Financial instruments: Liquidity risk DEDJTR manages its risk through continuous
monitoring of movements in exchange rates and
Liquidity risk is the risk that DEDJTR would ensures availability of funds through rigorous cash
be unable to meet its financial obligations as flow planning and monitoring. In December 2015,
and when they fall due. DEDJTR operates under DEDJTR entered into hedging arrangements with
the government fair payments policy of settling Treasury Corporation Victoria to manage its risk
financial obligations within 30 days and in respect of a future event to be held in 2018.
in the event of a dispute, making payments
within 30 days from the date of resolution. Interest rate risk
DEDJTR's maximum exposure to liquidity risk is the Exposure to interest rate risk is insignificant
carrying amounts of financial liabilities as disclosed and might arise primarily through DEDJTR's
in the balance sheet. DEDJTR manages its liquidity interest bearing liabilities and assets. The only
risk by: interest bearing liabilities and assets are the
finance lease liabilities and term deposits. DEDJTR's
• maintaining an adequate level of uncommitted interest bearing assets are managed by Treasury
funds that can be drawn at short notice to meet Corporation Victoria and any movement in interest
its short-term obligations rates are monitored on a daily basis.
• holding investments and other contractual Sensitivity analysis disclosure
financial assets that are readily tradeable
in the financial markets DEDJTR's sensitivity to market risk is determined
based on the observed range of actual historical
• careful maturity planning of its financial data for the preceding five year period, with
obligations based on forecasts of future all variables other than the primary risk variable
cash flows held constant. DEDJTR's fund managers cannot
be expected to predict movements in market rates
• a high credit rating for the State of Victoria and prices; sensitivity analyses are shown for
(Moody's Investor Services & Standard & Poor's illustrative purposes only. The following movements
triple-A), which assists in accessing debt market are "reasonably possible" over the next 12 months.
at a lower interest rate.
A shift of +100 basis points (1%) per cent and -100
DEDJTR's exposure to liquidity risk is deemed basis points (1%) per cent in market interest rates
insignificant based on prior period's data and (AUD) from year-end rates.
current assessment of risk. Maximum exposure
to liquidity risk is the carrying amounts of financial The table below discloses the impact on DEDJTR's
liabilities as disclosed in the balance sheet. net result and equity for each category of financial
instrument held by DEDJTR at the end of the
Financial instruments: Market risk reporting period as presented to key management
personnel if the above movements were to occur.
DEDJTR's exposures to market risk are primarily
through interest rate risk with only insignificant
exposure to foreign currency and other price
risks. Objectives, policies and processes used
to manage each of these risks are disclosed in
the paragraphs below:
Foreign currency risk
DEDJTR is exposed to minimal foreign currency
risk through its payables relating to purchases
of supplies and consumables from overseas.
This is because of a limited amount of purchases
denominated in foreign currencies and a short
timeframe between commitment and settlement.
DEDJTR Annual Report 2017-18 151
02
FINANCIAL PERFORMANCE
Interest rate exposure of financial instruments
($ thousand)
Interest rate exposure
Weighted Carrying Fixed interest Variable Non-interest
average interest rate bearing
amount rate
interest rate
2018 1,352,670 70,150 246,433 1,036,087
Financial assets 1.78% 329,891 – 241,013 88,878
Cash and deposits 3.05% 71 – – 71
Receivables(i) 487,446
Investments 1.53% 1,682,632 70,150 1,125,036
Total financial assets 8.01%
Financial liabilities 1,809,469 – – 1,809,469
Payables(i) 1.66% 292,351 – 292,351 –
Advances from Commonwealth 2.49% 335,365 321,330 14,035 –
Finance lease liability 439,651 –
Advances from Governement 2.49% 245,652 – – 439,651
Advances from non public sector 8.57% 321,330 – 245,652
Total financial liabilities 3,122,488 306,386 2,494,772
2017
Financial assets 1,808,930 76,430 239,031 1,493,469
Cash and deposits 285,099 – 183,892 101,207
Receivables(i) 73 – 73
Investments –
Total financial assets 2,094,102 76,430 422,923 1,594,749
Financial liabilities
Payables(i) 1,715,483 – – 1,715,483
Advances from Commonwealth 230,418 – 230,418 –
Finance lease liability 316,918 301,294 –
Total financial liabilities 301,294 15,624
2,262,819 246,042 1,715,483
(i) The carrying amounts disclosed exclude statutory receivables and payables (e.g. amounts owing from Victorian Government,
GST recoverable and GST payable).
152 DEDJTR Annual Report 2017-18
Interest rate risk sensitivity ($ thousand)
2018 Interest rate
Contractual financial assets
Cash and deposits -100 basis points +100 basis points
Receivables
Investments Carrying amount Net result Net result
Total impact
Contractual financial liabilities 1,352,670 (2,464) 2,464
Payables 329,891 (2,410) 2,410
Advances from Commonwealth 71
Borrowings – –
Advances from Governement 1,809,469 (4,874) 4,874
Advances from non public sector 292,351
Total impact 335,365 – –
2017 439,651 2,924 (2,924)
Contractual financial assets 245,652
Cash and deposits 140 (140)
Receivables – –
Investments – –
Total impact
Contractual financial liabilities 3,064 (3,064)
Payables
Borrowings 1,808,930 (2,390) 2,390
Total impact 285,099 – –
73 – –
1,715,483 (2,858) 2,390
316,918
– –
156 (156)
156 (156)
DEDJTR Annual Report 2017-18 153
02
FINANCIAL PERFORMANCE
8.2 Contingent assets Quantifiable contingent liabilities as at 30 June
and contingent liabilities
($ thousand)
Contingent assets and contingent liabilities are
not recognised in the balance sheet, but are 2018 2017
disclosed by way of a note and, if quantifiable, are
measured at nominal value. Contingent assets and Legal disputes 1,671 1,843
liabilities are presented inclusive of GST receivable Insurance claims
or payable respectively. Mining rehabilitation 1,419 1,787
Total contingent liabilities
Contingent assets 1,690 690
Contingent assets are possible assets that arise 4,780 4,320
from past events, whose existence will be confirmed
only by the occurrence or non-occurrence of one Non-quantifiable contingent liabilities
or more uncertain future events not wholly within
the control of the Department. From time to time the department enters into
arrangements with other parties to compensate
The Department did not have any significant them for losses they might incur as a result of
contingent assets for this and the comparative transactions they enter into. The arrangements
financial reporting period. are evaluated to establish whether they represent
onerous contracts, contingent liabilities or whether
Contingent liabilities they are executory in nature.
Contingent liabilities are: There are a number of litigation matters underway
at balance date, the details of which are not
• possible obligations that arise from past events, disclosed in order not to prejudice the cases.
whose existence will be confirmed only by the
occurrence or non-occurrence of one or more Contingent liabilities are not secured over any
uncertain future events not wholly within the of the assets of the department.
control of the entity, or
Voluntary purchase scheme
• present obligations that arise from past events
but are not recognised because: The State has compulsorily acquired a number
of properties (residential and commercial) through
–– it is not probable that an outflow of resources the Land Acquisition and Compensation Act 1986
embodying economic benefits will be required to facilitate delivery of various transport projects.
to settle the obligations, or Possible future claims for compensation arising
from the compulsory acquisition of these properties
–– the amount of the obligations cannot cannot be quantified at this stage.
be measured with sufficient reliability.
Contingent liabilities are also classified as either
quantifiable or non-quantifiable.
154 DEDJTR Annual Report 2017-18
Public acquisition overlays for the future Non-quantifiable contingent liabilities –
development of rail and road infrastructure joint arrangements
Public acquisition overlays are in place in order Royal Melbourne Showgrounds
to reserve certain areas of land for future
development of rail and road infrastructure. Under the State Support Deed – Core Land, the
Under section 98 of the Planning and Environment State has undertaken to ensure the performance
Act 1987, the State has a legislative responsibility of the payment obligations in favour of the
to compensate eligible land and property owners Concessionaire and the performance of the joint
who face either: operation financial obligations in favour of the
security trustee.
(i) loss on sale – an eligible landowner is entitled
to compensation for the incremental loss Under the State’s commitment to Royal Agricultural
on sale when a property affected by a public Society of Victoria (RASV), the State has agreed
acquisition overlay is sold for less than to support certain obligations of RASV that may
its market value, or arise out of the joint operation agreement. In
accordance with the terms set out in the state
(ii) financial loss – the entitlement to financial loss commitment to RASV, the State will pay (in the form
compensation is triggered when a development of a loan), the amount requested by RASV. If any
permit is refused because the property is outstanding loan amount remains unpaid at the
required for a public purpose. date which is 25 years after the commencement
of the operation term under the Development
Compensation and purchase claims occur as a result and Operation Agreement, RASV will be obliged
of claims by land owners. The future liability depends to satisfy and discharge each such outstanding
on factors including the number of claims received loan amount. This may take the form of a transfer
and the prevailing value of land at the time the claim to the State, of the whole of the RASV participating
is made, which cannot be reliably quantified. interest in the joint operation.
Onshore gas exploration The State has also entered into an agreement
through the State Support Deed – Non-Core Land
A Supreme Court litigation is progressing in relation with Showgrounds Retail Developments Pty Ltd
to onshore gas exploration permits and retention and the RASV whereby the State agrees to support
leases held under the Petroleum Act 1998 which is certain payment obligations of RASV that may arise
quantified at this time. under the Non-Core Development Agreement.
West Gate Tunnel Project Biosciences Research Centre (AgriBio Project)
The State and the Transurban Group entered The service fee payment obligations of Biosciences
into a public private partnership contract for the Research Centre Pty Ltd (on behalf of the joint
Transurban Group to build, operate and maintain operation participants) are supported by the
the West Gate Tunnel Project. Government policy State of Victoria via a State Support Deed.
is to fund the project from a State contribution, tolls Under this Deed, the State ensures that the joint
on the West Gate Tunnel and changes to tolling operation participants have (severally) the financial
on the existing CityLink toll road, and to implement capacity to meet their payment obligations
these through the legislative support outlined to the company, thereby enabling the company
in the contractual documents. Should legislative to meet its obligations to pay the service fee to the
support not be forthcoming in the agreed form Concessionaire pursuant to the Project Agreement.
and timeframe, the contractual documents specify The State underwrites the risk of any default
additional contingent State funding to replace by the Biosciences Research Centre Pty Ltd.
or augment funding from the toll revenue streams
that are not legislated. A number of variables may
influence the value of any State contingent funding
required, so it is not feasible to quantify any further
State funding requirement at this time.
DEDJTR Annual Report 2017-18 155
02
FINANCIAL PERFORMANCE
8.3 Fair value determination How this section is structured
This section sets out information on how DEDJTR For those assets and liabilities for which fair
determined fair value for financial reporting values are determined, the following disclosures
purposes. Fair value is the price that would are provided:
be received to sell an asset or paid to transfer
a liability in an orderly transaction between market • carrying amount and the fair value (which
participants at the measurement date. would be the same for those assets measured
at fair value);
The following assets and liabilities are carried
at fair value: • which level of the fair value hierarchy was used
to determine the fair value; and
• financial assets and liabilities at fair value through
operating result, • in respect of those assets and liabilities subject
to fair value determination using Level 3 inputs:
• property, plant and equipment, and
• a reconciliation of the movements in fair values
• biological assets. from the beginning of the year to the end; and
Fair value hierarchy • details of significant unobservable inputs used in
In determining fair values a number of inputs are the fair value determination.
used. To increase consistency and comparability
in the financial statements, these inputs are This section is divided between disclosures
categorised into three levels, also known as the fair in connection with fair value determination
value hierarchy. The levels are as follows for financial instruments (refer to Note 8.3.1 –
Fair value determination of financial assets
• Level 1 – quoted (unadjusted) market prices in and liabilities) and non-financial physical assets
active markets for identical assets or liabilities; (refer to Note 8.3.2 – Fair value determination:
Non-financial physical assets).
• Level 2 – valuation techniques for which the lowest
level input that is significant to the fair value
measurement is directly or indirectly observable;
and
• Level 3 – valuation techniques for which the
lowest level input that is significant to the fair
value measurement is unobservable.
DEDJTR determines whether transfers have
occurred between levels in the hierarchy
by reassessing categorisation (based on the
lowest level input that is significant to the fair
value measurement as a whole) at the end of
each reporting period.
The Valuer General Victoria (VGV) is DEDJTR’s
independent valuation agency and the Department
will engage them to monitor changes in the fair
value of each asset and liability through relevant
data sources to determine revaluations when
it is required.
156 DEDJTR Annual Report 2017-18
8.3.1 Fair value determination of financial assets and liabilities
DEDJTR currently holds a range of financial Where the fair value of the financial instruments
instruments that are recorded in the financial is different from the carrying amounts,
statements where the carrying amounts are the following information has been included
a reasonable approximation of fair value, either to disclose the difference.
due to their short-term nature or with the
expectation that they will be paid in full
by the end of the 2018–19 reporting period.
Fair value of financial instruments measured at amortised cost
($ thousand)
Carrying amount Fair Value Carrying amount Fair Value
2018 2017
2018 2017
1,352,670 1,808,930
Contractual financial assets 329,891 1,352,670 1,808,930 285,099
Cash and deposits 71 329,891 285,099 73
Receivables(i) 71 73
Investments 1,682,632 2,094,102
Total contractual financial assets 1,682,632 2,094,102
Contractual financial liabilities 1,809,469 1,715,483
Payables(i) 1,313,019 1,809,469 1,715,483 316,918
– Supplies and services 3,122,488 1,313,019 316,918
Borrowings 3,122,488 2,032,401
Total contractual financial liabilities 2,032,401
(i) The carrying amounts exclude statutory amounts (e.g. amounts owing from government, GST input tax credit recoverable,
and GST payable)
DEDJTR Annual Report 2017-18 157
02
FINANCIAL PERFORMANCE
Financial assets measured at fair value(i)
($ thousand)
Carrying amount Fair value measurement
at end of reporting period using:
Level 1(i) Level 2(i) Level 3(i)
2018 1,352,670 1,352,670 – –
Financial assets at fair value
Cash and deposits 329,891 329,891 – –
Receivables
Investments 71 71 – –
Total
2017 1,682,632 1,682,632 – –
Financial assets at fair value
Cash and deposits 1,808,930 1,808,930 – –
Receivables
Investments 285,099 285,099 – –
Total
73 73 – –
2,094,102 2,094,102 – –
(i) The fair value hierarchies are disclosed by class of financial instrument.
There have been no transfers between levels during the period.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could
be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate fair value.
Listed securities: The listed share assets are valued at fair value with reference to a quoted (unadjusted)
market price from an active market. The department categorises these instruments as Level 1.
158 DEDJTR Annual Report 2017-18
DEDJTR Annual Report 2017-18 159
02
FINANCIAL PERFORMANCE
8.3.2 Fair value determination: Non-financial physical assets
Fair value measurement hierarchy for assets
($ thousand)
Carrying Carrying
amount as at amount as at
30 June 2017
30 June 2018
277,435
Land at fair value 497,292
774,727
Non-specialised land 338,112
454,000
Specialised land 648,724 30,951
Total of land at fair value 986,837 484,951
Buildings at fair value 15,576
28,237
Specialised/heritage buildings 428,893 43,813
Non-Specialised buildings 35,755 50,141
50,141
Total of buildings at fair value 464,649
19,634
Plant and equipment at fair value 19,634
Vehicles(ii) 14,033 32,069
32,069
Plant and equipment 32,762
15,142
Total plant and equipment at fair value 46,795 15,142
1,420,477
Infrastructure at fair value
Infrastructure 51,148
Total infrastructure at fair value 51,148
Cultural assets at fair value
Cultural assets 18,353
Total cultural assets at fair value 18,353
Building leasehold improvements at fair value
Leasehold improvements 36,375
Total leasehold improvements at fair value 36,375
Building leasehold at fair value
Building leasehold –
Total building leasehold at fair value –
Total property, plant, equipment and infrastructure at fair value 1,604,157
(i) Classified in accordance with the fair value hierarchy.
(ii) Vehicles are categorised to level 3 assets as current replacement cost method is used in estimating fair value.
160 DEDJTR Annual Report 2017-18
($ thousand)
Fair value measurement at end of reporting period using:
Level 1(i) Level 2(i) Level 3(i)
2018 2018
2017 2018 2017 2017
– – 338,112 277,435 – –
– – – – 648,724 497,292
– – 338,112 277,435 648,724 497,292
– – – – 428,893 454,000
– – 35,755 30,951 – –
– – 35,755 30,951 428,893 454,000
– – – – 14,033 15,576
– – 91 91 32,671 28,146
– – 91 91 46,704 43,722
– – – – 51,148 50,141
– – – – 51,148 50,141
– – 24 24 18,329 19,610
– – 24 24 18,329 19,610
– – 15,142 – 21,233 32,069
– – 15,142 – 21,233 32,069
– – – 15,142 – –
– – – 15,142 – –
– – 389,125 323,643 1,215,032 1,096,834
DEDJTR Annual Report 2017-18 161
02
FINANCIAL PERFORMANCE
Non-specialised land The income approach is also used for land and
and non-specialised buildings buildings as a valuation technique that converts
future amounts (e.g. cash flows or income and
Non-specialised land and non-specialised buildings expenses) to a single current (i.e. discounted)
are valued using fair value. Under this valuation amount. The fair value measurement is determined
method, the assets are compared to recent on the basis of the value indicated by current market
comparable sales or sales of comparable assets expectations about those future amounts.
which are considered to have nominal or no added
improvement value. For the Public Administration output group,
the majority of specialised buildings are valued
An independent valuation was performed by the using the current replacement cost method.
Valuer-General Victoria (VGV) at 30 June 2018 As the depreciation adjustments are considered
of some of the Public Administration Sector assets as significant, unobservable inputs in nature,
to determine the fair value using the Current specialised buildings are classified as level 3 fair
replacement cost method approach. Valuation value measurements. For the Transport sector
of the assets was determined by analysing output group, the majority of specialised buildings
comparable sales and allowing for share, size, are valued using the market approach, adjusted
topography, location, and other relevant factors for the associated depreciation and allowance
specific to the asset being valued. From the sales for the buildings restricted use. As restricted
analysed, an appropriate rate per square metre use adjustments are considered as significant,
has been applied to the subject asset. unobservable inputs in nature, specialised buildings
are classified as Level 3 fair value measurements.
To the extent that non-specialised land and non-
specialised buildings do not contain significant, Plant and equipment
unobservable adjustments, these assets are
classified as level 2 under the market approach. Plant and equipment is held at fair value.
When plant and equipment is specialised in
Specialised land and specialised buildings use, such that it is rarely sold other than as part
of a going concern, fair value is determined using
The market approach is also used for specialised the current replacement cost method. There were
land, although it is adjusted for the community no changes in valuation techniques throughout
service obligation (CSO) to reflect the specialised the period to 30 June 2018. For all assets measured
nature of the land being valued. at fair value, the current use is considered the
highest and best use.
The CSO adjustment is a reflection of the valuer's
assessment of the impact of restrictions associated
with an asset to the extent that is also equally
applicable to market participants. This approach
is in light of the highest and best use consideration
required for fair value measurement, and takes
into account the use of the asset that is physically
possible, legally permissible, and financially feasible.
As adjustments of CSO are considered as significant
unobservable inputs, specialised land would be
classified as level 3 assets.
162 DEDJTR Annual Report 2017-18
Infrastructure assets Cultural assets
Infrastructure assets are valued using the Cultural assets (artworks) are valued using the
current replacement cost method. This cost depreciated replacement method in the public
represents the replacement cost of the asset after administration and transport sectors where
applying depreciation rates on a useful life basis. research of similar examples in existence in
Replacement costs relate to costs to replace the Australia was conducted and an estimated cost
current service capacity of the asset. Economic for replacement was established. Depreciation
obsolescence has also been factored into the from this value was then attributed to the asset.
Current replacement cost method calculation. For public safety and environment sector, cultural
and historic assets are valued using the market
An independent valuation of public administration approach. Under this valuation method, the historic
sector's heritage assets and infrastructure was and cultural assets are determined by a comparison
performed by the VGV. The valuation was performed to similar examples of the artists work in existence
based on the Current replacement cost method throughout Australia and research on prices paid
of the assets. The effective date of the valuation was for similar examples offered at auction or through
30 June 2017. An independent valuation of public art galleries in recent years.
safety and environment sector's structures was
performed by the VGV. The valuation was performed To the extent that public safety and environment
based on the Current replacement cost method of artwork and historic assets do not contain
the assets. The effective date of the valuation was significant, unobservable adjustments, these assets
30 June 2016. An independent valuation of transport are classified as level 2 under the market approach.
sector's infrastructure was performed by the VGV.
The valuation was performed based on the Current An independent valuation of the public
replacement cost method of the assets.The effective administration sector's heritage assets was
date of the valuation was 30 June 2015. performed by the VGV as at 30 June 2017.
The valuation was performed based on the
For transport and public administration sectors replacement cost of the assets. An independent
as current replacement cost method is considered valuation of transport sector's artwork and historic
as significant, unobservable inputs in infrastructure assets was performed by the VGV. The valuation
assets are classified as level 3 fair value was performed based on the Current replacement
measurements. cost method of the assets. The effective date of
the valuation was 30 June 2015. An independent
Motor vehicles under finance lease valuation of the public safety and environment's
sector artwork and historic assets was performed
Vehicles are valued using the depreciated cost by the VGV. The effective date of the valuation
method. The department acquires new vehicles was 30 June 2016.
and at times disposes of them before the end of
their economic life. The process of acquisition,
use and disposal in the market is managed by
experienced fleet managers who set relevant
depreciation rates during use to reflect the
utilisation of the vehicles.
DEDJTR Annual Report 2017-18 163
02
FINANCIAL PERFORMANCE
Reconciliation of Level 3 fair value movements ($ thousand) Specialised
buildings
2017 Specialised
Opening balance land
Purchases
Disposals 497,292 454,000
Transfers in/(out) of Level 3 – assets classified as held for sale 68,136 0
Transfers in/(out) – free of charge –
Transfer between classes – (10,282)
Transfers in/(out) via contributed capital 6,586 –
Subtotal –
Gains or losses recognised in net result 36,013 2,760
Depreciation 110,735 1,004
Recognition/(derecognition), (write-down) of assets
Subtotal –
Gains or losses recognised in other economic flows – other (6,517)
comprehensive income
Revaluation – (20,766)
Sub-total ––
Closing balance 30 June 2018 – (20,766)
40,698 2,176
40,698 2,176
648,724 428,893
164 DEDJTR Annual Report 2017-18
Plant and equipment Infrastructure ($ thousand) Leasehold Total
and vehicles Cultural assets improvements
1,096,834
43,722 50,141 19,610 32,069 91,429
20,704 – – 2,588
(2,913) – – (830) (14,025)
– – – (306)
(306) – – – 9,387
41 – – (1,597)
– – (800) (1,384)
(791) – – (640) 30,677
(4,536) 115,778
(1,299) (1,281) (6,697)
12,199 – – (3,500) –
(10,197) (39,260)
(9,217) (1,299) (1,281)
– (3,500)
(42,760)
(9,217)
–
– 2,307 – –
– 2,307 – – 45,180
46,704 51,149 18,329 21,233 45,180
1,215,032
DEDJTR Annual Report 2017-18 165
02
FINANCIAL PERFORMANCE
Reconciliation of Level 3 fair value movements ($ thousand) Specialised
buildings
2016 Specialised
Opening balance land
Purchases
Disposals 441,949 445,317
Transfers in/(out) of Level 3 – assets classified as held for sale 34,993 316
Transfers in/(out) – free of charge (76)
Transfers in/(out) – machinery of government transfers (5) –
Transfer between classes (141,848) –
Transfers in/(out) via contributed capital –
Subtotal –
Gains or losses recognised in net result – 9,750
Depreciation 22,452 –
Recognition/(derecognition), (write-down) of assets –
Subtotal (84,408) 9,990
Gains or losses recognised in net result
Revaluation – (22,638)
Sub-total –
Closing balance 30 June 2017 – (22,638)
139,751 21,331
139,751 21,331
497,292 454,000
166 DEDJTR Annual Report 2017-18
Plant and equipment Infrastructure ($ thousand) Leasehold Total
and vehicles Cultural assets improvements
1,022,498
42,060 55,309 9,595 28,268 59,239
18,050 77 – 5,803 (4,404)
(4,323) – –
– – – (142,062)
(214) – – – (143)
(143) – – – –
– 35,211
– (4,161) 862 5,204 8
1,104 – – –
11,007 (52,152)
8 (4,084) 862
14,482 (7,206) (44,013)
(552) (797) (532)
(12,820) (532) (7,206)
(1,084) (797) (44,545)
(12,820) –
– 9,950 – 171,032
– – 9,950 32,069 171,032
– 50,141 19,610 1,096,834
43,722
DEDJTR Annual Report 2017-18 167
02
FINANCIAL PERFORMANCE
Description of significant unobservable inputs to Level 3 valuations for 2018 and 2017
2018 and 2017 Asset class Valuation technique(i) Significant unobservable inputs(i)
Specialised land Market approach Community Service Obligation
(CSO) adjustment
Specialised / heritage buildings Income cash flow Present value discount rate of 4.5%
Current replacement cost method Direct cost per square metre
Useful life of specialised buildings
Vehicles Current replacement cost method Cost per unit
Useful life of vehicle
Plant and equipment Current replacement cost method Cost per unit
Useful life of plant and equipment
Infrastructure Current replacement cost method Cost per unit
Useful life of infrastructure
Cultural assets Current replacement cost method Cost per unit
Useful life of cultural assets
Specialised structures Current replacement cost method Cost per unit
Useful life of specialised structures
Leasehold Improvements Current replacement cost method Cost per unit
Useful life of leasehold improvements
(i) Illustrations on the valuation techniques, significant unobservable inputs and related quantitative range of those inputs are indicative
and should not be directly used without consultation with the department's independent Valuer.
168 DEDJTR Annual Report 2017-18
Biological assets measured at fair value and their categorisation in the fair value hierarchy
Breeding livestock – pigs, sheep 2018 ($ thousand) 2017 Level 2
and cattle Fair value
Carrying Level 2 Carrying measurement
Total biological assets amount Fair value amount
2,092 measurement 2,232 2,232
2,092 2,232
2,092 2,092 2,232
There have been no transfers between levels during the period. There were no changes in valuation
techniques throughout the period to 30 June 2018.
Biological assets comprises of livestock. Biological assets are measured at fair value less costs to
sell, with any changes recognised in the comprehensive operating statement – other economic flows.
Costs to sell include all costs that would be necessary to sell the assets, including freight and direct
selling costs.
The fair value of a biological asset is based on its present location and condition. If an active market exists
for a biological asset in its present location and condition, the quoted price in that market is the appropriate
basis for determining the fair value of that asset. Where access exists to different markets then the most
relevant market is referenced.
In the event that market determined prices or values are not available for a biological asset in its present
condition, the present value of the expected net cash flows from the asset, discounted at a current market
determined rate is utilised to determine fair value.
For livestock, fair value is based on relevant market indicators which include store cattle prices, abattoir
market prices, and cattle prices received/quoted for the Department’s cattle at the reporting date.
Prices for cattle generally reflect the shorter term spot prices available in the market place and vary
depending on the weight and condition of the animal.
DEDJTR Annual Report 2017-18 169
02
FINANCIAL PERFORMANCE
9. OTHER DISCLOSURES
Introduction 9.1 Ex-gratia expenses
This section includes additional material disclosures There were nil ex-gratia payments for the twelve
required by accounting standards or otherwise, months ended 30 June 2018 (30 June 2017:
for the understanding of this financial report. $2.3 million).
Structure Ex gratia expenses mean the voluntary payment
of money or other non-monetary benefit
9.1 Ex-gratia expenses (e.g a write off) that is not made either to acquire
goods, services or other benefits for the entity
9.2 Other economic flows included in net result or to meet a legal liability, or to settle or resolve
a possible legal liability or claim against the entity.
9.3 Non-financial assets held for sale
9.2 Other economic flows included
9.4 Equity disclosure in net result
9.5 Entities consolidated pursuant to section Other economic flows are changes in the volume
53(1)(b) of the FMA or value of an asset or liability that do not result
from transactions.
9.6 Responsible persons
Other gains/(losses) from other economic flows
9.7 Remuneration of executives include the gains or losses from:
9.8 Related parties • the revaluation of the present value of the long
service leave liability due to changes in the bond
9.9 Remuneration of auditors interest rates, and
9.10 Subsequent events • reclassified amounts relating to available-for-
sale financial instruments from the reserves to
9.11 Other accounting policies net result due to a disposal or derecognition of
the financial instrument. This does not include
9.12 Australian Accounting Standards issued reclassification between equity accounts due
that are not yet effective to machinery of government changes or ‘other
transfers’ of assets.
9.13 Departmental output objectives and
descriptions
9.14 Glossary of technical terms
9.15 Style conventions
170 DEDJTR Annual Report 2017-18
Other economic flows included in net result ($ thousand) 2017
2018
Net gain/(loss) on non-financial assets
Gross proceeds from sale of leased vehicles 2,899 4,182
Disposal of leased vehicles (2,189) (2,429)
Recognition of non-financial assets
Revaluation writedown property, plant and equipment 59 –
Gain/(loss) on disposal of property, plant and equipment (3,870) (15,595)
Gain arising from changes in fair value of biological assets (32,907) (17,653)
Decrease attributable to demise of biological assets
Decrease attributable to sales 434 1,769
Loss on disposal of intangible assets (5) (364)
Impairment of intangible assets (832)
Total net loss on non-financial assets (620) (2,904)
–
Net gains/(losses) on financial instruments –
Gain/(impairment) of loans and receivable (115) (33,826)
Net gain/(loss) arising from revaluation of financial instruments (36,314)
Realised gain/(loss) on foreign exchange hedge
Total net gains/(losses) on financial instruments (2) (191)
(2) 2
Other gains/(losses) from other economic flows (464)
Net gain/(loss) arising from revaluation of long service leave liability(i) (468) 228
Unwinding of other provision 39
Total other gains/(losses) from other economic flows
150 2,168
Total Other economic flows included in net result 12,117 3,361
(i) Revaluation gain/(loss) due to changes in bond rates. 12,267 5,529
(24,515) (28,258)
DEDJTR Annual Report 2017-18 171
02 ($ thousand) 2017
FINANCIAL PERFORMANCE 2018
9.3 Non-financial assets held for sale 66,160 129,111
71,018 70,666
Total non-financial assets held for sale
177 214
Current assets 137,355 199,992
Land held for sale
Buildings held for sale
Leased motor vehicles held for sale
Total non-financial assets held for sale
Measurement
Non-financial physical assets (including disposal
group assets) are treated as current and classified
as held for sale if their carrying amount will be
recovered through a sale transaction rather than
through continuing use.
This condition is regarded as met only when:
• the asset is available for immediate use
in the current condition, and
• the sale is highly probable and the asset’s sale
is expected to be completed within 12 months
from the date of classification.
These non-financial physical assets, related
liabilities and financial assets are measured
at the lower of carrying amount and fair value less
costs to sell, and are not subject to depreciation
or amortisation.
Freehold land held for sale is carried at fair value
less costs to disposal. Refer to Note 8.3.2 – Fair value
determination: Non-financial physical assets for the
valuation technique applied to non specialised land.
172 DEDJTR Annual Report 2017-18
9.4 Equity disclosure
Contributed capital
($ thousand)
2018 2017
Balance at beginning of financial year 2,423,092 2,382,511
Capital transactions with the State in its capacity as owner arising from:
Capital appropriations 2,066,340 1,553,191
Capital funding to agencies within portfolio (853,502) (1,068,370)
Administrative restructure and other transfers – net assets received
Administrative restructure and other transfers – net assets transferred 9,586 –
Net assets transferred to other government entities (3,514) –
Net assets transferred from other government entities (3,998,719) (2,448,389)
Net assets transferred through administered transactions 3,123,013 2,021,126
Composite reporting of Rural Assistance Commissioner(i) (17,444)
Balance at end of financial year – 467
– 2,423,092
2,766,296
(i) E ffective from 30 June 2016, the Rural Assistance Commissioner replaced the former Rural Finance Corporation Victoria.
Through an agreement with the State Government, rural assistance schemes such as grants and loans are delivered by Bendigo and
Adelaide Bank under the name Rural Finance. Rural Finance will continue to deliver rural assistance schemes, such as drought and
dairy concessional loans, on behalf of the State Government.
Capital funding to agencies within portfolio
($ thousand)
2018 2017
Public Transport Victoria (343,741) (705,105)
VicRoads (407,908) (306,973)
VicTrack
Melbourne Olympic Park Trust(i) (33,277) (6,822)
Victorian Arts Centre – (28,500)
State Library
Geelong Performing Arts Centre (12,811) (7,357)
Taxi Services Commission (39,636) (12,803)
Federation Square
Port of Melbourne Corporation (2,894) (716)
Musuem Victoria (1,232) (94)
Total capital contributions to agencies within portfolio (2,703)
(5,000) –
(4,300) –
(853,502) –
(1,068,370)
(i) Effective from 1 October 2016, portfolio responsibility for the Melbourne Olympic Park Trust was transferred from DEDJTR
to the Department of Health and Human Services (DHHS).
DEDJTR Annual Report 2017-18 173
02
FINANCIAL PERFORMANCE
Net assets transferred to other Government entities
($ thousand)
2018 2017
VicTrack (3,709,833) (2,405,836)
Department of Treasury and Finance (288,885) –
Victorian Fisheries Authority (3,514) –
Department of Environment, Land, Water and Planning(i) – (1,890)
Development Victoria(ii) – (42,738)
Visit Victoria(iii) – 2,076
Balance at end of financial year (4,002,233) (2,448,389)
(i) Effective 1 July 2016 Energy Safe Victoria transferred from DEDJTR to Department of Environment, Land, Water and Planning (DELWP).
(ii) Effective 1 April 2017, Places Victoria and Major Projects Victoria merged to form Development Victoria.
(iii) Effective 1 July 2016, as part of a machinery of government restructure, Visit Victoria commenced operations and took over portfolio
responsibility of Tourism Victoria and the Victorian Major Events Company Limited.
9.5 Entities consolidated pursuant to section 53(1)(b) of the FMA
The following entities have been consolidated into the department’s financial statements pursuant
to a determination made by the Minister for Finance under section 53(1)(b) of the FMA:
• Major Projects Victoria
• Rural Assistance Commissioner,
• Linking Melbourne Authority, and
• Tourism Victoria (Effective 1 June 2018, Tourism Victoria was abolished under the Major Events Legislation
Amendment (Ticket Scalping and Other Matters) Act 2018. The net assets of the entity was consolidated
with the Department.
The financial effects of each of those entities were not material to the departmental consolidated group.
However, the financial effects of those entities in aggregate were material to the departmental consolidated
group. Therefore, those entities are reported in aggregate in the table below.
174 DEDJTR Annual Report 2017-18
Departmental consolidated group:
($ thousand)
Department of Economic Other section Eliminations and DEDJTR
Development, Jobs, 53(1)(b) entities(i) adjustments consolidated group
Transport and Resources
2018 2017 2018 2017 2018 2017 2018 2017
Total 8,616,877 7,415,705 6,630 – (860) (2,761) 8,622,647 7,412,944
income from
transactions
Net result from (522,765) (458,761) (17,970) (9,920) – – (540,735) (468,681)
transactions
Total assets(ii) 5,316,421 5,144,721 416,496 – – – 5,732,917 5,144,721
293,696 – – – 3,279,634 2,575,251
Total liabilities 2,985,938 2,575,251
(i) Other non-material entities that are material in aggregate are reported in aggregate.
(ii) Total assets for other section 53(1)(b) entities in aggregate were not material to the DEDJTR consolidated group.
DEDJTR Annual Report 2017-18 175
02
FINANCIAL PERFORMANCE
9.6 Responsible persons
In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management
Act 1994, the following disclosures are made regarding responsible persons for the reporting period.
The persons who held the positions of ministers and accountable officer in DEDJTR were:
Secretary, Department of Economic Mr Richard Bolt 1 July 2017 to 30 June 2018
Development, Jobs, Transport and Resources
Minister for Public Transport Minister The Hon. Jacinta Allan MP 1 July 2017 to 30 June 2018
for Major Projects
Minister for Industry and Employment The Hon. Wade Noonan MP 1 July 2017 to 16 October 2017
The Hon. Ben Carroll MP 16 October 2017 to 30 June 2018
Minister for Resources The Hon. Wade Noonan MP 1 July 2017 to 16 October 2017
The Hon. Tim Pallas MP 16 October 2017 to 30 June 2018
Minister for Roads and Road Safety The Hon. Luke Donnellan MP 1 July 2017 to 30 June 2018
Minister for Ports
Minister for Creative Industries The Hon. Martin Foley MP 1 July 2017 to 30 June 2018
Minister for Industrial Relations The Hon. Natalie Hutchins MP 1 July 2017 to 30 June 2018
Minister for Agriculture The Hon. Jaala Pulford MLC 1 July 2017 to 30 June 2018
Minister for Regional Development
Minister for Tourism and Major Events The Hon. John Eren MP 1 July 2017 to 30 June 2018
Minister for Small Business, Innovation and The Hon. Philip Dalidakis MLC 1 July 2017 to 30 June 2018
Digital Economy and Trade and Investment
Accountable officers' remuneration
Total remuneration received or receivable by the accountable officers in connection with the management
of the department during the reporting period was in the range of $480,000 – $490,000 ($510,000 –
$520,000 in 2016–17).
Other related transactions and loans requiring disclosure under the Directions of the Minister for Finance
have been considered and there are no matters to report
Amounts relating to ministers are reported in the financial statements of the Department of Parliamentary
Services. For information regarding related party transactions of ministers, the register of members’ interests
is publicly available from:
www.parliament.vic.gov.au/publications/register‑of‑interests.
176 DEDJTR Annual Report 2017-18
9.7 Remuneration of executives regular basis, as well as non-monetary benefits
such as allowances and free or subsidised goods
The number of executive officers, other than or services.
ministers and accountable officers, and their
total remuneration during the reporting period Post-employment benefits include pensions
are shown in the table below. Total annualised and other retirement benefits paid or payable
employee equivalents provides a measure on a discrete basis when employment has ceased.
of full-time equivalent executive officers over
the reporting period. Other long-term benefits include long service
leave, other long service benefits or deferred
Remuneration comprises employee benefits compensation.
in all forms of consideration paid, payable or
provided by the entity, or on behalf of the entity, in Several factors affected total remuneration
exchange for services rendered, and is disclosed in payable to executives over the year. A number
the following categories. of employment contracts were completed and
renegotiated and a number of executive officers
Short-term employee benefits include amounts retired, resigned or were retrenched in the past year.
such as wages, salaries, annual leave or sick This has had a significant impact on remuneration
leave that are usually paid or payable on a figures for the termination benefits category.
Remuneration of executive officers ($ thousand)
Short-term employee benefits Total remuneration
Post-employment benefits 2018 2017
Other long-term benefits 45,899 40,281
Termination benefits 3,740 2,961
Total remuneration(i) 1,242 964
473 326
51,354 44,532
Total number of executives 260 223
Total annualised employee equivalent (AEE)(ii) 198.9 155.8
(i) T he total number of executive officers includes persons who meet the definition of Key Management Personnel (KMP) of the entity
under AASB 124 Related Party Disclosures and are also reported within the related parties note disclosure (Note 9.8).
(ii) Annualised employee equivalent is based on the time fraction worked over the reporting period.
DEDJTR Annual Report 2017-18 177
02
FINANCIAL PERFORMANCE
9.8 Related parties The Department transacts with other portfolio
agencies through transactions such as grants
The department is a wholly owned and controlled (Note 3.2 – Grants and other transfers) and capital
entity of the State of Victoria. appropriations (Note 9.4 – Equity disclosure) in line
with budgeted allocations. The Department has
The following agencies have been consolidated advances from Government, such as those relating
into the DEDJTR’s financial statements pursuant to to GST payments (required to account for timing
the determination made by the Minister for Finance differences). These advances are unsecured loans
under section 53(1)(b) of the Financial Management which bear no interest. See Note 7.1 – Borrowings.
Act 1994 (FMA):
Key management personnel (KMP) of DEDJTR
• Major Projects Victoria includes the Portfolio Ministers (see Note 9.6 –
Responsible persons) and members of the Senior
• Rural Assistance Commissioner Executive Team, which includes:
• Linking Melbourne Authority • Secretary: Richard Bolt
• Tourism Victoria (until abolition on 1 June • Employment, Investment and Trade, Head:
2018) Justin Hanney
Related parties of the department, Major Projects • Employment, Investment and Trade, Deputy Head
Victoria, Rural Assistance Commissioner, Linking & Agriculture Victoria Chief Executive Officer:
Melbourne Authority and Tourism Victoria include: Emily Phillips
• all key management personnel and their close • Strategy and Planning Lead Deputy Secretary:
family members and personal business interests Anthea Harris (part year) and Graeme Maddern
(controlled entities, joint ventures and entities (part year)
they have significant influence over);
• Corporate Services Lead Deputy Secretary:
• all cabinet ministers and their close family Sue Eddy (part year) and Luke Wilson (part year)
members; and
• Transport for Victoria Head: Gillian Miles
• all departments and public sector entities that
are controlled and consolidated into the whole • Major Transport Infrastructure Program
of state consolidated financial statements. Coordinator General: Corey Hannett
All related party transactions have been entered • CEO Creative Victoria: Andrew Abbott
into on an arm’s length basis.
• Chief Financial Officer: Greg Forck (part year),
Significant transactions with Simon Burrage (par t year), and Jessica Lambous
government-related entities (part year)
The Department receives parliamentary and special Key management personnel of the Administrative
appropriation to draw funds out of the Consolidated Offices include:
Funds to be applied towards Departmental outputs
(see Note 2.2 – Appropriation). In addition, the • Level Crossing Removal Authority – Richard Bolt,
Department oversees administered items on behalf Corey Hannett & Kevin Devlin (CEO)
of the State with reference to Payments made on
behalf of the State (Note 2.2 – Appropriation) and • Rail Projects Victoria – Richard Bolt, Corey
detailed in Note 4.2.1 – Administered Hannett & Evan Tattersall (CEO)
(non-controlled) items.
• Western Distributor Authority – Richard Bolt,
Corey Hannett & Peter Sammut (CEO)
• North East Link Authority – Richard Bolt, Corey
Hannett & Duncan Elliot (CEO)
178 DEDJTR Annual Report 2017-18
Key management personnel of the agencies • Major Projects Victoria: Richard Bolt – DEDJTR
consolidated pursuant to section 53(1)(b) of the FMA Secretary
into DEDJTR’s financial statements include:
• Rural Assistance Commissioner: Richard Bolt –
• Tourism Victoria: Richard Bolt, Justin Hanney, Commissioner and Emily Phillips – CE Agriculture
Andrew Dwyer, Deborah Beale and John Dalton Victoria.
– DEDJTR Secretary and Head and all the board
members (all part year) The compensation detailed below excludes the
salaries and benefits the Portfolio Minister's receives.
• Linking Melbourne Authority: Richard Bolt, Greg The Minister’s remuneration and allowances is set
Forck, Leanne Price(part year), Christina A Borzi by the Parliamentary Salaries and Superannuation
(part year), Robert Abboud (part year)and Katie Act 1968 and is reported within the Department of
O'Brien (part year) – DEDJTR Secretary and all Parliamentary Services’ Financial Report.
board members
Compensation of key management personnel:
($ thousand) ($ thousand)
2018 2017 2018 2017
DEDJTR(iii) DEDJTR(iii) Administrative Administrative
offices and offices and
section 53(iv) section 53(iv)
Short-term employee benefits(i) 3,059 3,587 1,870 1,930
Post-employment benefits 177 174 122 115
Other long-term benefits 86 85 45 42
Total compensation(ii)
3,322 3,845 2,038 2,087
(i) Total remuneration paid to KMPs employed as a contractor during the reporting period through an external service provider
has been reported under short-term employee benefits.
(ii) Note that KMPs are also reported in the disclosure of remuneration of executive officers (Note 9.7 – Remuneration of executives).
(iii) Where employees are KMPs of both DEDJTR and Administrative Offices and entities consolidated under the FMA s53(1), their
remuneration is reflected under DEDJTR's compensation of KMPs.
(iv) This includes remuneration of KMPs for Major Projects Victoria, Rural Assistance Commissioner, Linking Melbourne Authority
and Tourism Victoria (until abolition 1 June 2018)
DEDJTR Annual Report 2017-18 179
02
FINANCIAL PERFORMANCE
Transactions and balances with key
management personnel and other
related parties
Given the breadth and depth of State government
activities, related parties transact with the Victorian
public sector in a manner consistent with other
members of the public e.g. stamp duty and other
government fees and charges. Further employment
of processes within the Victorian public sector occur
on terms and conditions consistent with the Public
Administration Act 2004 and Codes of Conduct
and Standards issued by the Victorian Public Sector
Commission. Procurement processes occur on terms
and conditions consistent with the Victorian
Government Procurement Board requirements.
Outside of normal citizen type transactions with
DEDJTR, there were no related party transactions
that involved key management personnel, their
close family members and their personal business
interests. No provision has been required, nor any
expense recognised, for impairment of receivables
from related parties.
Outside of normal citizen type transactions, there
were no related party transactions that involved
key management personnel, their close family
members and their personal business interests,
for the following agencies consolidated into the
Department’s financial statements:
• Major Projects Victoria,
• Rural Assistance Commissioner,
• Linking Melbourne Authority, and
• Tourism Victoria (until abolition on
1 June 2018)
No provision has been required, nor any expense
recognised, for impairment of receivables from
related parties.
180 DEDJTR Annual Report 2017-18
9.9 Remuneration of auditors ($ thousand) 2017
2018
Victorian Auditor-General's Office
Audit of the financial statements 563 550
Total 563 550
9.10 Subsequent events 9.11 Other accounting policies
Other than the matters below, there are Contributions by owners
no events that have arisen since 30 June that
have significantly affected or may significantly Consistent with the requirements of AASB 1004
affect the operations, or results, or state of affairs Contributions, contributions by owners (that is,
of the Department. contributed capital and its repayment) are treated
as equity transactions and, therefore, do not form
Establishment of the Major Road part of the income and expenses of the Department.
Projects Authority
Additions to net assets that have been designated
The Major Road Projects Authority is an as contributions by owners are recognised as
independent statutory authority established contributed capital. Other transfers that are in the
on 1 July 2018 in an effort to bring a more nature of contributions to or distributions by owners
integrated approach to project delivery across have also been designated as contributions
the broader transport portfolio. This authority by owners.
will be consolidated within DEDJTR.
Transfers of net assets arising from administrative
Name change restructurings are treated as distributions to or
contributions by owners. Transfers of net liabilities
Effective 2 July 2018, Taxi Services Commision arising from administrative restructurings are
changed its name to Commercial Passenger Vehicle treated as distributions to owners.
Commission as proclaimed in the amending act
Commercial Passenger Vehicle Industry Amendment Accounting for the goods and services
(Further Reforms) Act 2017 tax (GST)
Income, expenses and assets are recognised net
of the amount of associated GST, except where
GST incurred is not recoverable from the taxation
authority. In this case, the GST payable is recognised
as part of the cost of acquisition of the asset
or as part of the expense.
Receivables and payables are stated inclusive of
the amount of GST receivable or payable. The net
amount of GST recoverable from or payable to the
Australian Taxation Office (ATO) is included with
other receivables or payables in the balance sheet.
Cash flows are presented on a gross basis.
Commitments, contingent assets and liabilities
are also stated inclusive of GST.
DEDJTR Annual Report 2017-18 181
02
FINANCIAL PERFORMANCE
9.12 Australian Accounting Standards (AAS) issued that
are not yet effective
Certain new AASs have been published that are not mandatory for the reporting period. DTF assesses
the impact of these new standards and advises DEDJTR of their applicability and early adoption where
applicable. For the financial year ended 30 June 2018, DEDJTR has assessed the new standards and has
decided not to early adopt these standards, as they will have no impact on DEDJTR.
Standard/ Summary Applicable for Impact on
Interpretation annual reporting DEDJTR's
AASB 9 Financial periods financial statements
Instruments beginning on
AASB 2014-1 The key changes include the 1 Jan 2018 The assessment has identified that
Amendments simplified requirements for the the amendments are likely to result
to Australian classification and measurement in earlier recognition of impairment
Accounting of financial assets, a new hedging losses and at more regular intervals.
Standards [Part accounting model and a revised The initial application of AASB 9 is
E Financial impairment loss model to recognise not expected to significantly impact
Instruments] impairment losses earlier, as the financial positon, however there
opposed to the current approach will be a change to the way financial
AASB 2014-7 that recognises impairment only instruments are classified and new
Amendments when incurred. disclosure requirements.
to Australian
Accounting Amends various AASs to reflect 1 Jan 2018 This amending standard will
Standards arising the AASB’s decision to defer defer the application period of
from AASB 9 the mandatory application AASB 9 to the 2018–19 reporting
date of AASB 9 to annual reporting period in accordance with the
periods beginning on or after transition requirements.
1 January 2018; as a consequence
of Chapter 6; and to amend reduced
disclosure requirements.
Amends various AASs to incorporate 1 Jan 2018 The assessment has indicated that
the consequential amendments there will be no significant impact
arising from the issuance of AASB 9. for the public sector.
182 DEDJTR Annual Report 2017-18
Standard/ Summary Applicable for Impact on
Interpretation annual reporting DEDJTR's
periods financial statements
AASB 15 Revenue beginning on
from Contracts with
Customers The core principle of AASB 15 requires 1 Jan 2018 The changes in revenue recognition
an entity to recognise revenue when requirements in AASB 15 may
AASB 2016-7 the entity satisfies a performance result in changes to the timing
Amendments obligation by transferring a promised and amount of revenue recorded
to Australian good or service to a customer. in the financial statements. The
Accounting Standard will also require additional
Standards – disclosures on service revenue
Deferral of AASB 15 and contract modifications.
for Not-for-Profit The initial application of ASB 15
Entities is not expected to significantly
impact the financial positon.
AASB 2016-3
Amendments This standard defers the mandatory 1 Jan 2019 This amending standard will defer
to Australian effective date of AASB 15 for not-for- the application period of AASB 15
Accounting profit entities from 1 January 2018 to 1 for not‑for-profit entities to the 2019‑20
Standards – January 2019. reporting period.
Clarifications to
AASB 15 This Standard amends AASB 15 to 1 Jan 2018 The assessment has indicated that
there will be no significant impact
clarify requirements on identifying for the public sector, other than the
impact identified for AASB 15 above.
performance obligations, principal
versus agent considerations and the
timing of recognising revenue from
granting a licence. The amendments
require: a promise to transfer to a
customer a good or service that
is ‘distinct’ to be recognised as a
separate performance obligation; for
items purchased online, the entity is
a principal if it obtains control of the
good or service prior to transferring
to the customer; and for licences
identified as being distinct from
other goods or services in a contract,
entities need to determine whether
the licence transfers to the customer
over time (right to use) or at a point in
time (right to access).
DEDJTR Annual Report 2017-18 183
02
FINANCIAL PERFORMANCE
Standard/ Summary Applicable for Impact on
Interpretation annual reporting DEDJTR's
Standard/ periods financial statements
Interpretation beginning on
AASB 16 Leases
Summary Applicable for Impact on DEDJTR's financial
AASB 1058 Income annual reporting statements
of Not-for-Profit periods
Entities beginning on
The key changes introduced by AASB 1 Jan 2019 The assessment has indicated that
16 include the recognition of most most operating leases, with the
operating leases (which are current exception of short term and low value
not recognised) on balance sheet. leases will come on to the balance
sheet and will be recognised as right
of use assets with a corresponding
lease liability. In the operating
statement, the operating lease
expense will be replaced by
depreciation expense of the asset
and an interest charge.There will
be no change for lessors as the
classification of operating and finance
leases remains unchanged.The initial
application of AASB 16 is expected
to significantly increase lease assets
and liabilities. The quantity of the
increase has not yet been determined.
This Standard will replace AASB 1 Jan 2019 The current revenue recognition
1004 Contributions and establishes for grants is to recognise revenue
principles for transactions that are up front upon receipt of the funds.
not within the scope of AASB 15, This may change under AASB 1058,
where the consideration to acquire as capital grants for the construction
an asset is significantly less than fair of assets will need to be deferred.
value to enable not-for-profit entities Income will be recognised over time,
to further their objectives. upon completion and satisfaction of
performance obligations for assets
being constructed, or income will be
recognised at a point in time
for acquisition of assets. The revenue
recognition for operating grants will
need to be analysed to establish
whether the requirements under other
applicable standards need to be
considered for recognition of
liabilities (which will have the
effect of deferring the income
associated with these grants). Only
after that analysis would it be possible
to conclude whether there are any
changes to operating grants. The
impact on current revenue recognition
of the changes is the phasing and
timing of revenue recorded in
the profit and loss statement. The
initial application of AASB 1058 is
not expected to significantly impact
the financial positon.
184 DEDJTR Annual Report 2017-18
Standard/ Summary Applicable for Impact on
Interpretation annual reporting DEDJTR's
periods financial statements
AASB 2016-8 beginning on
Amendments
to Australian This Standard amends AASB 9 and 1 Jan 2019 This standard clarifies the application
Accounting AASB 15 to include requirements and of AASB 15 and AASB 9 in a not-for-
Standards implementation guidance to assist profit context. The areas within these
– Australian not-for-profit entities in applying the standards that are amended for not-
Implementation respective standards to particular for-profit application include:
Guidance for Not- transactions and events.
for-Profit Entities AASB 9
• Statutory receivables are
recognised and measured
similarly to financial assets
AASB 15
• The “customer” does not need
to be the recipient of goods
and/or services;
• The “contract” could include an
arrangement entered into under
the direction of another party;
• Contracts are enforceable if
they are enforceable by legal
or “equivalent means”;
• Contracts do not have to have
commercial substance, only
economic substance; and
• Performance obligations need
to be “sufficiently specific”
to be able to apply AASB 15
to these transactions.
DEDJTR Annual Report 2017-18 185
02
FINANCIAL PERFORMANCE
Standard/ Summary Applicable for Impact on
Interpretation annual reporting DEDJTR's
periods financial statements
AASB 1059 Service beginning on
Concession
Arrangements: This standard applies to 1 Jan 2019 For an arrangement to be in scope
Grantor arrangements that involve an of AASB 1059 all of the following
operator providing a public service requirements are to be satisfied:
on behalf of a public sector grantor.
It involves the use of a service • Operator is providing public
concession asset and where the services using a service
operator manages at least some concession asset;
of the public service at its own
direction. An arrangement within • Operator manages at ‘least some’
the scope of this standard typically of public services under its own
involves an operator constructing discretion;
the asset used to provide the public
service or upgrading the assets • The State controls / regulates:
and operating and maintaining the
assets for a specified period of time. –– What services are to be provided;
The State has 2 types of PPPs: –– To whom; and
1. Social Infrastructure: A PPP that –– At what price
requires the government to make
payments to the operator upon • State controls any significant
commencement of services: residual interest in the asset.
• Operator finances and If the arrangement does not
constructs the infrastructure; satisfy all the above requirements
and the recognition will fall under the
requirements of another applicable
• State pays unitary service accounting standard.
payments over the term.
Currently the social infrastructure
2. Economic Infrastructure: A PPPs are only recognised on the
PPP that is based on user pays balance sheet at commercial
model: acceptance. The arrangement will
need to be progressively recognised
• Operator finances and as and when the asset is being
constructs the infrastructure; constructed. This will have the impact
of progressively recognising the
• State does not pay for the cost financial liability and corresponding
of the construction; and asset as the asset is being constructed.
• Operator charges asset users For economic infrastructure PPP
and recovers the cost of arrangements, that were previously
construction and operation not on balance sheet, the standard
for the term of the contract. will require recognition of these
arrangements on balance sheet.
There will be no impact to net debt,
as a deferred revenue liability will be
recognised and amortised over the
concession term.
The initial application of AASB 1059
has not been determined.
186 DEDJTR Annual Report 2017-18
9.13 Departmental output Sustainably Manage Fish, Game and
objectives and descriptions Forest Resources
The departmental outputs during the financial This output creates the conditions to grow
year ended 30 June 2018 are disclosed in the natural resources economy by ensuring
Note 4.1 – Departmental outputs. The outputs forestry, fish and game resources are sustainably
objectives and descriptions are summarised below. allocated and used for both recreational and
commercial purposes.
More productive, competitive
and sustainable food, fibre, energy Increase the economic, social
and resources industries and cultural value and impact
of the creative industries
Objective: Resources and Primary Industries
Objective: Creative Industries
This output group creates the conditions for
productive, competitive and sustainable food, fibre, These outputs contribute to the development of
energy and natural resources industries. These Victorian creative industries through the provision
outputs contribute to the departmental objective to of industry assistance programs, infrastructure
create more productive, competitive and sustainable development and policy advice. These outputs
food, fibre, energy and resource industries contribute to the departmental objective to increase
the economic, social and cultural value and impact
Descriptions of the creative industries.
Agriculture Descriptions
This output creates conditions for increased jobs, Development and Innovation
productivity and access to markets for Victoria’s
food and fibre industries. The Department works This output supports the creative industries
with research and industry partners, primary to deliver economic, social and cultural benefit
producers and rural communities across Victoria through: talent and leadership; the creative and
to address major and emerging challenges in business ecology; innovation and social impact;
productivity, biosecurity and competitiveness in participation and place making; and international
food and fibre industries. engagement.
Resources Creative Industries Portfolio Agencies
This output influences and advocates for the This output promotes, presents and preserves
provision of efficient, reliable and safe energy our heritage and the creative industries through
services through national forums and delivers Victoria’s cultural agencies: Arts Centre Melbourne,
State-based energy programs. It supports the Australian Centre for the Moving Image (ACMI),
development of renewable energy, improving Docklands Studios Melbourne, Film Victoria, Geelong
energy efficiency and productivity outcomes Performing Arts Centre, Melbourne Recital Centre,
for households and businesses and facilitating Museum Victoria, National Gallery of Victoria, and
new investment opportunities. The output also the State Library of Victoria.
provides efficient and effective regulatory services
to industry, promotes a sustainable resources Cultural Infrastructure and Facilities
sector and provides information to households
and businesses and undertakes community This output supports Victorian cultural venues and
engagement. stateowned facilities through strategic assessment
and provision of advice on portfolio infrastructure
*N ote: As per the approved Machinery of Government change proposals and projects. The output includes
effective 1 July 2016, energy functions transferred to DELWP consolidation of portfolio asset management
and are not reported within DEDJTR. plans and management of funding programs
for maintenance and minor capital works.
DEDJTR Annual Report 2017-18 187
02
FINANCIAL PERFORMANCE
Increase sustainable employment Major Projects
opportunities for Victorians and build
investment, trade and tourism prospects This output facilitates investment in the Victorian
for the State through working with economy through the development, delivery and
priority industry sectors, delivering major management of economic assets. This output
projects, investing in regional Victoria, represents activities undertaken by Major Projects
providing innovation opportunities for Victoria (MPV) within the Department of Economic
businesses, and building resilience in Development, Jobs, Transport and Resources.
the State’s workforce Output costs include the cost of projects for which
Major Projects Victoria has financial responsibility.
Objective: Employment, Industry and Growth
Regional Development
This output group delivers initiatives and activities
to foster investment, growth and employment This output guides the development and
opportunities to support workers, industries implementation of regional plans and strategies to
and regions. These outputs contribute to the manage growth and change in regional and rural
departmental objective to increase sustainable Victoria. It provides better services to encourage
employment opportunities for Victorians and innovation in order to create jobs and improve
build investment, trade and tourism prospects career opportunities for regional Victorians.
for the State through working with priority
industry sectors, delivering major projects, Tourism, Major Events and International Education
investing in regional Victoria, providing innovation
opportunities for businesses, and building resilience This output maximises employment and the
in the State’s workforce. long‑term economic benefits of tourism,
international education and major events to Victoria
Descriptions by developing and marketing the State
as a competitive destination.
Employment and Investment
Trade
This output provides programs to link business
and workforce needs with training, retraining This output promotes business growth opportunities
and support for skills required in the economy. It by connecting organisations to global business
also provides investment attraction and facilitation opportunities in priority markets and supporting
services to attract new investment and encourage the establishment and deepening of strategic
additional investment by companies already commercial partnerships.
operating in Victoria.
More productive and liveable places,
Industrial Relations towns and cities through integrated
and user-focused transport services
This output provides public and private sector and better infrastructure
industrial relations advice and strategic workforce
management counsel to Ministers and departmental Objective: Transport Network Safety, Operation
and agency reviews. and Development
Industry and Enterprise Innovation This output group delivers a safe, cost effective
and efficient transport network. This output group
This output provides access to information and supports the Department’s objective to sustainably
connections, and builds the capacity of businesses grow Victoria’s economy and employment. These
and industry to develop and effectively use new outputs contribute to the departmental objective
practices and technologies to increase productivity to create more productive and liveable cities and
and competitiveness in Victoria. It also helps regions through improved transport services and
businesses overcome barriers to competitiveness. better infrastructure.
188 DEDJTR Annual Report 2017-18
Descriptions Tram Services
This output delivers reliable and cost-effective tram
Bus services services and infrastructure investments, including
public transport services delivered through
This output delivers reliable and cost effective contractual arrangements with private operators.
statewide bus services and infrastructure
investments, including services delivered through Transport Safety, Security and Emergency
contractual arrangements with private operators. Management
This output delivers initiatives and regulatory
Integrated Transport activities that will improve safety and security
and strengthen resilience on Victoria’s
This output delivers strategic transport transport network.
infrastructure activity to improve the transport
system. The output contributes to the Department’s 9.14 Glossary of technical terms
objective to create more productive and liveable
cities and regions through improved transport Actuarial gains or losses on superannuation defined
services and better infrastructure. benefit plans
Actuarial gains or losses are changes in the present
Port and Freight Network Access value of the superannuation defined benefit liability
resulting from experience adjustments (the effects
This output delivers capital initiatives and programs of differences between the previous actuarial
to increase the capacity, efficiency and safety assumptions and what has actually occurred)
of the ports, freight and logistics network. and the effects of changes in actuarial assumptions.
Road Asset Management Administered item
Administered item generally refers to a department
This output group delivers programs and initiatives lacking the capacity to benefit from that item
to maintain Victoria’s freeways and arterial road in the pursuit of the entity’s objectives and to deny
network. Activities support the safety and reliability or regulate the access of others to that benefit.
of the network.
Amortisation
Road Operations and Network Improvements Amortisation is the expense which results from
the consumption, extraction or use over time of a
This output group delivers network improvement non‑produced physical or intangible asset. This
initiatives to enhance and develop Victoria’s expense is classified as an ‘other economic flow’.
freeways, arterial road network and strategic local
road connections. Activities support improvements Borrowings
to the safety and reliability of the network. Borrowings refers to interest bearing liabilities
mainly from public borrowings raised through
Taxi and Hire Vehicle Services the TCV, finance leases and other interest bearing
arrangements. Borrowings also include non-interest
This output delivers safe and accessible taxi bearing advances from government that are
and hire vehicle services in metropolitan acquired for policy purposes.
and regional Victoria through the regulation
of drivers and operators and promoting choices Comprehensive result
available to customers. The net result of all items of income and expense
recognised for the period. It is the aggregate of the
Train Services operating result and other comprehensive income.
This output delivers reliable and cost effective
train services and infrastructure investments
across the Victorian rail network, including services
delivered through contractual arrangements
with private operators.
DEDJTR Annual Report 2017-18 189
02
FINANCIAL PERFORMANCE
Commitments • a derivative that will or may be settled other
Commitments include those operating, capital than by the exchange of a fixed amount of cash
and other outsourcing commitments arising from or another financial asset for a fixed number
non-cancellable contractual or statutory sources. of the entity’s own equity instruments.
Controlled item Financial instrument
Controlled item generally refers to the capacity
of a department to benefit from that item in the A financial instrument is any contract that gives
pursuit of the entity’s objectives and to deny or rise to a financial asset of one entity and a financial
regulate the access of others to that benefit. liability or equity instrument of another entity.
Financial assets or liabilities that are not contractual
Current grants (such as statutory receivables or payables that
Amounts payable or receivable for current arise as a result of statutory requirements imposed
purposes for which no economic benefits of equal by governments) are not financial instruments.
value are receivable or payable in return.
Financial liability
Depreciation
Depreciation is an expense that arises from the A financial liability is any liability that is:
consumption through wear or time of a produced
physical asset. This expense is classified as (a) A contractual or statutory obligation:
a 'transaction' and so reduces the 'net result
from transaction'. • to deliver cash or another financial asset to
another entity; or
Effective interest method
The effective interest method is used to calculate • to exchange financial assets or financial liabilities
the amortised cost of a financial asset or liability with another entity under conditions that are
and of allocating interest income over the relevant potentially unfavourable to the entity; or
period. The effective interest rate is the rate that
exactly discounts estimated future cash receipts (b) A contract that will or may be settled in the
through the expected life of the financial instrument, entity's own equity instruments and is:
or, where appropriate, a shorter period.
• a non-derivative for which the entity is or may
Financial asset be obliged to deliver a variable number of the
A financial asset is any asset that is: entity's own equity instruments; or
(a) cash • a derivative that will or may be settled other
than by the exchange of a fixed amount of cash
(b) an equity instrument of another entity or another financial asset for a fixed number
of the entity's own equity instruments. For this
(c) a contractual right or statutory right: purpose the entity's own equity instruments do
not include instruments that are themselves
• to receive cash or another financial asset from contracts for the future receipt or delivery of the
another entity; or entity's ownequity instruments.
• to exchange financial assets or financial liabilities Grants and other transfers
with another entity under conditions that are
potentially favourable to the entity; or Transactions in which one unit provides goods,
services, assets (or extinguishes a liability) or labour
(d) a contract that will or may be settled in the to another unit without receiving approximately
entity's own equity instruments and is: equal value in return. Grants can either be operating
or capital in nature.
• a non-derivative for which the entity is or may
be obliged to receive a variable number of the While grants to governments may result in the
entity’s own equity instruments; or provision of some goods or services to the transferor,
they do not give the transferor a claim to receive
directly benefits of approximately equal value.
For this reason, grants are referred to by the AASB
as involuntary transfers and are termed non
190 DEDJTR Annual Report 2017-18
reciprocal transfers. Receipt and sacrifice assets less depreciation plus changes in inventories
of approximately equal value may occur, but only and other movements in non-financial assets.
by coincidence. For example, governments are Includes only those increases or decreases in
not obliged to provide commensurate benefits in non financial assets resulting from transactions
the form of goods or services to particular taxpayers and therefore excludes write offs, impairment
in return for their taxes. write‑downs and revaluations.
Grants can be paid as general purpose grants which Net result
refer to grants that are not subject to conditions
regarding their use. Alternatively, they may be paid Net result is a measure of financial performance
as specific purpose grants which are paid for a of the operations for the period. It is the net result
particular purpose and/or have conditions attached of items of income, gains and expenses (including
regarding their use. losses) recognised for the period, excluding those
that are classified as ’other economic flows –
General government sector other comprehensive income'.
The general government sector comprises all Net result from transactions/net operating balance
government departments, offices and other bodies
engaged in providing services free of charge or at Net result from transactions or net operating
a price significantly below their cost of production. balance is a key fiscal aggregate and is income
General government services include those which from transactions minus expenses from
are mainly non-market in nature, those which are transactions. It is a summary measure of
largely for collective consumption by the community the ongoing sustainability of operations. It excludes
and those which involve the transfer or redistribution gains and losses resulting from changes in price
of income. These services are financed mainly levels and other changes in the volume of assets.
through taxes, or other compulsory levies It is the component of the change in net worth
and user charges. that is due to transactions and can be attributed
directly to government policies.
Grants for on-passing
Net worth
All grants paid to one institutional sector (e.g. a state
general government) to be passed on to another Assets less liabilities, which is an economic
institutional sector (e.g. local government or a measure of wealth.
private non-profit institution).
Non-financial assets
Infrastructure systems
Non-financial assets are all assets that are not
Infrastructure systems provide essential services ‘financial assets’. It includes inventories, land,
used in the delivery of final services or products. buildings, infrastructure, road networks, land under
They are generally a complex interconnected roads, plant and equipment, investment properties,
network of individual assets and mainly include cultural and heritage assets, intangible and
sewerage systems, water storage and supply biological assets.
systems, ports, utilities and public transport assets
owned by the Department. Non-produced assets
Intangible produced assets Non-produced assets are assets needed for
production that have not themselves been
Refer to produced assets in this glossary. produced. They include land, subsoil assets,
and certain intangible assets. Non‑produced
Intangible non‑produced assets intangibles are intangible assets needed for
production that have not themselves been
Refer to non‑produced asset in this glossary. produced. They include constructs of society
such as patents.
Net acquisition of non-financial assets
(from transactions)
Purchases (and other acquisitions) of non-financial
assets less sales (or disposals) of non-financial
DEDJTR Annual Report 2017-18 191
02
FINANCIAL PERFORMANCE
Other economic flows – other Transactions
comprehensive income
Transactions are those economic flows that
Other economic flows – other comprehensive are considered to arise as a result of policy
income comprises items (including reclassification decisions, usually an interaction between two
adjustments) that are not recognised in net result entities by mutual agreement. They also include
as required or permitted by other Australian flows within an entity such as depreciation where
Accounting Standards. the owner is simultaneously acting as the owner of
the depreciating asset and as the consumer of the
The components of other economic flows – other service provided by the asset. Taxation is regarded
comprehensive income include: as mutually agreed interactions between
the government and taxpayers. Transactions
• changes in physical asset revaluation surplus, can be in kind (e.g. assets provided/given free of
charge or for nominal consideration) or where
• share of net movement in revaluation surplus the final consideration is cash. In simple terms,
of associates and joint ventures, and transactions arise from the policy decisions of
the government.
• gains and losses on remeasuring available-for-
sale financial assets. 9.15 Style conventions
Produced assets Figures in the tables and in the text have been
rounded. Discrepancies in tables between totals and
Produced assets include buildings, plant and sums of components reflect rounding. Percentage
equipment, inventories, cultivated assets and certain variations in all tables are based on the underlying
intangible assets. Intangible produced assets may unrounded amounts
include computer software, motion picture films, and
research and development costs (which does not The notation used in the tables is as follows:
include the start-up costs associated with capital
projects). – zero, or rounded to zero
(xxx.x) negative numbers
Sale of goods and services 201x year period
201x–1x year period
Refers to income from the direct provision of goods
and services and includes fees and charges for The financial statements and notes are presented
services rendered, sales of goods and services, fees based on the illustration for a government
from regulatory services, work done as an agent for department in the 2017–18 Model Report for
private enterprises. It also includes rental income Victorian Government Departments.
under operating leases and on produced assets
such as buildings and entertainment, but excludes
rent income from the use of non-produced assets
such as land. User charges include sale of goods
and services income.
Supplies and services
Supplies and services generally represent cost
of goods sold and the day-to-day running costs,
including maintenance costs incurred in the
normal operations of the department.
192 DEDJTR Annual Report 2017-18
03
NON-FINANCIAL
PERFORMANCE
DEDJTR Annual Report 2017-18 193
03
NON-FINANCIAL PERFORMANCE
Portfolio performance reporting – non-financial
The portfolio performance reporting – non-financial section includes the:
• report on progress towards achieving objectives, incorporating key initiatives and projects
• report on performance against output performance measures.
Changes to the department during 2017-18
The objectives, objective indicators and outputs for the Department were reviewed and updated to reflect
a change to the Department’s priorities.
The Department has made changes to its objectives for 2017-18 as shown in the table below:
Table 1: Changes to the departmental objectives during 2017-18
2017-18 departmental objective 2017-18 output Reason for change
More productive, competitive, Agriculture This objective has been amended
sustainable and jobs-rich food, to reflect the machinery of government
fibre and resources industries Resources change as the energy portfolio has
transferred to the Department of
Sustainably Manage Fish, Game Environment, Land, Water and Planning.
and Forest Resources
Increase the economic, social and Creative Industries Access, This objective has been amended
cultural value of tourism, major events Development and Innovation to reflect the alignment of creative
and creative industries and visitor economies that have
Creative Industries Portfolio Agencies been brought together to provide
a collective focus on visitor attraction,
Cultural Infrastructure and Facilities experience and satisfaction.
Tourism, Major Events
and International Education
Grow Victoria’s economy and Victorian Industrial Relations This objective has been amended
jobs by working with the private and Industry and Enterprise Innovation for clarity and alignment to the
public sectors to foster investment, Jobs and Investment Department’s mission statement.
trade and innovation
Major Projects
Regional Development
Trade
More productive and liveable places, Bus Services This objective has been amended
towns and cities through integrated Integrated Transport to reflect a change to the
and user-focused transport services Port and Freight Network Access Department’s priorities.
and better infrastructure
Road Asset Management
Road Operations and
Network Improvements
Taxi and Hire Vehicle Services
Train Services
Tram Services
Transport Safety, Security
and Emergency Management
194 DEDJTR Annual Report 2017-18
The Department has made changes to its output structure for 2017-18 as shown in the table below:
Table 2: Changes to the departmental output structure
2016-17 outputs Reason for change 2017-18 outputs
Access, Industry Development
and Innovation This output has been renamed to Creative Industries Access,
clarify that it relates to the Creative Development and Innovation
Employment and Investment Industries portfolio.
Energy and Resources This output has been renamed to better Jobs and Investment
reflect the priority of fostering job growth.
The energy component of this output Resources
has been transferred to the Department
of Environment, Land, Water and
Planning as a result of a machinery
of government change.
Reporting progress towards Progress towards achieving
achieving departmental this objective
objectives in the report
of operations In 2017-18, the department reported progress against
this objective using the following objective indicators
The department seeks to get our economy and outputs:
and society working together for the benefit of all
Victorians – by creating more jobs for more people, Objective Indicators
connecting people and businesses, and maintaining
Victoria’s envied reputation for liveability now • Value of Victorian food and fibre exports
and for the future. • Value of Victorian agriculture production
• Percentage of assessed fish stocks that
This section reports the department’s progress
on its 2017-18 departmental objectives through are fished sustainably
a range of indicators. Trends in these indicators • Annual number of metres drilled for minerals
demonstrate the department’s performance
and progress towards achieving these objectives. exploration in Victoria
• Annual level of production of minerals
Objective 1
and extractives
More productive, competitive, sustainable
and jobs-rich food, fibre and resources industries Outputs
The department seeks to create the conditions • Agriculture
for and support increased employment, • Resources
investment and trade in the food, fibre and • Sustainably Manage Fish, Game
resources sectors by delivering policy, regulation,
research, development and extension programs and Forest Resources
as well as emergency management.
DEDJTR Annual Report 2017-18 195
03
NON-FINANCIAL PERFORMANCE
Indicator: Value of Victorian food largest medicinal cannabis company, Canopy
and fibre exports Growth Corporation, to set up their Asia-Pacific
headquarters in Victoria.
The value of food and fibre exports from
Victoria increased 8 per cent from $11.9 billion The Victorian Government also announced new
in 2015-16 to $12.8 billion in 2016-17 (the latest animal industries planning reforms to balance
available data). There were significant increases industry growth, environmental protection and
in grains, horticulture, prepared foods, wine and community amenity. The reforms introduce new land
red meat exports. Victoria remained Australia’s use definitions and associated planning controls
largest food and fibre export state. for animal industries into the Victoria Planning
Provisions and all local planning schemes in Victoria.
The department grows and protects Victoria’s This clarifies land use planning regulation, allows
food and fibre industries through innovative policy, farmers more flexibility to manage their farms
regulation, research and service delivery. It works and facilitates risk-based assessment of planning
in collaboration with industry partners, primary permit applications.
producers, leading researchers and communities
to address major and emerging issues affecting DEDJTR’s aim of creating and diffusing
competitiveness, productivity and the sustainable knowledge through research, collaboration and
growth of Victoria’s food and fibre sector, as well commercialisation was enhanced through the
as the welfare of domestic and production animals. establishment of the DairyBio and DairyFeedbase
innovation partnerships as joint ventures between
Enhancing and maintaining market access is Agriculture Victoria and the Australian dairy industry.
essential to capturing increasing overseas demand These initiatives attract $100 million investment
for food and fibre. In 2017-18, Victoria led the way by over five years delivering high impact research
becoming the first state in Australia to implement for improved animal and plant breeding, animal
a robust electronic traceability system for sheep nutrition and feedbase productivity.
and goats. Since 1 January 2017, 15.8 million electronic
sheep tags have been purchased and over 468,000 Animal Welfare Victoria was established and is
electronically tagged sheep have been scanned implementing Victoria’s first ever Animal Welfare
and the information uploaded to the national Action Plan. The welfare of domestic animals was
livestock identification database. improved through delivery of the Domestic Animals
Amendment (Puppy Farm and Pet Shops) Act 2017
The department also effectively responded to many and the Code of Practice for the Keeping of
emergency events including pest and disease Racing Greyhounds.
incursions, frosts, floods and fires and delivered
front-line services to reduce impacts on the food Figure 1: Food and fibre exports from Victoria
and fibre sector and the environment. Responses
included anthrax, bluetongue virus, varroa mite, 13.0
tomato potato psyllid, chestnut blight, chocolate
band snail, as well as the Barwon South West fire 12.5
response and related agricultural recovery activities.
$ billion 12.0
Industry development and job creation is another
major focus. The department developed and 11.5 Data available
launched the Medicinal Cannabis Industry 11.0 October 2018
Development Plan, providing a clear pathway
to grow the state’s emerging medicinal cannabis 2014-15 2015-16 2016-17 2017-18
industry. Thanks to a collaborative approach across Year
Agriculture Victoria, Invest Victoria and Invest
Assist, Victoria is leading Australia in establishing
this new industry, including securing the world’s
196 DEDJTR Annual Report 2017-18
Table 3 Value of Victorian food and fibre exports 2014–15 2015–16 2016–17 2017–18
12.1 11.9
Measure (unit of measure) 12.8 Data available in October 2018
Food and fibre exports from Victoria ($ billion)
Indicator: Value of Victorian $ billionFigure 2: Gross value of Victorian
agriculture production agriculture production
The value of Victorian agriculture production 15
increased 7 per cent from $13.1 billion in 2015-16 to
$14.0 billion in 2016-17 (the latest available data). 14
This was driven by better seasonal conditions,
particularly for grain growers, and higher commodity 13
prices, especially for meat products. Global dairy
prices continue to have a negative impact on local 12
milk prices and production.
11 Data available
10 May 2019
2014-15 2015-16 2016-17 2017-18
Year
Table 4 Value of Victorian agriculture production 2014–15 2015–16 2016–17 2017–18
13.1 13.1 14.0 Data available in May 2019
Measure (unit of measure)
Gross value of Victorian agriculture production ($ billion)
Indicator: Percentage of assessed fish markets. Considerable investment has been made
stocks that are fished sustainably by the Victorian Fisheries Authority into the ongoing
management of key stocks such as abalone, rock
Quota-based fish stocks are assessed annually lobster, giant crab and scallops. This includes
to ensure their sustainability. In 2017-18 all quota- long-term research to understand the nature and
based fish stocks were assessed as being fished dynamics of the resource and collection and analysis
at sustainable levels. of a broad spectrum of data to help determine the
response of the resource to the impacts of fishing,
Victoria’s commercial fisheries supply an extensive before annual quotas are set.
variety of species to domestic and international
Table 5 Percentage of assessed fish stocks that are fished sustainably
Measure (unit of measure) 2014–15 2015–16 2016–17 2017–18
100 100 100 100
Percentage of quota-based fish stocks that were assessed
during the year as being fished sustainably (per cent)
DEDJTR Annual Report 2017-18 197
03
NON-FINANCIAL PERFORMANCE
Indicator: Annual number of metres Figure 3: Annual number of metres drilled
drilled for minerals exploration for minerals exploration in Victoria
in Victoria
200,000
There were 191,658 metres drilled in Victoria’s
resources sector for minerals exploration in 2016-17 150,000
(the latest available data). This was a 30 per cent
increase from the previous year mainly driven Metres
by continued successful drilling activity at the
Fosterville gold mine. 100,000
Exploration success at the Fosterville gold mine 50,000 Data available
is driving increased production with 263,845 ounces 2014-15 November 2018
produced in 2017. This is more than double the
production level of 2015 (123,095 ounces). 2015-16 2016-17 2017-18
Year
Table 6 Annual number of metres drilled for minerals exploration in Victoria
Measure (unit of measure) 2014–15 2015–16 2016–17 2017–18
87,321 147,167
Annual number of metres drilled for minerals exploration 191,658 Data available November 2018
in Victoria (metres)
Indicator: Annual level of production On 15 June 2018, the Helping Victoria Grow:
of minerals and extractives Extractive Resources Strategy was released.
The strategy is focused on ensuring high quality
Overall gold production in Victoria during 2016-17 extractive resources continue to be available at
(latest available data) was 329,452 ounces compared a competitive price to support Victoria’s growth.
to 256,653 ounces in the previous year. Production for This follows on from the launch of two pilot
extractives (sand, stone, and gravel) in 2016-17 (latest projects on 9 February 2018 in the Wyndham
available data) was 57 million tonnes, up 21 per cent and South Gippsland local government areas.
from 2015-16 due to higher demand for new housing The pilot projects, partnering with local councils
and infrastructure development in Victoria. The level and Department of Environment, Land, Water
of mineral sands production (164,353 tonnes in and Planning (DELWP), aim to better define
2016-17 (latest available data)) is lower, reflecting the strategically important extractive resource areas
exhaustion of Iluka Resources mines at Douglas and and apply suitable planning provisions to secure
Ouyen in western Victoria. Brown coal production these areas. With the demand for extractive
at 56 million tonnes in 2016-17 (latest available data) resources expected to double by 2050, the
was 6 per cent lower than the previous year due protection of key resources is vital for supporting
mainly to lower production following the closure infrastructure development in Victoria.
of the Hazelwood coal mine on 31 March 2017.
The Victorian Gas Program is progressing,
To attract new exploration investment to Victoria, including the delivery of the first Progress Report
the Minister for Resources launched a new tender on 12 January 2018 (highlighting an initial analysis
for 11 exploration blocks (covering a 9,500-square of Victoria’s onshore conventional gas resources)
kilometre area) on 22 June 2018. This forms part of and the release on 16 May 2018 of five new oil and
the Stavely minerals initiative in western Victoria and gas exploration blocks located in the offshore Otway
is supported by a community engagement program Basin in western Victoria. Other activities associated
and new geological information. The tenders closed with this science program include finalising
on 15 August 2018. This program is supported by the collaborative research agreements with the CSIRO
TARGET co-funded exploration grants program as part of the underground gas storage work stream,
with grants of up to $500,000 per block available. commissioning a $1 million contract to develop
198 DEDJTR Annual Report 2017-18
a new 3D geological model of the Gippsland Basin, In December 2017, the Commissioner for Better
and continuing to engage with local communities Regulation released her report into the earth
and stakeholders to provide information about resources regulator – Getting the Groundwork Right.
the risks, effects and potential benefits of onshore Since the release of the report, the Department has
conventional gas exploration and development. progressed key actions to improve regulation of
earth resources including actions for reducing the
The CarbonNet project, funded by the Victorian backlog of regulatory approvals. The 2018-19
and Commonwealth governments, is investigating Budget allocated $12.7 million for improving
the development of a commercial scale carbon earth resources regulation to address the
capture and storage network in the Gippsland Basin. recommendations within the report by the
As part of this project a marine seismic survey was Commissioner for Better Regulation over the next
completed in February 2018. The information from two years. An Implementation Plan (Getting the
this survey will inform the next phase of the project. Groundwork Right: Implementation Plan) was
The CarbonNet project provides a pathway for released on 3 May 2018. Key priorities include
low emission products such as hydrogen produced speeding up approvals for quarries in the
from coal. The Hydrogen Energy Supply Chain extractives sector for low risk projects, developing
Pilot Demonstration Project, a world first, was improved guidance materials, working with DELWP
launched on 12 April 2018 and has the potential to improve the interface with planning, and
to generate new jobs and attract investment to developing standard risk management plans.
the Latrobe Valley.
Table 7 Annual level of production of minerals and extractives
Measure (unit of measure) 2014–15 2015–16 2016–17 2017–18
Annual production of brown coal (1,000 tonnes) 60,957 59,757 56,095 Data available November 2018
Annual production of gold (ounces) 198,387 256,653 329,452 Data available November 2018
Annual production of antimony (tonnes) 3,684 5,945 5,138 Data available November 2018
Annual production of mineral sands (tonnes) 546,514 200,107 164,353 Data available November 2018
Annual production of extractives (million tonnes) 50.0 47.3 57.4 Data available November 2018
DEDJTR Annual Report 2017-18 199
03
NON-FINANCIAL PERFORMANCE
Figure 4a: Annual production of brown coal Figure 4b: Annual production of gold
62,000 350,000
60,000 300,000
Tonnes (’000) 58,000 Ounces
250,000
56,000
54,000 Data available 200,000 Data available
52,000 November 2018 150,000 November 2018
2014-15 2015-16 2016-17 2017-18 2014-15 2015-16 2016-17 2017-18
Year Year
Figure 4c: Annual production of antimony Figure 4d: Annual production of mineral sands
7,000 600,000
6,000 500,000
5,000 400,000
Tonnes 4,000 Tonnes 300,000
3,000
2,000 200,000
1,000 Data available 100,000 Data available
0 November 2018 0 November 2018
2014-15 2014-15
2015-16 2016-17 2017-18 2015-16 2016-17 2017-18
Year Year
Figure 4e: Annual production of extractives
70
60
Tonnes (millions) 50
40
30
20
10 Data available
0 November 2018
2014-15 2015-16 2016-17 2017-18
Year
200 DEDJTR Annual Report 2017-18
The words you are searching are inside this book. To get more targeted content, please make full-text search by clicking here.
11557 DEDJTR Annual Report 2017 2018 BOOK
Discover the best professional documents and content resources in AnyFlip Document Base.
Search