not as forecast in the Defence PBS 2017–18.

The variation (revised estimate figure) reflects the latest schedule of contract deliverables and a revised allocation of funding to address the key risks for the project associated with the stand up of 6th Aviation Regiment, the remediation of technical risks, role equipment and supportability issues.

Helicopter Aircrew Training System

AIR 9000 Phase 7

479 200 90 93 3

The acquisition of the project is as forecast in the Defence PBS 2017–18. All 15 aircraft and all synthetic training devices, including three flight simulators, have been delivered to Australia. AIR 9000 Phase 7 is on track to commence training in early 2018.

The variation is due to early delivery of contract milestones brought forward from 2018-19 to 2017-18, partially offset by minor reductions in other Project requirements.

Battlefield Airlift - Caribou Replacement

AIR 8000 Phase 2

1,414 724 78 68 -9


1) Reprogramming of planned FMS payment and increase in Identification Friend or Foe (IFF) Mode IV requirement ($5m);

2) Delay to future financial years for contract modifications for aircraft baseline changes for Missile Warning System and Link 16 ($20m), and delayed delivery schedules for spares contracts ($12m); and

3) The foreign currency exchange price basis adjustment up from PBS 2017–18 to MYEFO 2017–18 ($1m).

Bridging Air Combat Capability AIR 5349 Phase 1

3,349 2,811 40 3 -37


1) Delay in the establishment of a contract by the US government for a test base system with budget reprogrammed to future financial years to align with delivery ($7m); and

2) Reprogramming budget to future financial years to align with when US government contracts are expected to be finalised ($30m).

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Approved Project

Expenditure $m



2017 $m


$m


$m

Variation $m


Joint Domain

Battlespace Communications System (Land)

JP 2072 Phase 2B

920 196 178 168 -10


The variation is due to rescheduled delivery of the enhanced deployable LAN capability.

ADF Identification Friend or Foe and Automatic Dependent Surveillance - Broadcast

AIR 90 Phase 1

425 56 79 73 -6


The expenditure against the planned budget is below the PBS 2017–18.

The variation is due to a rescheduled delivery of IFF systems.

Civil Military Air Traffic System (CMATS)

AIR 5431 Phase 3

920 61 66 70 3


The variation is due to additional requirements for Australian Military Airspace Control Communications System enhancements.

Woomera Test Range Remediation

JP 3024 Phase 1

237 110 60 58 -1

The acquisition of the project is as forecast in the Defence PBS 2017–18. The variation in funding from Budget Estimates relates to the early completion of contract milestones for the detailed design review and range instrument radar technical progress review.

Enhanced Land Electronic Warfare Systems

DEF 500 Phase 1

176 61 57 45 -12

The acquisition of the project differs from the Defence PBS 2017–18 as the Initial Operating Capability has been rescheduled to 2018-19, whilst the Final Operating Capability remains as forecast. The variation in funding from Budget Estimates relates to rescheduled delivery of the training systems.

Nulka Missile Decoy Enhancements

SEA 1397 Phase 5C

174 95 42 38 -5

The acquisition of the project is as forecast in the Defence PBS 2017–18. The variation in funding from Budget Estimates is largely due to rescheduled acquisition of Trial Rounds.

Improved Tactical Electronic Support Capability for ANZAC Class

SEA 1448 Phase 4A

279 165 42 44 2

The acquisition of the project is as forecast in the Defence PBS 2017–18. The project delivery remains on schedule. All ships have now been fitted with the Electronic Support mission system.

The variation in funding from Budget Estimates relates largely to higher costs based on Technical Support for internal communications.

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Phase

Approved Project

Expenditure $m



2017 $m


$m


$m

Variation $m


Land Domain

Medium and Heavy Capability (MHC), Field Vehicles, Modules and Trailers (FVMT)

LAND 121 Phase 3B

3,404 1,002 710 688 -22


The variation is due primarily to equipment deliveries and associated payments that were brought forward into 2016-17 from 2017-18.

Project Overlander - Protected Mobility Vehicle-Light

LAND 121 Phase 4

1,944 273 223 203 -20


The variation is primarily due to an additional reliability trial being conducted in August 2017 that has resulted in some linked project milestones and payments being deferred to 2018-19.

Soldier Enhancement Version 2 - Lethality

LAND 125 Phase 3C

456 140 131 131 0


The expenditure against the planned budget is on track.

Night Fighting Equipment Replacement

LAND 53 Phase 1BR

421 32 72 77 5


The variation is due to payments originally planned for 2016-17 being deferred to 2017-18 and the bringing forward of payments for weapons integration and price escalation provisions.

Enhanced Gap Crossing Capability

LAND 155 Phase 1

211 102 66 76 10


The variation is due to payments originally planned for 2016-17 not occurring until 2017-18, offset by some Battle Management System spares, support equipment and project management costs rescheduled to 2018-19 and 2019-20.

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Expenditure $m



2017 $m


$m


$m

Variation $m


Maritime Domain

Air Warfare Destroyer Program SEA 4000 Phase 3

0 7,120 683 520 -162

Ship 01 was commissioned as HMAS Hobart by Navy in September 2017. The initial period of builders sea trials for Ship 02, commenced as planned in November 2017, with further trials continuing in the first quarter of 2017. Ship 03 is on track to be launched and officially named in mid-2018.

The variation is due to cost savings against the Alliance Based Target Incentive Agreement (ABTIA), as a result of Navantia being inserted into the Shipyard. This is followed by closure of unrealised formal risks and issues after the delivery of Ship 1 and further savings against the ABTIA indexation estimate budget, which has been reduced to better reflect expected movements in ABS indices.

The revised estimate is sufficient to successfully complete the key activities of the Air Warfare Destroyer Program based on current forecasts of expected expenditure against the approved scope of work and the known risks and issues.

Future Submarine Design and Construction

SEA 1000 Phase 1B

2,228 102 319 311 -8


The engagement of secondees, further Collins Life of Type Extension Studies, and other activities have been reprogrammed from 2017-2018 to future fiscal years without affecting the acquisition forecast.

Maritime Operational Support Capability

SEA 1654 Phase 3

1,037 89 270 275 5

The changes primarily relate to an increase in foreign exchange fluctuations; offset against a reduction in the forecast expenditure on prime acquisition price escalation payments, and the procurement of long lead time items and training development activities.

Future Frigate - Design and Construction

SEA 5000 Phase 1

393 141 133 143 10

The expenditure against the planned budget at the 2017-18 Budget Estimates has increased.

The variation is due to an increase in contractor support for the tender evaluation period and the lead up to Gate 2 Government approval in 2018.

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Approved Project

Expenditure $m



2017 $m


$m


$m

Variation $m


Maritime Domain (Continued)

Collins Sonar Capability Assurance Program

SEA 1439 Phase 6

124 42 67 77 10

The acquisition of the project is as forecast in the Defence PBS 2017–18, with the exception due to slippage of sonar design milestones.

The variation is due to rescheduled sonar design milestones. This variance has been accommodated within funding made available through opportunities to reschedule some activities within the Submarine Enterprise.

Amphibious Ships (LHD) JP 2048 Phase 4A/B

3,089 2,789 49 44 -5

The acquisition of the project is not as forecast in the Defence PBS 2017-18. Testing and acceptance of the capability has been rescheduled. As a result, expenditure has been revised from $49m down to $44m.

Collins Communications and Electronic Warfare Programme

SEA 1439 Phase 5B2

596 94 41 96 55

The acquisition of the project has increased since Defence PBS 2017–18 as Second Pass (Gate 2) submission for SEA 1439 Phase 5B2 Stage Two was approved by Government in March 2017, with project receiving funding post Defence PBS 2017–18.

The variation is due to the Stage Two component being approved by Government in March 2017 with project receiving funding post Defence PBS 2017–18, slippage of Stage 1 Prime System Integrator milestones from the previous financial year, and increase in Platform integration and installation work for Sheean and Collins. This variance has been accommodated within funding made available through opportunities to reschedule some activities within the Submarine Enterprise.

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Domain/ Project Name Approved Project

Expenditure $m



2017 $m


$m


$m

Variation $m

Total Top 30 Projects (Gross Plan) 56,601 28,666 6,731 6,182 -549

Other Approved Project Gross Plans 86,123 67,257 1,153 1,426

Total – Approved Projects (Gross Plan) 142,724 95,923 7,884 7,608

Management Margin: Slippage -1,305 -691

Payments Required for the Approved Programme 6,579 6,917

Note

1. One classified project has not been included in this table due to its classified nature.

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APPENDIX D: TOP 30 SUSTAINMENT PRODUCTS BY 2017–18 FORECAST EXPENDITURE

Table 69: Top 30 Sustainment Products by 2017–18 Forecast Expenditure

Domain/ Project Name Product Serial


$m

Revised AE's Estimate 2017-18

$m

Variation $m


Air Domain

F/A-18F Super Hornet Weapon System

CAF21 266 260 -6 The budget variation is due to the foreign currency exchange price basis adjustment down from PBS 2017–18 to MYEFO 2017–18 ($5.7m).

E-7A Airborne Early Warning and Control Capability System

CAF20 212 208 -4


The budget variation is due to the foreign currency exchange price basis adjustment down from PBS 2017–18 to MYEFO 2017–18 ($4m).

F/A-18 A/B Classic Hornet Weapon System

CAF02 189 186 -3


The budget variation is due to foreign currency exchange price basis adjustment down from PBS 2017–18 to MYEFO 2017–18 ($2.7m).

Multi Role Helicopter Weapon System

CA48 172 178 6

The sustainment of the product is not as forecast in the Defence PBS 2017–18. The changes relate to increased maturity and confidence of the platform to achieve the forecasted annual Rate of Effort

The variation is due to a decision to fully fund the achievement of the forecasted annual Rate of Effort.

Armed Reconnaissance Helicopter System

CA12 137 123 -14

The sustainment of the product is not as forecast in the Defence PBS 2017–18.

The variation is due to the change in forecasted Rate of Effort, due to the impact of a pause of operations while investigations were underway into an incident with a common user nation's aircraft.

C130J-30 Weapon System

CAF06 129 126 -3 The budget variation is due to the foreign currency exchange price basis adjustment down from PBS 2017–18 to MYEFO 2017–18 ($2.8m).

Lead-In Fighter Hawk Weapon System

CAF03 126 126 - The expenditure against the planned budget is on track.

C-17 Heavy Air Lift Weapons system

CAF19 115 112 -3


The budget variation is due to the foreign currency exchange price basis adjustment down from PBS 2017–18 to MYEFO 2017–18 ($3m).

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Table 69: Top 30 Sustainment Products by 2017–18 Forecast Expenditure (Continued)



$m


$m

Variation $m



P3C Orion Weapons System

CAF04 105 81 -24

Planned variation is due to a delay in planned disposals activity and reduced Avionics repairable item inductions below what was planned.

The budget variation is due to: 1) Allocation of Air Force budget for the new platform ($25m); and 2) The foreign currency exchange price basis adjustment down from PBS 2017–18 to MYEFO 2017–18 ($0.9m).

KC-30A Weapon System

CAF22 72 86 14 The budget variation is due to the allocation of Air Force budget for additional aircraft.

MH-60R Seahawk Romeo Weapon System

CN35 56 89 33

The sustainment of the product is as forecast in the Defence PBS 2017–18. The Seahawk Romeo capability is operated from HMAS Albatross in Nowra and is currently supporting six embarked flights on Navy ships and the capability will continue to grow to a mature state of eight embarked flights over the next two years.

The expenditure against the planned budget is above the 2017-18 Budget Estimate. The variation results from the Product being allocated Future Sustainment funding in September 2017.

Joint Domain

Army Munitions and Army Guided Weapons

CA59 and CA60

178 189 11 The sustainment of the product is as forecast in the Defence PBS 2017–18.

The variation is due to increased requirements for explosive materiel to support Army.

Navy Munitions and Navy Guided Weapons

CN37 and CN38

149 153 4 The sustainment of the product is as forecast in the Defence PBS 2017–18.

The variation is due to increased requirements for explosive materiel to support Navy.

Air Force Munitions and Air Force Guided Weapons

CAF32 and CAF33

116 110 -6 The sustainment of the product is as forecast in the Defence PBS 2017–18.

The variation is due to a delay in delivery of munitions to support Air Force.

Wide Area Surveillance CAF13 91 89 -2 The sustainment of the product is as forecast in the Defence PBS 2017–18.

The variation relates to anticipated cost efficiencies in contract management.

Battlespace Communications Systems

CA31 57 74 17

The sustainment of the product is not as forecast in the Defence PBS 2017–18.

The variation is due to the additional activities associated with the Ready Battle Group. This will address capability outputs within the Ready Battle Group.

Air Battlespace Management Systems

CAF14 55 54 -1

The sustainment of the product is as forecast in the Defence PBS 2017–18.

The variation relates to the earlier than originally planned procurement of additional Mobile Control and Reporting Centre internet Protocol Radios.

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$m


$m

Variation $m


Joint Domain (Continued)

Air Traffic Control (ATC) Capability

CAF12 54 52 -2 The sustainment of the product is as forecast in the Defence PBS 2017–18.

The variation is largely due to rescheduling of Fixed Tactical Air Navigation system procurement.

Command and Control Capability Systems

CAF16 54 49 -5


The variation relates to reduction in some planned hardware replacements, software upgrades and enhancements.

Land Domain

ADF Clothing CA39 89 92 3


The variation is due to additional requirements for Air Force Multi Purpose Jackets, R.M.Williams boots and Army Cadet boots that have been agreed and funded by the Capability Manager.

Commercial Vehicle Fleet

CA19 78 67 -11


The availability of improved fleet management information from the Whole of Government contractor has enabled more accurate fleet replacement planning to take place and better efficiency of fleet vehicles. The product is also able to access cheaper vehicles, in some categories.

Maritime Domain

Collins class submarines

CN10 575 571 -4 The sustainment of the product is as forecast in the Defence PBS 2017–18.

No significant variation to financial estimate for delivery of CN10.

Anzac Class Frigate (FFH)

CN02 322 356 34


The variation is due to funding adjustments provided from other Navy products for additional treatment of maintenance, supportability and obsolescence risks.

Canberra Class Landing Helicopter Dock

CN34 106 124 18


The variation is due to funding adjustments provided from other Navy products for additional identified planned and corrective maintenance requirements.

Adelaide Class Frigate CN01 96 83 -13


The variation is due to funding adjustments provided to other Navy products as a result of contract reviews noting the planned withdrawl dates and cancelled Supported Maintenance Periods overseas.

Auxiliary Oiler Replenishment (AOR) HMAS Success

CN43 78 63 -15 The sustainment of the product is not as forecast in the Defence PBS 2017–18.

The variation is due to the decision to bring forward the planned withdrawal dates from service of the current Replenishment Capability, and funding adjustments provided to other Navy products.

Armidale Class Patrol Boat

CN09 64 76 12 The sustainment of the product is as forecast in the Defence PBS 2017–18.


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$m


$m

Variation $m


Maritime Domain (Continued)

Hydrographic Support CN46 63 69 6 The sustainment of the product is not as forecast in the Defence PBS 2017–18. The variation is due to funding adjustments provided from other Navy products for additional identified planned and corrective maintenance requirements.

Huon Class Mine Hunter Coastal

CN14 61 65 4



Cross Platform Items of Supply

CN49 57 54 -3 The sustainment of the product is not as forecast in the Defence PBS 2017–18. The variation is due to funding adjustments provided to other Navy products.

Total - Top 30 Products 3,922 3,965 43

Other Approved Sustainment Product Estimates 1,707

Total Sustainment Product Funds Available 5,673

Support to Operations 395

Total Sustainment and Operations Funding 6,068

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APPENDIX E: FACILITIES AND INFRASTRUCTURE PROGRAM

Table 70: Approved Major Capital Facilities Projects by State and Federal Electorate

State and Electorate

Total Estimated

Expenditure $m

Cumulative Expenditure

to 30 June 2017

$m

2017-18 Budget

Estimate $m

2017-18 Revised

Estimate $m

Variation $m

Project Performance Update and Explanation of financial variation

New Air Combat Capability (AIR 6000 NACC)[1]

RAAF Williamtown NSW - Paterson - 526.0 254.4 239.7 -14.7 The financial variation is a result of delays due to contamination issues.

RAAF Tindal NT - Lingiari - 85.9 187.7 176.8 -10.8 The financial variation is a result of change in delivery schedule.

Total 1,477.0 611.9 442.1 416.6 -25.5

Enhanced Land Force (ELF) Stage 2[1]

Lone Pine Barracks NSW - Hunter - 115.8 - - -

Puckapunyal Training Area VIC - McEwan - 8.8 2.1 2.3 0.2 The financial variation is a result of change in delivery schedule.

Simpson Barracks, Watsonia VIC - Jagajaga - 20.2 - - -

RAAF Amberley QLD - Blair - 9.6 - - -

Lavarack Barracks, Townsville QLD - Herbert - 66.1 - - -

Townsville Training Area QLD - Kennedy - 3.9 - - -

Greenbank Training Area QLD - Rankin - 120.7 - - -

Gallipoli Barracks, Enoggera QLD - Ryan - 807.9 - - -

Wide Bay Training Area QLD - Wide Bay - 91.8 - - -

Kokoda Barracks, Canungra QLD - Wright - 71.8 - - -

Cultana Training Area SA - Grey - 5.5 47.0 51.8 4.8 The financial variation is a result of change in delivery schedule.

RAAF Edinburgh SA - Wakefield - 34.5 - - -

Majura Field Training Area ACT - Fraser - 22.4 - - -

Total 1,457.8 1,379.1 49.1 54.1 5.1

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Total Estimated

Expenditure $m


to 30 June 2017

$m

2017-18 Budget

Estimate $m

2017-18 Revised

Estimate $m

Variation $m


Maritime Patrol Aircraft Replacement (AIR 7000 Phase 2B)[1]

RAAF Edinburgh SA - Wakefield - 165.6 148.2 148.2 -

RAAF Townsville QLD - Herbert - - - - -

RAAF Pearce WA - Pearce - - - - -

RAAF Darwin NT - Solomon - - 4.4 4.4 -

Total 707.9 165.6 152.6 152.6 -

Hardened & Networked Army (HNA) Phase 2, Edinburgh Defence Precinct

Cultana Training Area SA - Grey 520.6 483.3 - 12.6 12.6 Project has been approved since the PBS 2017–18.

HMAS Cerberus Redevelopment

HMAS Cerberus VIC - Flinders 463.1 - - 15.0 15.0 Project has been approved since the PBS 2017–18.

Air Traffic Control Complex Infrastructure Project and Fixed Base Defence Air Traffic Management and Control System (AIR 5431 Phases 2 and 3)[1]

RAAF Amberley QLD - Blair - 17.5 18.6 18.5 -0.1 The financial variation is a result of change in delivery schedule.

Army Aviation Centre Oakey QLD - Groom - 2.8 25.4 25.3 -0.1 The financial variation is a result of change in delivery schedule.

RAAF Townsville QLD - Herbert - 3.7 28.8 28.7 -0.1 The financial variation is a result of change in delivery schedule.

RAAF Richmond NSW - Greenway - 2.4 19.7 19.6 -0.1 The financial variation is a result of change in delivery schedule.

HMAS Albatross NSW - Gilmore - 1.7 4.7 4.7 -0.0 The financial variation is a result of change in delivery schedule.

RAAF Williamtown NSW - Paterson - 3.4 27.0 26.9 -0.1 The financial variation is a result of change in delivery schedule.

RAAF East Sale VIC - Gippsland - 5.1 0.7 0.7 -0.0 The financial variation is a result of change in delivery schedule.

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Total Estimated

Expenditure $m


to 30 June 2017

$m

2017-18 Budget

Estimate $m

2017-18 Revised

Estimate $m

Variation $m


RAAF Woomera SA - Grey - 1.4 7.8 7.8 -0.0 The financial variation is a result of change in delivery schedule.

RAAF Edinburgh SA - Wakefield - 1.2 1.7 1.7 -0.0 The financial variation is a result of change in delivery schedule.

RAAF Gingin WA - Pearce - 0.4 6.8 6.8 -0.0 The financial variation is a result of change in delivery schedule.

RAAF Pearce WA - Pearce - 2.1 25.4 25.3 -0.1 The financial variation is a result of change in delivery schedule.

RAAF Darwin NT - Solomon - 4.1 27.5 27.4 -0.1 The financial variation is a result of change in delivery schedule.

RAAF Tindal NT - Lingiari - 7.8 28.7 28.6 -0.1 The financial variation is a result of change in delivery schedule.

Total 409.9 53.5 222.8 221.8 -1.0

Battlefield Airlifter Facilities (AIR 8000 Phase 2)

RAAF Amberley QLD - Blair 370.4 62.3 120.0 141.2 21.2

The financial variation is a result of slippage of expenditure from 2016-17 to 2017-18 and the opportunity to deliver construction works earlier than planned.

HMAS Stirling Redevelopment Stage 3A

HMAS Stirling, Rockingham WA - Brand 366.8 15.0 70.4 71.3 0.9 The financial variation is a result of change in delivery schedule.

Growler Airborne Electronic Attack Capability Facilities (AIR 5349 Phase 3)

RAAF Amberley QLD - Blair - 71.2 55.0 63.9 8.9 The financial variation is a result of higher than anticipated tender prices.

Delamere Weapons Range NT - Lingiari - 17.2 49.0 56.9 7.9 The financial variation is a result of higher than anticipated tender prices.

Total 348.6 88.4 104.0 120.8 16.8

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Total Estimated

Expenditure $m


to 30 June 2017

$m

2017-18 Budget

Estimate $m

2017-18 Revised

Estimate $m

Variation $m


Pilot Training System Facilities (AIR 5428 Phase 1)[1]

RAAF East Sale VIC - Gippsland - - 101.6 101.7 0.0 The financial variation is a result of change in delivery schedule.

RAAF Pearce WA - Pearce - 79.9 66.4 66.4 0.0 The financial variation is a result of change in delivery schedule.

RAAF Edinburgh SA - Wakefield - 27.5 - - -

RAAF Williamtown NSW - Paterson - 2.4 - - -

RAAF Gingin WA - Pearce - 2.4 - - -

Total 329.8 112.1 168.0 168.1 0.1

LAND 121 Stage 2 (Phases 3 and 4)[1]

Lavarack Barracks, Townsville QLD - Herbert - 56.9 50.0 48.0 -2.0 The financial variation is a result of lower than anticipated tender prices.

RAAF Darwin NT - Solomon - 0.0 - - -

Gallipoli Barracks, Enoggera QLD - Ryan - 17.9 31.0 29.8 -1.2 The financial variation is a result of lower than anticipated tender prices.

RAAF Williamtown NSW - Paterson - 5.5 8.2 7.9 -0.3 The financial variation is a result of lower than anticipated tender prices.

Holsworthy Barracks, Holsworthy NSW - Hughes - 0.1 1.3 1.2 -0.1 The financial variation is a result of lower than anticipated tender prices.

Puckapunyal Training Area VIC - McEwan - 3.5 13.0 12.5 -0.5 The financial variation is a result of lower than anticipated tender prices.

Campbell Barracks WA - Curtin - 0.0 4.4 4.2 -0.2 The financial variation is a result of the delay in commencement of construction.

RAAF Edinburgh SA - Wakefield - 3.8 6.1 5.9 -0.2 The financial variation is a result of lower than anticipated tender prices.

Robertson Barracks NT - Solomon - 0.0 3.5 3.4 -0.1 The financial variation is a result of lower than anticipated tender prices.

Total 276.5 87.7 117.5 112.8 -4.7

RAAF Base Williamtown Redevelopment Stage 2

RAAF Williamtown NSW - Paterson 274.0 47.5 103.1 102.6 -0.5 The financial variation is a result of delays due to contamination issues.

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Total Estimated

Expenditure $m


to 30 June 2017

$m

2017-18 Budget

Estimate $m

2017-18 Revised

Estimate $m

Variation $m


Explosive Ordnance Logistics Reform Program[1]

HMAS Cerberus VIC - Flinders - - - - - Project has been approved since the PBS 2017–18.

Fleet Base West, Stirling WA - Brand - - - - - Project has been approved since the PBS 2017–18.

RAAF Amberley QLD - Blair - - - - - Project has been approved since the PBS 2017–18.

RAAF Darwin NT - Solomon - - - - - Project has been approved since the PBS 2017–18.

RAAF Edinburgh SA - Wakefield - - - - - Project has been approved since the PBS 2017–18.

RAAF Williamtown NSW - Newcastle - - - - - Project has been approved since the PBS 2017–18.

Fort Direction TAS - Franklin - - - - - Project has been approved since the PBS 2017–18.

Mangalore VIC - Murray - - - - - Project has been approved since the PBS 2017–18.

Mt Stuart TAS - Denison - - - - - Project has been approved since the PBS 2017–18.

Myambat NSW - Hunter - - - - - Project has been approved since the PBS 2017–18.

Point Wilson VIC - Corio - - - - - Project has been approved since the PBS 2017–18.

Twofold Bay NSW - Eden-

Monaro - - - - -

Project has been approved since the PBS 2017–18.

Total 230.9 - - 55.0 55.0 Project has been approved since the PBS 2017–18.

Campbell Barracks Redevelopment

Campbell Barracks WA - Curtin 223.6 115.3 38.2 66.4 28.3 The financial variation is a result of additional costs relating to asbestos remediation.

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Expenditure $m


to 30 June 2017

$m

2017-18 Budget

Estimate $m

2017-18 Revised

Estimate $m

Variation $m


C-17 Maintenance Facility, Aircraft Apron and Associated Infrastructure (AIR 8000 Phase 3)

RAAF Amberley QLD - Blair 219.4 - 100.0 118.0 18.0 The financial variation is a result of the opportunity to deliver construction works earlier than planned.

Garden Island Critical Infrastructure Recovery - Stage 1

Garden Island Defence Precinct NSW - Sydney 213.4 - - 35.0 35.0 Project has been approved since the PBS 2017–18.

HMAS Albatross Redevelopment Stage 3

HMAS Albatross NSW - Gilmore 192.0 183.3 0.5 5.6 5.1 The financial variation is a result of project finalisation costs.

Air 9000 Ph 8 Facilities for the Future Naval Aviation Combat System (FNACS) - MH-60R[1]

HMAS Albatross, Nowra NSW - Gilmore - 161.5 0.4 0.5 0.1 The financial variation is a result of change in delivery schedule.

HMAS Stirling, Rockingham WA - Brand - 18.8 - - -

Twofold Bay, Eden NSW - Eden-

Monaro - 4.2 - - -

Total 189.0 184.4 0.4 0.5 0.1

Defence Terrestrial Communications Network Facilities Upgrade (JP 2047 Phase 3)[2]

National 131.1 73.8 32.8 47.2 14.4 The financial variation is a result of change in delivery schedule.

Airfield Capital Works (Curtin, Tindal and Townsville)[1]

RAAF Townsville QLD - Herbert - - - - -

RAAF Curtin WA - Durack - - 2.4 0.9 -1.5 The financial variation is a result of change in delivery schedule.

RAAF Tindal NT - Lingiari - - 33.6 12.7 -21.0 The financial variation is a result of reduced scope requirement.

Total 95.3 51.0 36.0 13.6 -22.5

Space Surveillance Telescope (JP 3029 Phase 2)

Harold E Holt, Exmouth WA - Durack 79.0 15.7 27.5 53.4 25.9 The financial variation is a result of change in delivery schedule.

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Total Estimated

Expenditure $m


to 30 June 2017

$m

2017-18 Budget

Estimate $m

2017-18 Revised

Estimate $m

Variation $m


Russell Offices Buildings 5 and 6 Infrastructure Upgrade

Russell Offices ACT - Canberra 75.4 - - 14.1 14.1 Project has been approved since the PBS 2017–18.

Delamere Range Facilities Redevelopment

Delamere Air Weapons Range NT - Lingiari 74.4 15.3 35.3 54.5 19.2 The financial variation is a result of higher than anticipated tender prices.

Land 17 Phase 1B/C

Gallipoli Barracks, Enoggera QLD - Ryan - - 3.4 4.9 1.4 The financial variation is a result of change in delivery schedule.

Lavarack Barracks QLD - Herbert - - 6.5 9.2 2.7 The financial variation is a result of change in delivery schedule.

Robertson Barracks NT - Solomon - - 6.0 8.6 2.5 The financial variation is a result of change in delivery schedule.

Puckapunyal Training Area VIC - McEwan - 0.4 6.5 9.2 2.7 The financial variation is a result of change in delivery schedule.

Campbell Barracks WA - Curtin - - 3.3 4.7 1.4 The financial variation is a result of change in delivery schedule.

Holsworthy Barracks NSW - Hughes - - 2.9 4.2 1.2 The financial variation is a result of change in delivery schedule.

RAAF Williamtown NSW - Newcastle - - 3.0 4.3 1.3 The financial variation is a result of change in delivery schedule.

Proof & Experimental Establishment - Port Wakefield

QLD - Wakefield - - 0.7 1.0 0.3 The financial variation is a result of change in delivery schedule.

Total 57.1 0.4 32.3 45.9 13.6

Departm

ent o

f Defe

nce

10

5



Total Estimated

Expenditure $m


to 30 June 2017

$m

2017-18 Budget

Estimate $m

2017-18 Revised

Estimate $m

Variation $m


REDFIN Infrastructure (JP 2097 Phase 1B)[1]


Campbell Barracks WA - Curtin - - 0.2 0.4 0.2 The financial variation is a result of change in delivery schedule.

Defence Establishment Howard Springs NT - Solomon - - 1.8 3.7 1.9 The financial variation is a result of change in delivery schedule.

Lavarack Barracks QLD - Herbert - - 0.0 0.1 0.0 The financial variation is a result of change in delivery schedule.

Total 50.5 34.5 5.6 11.6 6.0

Facilities for Chinook Helicopter (AIR 9000 Phases 5B and 5C)

RAAF Townsville QLD - Herbert 49.8 41.4 1.4 8.3 6.9 The financial variation is a result of cost variations associated with latent conditions.

Woomera Range Remediation Facilities (AIR 3024 Phase 1)

Woomera SA - Grey 48.6 - 29.6 45.3 15.7 The financial variation is a result of change in delivery schedule.

Puckapunyal Military Area High Voltage Upgrade

Puckapunyal Training Area VIC - McEwan 32.7 12.7 8.1 20.0 11.8 The financial variation is a result of change in delivery schedule.

Electronic Warfare Operational Support (JP500 Phase 2)

RAAF Edinburgh SA - Wakefield 24.9 - 14.6 14.6 -

10

6

Defe

nce

Portfo

lio A

dditio

na

l Estim

ate

s S

tate

men

ts 2

01

7–18



Total Estimated

Expenditure $m


to 30 June 2017

$m

2017-18 Budget

Estimate $m

2017-18 Revised

Estimate $m

Variation $m


LAND 155 Enhanced Gap Crossing Capability [1]

Wallangarra QLD - Maranoa - - - 6.4 6.4 Project has been approved since the PBS 2017–18.

Lavarack Barracks, Townsville QLD - Herbert - - - 3.8 3.8 Project has been approved since the PBS 2017–18.

Liverpool Military Area (LMA) NSW - Fowler - - - 6.8 6.8 Project has been approved since the PBS 2017–18.


HMAS Moreton Unit Relocation

HMAS Moreton QLD - Griffith 15.6 - - 5.3 5.3 Project has been approved since the PBS 2017–18.

LAND 500 Ph1 – Remediation of Tactical Land Electronic Warfare

Holsworthy Barracks NSW - Hughes - - - 0.8 0.8 Project has been approved since the PBS 2017–18.

Borneo Barracks QLD - Groom - - - 8.7 8.7 Project has been approved since the PBS 2017–18.

Simpson Barracks VIC - Jagajaga - - - 0.1 0.1 Project has been approved since the PBS 2017–18.


Centralised Processing Facilities and Infrastructure

National 12.9 1.9 5.5 5.5 - The financial variation is a result of change in delivery schedule.

Low Level Bridge Repair

Fleet Base West, Stirling WA - Brand 12.8 12.4 0.1 0.1 0.0 The financial variation is a result of change in delivery schedule.

RAAF Base Amberley Sewerage Treatment Plant

RAAF Amberley QLD - Blair 9.2 - 5.4 0.5 -4.9 The financial variation is a result of change in delivery schedule.

Departm

ent o

f Defe

nce

10

7



Total Estimated

Expenditure $m


to 30 June 2017

$m

2017-18 Budget

Estimate $m

2017-18 Revised

Estimate $m

Variation $m


Potable Water Supply Upgrade

RAAF Pearce WA - Pearce 8.7 0.8 7.3 3.0 -4.3 The financial variation is a result of change in delivery schedule.

Underwater Explosive Test Facility - DSTO

DSTG Nagambie VIC - Murray 7.6 - - 3.0 3.0 Project has been approved since the PBS 2017–18.

Shoalwater Bay Training Area (SWBTA) - Vehicle Wash Point

Shoalwater Bay Training Area QLD -

Rockhampton 6.8 - - 4.7 4.7 Project has been approved since the PBS 2017–18.

Port Wakefield - P&EE Vibration Test Facility

Port Wakefield SA - Wakefield 6.7 - - 6.7 6.7 Project has been approved since the PBS 2017–18.

DSTO Graytown Armour Testing Facility

DSTG Graytown VIC - Murray 5.0 - - 1.7 1.7 Project has been approved since the PBS 2017–18.

Land 136 Ph 1 Land Force Mortar Replacement [1]


Irwin Barracks WA - Curtin - - 0.2 1.2 1.0 The financial variation is a result of change in delivery schedule.

Robertson Barracks NT - Solomon - - 0.2 1.5 1.2 The financial variation is a result of change in delivery schedule.

Total 4.5 0.2 0.6 3.8 3.2

Projects in or about to enter Defects Liability Period [3]

7.8 17.6 9.8 The financial variation is a result of slippage of project finalisation costs from 2016-17 to 2017-18.

Total 9,240.1 3,849.6 1,938.7 2,277.0 338.3

Notes

1. These projects cross state and electoral boundaries. Estimated cumulative expenditure to 30 June 2017 and expenditure estimates for 2017-18 are provided in the table per location.

2. This project is delivering facilities at over 200 locations that cross state and electoral boundaries.

3. This amount represents the expenditure estimates for contract administration of 15 completed projects during their first year in-use. This includes the Deployable Defence Air Traffic Management and Control Systems included in PBS 2017-18.

4. Variations of $0.0m relate to movements of less than $50,000.


108

Information is as reported in PBS 2017–18 with the following updates:

New South Wales

RAAF Base Williamtown Redevelopment Stage 2

This project will sustain and improve the functionality and capability of RAAF Base Williamtown, NSW, including upgrades or replacement of critical ageing infrastructure to meet future requirements. The project is scheduled for completion by late 2021.

HMAS Albatross Redevelopment Stage 3

This project will replace ageing and obsolete engineering services and infrastructure at HMAS Albatross. The project will also provide a combination of new and refurbished facilities to support operational and training outcomes as well as enabling functions. Construction is complete and currently in the Defects Liability Period.

Garden Island (East) Critical Infrastructure Recovery Project (CIRP) – Stage One

This project will address critical structural, condition and engineering services risks on the Cruiser Wharf at Garden Island (East), Sydney, NSW. The project is scheduled for completion by late 2021.

JP2008 Phase 5B Ground Satellite Station

This project will provide facilities (mainly engineering services infrastructure) to support JP2008PH5B requirements, at Kapooka Training Base, Wagga Wagga. The project is scheduled for completion by late 2018.

Queensland

Battlefield Airlifter Facilities (AIR 8000 Phase 2)

This project will provide facilities at RAAF Base Amberley, QLD to accommodate and support the operation of the new C-27J Battlefield Airlifter (BFA) aircraft. The project is scheduled for completion by mid-2019.

Growler Airborne Electronic Attack Capability Facilities (AIR 5349 Phase 3)

This Project will provide the necessary working accommodation, maintenance, warehousing and training facilities at RAAF Base Amberley, QLD to support the introduction of the Growler Airborne Electronic Attack Capability. The project is scheduled for completion by early 2021.

Facilities for Chinook Helicopter (AIR 9000 Phases 5B and 5C)

This project will provide new and upgraded facilities to support the introduction into service of the new CH47 F Chinook Helicopter. The project will provide working accommodation, simulator facilities, aircraft hangars and workshops, storage facilities and supporting infrastructure for the Army’s 5th Aviation Regiment at RAAF Base Townsville. Construction is complete and currently in the Defects Liability Period.

C-17 Maintenance Facility, Aircraft Apron and Associated Infrastructure (AIR 8000 Phase 3)

This project will provide a maintenance facility, working accommodation, an aircraft apron and associated facilities at RAAF Base Amberley. This project is scheduled for completion by early 2019.


109

Shoalwater Bay Training Area Vehicle Wash Point

This project will provide a vehicle wash point at the main entrance to the Shoalwater Bay Training Area. The project is scheduled for completion in mid-2018.


This project will ensure that Navy’s operational and administrative functions are retained after the partial disposal of surplus Defence land at Bulimba Barracks. The project also seeks to construct new facilities and services on the remaining portion of the site to replace those functions that will be displaced due to the partial disposal of the site. The project is scheduled for completion by early 2019.

Western Australia

Campbell Barracks Redevelopment

This project will provide a new Headquarters for the Special Air Services Regiment, communications facilities, working accommodation, storage facilities and supporting site infrastructure at Campbell Barracks, WA. The project is scheduled for completion by early 2019.

Northern Territory

Delamere Range Facilities Redevelopment

This project will redevelop key range facilities and infrastructure to enable Growler and Mobile Threat Training Emitter Systems capability at Delamere Air Weapons Range, NT. The project is scheduled for completion by late 2018.

South Australia

Woomera Range Remediation Facilities (AIR 3024 Phase 1)

This facilities project will provide new and upgraded facilities and infrastructure that are capable of facilitating the operation of a new range safety and control system at Woomera, SA. The project is scheduled for completion in mid-2018.

Victoria

Puckapunyal Military Area High Voltage Upgrade

The project will provide an essential upgrade to the High Voltage power supply and reticulation network at the Puckapunyal Military Area, Victoria. The project is scheduled for completion in early 2018.


This project will provide engineering services upgrade, consolidation of Living In Accommodation (LIA) and Mess Facilities, co-location of Clothing Store with Naval Store, School of Survivability and Ship Safety upgrade, Gym upgrade, Armoury, Explosive Ordnance (EO) and Weapons Storage Facility upgrade, and demolition. The project is scheduled for completion in 2025.

Australian Capital Territory

Russell Buildings R5 and R6 Infrastructure Upgrade

The project will provide essential building and engineering services upgrades to extend the life of Russell Buildings R5 and R6. The project is scheduled for completion by mid2020.


110

Various Locations

New Air Combat Capability (AIR 6000 NACC)

This project will provide new and upgraded facilities and infrastructure to support the introduction of the Joint Strike Fighter at RAAF Base Williamtown Newcastle, NSW, and RAAF Base Tindal, Katherine, NT with support facilities and infrastructure provided at Defence Establishment Myambat, NSW and seven Forward Operating Bases. The project is scheduled for completion by mid-2020.

Enhanced Land Force (ELF) Stage 2

This project will provide modern purpose-built facilities and supporting infrastructure for the 8th/9th Battalion the Royal Australian Regiment and supporting elements of the Army's 7th Brigade at Gallipoli Barracks in Enoggera, Brisbane. The project includes the construction of new and refurbished accommodation and training facilities, as well as common use facilities and site infrastructure upgrades, at Enoggera and other Defence sites across four States and both mainland Territories.

Facilities at Townsville, Singleton, Duntroon and Watsonia will provide modern accommodation and supporting infrastructure for increased Army career training. In Sydney, at RAAF Bases Amberley and Edinburgh, and at nine other Defence Training Areas, new and refurbished facilities with site infrastructure upgrades will be provided for Army and joint enabling elements supporting the Enhanced Land Force capabilities.

All works are complete with the exception of works at Cultana Training Area, which a rescheduled for completion by late 2018.

Air Traffic Control Complex Infrastructure Project and Fixed Base Defence Air Traffic Management and Control System (AIR 5431 Phases 2 and 3)

This project will provide facilities across 13 bases in support of replacement Air Traffic Management Surveillance, Command and Control Systems under AIR 5431 Phases 2 and 3, incorporating the replacement of aged and degraded Air Traffic Control Towers. The project is scheduled for completion by early 2023.

LAND 121 Stage 2 (Phases 3 and 4)

This project will provide facilities across nine bases to sustain the B-vehicle fleet IAW the Basis of Issue for Army, RAAF and Joint Logistics Command. These facilities will maintain (workshops and repair parts storage), support (fuel points, loading ramps, wash points and weigh bridges) and sustain (shelters and hardstand) the vehicles from vehicle acquisition Phase 3A (G-Wagon), Phase 3B (Light/Light Weight and Medium/Heavy) and Phase 4 (Protected Mobility Vehicles Light). The project is scheduled for completion by early 2020.

Facilities for the MH-60R Seahawk Maritime Combat Helicopters (AIR 9000 Phase 8)

This project will provide new and upgraded facilities for maritime helicopter operations at HMAS Albatross, NSW, HMAS Stirling, WA and at Eden, NSW. The project includes the provision of facilities for aircraft hangars and workshops, synthetic training and working accommodation primarily at HMAS Albatross as well as additional explosive ordnance facilities at HMAS Stirling and Eden. Construction is complete and currently in the Defects Liability Period.


111

Helicopter Aircrew Training System (JP 9000 Phase 7)

This project will provide new and upgraded training facilities to support the introduction of the new joint Navy and Army Helicopter Aircrew Training System. The project will provide working accommodation, simulation facilities, training facilities and aircraft hangars at HMAS Albatross, NSW as well as communication rooms and helicopter operation areas at Jervis Bay Airfield, ACT. The project was completed in July 2017 and is now in the Defects Liability Period.

Airfield Capital Works (Curtin, Tindal and Townsville)

This project will resurface asphalt pavement and replace airfield lighting at RAAF Base Curtin, WA, RAAF Base Tindal, NT and RAAF Base Townsville, QLD. The project is scheduled for completion by mid-2019.

REDFIN Infrastructure (JP2097 Phase 1B)

This project will provide facilities for the Special Operations Vehicle (SOV) fleet to support mobility and communications for Special Operations Forces. The project is scheduled for completion by mid-2018.

LAND 17 Phase 1B/1C

This project will provide facilities at eight Defence establishments to provide the necessary working, storage, maintenance and training facilities to support the additional Lightweight Towed Howitzer and simulation capability being acquired under LAND 17 Phase 1B/1C. The project is scheduled for completion by mid-2018.

Land Force Mortar Replacement (LAND 136 Phase 1)

This project will provide facilities to support the introduction into service of new mortar simulation systems. The project is scheduled for completion in early 2018.

Defence Centralised Processing Facilities

This project will provide upgrades to building services at eight Defence locations, to support the consolidation of information and communications technology hosting services. The project is scheduled for completion in early 2018

LAND 155 Enhanced Gap Crossing Capability

This project will provide new storage and hardstand facilities to support the introduction of enhanced gap crossing capability at Liverpool Military Area, NSW, Joint Logistics Unit South QLD, Joint Logistics Unit North QLD and Joint Logistics Unit North, NT. The project is scheduled for completion by mid-2018.

Explosive Ordnance Logistics Reform Program

This project will address explosive ordnance storage capacity shortfalls through delivery of new and enhanced explosive ordnance facilities at 12 Defence sites. The project is scheduled for completion by mid-2020.


112

APPENDIX F: STATUS OF MAJOR PROJECTS FORESHADOWED FOR

GOVERNMENT AND PARLIAMENTARY STANDING COMMITTEE ON PUBLIC

WORKS CONSIDERATION (PWC) IN 2017–18

Explanation of the Major Projects Foreshadowed for PWC Consideration in 2017–18

Information is as reported in the PBS 2017–18.

Table 71: Major Capital Facilities Projects Foreshadowed for Consideration and Approval

State/Electorate

Actual/Indicative

PWC Referral

Date

Actual/ Indicative

PWC Hearing

Date[1] Current

Status

Major Capital Facilities Projects Foreshadowed for PWC Consideration in 2017-18

Garden Island Critical Infrastructure Recovery Project - Stage 1

NSW - Wentworth 1 March 2017 14 May 2017 Completed

LAND 155 Enhanced Gap Crossing Capability

Multiple 1 March 2017 5 May 2017 Completed

Russell Buildings R5 and R6 Infrastructure Upgrade

ACT - Fraser 1 March 2017 5 May 2017 Completed


(previously known as Bulimba Barracks Partial Disposal and Unit Relocation)[2]

Qld - Griffith 30 March 2017 5 May 2017 & 28 July 2017

Completed


VIC - Hastings 22 June 2017 28 September 2017

Completed

JP2008 Phase 5 B2 – Ground Satellite Station (GSS)

Multiple 22 June 2017 15 September 2017

Completed

Explosive Ordnance Logistics Reform Program (EOLRP)

Multiple 22 June 2017 29 September 2017

Completed

Joint Health Command (JHC) Garrison Health Facilities Upgrade

Multiple Late 2017/ Early 2018

Early 2018 In development

Navy Guided Weapons Sustainment System (NGWSS) Remediation and Augmentation

Multiple Early 2018 Mid 2018 In development

JP157 Phase 1 Replacement Aviation Refueling Vehicles

Multiple Early 2018 Early 2018 In development

JP2110 Phase 1B Chemical, Biological, Radiological and Nuclear Defence (CBRND) Capability Facilities[3]


Defence Site Maribyrnong Remediation

Vic – Melbourne Ports

Late 2017 Early 2018 In development

Defence Science and Technology Group Edinburgh (DSTG EDN) Conference and

Information Systems Centre

SA - Wakefield Mid 2018 Mid 2018 In development

Garden Island Critical Infrastructure Recovery Project - Stage 2

NSW - Wentworth Early 2018 Mid 2018 In development


113

Table 71: Program of Works Foreshadowed for Consideration and Approval (Continued)

State/Electorate Actual/Indicative

PWC Referral

Date

Actual/Indicative

PWC Hearing

Date[1]

Current

Status

Major Capital Facilities Projects Foreshadowed for PWC Consideration in 2017-18 (Continued)

P0007 Aircraft Pavement and Airfield Lighting at RAAF Base Pearce, Gin Gin, RAAF Base East Sale and Army Aviation Centre Oakey

Multiple Mid 2018 Late 2018 In development

Point Wilson Waterside Infrastructure

Redevelopment

VIC - Jagajaga Early 2018 Early 2018 In development

Facilities to Support Naval Operations in the North


Larrakeyah Barracks Redevelopment

NT - Solomon Early 2018 Mid 2018 In development

F-35 Engine Test Cell 1 Upgrade

QLD - Blair Late 2017/ Early 2018


SEA1654 Maritime Operational Support

Capability (MOSC)

Multiple Late 2017/ Early 2018


AIR 2025 Phase 6 Jindalee Operational Radar Networks (JORN)

Multiple Mid 2018 Mid 2018/ Late 2018

In development

Notes

1. Hearing dates will be subject to the Committee’s consideration and agreement.

2. HMAS Moreton Unit Relocation Project (previously known as J0126 Bulimba Barracks Partial Disposal and Unit Relocation) costs have increased and now exceed the medium works threshold. This project is now a major project.

3. JP2110 Phase 1B – Chemical, Biological, Radiological and Nuclear Defence (CBRND) Capability Facilities costs have increased and now exceed the medium works threshold. This project is now a major project.


114

Table 72: Medium Projects Foreshadowed for Consideration and Approval

State/Electorate PWC

Notification Current

Status

Medium Projects Foreshadowed to Seek Approval in 2017-18

SEA 1778 Ph1 - Deployable Mine Counter Measures NSW - Wentworth Early 2018 In development

RAAF Base Pearce - Upgrade of Potable Water Infrastructure

WA - Pearce Early 2018 In development

LAND154 Phase 2 Stage 1 (Weapons Technical Intelligence) Joint Counter Improvised Explosive Device Capability

Multiple Late 2018 In development

2CER Compensatory Hardstand within Gallipoli Barracks

Qld - Ryan Mid 2018 In development

RAAF Base Amberley Sewerage Treatment Plant Qld - Blair Mid 2018 In development

Building 106 Extensions and Alterations, Environmental Test Facility Proof and Experimental Establishment

SA - Wakefield Early 2018 In development

LAND154 Phase 2 Stage 2 (Force Protection Electronic Counter Measures) Joint Counter Improvised Explosive Device Capability

Multiple Early 2018 In development

Upgrade to the Multi-Purpose Wharf at Twofold Bay, Eden

NSW - Eden Monaro


Special Technical Facility (Capability Project) Victoria Early 2018 In development

RAAF Williamtown Childcare Centre (Sustainment Project

NSW - Paterson Early 2018 In development

Robertson Barracks Close Training Area (RBCTA) Post Acquisition (Sustainment Project)

NT - Lingiari Mid 2018 In development

Dedicated Facilities for A COY 41 RNSWR in Tweed Heads

NSW - Richmond Late 2019 In development

Combat Training Centre - Jungle Training (Tully) Replacement Stokes Litters and Suspension Bridge

Qld - Kennedy 25 May 2017

Completed

DSTO Fishermans Bend, Vic – Underwater Explosive Ordnance (EO) Test Facility

Vic – Melbourne Ports

15 June 2017 Completed

Proof and Experimental Establishment (P&EE) Vibration Test Facility - Port Wakefield

SA - Wakefield 17 August 2017 Completed

LAND 500 Phase 1 - Remediation of Tactical Land Electronic Warfare

Multiple 15 June 2017 Completed

DSTO Graytown Armour Testing Facility Vic - Murray 15 June 2017 Completed

Land 9000 Chinook Configuration Alignment Program QLD - Herbert 17 August 2017 Completed

Robertson Barracks Small Arms Range Project NT - Lingiari 31 July 2017 Completed


115

Explanation of Projects

Information is as reported in the PBS 2017–18, except for the following revisions:

South Australia

Defence Science and Technology Group Edinburgh Conference and Information Systems Centre

This project will provide information and communications technology equipment facilities, and secure

meeting, conference and training facilities. Subject to Government and Parliamentary approvals,

construction is planned to commence in late 2018 and be complete by early 2020.

Cultana Training Area Redevelopment - Stage 2

This project will provide new infrastructure and facilities at the Cultana Training Area, to support ADF

training activities. Subject to Government and Parliamentary approvals, construction is planned to

commence in early 2020 and be complete by mid-2021.

Northern Territory

Larrakeyah Barracks Redevelopment

This project will provide new and/or refurbished facilities at Larakeyah Barracks. Subject to Government

and Parliamentary approvals, construction is planned to commence in late 2018 and be complete by late

2022.

Naval Operations in the North

This project will provide new facilities to support naval operations, including berthing and fueling

facilities. Subject to Government and Parliamentary approvals, construction is planned to commence in

late 2018 and be complete by mid-2023.

Victoria

Point Wilson Waterside Infrastructure Redevelopment

This project will address deficiencies in the current waterside infrastructure at Point Wilson. Subject to

Government and Parliamentary approval, construction is planned to commence in mid-2018 and be

complete by mid-2021.

New South Wales

Garden Island (East) Critical Infrastructure Recovery Project (CIRP) – Stage Two

This project will address critical wharf infrastructure and engineering services risks at Garden Island

(East), Sydney, NSW (excluding those being addressed under Stage One). Subject to Parliamentary

approval, construction is planned to commence in late 2018 and be completed by mid-2024.

Navy Guided Weapons Maintenance Facilities Project

This project will provide facilities at Defence Establishment Orchard Hills to support maintenance of

guided weapons. Subject to Government and Parliamentary approval, construction is planned to

commence in late 2018 and be completed by early 2020.


116

Various Locations

Joint Health Command – Garrison Health Facilities Upgrade

This project will provide new and refurbished facilities at up to 12 Defence sites to support the efficient

delivery of health services for the ADF. Subject to Government and Parliamentary approval, construction

is planned to commence in mid-2018 and be complete by mid-2020.

Airfield Capital Works (RAAF Bases Pearce, Gin Gin, East Sale and Army Aviation Centre Oakey)

This project will provide aircraft pavement and aeronautical ground lighting maintenance works at RAAF

Bases Pearce, Gin Gin, East Sale and Army Aviation Centre Oakey. Subject to Government and

Parliamentary approvals, construction is planned to commence in mid-2018 and be complete by mid-2021.

JP2110 Phase 1B – Chemical, Biological, Radiological and Nuclear Defence (CBRND) Facilities

This project will provide new and refurbished facilities including training and storage facilities, to support

ADF CBRND activities. Subject to Government and Parliamentary approvals, construction is planned to

commence in early 2019 and be complete by mid-2019.

SEA1654 Phase 3 - Maritime Operational Support Capability (MOSC)

This project will provide upgraded facilities and infrastructure to support the introduction of a single class

of Auxiliary Oiler Replenishment (AOR) vessel to replace the current ageing support ships HMAS Success

and Sirius at HMAS Stirling (Fleet Base West), Randwick Barracks, Garden Island (Fleet Base East) and

HMAS Watson. Subject to Parliamentary approvals, construction is planned to commence in mid-2018 and

be completed by late 2020.

AIR2025 Phase 6 - Jindalee Operational Radar Networks (JORN)

This project will provide upgraded facilities and infrastructure to extend the Life of Type of the JORN

capability to 2040 at Harts Range Receive and Transmit sites in the Northern Territory. Subject to

Government and Parliamentary approvals, construction is planned to commence in mid-2018 and be

completed by mid-2019.


117


Entity Resources and Planned Performance

Section 1: DHA Overview and Resources

Section 2: DHA Outcomes and Planned Performance

Section 3: DHA Explanatory Tables and Budgeted Financial Statements


118



119

DEFENCE HOUSING AUSTRALIA

Section 1: DHA Overview and Resources

1.1 STRATEGIC DIRECTION STATEMENT

The main function of Defence Housing Australia (DHA) is to provide housing and related services to members of the Australian Defence Force (ADF) and their families in response to Defence requirements. In fulfilling its role, DHA contributes to Defence retention, recruitment and operational goals.

DHA’s total housing portfolio primarily accommodates ADF Members with Dependents (MWD) and their families, but also includes off-base accommodation for ADF singles (Members without Dependants [MWOD] and Members with Dependants (Unaccompanied) [MWD(U)]), newly acquired properties coming online, properties being refurbished or offline for maintenance, and those at the end of lease about to be disposed from the portfolio.

DHA is active in Australian residential housing markets, constructing, purchasing and leasing houses for ADF personnel and raising capital through the sale of properties. DHA is a large property manager, responsible for managing the allocation of dwellings to ADF members and the resulting tenancies. DHA manages:

• About 18,800 dwellings in all states and territories of Australia valued at about $11 billion;

• The allocation of dwellings to 16,500 ADF members (MWD, MWOD and MWD(U));

• 14,000 ADF members renting accommodation privately and receiving Rent Assistance (RA); and

• The allocation of on-base accommodation for about 11,000 ADF members (41,000 beds).

DHA manages a large portfolio of residential developments. DHA acquires and develops land to build enduring and sustainable communities of mixed military and private owners and tenants. DHA also acquires retail land and manages dwelling construction.

DHA is a Government Business Enterprise (GBE) operating under the provisions of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). It is required to maintain a strong balance sheet and to meet shareholder return obligations. DHA is within the Defence portfolio and reports to the Minister for Defence and the Minister for Finance as joint Shareholder Ministers.

DHA is not directly funded from the Federal Budget. DHA is a full tax paying entity and contributes 60% of Net Profit after Tax as an annual dividend to the Australian Government. DHA helps to finance its activities by selling and leasing back dwellings through its Property Investment program and selling land and property that is surplus to its requirements.

Defence Portfolio Additional Estimates Statements 2017-18

120

DHA Organisational Structure

The composition of DHA’s Board of Directors and associated committees is detailed below. As at 31 December 2017, the DHA Board members were:

Chairman Hon J.A.L. (Sandy) Macdonald

Managing Director Ms Jan Mason

Commercial Director Hon Alan Ferguson

Commercial Director Mr Robert Fisher AM

Commercial Director Ms Andrea Galloway

Commercial Director Mr Ewen Jones

Nominee Secretary of Defence Mr Martin Brady AO

Nominee Chief of Defence Force Commodore Vicki McConachie CSC RANR

Nominee Secretary of Finance Ms Janice Williams

The DHA Board also has the following subcommittees, Board Audit Committee, Board Property Committee and Nomination and Remuneration Committee.

DHA has an Advisory Committee that had the following members as at 31 December 2017:

Chairperson Commodore Vicki McConachie CSC RANR

Convenor of Defence Families of Australia Ms Maree Sirois

Appointee of Chief of Navy RADM Michael Noonan AM RAN (Deputy Chief of Navy)

Appointee of Chief of Army MAJGEN Rick Burr DSC AM MVO (Deputy Chief of Army)

Appointee of Chief of Air Force AVM Gavin Turnbull AM (Deputy Chief of Air Force)

Appointee of Defence Housing Australia Ms Jan Mason (Managing Director)


121

DHA’s wholly owned subsidiary entity, DHA Investment Management Limited, has a Board comprising a Chairperson and two directors.

As at 31 December 2017, the DHA Investment Management Limited Board members were:

Chairperson Mr Martin Brady AO

Director Ms Jan Mason

Director Ms Suzanne Pitson

The chart below shows DHA’s Senior Executive.


122

1.2 DHA RESOURCE STATEMENT

Table 1: DHA Resource Statement – Budget Estimates for 2017–18 as at Additional Estimates February 2018[1]

Estimate

as at

Budget

2017-18

$'000

Proposed

Additional

Estimates

2017-18

$'000

Total

estimate at

Additional

Estimates

2017-18

$'000

Opening balance/Reserves at bank 233,367 (2,111) 231,256

Revenue from Government

Payments from related entities

Amounts from the portfolio department -

Department of Defence 803,042 (104,775) 698,267

Total payments from related entities 803,042 (104,775) 698,267

Total funds from Government 803,042 (104,775) 698,267

Funds from other sources

Interest 3,548 1,556 5,104

Sale of goods and services 609,474 (98,277) 511,197

Total funds from other sources 613,022 (96,721) 516,301

Total net resourcing for agency 1,416,064 (201,496) 1,214,568

Actual 2016-17 2017-18

Average staffing level (number) 624 654

Note

1. DHA is not directly appropriated. Appropriations are made to Department of Defence w hich

are then paid to DHA and are considered "departmental" for all purposes.


123

1.3 BUDGET MEASURES

There are no budget measures relating to DHA for the 2017-18 Additional Estimates.


124

Section 2: DHA Outcomes and Planned Performance

2.1 OUTCOME AND PERFORMANCE INFORMATION

Outcome 1: To contribute to Defence outcomes by providing total housing services that meet Defence Operational and client needs through a strong customer and business focus

Outcome 1 Strategy

No changes have been made to this outcome strategy since the PBS 2017-18.

Outcome Expense Statement

Table 2: Budgeted Expenses for Outcome

2016-17

Actual

expenses

$'000

2017-18

Revised

estimated

expenses

$'000

2018-19

Forw ard

estimate

$'000

2019-20

Forw ard

estimate

$'000

2020-21

Forw ard

estimate

$'000

Program 1.1: (Other Departmental - DHA)

Revenue from Government

Payment from related entities 615,134 633,401 570,275 581,843 576,708

Revenues from other independent sources 576,130 507,379 693,979 729,605 636,564

Total expenses for Program 1.1 1,191,264 1,140,780 1,264,254 1,311,448 1,213,272

2016-17 2017-18

Average staffing level (number) 624 654


125


Program 1.1: The provision of Defence housing and housing related services

Program 1.1 Objectives

Include:

• Provide modern quality housing that meets Defence requirements and community standards.

• Meet financial returns.

Delivery Program deliverables;

• Deliver housing provisioning schedule outcomes to within 1% of agreed numbers.

• Deliver major land development and acquisition/construction activities in key Defence locations.

• Achieve sustainable sale and leaseback and disposal revenues.


Year Performance criteria Targets Actuals

2016-17 • Houses supplied against provisioning schedule

• Members satisfied with their service residence

• Return on equity

• > 99%

• > 80%

• 4.3%

• 97.9%

• 87.3%

• 4.3%

2017-18 • Houses supplied against provisioning schedule



• > 99%

• > 80%

• 3.9%

2018-19 and beyond

• Houses supplied against provisioning schedule



• > 99%

• > 80%

• 5.9%


126

Section 3: DHA Explanatory Tables and Budgeted Financial Statements

DHA advises no significant changes to targets published in the PBS 2017-18.

3.1 EXPLANATORY TABLES

Not applicable to DHA.


127

3.2 BUDGETED FINANCIAL STATEMENTS

3.2.1 Budgeted Financial Statements

Table 3: Comprehensive Income Statement (showing net cost of services) for the period ended 30 June[1]

2016-17

Actual

$'000

2017-18

Revised

budget

$'000

2018-19

Forw ard

estimate

$'000

2019-20

Forw ard

estimate

$'000

2020-21

Forw ard

estimate

$'000

INCOME

Revenue

Sale of goods and rendering of services 1,183,849 1,136,832 1,261,155 1,305,686 1,206,056

Interest 7,415 5,052 4,165 6,589 8,100

Total revenue 1,191,264 1,141,884 1,265,320 1,312,275 1,214,156

Total income 1,191,264 1,141,884 1,265,320 1,312,275 1,214,156

EXPENSES

Employee benefits 63,108 68,120 69,837 71,596 73,402

Suppliers 1,017,030 955,537 1,037,356 1,077,856 1,021,535

Depreciation and amortisation 18,185 21,584 21,399 22,101 21,675

Finance costs 25,867 25,887 25,887 25,887 25,887

Write-dow n and impairment of assets 11,118 6,657 4,510 4,618 4,721

Losses from asset sales 3,736 1,104 1,066 827 884

Total expenses 1,139,044 1,078,889 1,160,055 1,202,885 1,148,104

Profit (Loss) before income tax 52,220 62,995 105,265 109,390 66,052

Income tax expense 19,372 23,492 35,968 35,939 23,894

Net profit/(loss) 32,848 39,503 69,297 73,451 42,158

Profit/(loss) attributable to the Australian

Government 32,848 39,503 69,297 73,451 42,158

Total comprehensive income attributable

to the Australian Government 32,848 39,503 69,297 73,451 42,158

Note

1. The data in this table is based on DHA's 2017-18 Corporate Plan w hich is w ith our Shareholder Ministers for

approval. The Corporate Plan is prepared on a cost basis, w hilst the Additional Estimates submission has been

prepared on a fair value basis, in line w ith the PGPA Act Financial Reporting Rules.


128

Table 4: Budgeted Departmental Balance Sheet (as at 30 June)[2][3]

2016-17

Actual

$'000

2017-18

Revised

budget

$'000

2018-19

Forw ard

estimate

$'000

2019-20

Forw ard

estimate

$'000

2020-21

Forw ard

estimate

$'000

ASSETS

Financial assets

Cash and cash equivalents 231,256 125,562 178,191 227,463 235,704

Trade and other receivables 81,926 23,447 - - -

Other investments 38 1,090 1,090 1,090 1,090

Other f inancial assets 12,638 13,669 13,711 13,644 13,297

Total financial assets 325,858 163,768 192,992 242,197 250,091


Land and buildings 1,784,644 1,765,415 1,761,159 1,788,026 1,830,957

Property, plant and equipment 8,497 8,213 8,155 8,190 7,589

Intang bles 6,448 5,434 4,789 4,204 4,196

Inventories 1,025,683 1,272,308 1,305,787 1,288,477 1,253,353

Tax assets 23,081 19,182 17,888 16,672 15,286

Other non-financial assets 33,336 30,637 30,303 30,722 30,851

Total non-financial assets 2,881,689 3,101,189 3,128,081 3,136,291 3,142,232

Assets held for sale 4,436 7,122 7,122 7,122 7,122

Total assets 3,211,983 3,272,079 3,328,195 3,385,610 3,399,445

LIABILITIES

Payables

Suppliers 47,150 71,949 18,459 18,884 19,319

Dividends 39,585 36,280 55,494 55,449 36,865

Other payables 30,180 56,559 108,687 119,855 118,839

Total payables 116,915 164,788 182,640 194,188 175,023


Loans 509,580 509,580 509,580 509,580 509,580

Total interest bearing liabilities 509,580 509,580 509,580 509,580 509,580

Provisions

Employee provisions 14,263 22,738 21,075 21,606 22,150

Other provisions 125,027 101,038 94,767 90,180 85,016

Total provisions 139,290 123,776 115,842 111,786 107,166

Total liabilities 765,785 798,144 808,062 815,554 791,769

Net assets 2,446,198 2,473,935 2,520,133 2,570,056 2,607,676

EQUITY[1]

Parent entity interest

Contributed equity 396,148 396,148 396,148 396,148 396,148

Reserves 2,006,470 2,039,190 2,071,585 2,103,506 2,135,833

Retained surplus / (accumulated deficit) 43,580 38,597 52,400 70,402 75,695

Total parent entity interest 2,446,198 2,473,935 2,520,133 2,570,056 2,607,676

Attributed to non-controlling interest

Total non-controlling interest - - - - -

Total Equity 2,446,198 2,473,935 2,520,133 2,570,056 2,607,676

Notes

1. Equity is the residual interest in assets after the deduction of liabilities.

2. Prepared on Australian Accounting Standards Basis.





129

Table 5: Budgeted Departmental Statement of Cash Flows (for the period ended 30 June)

2016-17

Actual

$'000

2017-18

Revised

budget

$'000

2018-19

Forw ard

estimate

$'000

2019-20

Forw ard

estimate

$'000

2020-21

Forw ard

estimate

$'000


Cash received

Sale of goods and rendering of services 1,063,575 1,185,223 1,299,856 1,313,170 1,214,256

Interest 8,532 5,104 4,164 6,594 8,126

Other 63,007 28,951 19,587 1,768 2,069


Cash used

Employees 80,517 59,645 71,500 71,065 72,858

Suppliers 975,281 1,183,957 1,129,566 1,065,985 991,710

Borrow ing costs 19,418 25,887 25,887 25,887 25,887

Other 115,861 29,627 18,894 32,745 33,472

Total cash used 1,191,077 1,299,116 1,245,847 1,195,682 1,123,927

Net cash from / (used by) operating activities (55,963) (79,838) 77,760 125,850 100,524


Cash received

Proceeds from sales of property, plant and

equipment69,666 35,484 42,650 33,065 35,375


Cash used

Purchase of property, plant, equipment and

intang bles40,181 13,549 31,501 54,149 72,209

Total cash used 40,181 13,549 31,501 54,149 72,209

Net cash from / (used by) investing activities 29,485 21,935 11,149 (21,084) (36,834)


Cash received

Other

Total cash received - - - - -

Cash used

Dividends paid 62,719 47,791 36,280 55,494 55,449

Total cash used 62,719 47,791 36,280 55,494 55,449

Net cash from / (used by) financing activities (62,719) (47,791) (36,280) (55,494) (55,449)

Net increase/(decrease) in cash held (89,197) (105,694) 52,629 49,272 8,241

Cash and cash equivalents at the beginning of the

reporting period320,453 231,256 125,562 178,191 227,463

Cash and cash equivalents at the end of the

reporting period 231,256 125,562 178,191 227,463 235,704

Notes

1. Prepared on Australian Accounting Standards basis.





130

Table 6: Departmental Statement of Changes in Equity – Summary of Movement (Budget Year 2017–18)[1][2]

Retained

earnings

$'000

Asset

revaluation

reserve

$'000

Other

reserves

$'000

Contributed

equity /

capital

$'000

Total

equity

$'000

Opening balance as at 1 July 2017

Balance carried forw ard from previous period 43,580 2,006,470 396,148 2,446,198

Adjusted opening balance 43,580 2,006,470 - 396,148 2,446,198

Comprehensive income

Surplus/(deficit) for the period 39,503 39,503

Total comprehensive income 39,503 - - - 39,503

Transactions with owners

Distributions to owners

Returns on capital:

Dividends (44,486) (44,486)

Contributions by owners

Other 32,720 32,720

Sub-total transactions with owners (44,486) 32,720 - - (11,766)

Estimated closing balance as at

30 June 2018 38,597 2,039,190 - 396,148 2,473,935

-

Closing balance attributable to the

Australian Government 38,597 2,039,190 - 396,148 2,473,935


Notes





131

Table 7: Statement of Asset Movements (2017–18)[1][2]

Land

$'000

Buildings

$'000

Other

property,

plant and

equipment

$'000

Computer

softw are

and

intangibles

$'000

L&B,

IP&E held

for sale

$'000

Total

$'000

As at 1 July 2017

Gross book value 960,923 823,727 21,225 20,681 4,436 1,830,992

Accumulated depreciation/amortisation

and impairment (12,728) (14,233) (26,961)

Opening net book balance 960,923 823,727 8,497 6,448 4,436 1,804,031

CAPITAL ASSET ADDITIONS

Estimated expenditure on new or

replacement assets

By purchase - other 2,721 1,100 2,686 6,507

Total additions - - 2,721 1,100 2,686 6,507

Other movements

Assets held for sale or in a disposal

group held for sale (17,742) (17,742) 35,484 -

Revaluation 18,288 14,432

Depreciation/amortisation expense (16,471) (3,005) (2,114) (21,590)

Disposals (c) (35,484) (35,484)

Total other movements 546 (19,781) (3,005) (2,114) - (24,354)

As at 30 June 2018

Gross book value 961,469 820,417 23,946 21,781 7,122 1,834,735

Accumulated depreciation/amortisation

and impairment - (16,471) (15,733) (16,347) - (48,551)

Closing net book balance 961,469 803,946 8,213 5,434 7,122 1,786,184

Notes





132

GLOSSARY

Accumulated depreciation

The aggregate depreciation recorded for a particular depreciating asset.

Additional estimates

Where amounts appropriated at Budget time are required to change, Parliament may make adjustments to portfolios through the Additional Estimates Acts.

Administered appropriation

Revenue, expenses, assets and liabilities administered by an agency for the Commonwealth (such as taxes, benefits payments and public debt) that are not concerned with running the agency or its commercial activities.

Administered items

Expenses, revenues, assets or liabilities managed by agencies on behalf of the Commonwealth. Agencies do not control administered items. Administered expenses include grants, subsidies and benefits. In many cases, administered expenses fund the delivery of third party outputs.

Agency Assets, liabilities, revenues and expenses that are controlled by Defence or a subsidiary. Includes officials allocated to the organisation.

Amortisation A term used interchangeably with depreciation, except that it applies to a non-current physical asset under finance lease, or a non-current intangible asset, over its limited useful life.

Appropriation An authorisation by Parliament to spend money from the Consolidated Revenue Fund (the principal working fund of the Commonwealth) for a particular purpose.

Annual appropriation

Two Appropriation Bills are introduced into Parliament in May and comprise the Budget for the financial year beginning 1 July. Further Bills are introduced later in the financial year as part of the Additional Estimates.

Assets Future economic benefits controlled by Defence as a result of past transactions or other past events. Assets are initially recognised at the cost of acquisition. Non-financial assets are subject to ongoing revaluation assessment.

Assets under construction

Assets under construction by Defence for Defence, or for the use of another entity according to a construction contract where Defence controls the asset until completion, or assets under construction or otherwise being made ready by another entity for use by Defence.

Australian Accounting Standards

Specify techniques of accounting practice and the method of presenting financial information about a reporting entity.

Average funded strength

A budgetary measure used to count the average number of Australian Defence Force (ADF) members paid on a full-time equivalent basis during a financial year.

Capability The combination of military equipment, personnel, logistics support, training, resources, etc. that provides Defence with the ability to achieve its operational aims.

Glossary

133

Capability Manager

A Capability Manager is responsible for raising, training and sustaining in-service capabilities through the coordination of fundamental inputs to capability. Capability Managers include the Service Chiefs, the Chief of Joint Operations and the Chief Information Officer.

Capital budget All proposed capital expenditure funded by appropriation for outcomes, by equity injections or loans and/or appropriations for administered capital, or by other sources.

Capital expenditure

Expenditure by an agency on capital projects, for example purchasing a building.

Coalition Countries including Australia who provide troops, logistical support or assistance in Military Operations, peacekeeping or reconstruction efforts.

Combined exercise

An exercise or activity involving one or more Services of the ADF with the forces of other countries.

Consolidated Revenue Fund

Section 81 of the Constitution stipulates that all revenue raised or money received by the Commonwealth forms the one consolidated revenue fund. The fund is not a bank account. The Official Public Account reflects most of the operations of the fund.

Corporate governance

The process by which agencies are directed and controlled. It is generally understood to encompass authority, accountability, stewardship, leadership, direction and control.

Defence Capability Plan

The Defence Capability Plan is a costed, detailed development plan for Australia’s military capabilities over a ten-year period. The plan is reviewed regularly to take account of changing strategic circumstances, new technologies and changed priorities, in the context of the overall Defence budget.

Defence information environment

Encompasses all of Defence’s computing and communication capabilities at all classification levels. It supports all Defence warfighting functions, including overseas deployed elements and connection to Coalition networks, as well as the day-to-day management functions.

Defence Management and Finance Plan

The Defence Management and Finance Plan provide Ministers and central agencies with a clear oversight of Defence planning and financing strategies. It describes the strategies agreed through the 2000 Defence White Paper and subsequent Strategic Review papers. As a compendium of information attached to Defence’s annual Portfolio Budget Submission, it is intended to help Ministers make informed strategic and budgetary decisions on Defence, by bringing into one document the expected financial position of the portfolio taking into account existing commitments and proposed new investments. The Plan also provides the Government with the information necessary to ensure that its investment in Defence is both affordable and sustainable.

Defence Procurement Review

An independent review initiated by the Government in December 2002 to examine the procurement process for major acquisitions in Defence. The review was led by Mr Malcolm Kinnaird and is also known as the Kinnaird Review.

134

Departmental items

Assets, liabilities, revenues and expenses that are controlled by the agency in providing its outputs. Departmental items would generally include computers, plant and equipment assets used by agencies in providing goods and services and most employee expenses, supplier costs and other administrative expenses incurred.

Depreciation Apportionment of an asset’s capital value as an expense over its estimated useful life to take account of normal usage, obsolescence, or the passage of time.

Discretionary grants

Payments where the portfolio Minister and paying agency have discretion in determining whether or not a particular applicant should receive funding and may or may not impose conditions in return for the grant. There is a central discretionary grants register.

Employee Any Australian Public Service officer of Defence or serving Defence Force member who receives a salary or wage, along with other benefits, for the provision of services whether on a full-time, part-time, permanent, casual or temporary basis.

Employee expenses

Include, but are not limited to, benefits provided to employees in the form of salaries and wages, performance pay, senior officers’ allowances, leave, and superannuation, but does not include amounts paid or owed to employees as reimbursement of out-of-pocket expenses.

Equity injection An additional contribution, over and above the cost of outputs. Equity injections form part of the Commonwealth’s investment in Defence.

Expense Total value of all of the resources consumed in producing goods and services or the loss of future economic benefits in the form of reductions in assets or increases in liabilities of an entity.

Fair value The amount for which an asset could be exchanged, or a liability settled, between knowledgeable and willing parties in an arm’s length transaction. The fair value can be affected by the conditions of the sale, market conditions and the intentions of the asset holder.

Force element A component of a unit, a unit or an association of units having common prime objectives and activities.

Force element group

A grouping of force elements with an appropriate command and control structure for a specified role or roles (eg the Navy Submarine Group).

Forward estimates The level of proposed expenditure for future years, based on relevant demographic, economic and other future forecasting assumptions. The Government required forward estimates for the following three financial years to be published in each annual Federal Budget paper.

Garrison Support Services

Includes a range of base support services such as ground maintenance, hospitality, training area management, base security, transport, air support and fire fighting and rescue services.

Glossary

135

Group A high-level organisational grouping of functions and activities used by the Defence Executive as its primary management grouping (e.g. the Capability Development Group).

Infrastructure Items owned, leased or otherwise under the control of Defence in support of activities on land and within buildings. Infrastructure includes items such as runways, roads, car parks, parade grounds, ovals, lighting, water, sewerage and other general service related items. It does not include land upon which, or within which, it is constructed or those fixed items integral to, and under, buildings.

Interoperability The ability of systems, units or forces to provide the services to, and accept services from, other systems, units or forces and to use the services so exchanged to enable them to operate effectively together.

Inventory Inventory is comprised of consumable stores and supplies, fuel and explosive ordnance used in the delivery of Defence services. These are items which are consumed in normal use, lose their identity during periods of use by incorporation into, or attachment upon, another assembly, as a result of wear and tear, cannot be reconditioned because their design does not make it possible or their specific values do not justify it.

Joint exercise An exercise involving two or more Services of the ADF.

Liabilities Sacrifices of future economic benefits that Defence is presently obliged to make to other entities as a result of past transactions or other past events.

Listed entity An entity established by regulation under the Public Governance, Performance and Accountability Act 2013. The Act provides financial management authority to, and requires accountability by the Chief Executive of an agency. This used to be called ‘Prescribed agency’ under the former Financial Management and Accountability Act 1997.

Materiel Acquisition Agreements

Materiel Acquisition Agreements cover the Capability Acquisition and Sustainment Group’s (formerly known as Defence Materiel Organisation) acquisition services to Defence for both major and minor capital equipment.

Materiel Sustainment Agreements

Materiel Sustainment Agreements are between the Capability Managers and the Chief Executive Officer of the Capability Acquisition and Sustainment Group. These agreements cover the sustainment of current capability, including good and services such as repairs, maintenance, fuel and explosive ordnance.

Military response options

A set of generic tasks that describe the range of military options the Government could consider as a basis for a response to a particular situation or contingency.

Net assets See Equity.

136

Network Centric Warfare

The aim of Network Centric Warfare is to improve the ability of the ADF to collaborate internally with supporting agencies and with coalition partners across organisation and geographic boundaries. Network Centric Warfare would allow Defence to harness recent development in computing and communications technologies to enhance decision making and warfighting capability.

Operating result Equals revenue less expense.

Operational tempo

The rate at which the ADF is able to deliver its operations effects, for example, the rate at which forces are dispatched and the time in which they are turned around for their next task. At the local level, this might translate to the crew of an aircraft spending a very small amount of time on the ground before it is re-tasked for its next mission. At the organisational level, this translates to available fighting forces spending very little time at home before they are deployed again for their next operation.

Outcomes The results that the Government seeks from Defence, and are achieved by the successful delivery of its outputs, to the standards set in the Portfolio Budget Statements. For more information, see Defence’s Section 2 - Planned Outcome Performance.

Permanent forces The permanent Navy, the regular Army and the permanent Air Force.

Platforms Refers to air, land, surface or sub-surface assets that are discrete and taskable elements within the ADF.

Portfolio Additional Estimates Statements

Similar to the portfolio budget statement and prepared at Additional Estimates time to support and update on the Government’s original annual budget for Defence.

Portfolio Budget Statements

The document presented by the Minister for Defence to Parliament to inform Senators and Members of the basis for the Defence budget appropriations in support of the provisions in Appropriations Bills 1 and 2. The statements summarise the Defence budget and provides detail of outcome performance forecasts and resources in order to justify expenditure for Defence.

Price One of the three key efficiency indicators. The amount the government or the community pays for the delivery of agreed outputs.

Public Governance, Performance and Accountability Act 2013

The Public Governance, Performance and Accountability Act 2013 replaced the Financial Management and Accountability Act 1997 and the Commonwealth Authorities and Companies Act 1997.

Professional Service Providers

Individuals with specialist skills contracted to fill a line position.

Purchaser-provider arrangements

Arrangements under which the outputs of one agency are purchased by another agency to contribute to outcomes. Purchaser-provider arrangements can occur between Commonwealth agencies and state/territory government or private sector bodies.

Glossary

137

Quality One of the three key efficiency indicators. Relates to the characteristics by which customers or stakeholders judge an organisation, product or service. Assessment of quality involves use of information gathered from interested parties to identify differences between user's expectations and experiences.

Quantity One of the three key efficiency indicators. Examples include: the size of an output; count or volume measures; how many or how much.

Readiness The readiness of forces to be committed to operations within a specified time, dependent on the availability and proficiency of personnel, equipment, facilities and consumables.

Reserves The Naval Reserve, the Army Reserve and the Air Force Reserve.

Revenues Inflows or other enhancements, or savings in outflows, of future economic benefits in the form of increases in assets or reductions in liabilities of Defence, other than those relating to contributions by the Commonwealth, that result in an increase in equity during the reporting period.

Risk management At the highest level, involves the identification and mitigation of those risks that have the potential to adversely affect the achievement of agreed output performance at the agreed output price.

Special account Balances existing within the Consolidated Revenue Fund that are supported by standing appropriations (Public Governance, Performance and Accountability Act 2013, ss.78 and 80). Special accounts allow money in the Consolidated Revenue Fund to be acknowledged as set-aside (hypothecated) for a particular purpose. Amounts credited to a Special Account may only be spent for the purposes of the Special Account. Special Accounts can only be established by a written determination of the Finance Minister (s.78 of the Public Governance, Performance and Accountability Act 2013) or through an Act of Parliament (referred to in s.80 of the Public Governance, Performance and Accountability Act 2013).

Special Appropriations (including Standing Appropriations)

An amount of money appropriated by a particular Act of Parliament for a specific purpose and number of years. For special appropriations the authority to withdraw funds from the Consolidated Revenue Fund does not generally cease at the end of the financial year.

Standing appropriations are a sub-category consisting of ongoing special appropriations — the amount appropriated will depend on circumstances specified in the legislation.

Specialist military equipment

Items of a specific military nature and that are not available through the normal external market in their current form to other than government military purchasers. It includes the prime military equipment plus the direct support items associated with the equipment.

Standard Defence Supply System (SDSS)

A key information system for the financial management of inventory, general stores, repairable items and other assets associated with Defence’s logistic capability.

138

System Program Office

The office of the Program Manager. It serves as the single point of contact with industry, government agencies, and other activities participating in the acquisition process of a given system.

Theatre The area in which military operations and activities take place.

Two-pass approval process

The process by which major capital investment proposals are developed for consideration and approval by the Government.

Unit ready days The number of days that a force element is available for tasking, by the Maritime commander, either outside of major maintenance and within planned readiness requirements, or in accordance with contracted availability. Planned unit ready days are determined for each Force Element Group by aggregating total days for the unit in commission, less all days when the unit is Programmed to be in major maintenance and conducting associated pre-workup (preparations for initial operational training) or based on the total number of days the force element is contracted to be available to Defence. Contracted availability applies to the Armidale-class patrol boats and may apply to other classes in the future.

Weighted average cost

An inventory valuation method which considers the fluctuating prices and quantities of acquired goods in computing of the cost of inventory. The weighted average method takes the prices of units at the beginning inventory and the varying prices of purchases made and are weighted by the number of units to determine the weighted average cost per unit. It may be computed as the weighted average cost of all available goods present in a given period, or as a weighted moving average cost adjusted when new goods are delivered.

Write-downs The reduction in the value of assets.

Acronyms

139

ACRONYMS

A

AAF Army Amenities Fund

AAFCANS Army and Air Force Canteen Service

ACPB Armidale Class Patrol Boats

ADF Australian Defence Force

ADFA Australian Defence Force Academy

ADFHQ Australian Defence Force Headquarters

ADO Australian Defence Organisation

AFATDS Advanced Field Artillery Tactical Data System

AFS Average Funded Strength

AGIMO Australian Government Information Management Office

AIS Aeronautical Information System

AMCIP Approved Major Capital Investment Program

AMSO Australian Military Sales Office

ANAO Australian National Audit Office

AO Amphibious and Afloat Support – Oil Tanker

AOR Amphibious and Afloat Support – Replenishment Ship

APS Australian Public Service

APRCC Australian Protected Route Clearance Capability

ASEC Associate Secretary

ASMD Anti-Ship Missile Defence

ASPI Australian Strategic Policy Institute

AUSAID Australian Agency for International Development

AWD Air Warfare Destroyer

B

BAU Business as Usual

C

CASG Capability Acquisition and Sustainment Group

C-RAM Counter Rocket, Artillery & Mortar

CCSM Collins class Submarine

CDF Chief of the Defence Force

140

CDG Capability Development Group

CDIP Capability Development Improvement Program

CEO Chief Executive Officer

CFOG Chief Finance Officer Group

CIR Capability Investment and Resources

CIOG Chief Information Officer Group

CJOPS Chief of Joint Operations

CPTs Crew Procedural Trainers

D

DACC Defence Assistance to the Civil Community

DCBs Departmental Capital Budget

DCEO Deputy Chief Executive Officer

DCP Defence Capability Plan

DDG Hobart Class Air Warfare Destroyers

DES Defence Executive Support

DFACA Defence Force Aid to the Civil Authority

DFAT Department of Foreign Affairs and Trade

DFRB Defence Force Retirement Benefits

DFRDB Defence Force Retirement and Death Benefits Scheme

DHA Defence Housing Australia

DHF Defence Housing Forecast

DHFCS Defence High Frequency Communications System

DMO Defence Materiel Organisation

DPG Defence People Group

DSTG Defence Science & Technology Group

DSTO Defence Science & Technology Organisation

E

EIG Estate & Infrastructure Group

ELF Enhanced Land Force

ES Electronic Support

ESSM Evolved Sea Sparrow Missiles

F

FFG Adelaide Class Frigate

Acronyms

141

FFG Guided Missile Frigate

FFH Anzac Class Frigate

FMA Financial Management and Accountability

FOC Full Operational Capability

FTE Full Time Equivalent

G

GMCOM General Manager Commercial

GM LM General Manager Land and Maritime

GM JSA General Manager Joint, Systems and Air

H

HF High Frequency

HMAS Her Majesty's Australian Ship

HQ Headquarters

I

ICT Information and Communications Technology

IFR International Fleet Review

IISS International Institute for Strategic Studies

ILMF Intermediate Level Maintenance Facility

IOC Initial Operational Capability

IPA Independent Project Analysis

ISPE Industry Skilling Program Enhancement

ISSC In-Service Support Contract

J

JLC Joint Logistics Command

JORN Jindalee Operational Radar Network

JP Joint Project

JPD Joint Project Directive

JSF Joint Strike Fighter

L

LAIRCM Large Aircraft Infra Red Counter Measure

LEAP Living Environment and Accommodation Precinct

142

LHD Landing Helicopter/Heavy Dock

LOGIS Logistics Information Systems

LSD Landing Ship Dock

M

MAA Materiel Acquisition Agreement

METOC Mobile Meteorological and Oceanographic

MFO Multi-National Force Observers

MHC Coastal Mine Hunter

MHFCS Modernised High Frequency (HF) Communications System

MIMT Moorebank Intermodal Freight Terminal

MRH Multi-Role Helicopter

MRTT Multi-Role Tanker Transport

MSA Materiel Sustainment Agreement

MSBS Military Superannuation and Benefits Scheme

N

NACC-ISP New Air Combat Capability – Industry Support Program

NAVWAR Navigation Warfare

NPOC Net Personnel & Operating Costs

O

OPA Official Public Account

P

PAES Portfolio Additional Estimates Statements

PBS Portfolio Budget Statements

PGPA Public Governance Performance and Accountability

PIC Priority Industry Capability

PICIP Priority Industry Capability Innovation Program

PRM Project Realisation Manager

PTS Post Traumatic Stress

PWC Committee on Public Works

PWEA Point Wilson Explosive Area

Acronyms

143

R

RAAF Royal Australian Air Force

RADM Rear Admiral

RANCCF Royal Australian Navy Central Canteens Fund

S

SADI Skilling Australia’s Defence Industry

SAR Search and Rescue

SATCOM Satellite Communications

SERAS Submarine Escape Rescue and Abandonment Systems

S&T Science & Technology

SIE Single Information Environment

SOETM Services for Other Entities and Trust Moneys

SME Specialist Military Equipment

SPI Strategic Policy and Intelligence

SPO System Program Office

T

TACAN Tactical Air Control and Navigation

U

UAD Unit Availability Days

URD Unit Ready Days

USAF United States Air Force

USN United States Navy

V

VRs Voluntary Redundancies

W

WGS Wideband Global SATCOM System

WTSS Weapons Training Simulation System

portfolio additional estimates statements 2017-18 · user guide ix user guide the purpose of the...

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