Outcome 1 - To enhance social and economic welfare of the Australian community by fostering competitive, efficient, fair and informed Australian markets
Additional resourcing will be provided to the Australian Competition and Consumer Commission to develop record keeping rules to ensure Australia Post (AP) is not inappropriately cross subsidising its retail services and to inquire into disputes and make recommendations in relation to AP's bulk interconnection service.
Additional resourcing will also be provided to the Australian Communications Authority to calculate the cost of AP's community service obligations and to monitor and report on quality of service issues.
Further details may be found in the Minister for Communications, Information Technology and the Arts' Press Release No. 253/02 of 14 November 2002.
Medical Indemnity Insurance Assistance Package
The Government has decided to provide additional funding of $0.5 million in 2002-03 for the Australian Competition and Consumer Commission to monitor medical indemnity insurance premiums following implementation of the Government's package of measures.
Included within this additional funding is $246.5 million over four years to the Department of Health and Ageing to implement the Government's package of measures for providing assistance to doctors, United Medical Protection Limited and the medical indemnity insurance industry generally.
This package was announced in the Prime Minister's Press Release of 23 October 2002 and is aimed at ensuring key private medical services, including in rural and regional areas, are maintained, and providing a new framework for the provision of medical indemnity insurance in Australia.
Map 2: Outcomes and output groups
Table 1.1: Summary of measures since the 2002-03 Budget
Breakdown of additional estimates by appropriation bill
The Australian Competition and Consumer Commission (ACCC) has not made any changes to its outcome or outputs since the 2002-03 Portfolio Budget Statements.
The ACCC has not made any changes to its performance information since the 2002-03 Portfolio Budget Statements.
Budgeted agency statement of financial performance
This statement provides a picture of the expected financial results for the Australian Competition and Consumer Commission (ACCC) by identifying full accrual expenses and revenues, which highlights whether the ACCC is operating at a sustainable level.
Budgeted agency statement of financial position
This statement shows the financial position of the ACCC. It enables decision makers to track the management of the ACCC's assets and liabilities.
Budgeted agency statement of cash flows
This statement identifies expected cash flows from operating activities, investing activities and financing activities.
Agency non-financial assets - summary of movement
This statement shows the movement in the ACCC's non-financial assets over the Budget year 2002-03.
Notes of Administered Activity
Note of budgeted administered financial performance
This note identifies revenues and expenses administered on behalf of the Government. It also discloses administered revenues from government and transfers to the Public Account.
Note of budgeted administered financial position
This note shows the assets and liabilities administered on behalf of the Government.
Note of budgeted administered cash flows
This note shows cash flows administered on behalf of the Government.
Table 3.1: Budgeted agency statement of financial performance (for the period ended 30 June)
Table 3.2: Budget agency statement of financial position (as at 30 June)
Table 3.3: Budgeted agency statement of cash flows (for the period ended 30 June)
Basis of accounting
The financial statements have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets which, are at valuation. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.
Agency and administered items
Agency assets, liabilities, revenues and expenses are those items that are controlled by the ACCC. They are used by the ACCC in producing its outputs, including:
- computers, plant and equipment used in providing goods and services;
- liabilities for employee entitlements;
- revenues from appropriations or independent sources in payment of outputs; and
- employee, supplier and depreciation expenses incurred in producing Commission outputs.
Administered items are those items which are controlled by the Government and managed or oversighted by the ACCC on behalf of the Government. These administered items managed or controlled by the ACCC include authorisation fees, fines and costs.
The purpose of the separation of agency and administered items is to enable the assessment of administrative efficiency of the agency in providing goods and services.
Revenue from government
Revenue from government are revenues relating to the core operating activities of the ACCC. Policies for accounting for revenue from government follow:
Since 1 July 1999, the Commonwealth Budget has been prepared under an accruals framework.
Appropriations to the ACCC for its agency outputs are recognised as revenue to the extent they have been received into the ACCC's bank account or are entitled to be received by the ACCC at year end.
Resources received free of charge
Services received free of charge are recognised in the statement of financial performance as revenue when and only when a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.
Revenue from the sale of goods is recognised upon the delivery of goods to customers. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.
Administered revenue includes fines and costs, which are recognised as per the court judgement orders. Authorisation fees are recognised when the application is received.
A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased non-current assets and operating leases under which the lessor effectively retains substantially all such risks and benefits.
Where a non-current asset is acquired by means of a finance lease, the asset is capitalised at the present value of minimum lease payments at the inception of the lease and a liability recognised for the same amount. Leased assets are amortised over the period of the lease. Lease payments are allocated between the principal component and the interest expense.
Operating lease payments are charged to the statement of operating performance on a basis which is representative of the pattern of benefits derived from the lease assets.
Court costs, which are awarded, are not considered as receivables or as creditors, as the case may be, until the costs have been agreed by the concerned parties.
A provision is raised for any doubtful debts based on a review of the collectability of all outstanding accounts as at year end.
Bad debts are written off during the year in which they are identified.
Property, plant and equipment
Asset recognition threshold
Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $1,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).
Schedule 1 requires that buildings, infrastructure, plant and equipment be revalued progressively in accordance with the `deprival' method of valuation in successive three year cycles.
The ACCC revalued all its assets (except intangibles) on 1 July 1999. The current revaluation cycle commenced in 1999-2000. The ACCC is currently having its assets revalued in accordance with its revaluation strategy. However, no revaluation adjustments have been factored into the current budget estimates.
The ACCC is implementing the requirements of Schedule 1 as follows:
- leasehold improvements were revalued as at 1 July 1999 at depreciated replacement cost;
- plant and equipment (including furniture and fittings, office equipment and computer equipment excluding software) assets, were revalued as at 1 July 1999 at deprival value; and
- intangibles (software) have not been revalued.
Depreciation and amortisation
Depreciable property, plant and equipment assets are written off to their estimated residual values over their estimated useful lives to the ACCC using, in all cases, the straight line method of depreciation. Leasehold improvements are amortised on a straight line basis over the lesser of the estimated life of the improvements or the unexpired period of the lease.
Depreciation/amortisation rates (useful lives) and methods are reviewed at each balance date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. Residual values are re-estimated for a change in prices only when assets are revalued.
Depreciation and amortisation rates apply to each class of depreciable asset are as follows:
Total useful life
Lesser of the term of the lease or 10 years
Furniture and fittings
3 to 7 years