Chief Finance Officer's Report
Nick Shaw
Chief Finance Officer
BBus (Accountancy), Fellow of CPA Australia
The Department of Transport and Main Roads’ vision is creating a single integrated transport network accessible to everyone. In order to achieve this vision, the department accelerated investment in major transport and road infrastructure investments
during 2018–19, including the continued delivery of upgrades to the Bruce Highway, Toowoomba Second Range Crossing, various State road upgrades and the continued roll-out of the New Generation Rollingstock. The department also continued to respond
to the changing transport landscape, investing in customer-centric, digitally-enabled transport solutions including Mobility as a Service, Customer Oriented Registration and Licensing and the Cooperative and Automated Vehicle Initiative.
The department continues to deliver its services in a fiscally responsible way, recording a small operating deficit at the end of the financial year. This was due mainly to the timing in the receipt of grant funding relating to natural disasters.
In accordance with the requirements of section 77(2)(b) of the Financial Accountability Act 2009, I have provided the Director-General with a statement that the financial internal controls of the department are operating efficiently, effectively
and economically in compliance with section 57(1) of the Financial and Performance Management Standard 2009.
This financial summary provides an overview of the department’s financial results for 2018–19. A comprehensive set of financial statements is provided in this report, which includes an analysis of actual expenditure compared to the published
budget with explanations of major variances.
Funding sources
Funding to meet departmental operational requirements and for capital investment in the transport network, is received from the Queensland Government, own sourced revenue, and from allocations from the Australian Government. Key drivers of the department’s
funding include the delivery of capital investment in the roads and transport infrastructure network and in the provision of our key objectives through operational service delivery. In 2018–19, the budgeted revenue for the department was $6.074
billion and the capital budget for 2018–19 was $3.186 billion.
Funding from government comprises departmental services revenue, equity injections, and allocations from the Australian Government for capital and maintenance works on the National Network.
Administered revenue
The department administers, but does not control, certain resources on behalf of the Queensland Government. The main source of administered revenue is from user charges and fees from motor vehicle registrations, traffic fines, and other regulatory fees
and fines.
Financial performance
The department recorded an operating deficit of $28 million for 2018–19. Table 1 summarises the financial results of the department’s operations for 2018–19 and 2017–18.
Table 1: Summary of financial results of the department’s operations
| Category |
2018–19
$'000
|
2017–18
$'000
|
| Total income |
6,144,435 |
6,006,492 |
| Total expenses |
6,172,880 |
5,799,630 |
| Operating result for the year |
(28,445) |
206,862 |
Income
The department’s total income of $6.144 billion included appropriation revenue from the Queensland Government of $5.275 billion, user charges of $711 million and grants and other contributions of $107 million. In 2018–19, the department’s
total income has increased by $138 million mainly due to increased appropriation revenue received for revised depreciation funding, funding for bus driver wage parity, South East Queensland 4G bus contracts and increased funding from motor vehicle registration
revenue. Queensland Government appropriations are the main source of income and account for 86 per cent of total income earned in the reporting period.
Figure 1: Income by category for the year ended 30 June 2019
|
Category |
Income % |
$'000 |
|
Appropriation revenue |
85.92% |
5,274,759 |
|
User charges and fees |
11.59% |
711,380 |
|
Grants and other contributions |
1.74% |
106,959 |
|
Other revenue |
0.75% |
46,316 |
|
Total revenue |
|
6,139,414 |
Expenses
Total expenses for the department were $6.173 billion. Supplies and services was our largest spend category, constituting 59 per cent of total expenditure. This was followed by asset depreciation and grants and subsidies. Approximately 71 per cent of
total supplies and services consists of payments to operators of rail, bus air and ferry services.
Expenditure in 2018–19 has increased by $373 million, mainly due to increased payments of $129 million for rail operator services and $82 million related to work performed on Toowoomba Regional Council and Lockyer Valley Regional Council assets
during construction of the Toowoomba Second Range Crossing project.
Figure 2: Expenses by category for the year ended 30 June 2019
|
Category |
Income % |
$'000 |
|
Supplies and services |
59.47% |
3,671,862 |
|
Depreciation and amortisation |
19.10% |
1,178,722 |
|
Grants and subsidies |
9.61% |
593,073 |
|
Employee expenses |
9.26% |
571,425 |
|
Finance and borrowing costs |
1.69% |
104,339 |
|
Other |
0.87% |
53,459 |
|
Total expenses |
|
6,172,880 |
Financial position
The net assets position reported in the financial statements shows the net worth of the department. As at 30 June 2019, this was $64.754 billion. Table 2 summarises the department’s financial position for
2018–19 and 2017–18.
Table 2: Summary of financial position – Assets and liabilities
| Category |
2018-19
$'000 |
2017-18
$'000 |
| Total assets |
67,262,349 |
63,712,233 |
| Total liabilities |
2,508,073 |
2,372,514 |
| Total equity |
64,754,276 |
61,339,719 |
As at 30 June 2019, the department held assets totalling $67.262 billion, representing an increase of six per cent compared to the previous year. The variance between the years is primarily driven by new road assets capitalised for road sections on the
Bruce and Warrego Highways. The department’s transport infrastructure network makes up 80 per cent of total assets and is valued at $53.836 billion. The department’s infrastructure assets consist of $42.110 billion in roads, $11.420 billion
in structures and $0.306 billion in other assets.
As at 30 June 2019, the department held liabilities totalling $2.508 billion which comprises mainly of payables, provisions and interest-bearing liabilities. A significant component of the department’s lease liabilities relates to transport assets
such as Gold Cost Light Rail system, New Generation Rollingstock and the Toowoomba Second Range Crossing.
