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Australian Government Coat of Arms

Budget | 2014-15

Budget 2014-15
Australian Government Coat of Arms, Budget 2014-15

Statement 8 (continued)

Contingent liabilities and assets

Contingent liabilities and contingent assets of the Australian Government are listed below by portfolio. These contingent liabilities and assets are a specific category of fiscal risks. Broadly, they represent possible costs or gains to the Australian Government arising from past events or decisions which will be confirmed or otherwise by the outcome of future events that are not within the Government's control.

Contingencies reported in this statement include loan guarantees, non‑loan guarantees, warranties, indemnities, uncalled capital and letters of comfort, together with those contingencies considered remote. These contingencies are in addition to the liabilities and assets already recognised in the consolidated financial statements of the Australian Government general government sector in Statement 9.

In general, information on contingent liabilities and assets is based on information provided by Australian Government departments and entities and is current to 31 March 2014. In some cases, other dates are used and those are noted in the relevant section.

Table 2: Summary of contingent liabilities and contingent assets in the Statement of Risks since the 2013‑14 Budget, 2013 PEFO and the 2013‑14 MYEFO(a)
Significant remote contingencies(b) Status Category(c)(d)(e)
Agriculture    
Compensation claims arising from suspension of livestock exports to Indonesia Modified Other
Communications    
NBN Co Limited — Equity Agreement Modified Guarantee
Telstra Financial Guarantee Modified Guarantee
Optus Financial Guarantee Removed
Termination of the funding agreement with OPEL Network Pty Ltd Modified Other
Defence    
ADI Limited — Officers' and Directors' indemnities Modified Indemnity
Defence indemnities and remote contingencies Modified Indemnity
Litigation cases Modified Other
Industry    
Liability for damages caused by space activities Modified Other
Infrastructure and Regional Development    
Maritime Industry Finance Company Limited — Board Members' Indemnity Modified Indemnity
Moorebank Intermodal Company Limited — Board Members' Indemnity Modified Indemnity
Tripartite deeds relating to the sale of federal leased airports Modified Other
Treasury    
Financial Claims Scheme Modified Guarantee
Guarantee of State and Territory borrowing Modified Guarantee
Guarantee Scheme for Large Deposits and Wholesale funding Modified Guarantee
Guarantees under the Commonwealth Bank Sale Act 1995 Modified Guarantee
Reserve Bank of Australia — guarantee Modified Guarantee
Contingent liabilities — unquantifiable
Agriculture    
Compensation claims arising from equine influenza outbreak Modified Other
Emergency pest and disease response arrangements Unchanged Other
Attorney‑General's    
Native Title agreements — access to geospatial data Unchanged Indemnity
Australian Victims of Terrorism Overseas Payment Unchanged Other
Disaster Recovery New Other
Native Title costs Unchanged Other
Communications    
NBN Co Limited — Board Members' Insolvency Indemnity Unchanged Indemnity
Defence    
Cockatoo Island Dockyard Modified Indemnity
Land decontamination, site restoration and decommissioning of Defence assets Modified Other
Defence non‑remote contingent liabilities Modified Other
Employment    
Job Services Australia — Employment Pathway Fund Unchanged Other
Indemnity provided to the Administrator and the Assistant Administrators of the Health Services Union Removed
Environment    
Kyoto Protocol Emissions Target Removed
End of lease at the former National Halon Bank site, Braybook, Victoria Removed
The Murray‑Darling Basin Authority reform — additional net costs Removed
Finance    
ASC Pty Ltd — Directors' indemnities Unchanged Indemnity
Commonwealth Superannuation Corporation — immunity and indemnity Unchanged Indemnity
Future Fund Management Agency and Future Fund Board of Guardians — indemnity Unchanged Indemnity
Googong Dam Unchanged Indemnity
Indemnities for the Reserve Bank of Australia and private sector banks Unchanged Indemnity
Indemnities relating to other former asset sales, privatisations and information technology outsourcing projects Unchanged Indemnity
Australian Government general insurance fund — Comcover Modified Other
Australian Government domestic property Unchanged Other
Litigation — Davis Samuel case Unchanged Other
Foreign Affairs and Trade    
Export Finance and Insurance Corporation — board member and senior management indemnities Unchanged Indemnity
Health    
Australian Medical Association Unchanged Indemnity
Australian Red Cross Society — indemnities Unchanged Indemnity
Blood and blood products liability cover Unchanged Indemnity
CSL Ltd Unchanged Indemnity
Indemnities relating to vaccines Unchanged Indemnity
Medical Indemnity Exceptional Claims Scheme Unchanged Indemnity
New South Wales Health Administration Council — indemnity New Indemnity
Tobacco plain packaging litigation New Other
Immigration and Border Protection    
Northern Patrol and Response — Triton Modified Indemnity
Southern Ocean Maritime Patrol and Response Programme Modified Indemnity
Immigration Detention Services by state and territory governments — liability limit Modified Indemnity
Immigration and Detention operations — liability limit Removed
Regional Processing Centres — liability limit Removed
Industry    
Australian Nuclear Science and Technology Organisation — indemnity Unchanged Indemnity
British atomic test site at Maralinga Modified Indemnity
Gorgon liquefied natural gas and carbon dioxide storage project — long‑term liability Modified Indemnity
Snowy Hydro Limited — water releases Unchanged Indemnity
Liability for costs incurred in a national liquid fuel emergency Modified Other
Infrastructure and Regional Development    
Indemnity provided to the New South Wales Rural Fire Fighting Service in relation to the Jervis Bay Territory Unchanged Indemnity
Australian Maritime Safety Authority incident costs Unchanged Other
Social Services    
Business Services Wage Assessment Tool Unchanged Other
National Disability Insurance Scheme Unchanged Other
Treasury    
Terrorism insurance — commercial cover Unchanged Guarantee
Australian Taxation Office — constitutional challenge to the
minerals resource rent tax
Removed
Contingent assets — unquantifiable
Defence    
Defence non‑remote contingent assets Modified Other
Health and Ageing    
Legal action seeking compensation from Sanofi Unchanged Other
Legal action seeking compensation from Wyeth Unchanged Other
Industry    
Wireless Local Area Network Unchanged Other
Contingent liabilities — quantifiable  
Defence    
Claims against the Department of Defence Modified Other
Environment    
Low Carbon Australia Limited — Board of Directors' and senior management indemnities Modified Indemnity
Foreign Affairs and Trade    
Export Finance and Insurance Corporation Modified Guarantee
Immigration and Border Protection    
Northern Maritime Patrol and Response — Ashmore Guardian Removed
Social Services    
Accommodation Bond Guarantee Scheme Modified Guarantee
Treasury    
Australian Taxation Office — tax disputes Modified Other
International financial institutions — uncalled capital subscriptions Modified Other
International Monetary Fund Modified Other

(a) Detailed descriptions of these items are in the following text.

(b) All risks now categorised under the new heading 'Significant Remote Contingencies' have been classified as modified, even though the risk itself may not have materially changed.

(c) Guarantees — a guarantee is where one party promises to be responsible for the debt or performance obligations of another party should that party default in some way.

(d) Indemnities — an indemnity is a legally binding promise whereby a party undertakes to accept the risk of loss or damage another party may suffer.

(e) Other — contingent liabilities and assets which are not guarantees or indemnities.