Part C - Australian Competition and Consumer Commission

Section 1: Overview, Additional Estimates and Variations to Outcomes

Overview

There has been no change to the overview to that included in the 1999-2000 Portfolio Budget Statements.

Additional Estimates and Variations to Outcomes

An additional appropriation of $5.081 million is provided for the ACCC in the 1999-2000 Additional Estimates context. This additional appropriation relates to $5 million for monitoring retail prices during the transition to A New Tax System (ANTS) and $0.081 million for the ACCC’s 1998-99 carryover.

The Australian Competition and Consumer Commission Additional funding for retail price monitoring relating to A New Tax System

The ACCC will undertake a number of national price collections during 1999-2000 to enable the ACCC to effectively monitor price changes during the transition to ANTS.

Funding of $28 million (to be provided over three financial years) was allocated to the ACCC in the 1999-2000 Budget to administer new legislation prohibiting price exploitation in relation to the New Tax System. Subsequently, in light of the success of the ACCC’s price monitoring activities in relation to the reduction in Wholesale Sales Tax (WST) from 32 per cent to 22 per cent on certain goods from (29 July 1999), an extension of the ACCC’s price monitoring activities was agreed. The surveys undertaken during the WST reduction demonstrated that widespread data collection is an effective deterrent against price exploitation. The survey indicated a high compliance rate among manufacturers, distributors and retailers.

The ACCC’s price monitoring activities will, with passage of the A New Tax System (Indirect Tax and Consequential Amendments) Bill 1999, be broadened to increase the number of prices of goods and services surveyed, the frequency of surveys and the number of sites throughout Australia where surveys are conducted. To promote a high level of compliance with the prohibition on price exploitation, collections of price information are required before, during and after the introduction of ANTS. This will also assist to ameliorate community concern over the implementation of ANTS.

The increased scope and incidence of price surveys to be conducted by the ACCC will assist to prevent price exploitation in the lead up to, as well as through the implementation of, ANTS. This will enable any exploitative anticipatory price rises prior to the implementation of ANTS to be detected and dealt with under the Trade Practices Act. The ACCC requires an additional $5 million in 1999-2000 to undertake the expansion of this monitoring function.

A transparent price monitoring regime demonstrably promotes higher compliance by retailers (and their suppliers). This reflects the recognition by business of the ACCC’s role in price collection and analysis at the ‘coalface’. The increased appropriation will strengthen the ACCC’s ability to ensure that consumers are not subjected to price exploitation under ANTS.

1998-99 Carryover

The ACCC also expects to receive additional funding in the form of an equity injection of $0.081 million being the difference between the 1998-99 estimate carryover at budget time and the actual carryover.

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Australian Competition and Consumer Commission — Appropriations 1999-2000

Table 1.1: Summary of Measures since the 1999-2000 Budget

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Breakdown of Additional Estimates by Appropriation Bill

Table 1.2: Appropriation Bill (No. 3) 1999-2000

 

1998-99
Estimated Expenses
1

$’000

1999-2000
Budget


$’000

1999-2000
Revised


$’000

Additional Estimates


$’000

Reduced Estimates


$’000

Agency Outputs

Outcome 1 — To enhance social and economic welfare of the Australian community by fostering competitive, efficient, fair and informed Australian markets

39,007

50,872

55,872

5,000

Total

39,007

50,872

55,872

5,000

1 These figures are those published as 1998-99 Estimated Expenses in the 1999-2000 Budget Appropriation (Budget Paper No. 4: Agency Resourcing)

Table 1.3: Appropriation Bill (No. 4) 1999-2000

 

1998-99
Estimated
Expenses
2
$’000

1999-2000
Budget

$’000

1999-2000
Revised

$’000

Additional
Estimates

$’000

Reduced
Estimates

$’000

Equity Injections and Loans          

Equity Injections

Loans

Carryover from previous years




81


81


Total

81

81

2 These figures are those published as 1998-99 Estimated Expenses in the 1999-2000 Budget Appropriation (Budget Paper No. 4: Agency Resourcing). 

Table 1.4: Staff Years (Number)

 

1999-2000
Budget

1999-2000
Revised

Variation

Outcome 1

372

372

Section 2: Outcomes and Outputs Information

Outcomes and Output Groups

The ACCC has not made any changes to its outcome or outputs since the 1999-2000 Portfolio Budget Statements.

Explanation of Variations

The two additional estimates measures explained below fall under the Commissions current output 1.1.1: Compliance obligations pursuant to administration of Acts (Trade Practices Act, Prices Surveillance Act) and statutory responsibilities arising from parts of other relevant Acts and subordinate regulatory instruments.

The Australian Competition and Consumer Commission Additional funding for retail price monitoring relating to A New Tax System

The Government will provide additional resources for 1999-2000 to the Australian Competition and Consumer Commission (ACCC) to monitor retail prices during the transition to A New Tax System.

The ACCC will be:

  • given additional funding in 1999-2000 to commence a number of national price collections. The collections will provide a rigorous analysis of prices.
  • required to monitor and report to the Minister under S75AZ of the ‘A New Tax System’ (Trade Practices Amendment) Act 1999. The legislation also requires that the reports be made public by the Minister as soon as practicable.

Revised Performance Information and Level of Achievement — 1999-2000

Table 2.1 shows the performance information that the ACCC will use to assess the level of its achievement against Output 1.1.1 during 1999-2000.

Table 2.1: Performance Information for Outputs Affected by Additional Estimates — Outcome 1

Table 2.1: Performance Information 1999-2000

Output Group 1.1 — Australian Competition and Consumer Commission

Indicators Measures
Output 1.1.1: Compliance obligations pursuant to administration of Acts (Trade Practices Act, Prices Surveillance Act) and statutory responsibilities arising from parts of other relevant Acts and subordinate regulatory instruments. Price collection survey strategy discourages profiteering, informs consumers and retailers, and assists with community acceptance of ANTS. Effective and timely price collection surveys carried out at strategic times throughout the implementation phase of ANTS.

The effectiveness indicators for Outcome 1 and performance information for the other outputs underneath this outcome are unchanged from the 1999-2000 Performance Budget Statement.

Section 3: Budget Financial Statements

The budget financial statements will form the basis of the financial statements that will appear in the Australian Competition and Consumer Commission’s 1999-2000 Annual Report, and form the basis for the input into the Whole of Government Accounts.

Budget Statement of Revenues and Expenses (Budget Operating Statement)

This statement provides a picture of the expected financial results for the ACCC by identifying full accrual expenses and revenues, which highlights whether the ACCC is operating at a sustainable level.

Budget Statement of Assets and Liabilities (Budget Balance Sheet)

This statement shows the financial position of the ACCC. It enables decision-makers to track the management of the ACCC’s assets and liabilities.

Budget Cash Flow Statement

This statement identifies expected cash flows from operating activities, investing activities and financing activities.

Capital Budget

This statement shows all proposed capital expenditure funded through the Budget as appropriations or from internal sources.

Table 3.1: Budget Statement of Revenue and Expenses

 

Estimated Actual 3

Revised Budget

Estimated

 

1998-99
$’000

1999-00
$’000

2000-01
$’000

2001-02
$’000

2002-03
$’000

Agency Revenue and Expenses          
Revenues          
Revenue from government          

Ordinary annual appropriations (net appropriations)


35,621


52,380


44,289


40,762


34,353

Capital appropriation

81

Other services

3,386

3,492

3,609

3,282

3,338

Resources received free of charge

59

55

55

55

55

Revenue from other sources          

Sales of goods and services

341

468

468

468

468

Total Revenue

39,407

56,476

48,421

44,567

38,214

Expenses          
Employees

20,463

22,755

22,584

22,502

20,296

Suppliers

17,603

32,676

24,951

21,392

17,321

Depreciation and amortisation

1,301

860

870

658

575

Other

14

1,454

14

14

14

Total Expenses

39,381

57,745

48,419

44,566

38,206

Operating Result Before Capital User Charge


26


(1,269)


2


1


8

Capital User Charge

Transfers and Dividends

Accumulated Results at Year End

26

(1,269)

2

1

8

Administered Revenue and Expenses          
Expenses          
Total Expenses

Revenue          
Fines and costs

2,000

9,775

9,775

9,775

9,775

Authorisation fees

300

200

200

200

200

Other

50

25

25

25

25

Total Revenue

2,350

10,000

10,000

10,000

10,000

Net contribution to government

3 These figures are those estimated actuals as published in the 1999-2000 Treasury Portfolio Budget Statements.

Table 3.2: Budget Statement of Assets and Liabilities

 

EstimatedActual 4

Revised Budget

Estimated

 

1998-99
$’000

1999-00
$’000

2000-01
$’000

2001-02
$’000

2002-03
$’000

Agency Assets and Liabilities          
Debt          
Leases

93

113

133

153

173

Total Debt

93

113

133

153

173

Provisions and Payables          
Employees

6,208

6,691

7,203

7,633

7,939

Suppliers

950

1,050

1,050

900

900

Total Provisions and Payables

7,158

7,741

8,253

8,533

8,839

Equity          
Accumulated results

(2,840)

(4,111)

(4,109)

(4,108)

(4,100)

Total Equity

(2,840)

(4,111)

(4,109)

(4,108)

(4,100)

Total Liabilities and Equity

4,411

3,743

4,277

4,578

4,912

Financial Assets          
Cash

13

13

13

13

13

Receivables

50

50

50

50

50

Total Financial Assets

63

63

63

63

63

Non-financial Assets          
Buildings (leasehold improvements)

1,522

1,794

2,098

2,376

2,537

Infrastructure, plant and equipment

2,005

1,203

1,550

1,639

1,743

Intangibles

346

215

85

Inventories

85

90

95

100

105

Other

390

378

386

400

464

Total Non-financial Assets

4,348

3,680

4,214

4,515

4,849

Total Assets

4,411

3,743

4,277

4,578

4,912

4 These figures are those estimated actuals as published in the 1999-2000 Treasury Portfolio Budget Statements.

Table 3.3: Budget Cash Flow Statement

 

Estimated Actual 4

Revised Budget

Estimated

 

1998-99
$’000

1999-00
$’000

2000-01
$’000

2001-02
$’000

2002-03
$’000

Agency Cash Flows          
Operating Activities          
Cash Received          
Appropriations

39,007

55,953

47,898

44,044

37,691

Sales of goods and services

400

468

468

468

468

Total Cash Received

39,407

56,421

48,366

44,512

38,159

Cash Used          
Employees

19,990

22,272

22,072

22,072

19,990

Suppliers

16,957

32,414

24,890

21,486

17,315

Other

14

14

14

14

14

Total Cash Used

36,961

54,700

46,976

43,572

37,319

Net Cash from Operating Activities

2,446

1,721

1,390

940

840

Investing Activities          
Cash Received          
Total Cash Received

Cash Used          
Purchase of property, plant and equipment

2,446

1,721

1,390

940

840

Total Cash Used

2,446

1,721

1,390

940

840

Net Cash from Investing Activities

2,446

1,721

1,390

940

840

Financing Activities          
Cash Received          
Total Cash Received

Cash Used          
Capital user charge paid          
Repayment of borrowings          
Total Cash Used

Net Cash from Financing Activities

Net increase/decrease in cash held

Add cash as at 1 July

13

13

13

13

13

Cash as at 30 June

13

13

13

13

13

Administered Cash Flows          
Operating Activities          
Administered Cash Received          
Fines and costs

2,000

9,775

9,775

9,775

9,775

Authorisation fees

300

200

200

200

200

Other

50

25

25

25

25

Total Administered Cash Received

2,350

10,000

10,000

10,000

10,000

4 These figures are those estimated actuals as published in the 1999-2000 Treasury Portfolio Budget Statements.

Capital Budget

Table 3.4: Capital Budget

 

Estimated Actual 4

Revised Budget

Estimated

 

1998-99
$’000

1999-00
$’000

2000-01
$’000

2001-02
$’000

2002-03
$’000

Funded by Capital Appropriations

81

Funded internally by Agency resources

2,446

1,640

1,390

940

840

Total

2,446

1,721

1,390

940

840

4 These figures are those estimated actuals as published in the 1999-2000 Treasury Portfolio Budget Statements.

Notes to the Financial Statements

The ACCC’s 1998-99, 1999-2000, 2000-2001, 2001-02, 2002-03 Financial Statements have been prepared in accordance with the accounting principles adopted in preparing the 1997-98 Financial Statements as published in the 1997-98 ACCC Annual Report. It should be noted that the accounting policies remain consistent as those published in the Annual Report.

The changes to the ACCC’s financial statements specifically relating to the Additional Estimates are as follows:

Budget Statement of Revenues and Expenses (Budget Operating Statement)

Increase in the Ordinary annual appropriations (net appropriations) and suppliers item.

Budget Cash Flow Statement

Increase in the Appropriations and suppliers item.

Appendix 1

Non-Appropriation Agency and Administered Revenue

 

Budget Estimate

Revised Estimate

 

1999-2000
$'000

1999-2000
$'000

Agency Revenue    
Section 31 of the Financial Management and Accountability Act 1997


468


468

Resources free of charge

55

55

Total Agency Revenue

523

523

Administered Revenue    
Miscellaneous

10,000

10,000

Total Estimated Agency and
Administered Revenue


10,523


10,523

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